The Auditor’s Report which accompanies Luton Borough Council’s Statement of Accounts Report for 2017/18 shines a light into how the Council feel they will get best value return for the town’s residents’ money.
The Council report notes that since 2011/12 they have had to make savings of £113 million on budgets and services. The reason they give is Central Government Austerity cuts.
However during this time Luton Borough Council have continued to invest airport concession income back into airport projects, rather than fill this budget shortfall. When decisions are made at Finance Committee about the amounts required for these projects, they are made in private under an archaic Local Government Law. The amounts are not revealed, even in Freedom of Information Requests, as not in the public interest.
The Auditor’s Report questions the risks involved in these investments and asks why the Council have not entered the projects with financial risk sharing partners.
For the Direct Consent Order which the Council is undertaking to apply to Central Government to enable the expansion of the airport to 32 million passengers, as of 31st March 2018 costs were £3.727 million. The estimated scheme cost for just the Consent Order, is £40 million.
The costs for the Century Park Access Road, note this is just for the single carriageway access road, not the business park development which is where the long term job creation will supposedly be, are to 31st March 2018 £4.051 million.
The initial cost estimate was £120-£140 million; this has now been revised to an estimated £170 million. The scheme will be in two stages, the first for just a single full length carriageway, planned to be funded solely by the Council for £95 million, the second phase of dualling this road is estimated at £75 million, with money currently being requested from Eastern England Heartlands.
The Bartlett Square Development in Kimpton Road Luton has cost to 31st March 2018 £3.245 million.
The total scheme costs are estimated to be £30million, but the Council has set itself a limit of £6million, with the rest sold to a developer, or joint venture partner.
These three projects have therefore cost to 31st March 2018, £11.023 million, with total estimated costs of £216 million
With the £225 million already committed to the DART project by the Council, we have £236.023 million already disappearing from Council coffers.
All these costs are summarised below
|Direct Consent Order||40|
|Century Park Access Road – initially single lane||95|
|Century Park Access Road – to update to dual carriageway||75|
If these projects stay within the estimated budgets, the total will be an eye watering £441 million spent on projects which could potentially give no reward at all, if the climate change and effects of air pollution on health debates restrict airport growth, or the projected demand that the Council seems to think exists for passenger growth, does not materialise?
This money is being provided by Luton Borough Council as debenture loans at 8% interest, to London Luton Airport Ltd. They repay the loans with money they take from the airport concession income.
So we have the Council’s company paying off the Council with money which is already the Councils, which instead of being spent on filling the £113 million budget cuts hole, is being paid to International Bankers and the Public Works Board.
The Council presentation of how much money their airport company puts back into the town, conveniently forgets that it is already their money.
If like us you feel that the duty of a responsible Local Authority to use its only asset, to give full financial benefit to its residents, instead of the debts accrued in these developments, then question your local Councillor and at the next consultation – and say no to all development.