Council stands by quoted £119m loan to Luton Airport company after challenge by Lib Dems

Luton Borough Council has defended its quoted £119m loan to its airport company - after a challenge by Lib Dems that the true figure could be higher.

By Euan Duncan
Wednesday, 28th July 2021, 3:16 pm
Luton Airport
Luton Airport

Conflicting figures over the extent of the loan were raised at a full council meeting by leader of the Liberal Democrat opposition group and Barnfield councillor David Franks.

“The council press release quoted £119m as the extent of the agreed new council loans to London Luton Airport Limited (LLAL) … is that the correct figure, please?” he asked.

Councillor Andy Malcolm, portfolio holder for finance, replied: “So £119m is the exact amount as noted in the press release, which also mentioned the potential for an extra £20m to be drawn down if necessary.

“Modelling suggests passenger numbers will go back to where they were pre-pandemic around 2024.

“If that modelling isn’t quite right, and growth is slower getting back to where we were before the pandemic started, then the airport company might have to draw down on that.”

Councillor Franks said: “The reason I ask is the external auditors’ position statement presented to the audit committee quoted a figure of £156m which they claim they were given by the council. Where did that come from?”

In response to this, councillor Malcolm said LLAL had been in negotiations with the airport's operating company London Luton Airport Operations Limited (LLAOL) about how to share the financial difficulties.

He said: “If anything, it gives an indication of a good deal that the figure has fallen from where it was earlier in the process when the final package of support was arranged."

London Luton Airport is operated by a private company, entirely separate to LLAL, under a concession agreement.

Councillor Malcolm added: "...This money is borrowed from the public works loans board. It’s not council taxpayers’ money.

“It’s not going to have any impact on our delivery of services and the airport company will pay back that interest.”