This was the day was the that the Ministry of Housing, Communities and Local Government (MHCLG), agreed to give Luton Borough Council (LBC) a Capitalisation Directive for £35 million for the financial year 2021/22. This means that LBC are being allowed to borrow that sum to use in service budgets. Normally such actions are not allowed by Law, to protect Councils from the burden of repayments, and to stop them living outside their means. This decision was made after a financial review of LBC’s books, by the MHCLG in October/November last year.
The following morning on local BBC radio, the CEO said that inspection had shown LBC had taken the right approach to the drastic loss in income from the airport due to Covid-19, and MHCLG were confident that LBC were doing the right things. When asked about the comment by MHCLG that Councils had found themselves in financial difficulties, some due to the pandemic, others by poor management, the CEO reiterated the point made about the inspection last year.
The second piece of news on the 10th was the confirmation of the closure of 15 Children’s Centres in Luton. This, along with the job cuts at LBC, was attributed to a loss of income from London Luton Airport Ltd (LLAL) last year.
The third piece was that the planning application, 17/002300/EIA, for the New Century Park Business Park and access road, presented to the Development Control Committee of LBC in March 2019, was to be reviewed at their next meeting on the 24th February.
In 2019 the employment phase of the Application was given outline consent, mainly for new car park provision, and the access road was given full permission. As we have mentioned recently, the scheme was not progressed due to complicated discussion on the Section 106 agreements of the plan, but it would appear that these are now ready for signing. The Planning Officers at LBC have decided however, that as the landscape has changed so much since 2019, it should go back to Committee to be reaffirmed, or indeed withdrawn, as there has been a change in makeup of that Committee, and opinions may have changed?
Three news items on the same day, all linked by one common thread, LBC’s poor commercial decision in putting all its eggs in the one basket of its airport company and the Airport.
The opportunity to put £35 million into services is good news, but it and interest will have to be paid back. At some point or other, cuts will have to be made to service those repayments, unless a magic money tree appears outside the Town hall. If the sum of circa £500 million had not been borrowed and lent to LLAL for vanity projects at the airport, the reserves of LBC would have made this loan unnecessary. The CEO stressed the point that LLAL had put £22 million into budgets in 2020/21, and given £9 million to charity. He did not however mention the £60 million bailout loan that LBC had to give LLAL it keep it solvent and keep the airport in Council ownership. A net loss of £29 million in revenue is – as ever – brushed away under the carpet.
Without the borrowing of money for LLAL, would the Children’s Centres still be open? We think without a doubt. Yet again, they join the list of collateral damage down to LLAL debts on vanity projects.
The Century Park plan is yet another LLAL project funded by LBC. The employment area is just a tenuous smoke screen for the road application, which as you know is the deliverer of the LLAL Development Consent Order for airport expansion. This road will require another batch of multi million pound loans from LBC to LLAL, and yet more diversion of funds from services to pay them off, if the decision to build is upheld.
Let us go back to the point made by the MHCLG, that some Councils find they in are difficulties due to the pandemic, others down to poor management. We think LBC finds itself in the unique situation of being the victim of both of these. It has over invested due to poor management in the one of the biggest casualties of COVID, aviation, and as a result other services within Luton bear the brunt as ever.
We would hope that at the meeting on the 24 February, the Development Control Committee will see this cycle has to stop, and revoke the permissions made in 2019. We feel strongly that the best interests of Luton and its residents must take precedence over the money pit that is LLAL and its airport projects.
Stop Luton Airport Expansion