A local blogger has given us permission to share part of his work on how Luton Borough Council has got itself in its current pickle.
“Luton Borough Council has become entirely dependent on property development for funding services, despite the fact that the National Audit Office has warned that council spending on development is distorting the property market and reducing the profitability and, hence, sustainability, of those very developments. It is a scheme, that is robbing future generations to pay for today’s mismanagement, and to enable governments to go on continually cutting local government funding, which, in turn, forces councils to make more loans to their supposedly ‘arm’s length’ development companies.
SARS-CoV-2 virus has become the spanner in the works of this almighty casino enterprise by local governments, and so now, those arm’s length golden geese are all coming home to roost and clamouring to be fed. The councils are stuffed, because, if their pet companies have to be sold off, they are not allowed to use the money for the services they set the companies up to pay for. So now the bail outs start, as all the authorities borrow money below the market rate in order to bail out their own companies. The companies they have destroyed their towns to create, because they are both developer and planner, and their only Plan is the very perpetual growth scheme that got them into trouble in the first place.
The National Audit Office warned about all this back at the beginning of the 2020:
“Both CIPFA’s and the Department’s changes aimed to reinforce the existing point that: “Authorities must not borrow more than, or in advance of their needs purely in order to profit from the investment of the extra sums borrowed”. The implication of this is that authorities should not borrow to invest solely for yield.
Sadly, as with all things Planning’ and ‘Guidance, Local Authorities–being elected bodies–are free to ignore all these common sense rules and principles: So Luton will go on lending many millions to its cash cow airport, in order to compete with Stansted, Heathrow, and Gatwick, who are owned by multinational large concerns with rich shareholders, not small Home County Borough Councils.
Stop Luton Airport Expansion