On the 15th of August, the Executive Committee of Luton Borough Council (LBC) met, and the main item on the agenda was the Revenue & Capital Budget Monitoring Report for the 1st quarter of this financial year 2022/23.
It was no surprise that the rampant rise in inflation has a devastating effect on LBC Service Budgets. In this first quarter those costs have indicated overspend across the full year of at least £10.853 million. In the Budget for 2022/23, £5 million was set aside into reserves as a one-off risk cover for inflation and Coronavirus impacts. Sadly, we expect more saving’s will have to be found to bridge further gaps in the coming nine months.
Two days later the 17th, The Scrutiny Finance Review Group met to discuss the same report. As this Group is a cross party-political group, as opposed to the solely Labour Executive, its contents were discussed in more detail. And the subject of Preservation House was discussed at length.
We introduced you to this property in September 2021- (New Century Park Access Road – more Council money well spent). This warehouse occupies the spot where this road will start, a road that has never had a business case or funding for its full costs but is crucial to Terminal 2 expansion plans.
A tenant has been found for this building, which cost £3.2 million to purchase, but the rental agreement with the tenant only partly meets operational costs, so there is a £675,000 per annum shortfall. We would love to know why that is? Surely the operation of the building is down to the new tenant? Why would LBC agree to a deal knowing it would not actually bring them any positive income, or even cover costs. Could it be that the embarrassment of an empty building is more acute than not getting enough to cover your costs from renting it?
Apparently, LBC was legally committed to acquire the site, but they haven’t achieved that. It slipped our notice last September that what LBC have done is taken the Leasehold on the building, and not the Freehold of the actual land. This land will now have to be acquired in a sellers’ market, as the sellers now know how crucial the plot is to LBC plans.
£3.2 Million, how useful that would be now?
Another issue discussed was the £550 million in loans LBC have made to its airport company, London Luton Airport Ltd/Luton Rising (LR).
The security LR have given LBC on these loans is the airport itself, and apparently that is all legal and has been registered with Companies House; so that is all above board then.
The fact that as the sole shareholder in LR, LBC own the airport anyway, has yet again been lost in financial jargon rather that plain common sense. As LBC already know that when LR has spent all these loans, and LBC can no longer get any cheaper rate ones from the Public Works Loans Board, LR will have to declare insolvency and sell its only assets, the airport, and the DART. LBC would then become the main creditor and get back nowhere near that £550 million figure. The letters lodged with Companies House would not even be worth the paper they are written on.
£550 Million, how useful that would be now?
The officer presenting this report finally got around to thanking all the LBC staff and officers who have burnt the midnight oil and made unpalatable cuts and savings to keep this deficit figure so manageable. However, in recent weeks LR have taken on more staff, created new positions, and added more expenditure in relation to DART.
This shows yet again that the residents of Luton (223,500 at the last Census), and those who serve them so valiantly within Luton Town Hall, are but cannon fodder for the “crucial” staff of Luton Rising.
LBC throw all this money at LR, as in their plans to eradicate poverty in Luton by 2040, which is the only option the lazy Senior Officers and Executive Councillors could come up with. Banking the airport cash and using it when times are rough, which worked perfectly well up to 2015, was never even in the equation.
If LBC are so concerned about saving the service budgets of Luton all finance to Luton Rising must be stopped now — but sadly that is just not going to happen.
SAVE LUTON NOW, STOP LUTON AIRPORT EXPANSION NOW