When BBC local radio gave airtime to the granting of the LLAL stabilisation loan the following day, they had an interview with the ex-Chair, now Vice-Chair of LLAL, Councillor Malcolm, and the Leader of the opposition group on LBC, Councillor Franks of the Liberal Democrats.
At previous Full Council and other Committees, Councillor Franks had asked the Leader of the controlling Labour group, Councillor Simmons, to put a figure on the loans LBC has given to LLAL. He was never given an answer, as the meetings were in public, and he was told he would receive the details in writing. Based on this, the Lib Dems calculated a figure of £450 million for those loans.
However during this radio interview, Councillor Malcolm actually confirmed the current debts of LLAL were £500 million. Add to this the £139 million, and we reach £639 million. Councillor Malcolm reiterated again that these loans have had no effect on the central budgets of LBC, previously, now and in the future.
In the last filed LLAL accounts of March 2019, these loans showed an interest rate of 8%. These loans were taken out with Central Government’s Public Works Loans Board. Details of the interest rates are not published, but usually sit between 1 and 1.5%, so for the purpose of our article, we will use 1.25% as a figure. This would give an interest return to LBC of 6.75% as their premium on top.
1.25% of £639 million gives a return of £8 million to the PWLB, and 6.75% would give a return of £43 million to LBC. If LBC think this is a great income stream for their budgets, then why lending to LLAL is/was the best way to go? Surely the question needs to be asked, what would have happened to this £690 million total figure, without it repaying those loans?
If funds hadn’t been kept back from the Concession Fee by LLAL, then surely the monies paid to LBC would have been double/triple the amounts actually paid? Similarly, couldn’t the donations made to charity have been far higher?
Therefore, these debts MUST have had an effect on the budgets of Luton, by the simple fact that funds have been willingly spent on cosmetic projects and those with little or no guaranteed economic benefits. These are funds which would have kept children’s early learning centres/libraries/community centres open, and indeed the many other community projects and facilities hit by LBC cuts in recent years.
With a track record like this, the thought of how much money LBC/LLAL will think is reasonable to throw away in pursuit of their expansion plans, clearly shows why those plans must be stopped now.
Stop Luton Airport Expansion – NOW