Since the totally expected decision by The Secretary of State for Transport, to pass the Development Consent Order for expansion of Luton airport, we’ve been trying to absorb the details, and form some conclusions and opinions.
Firstly, we have the fact that the Examining Authority (ExA) refused the application!!!
The ExA agreed that this expansion would contribute to meeting the need to address airport capacity in the Southeast of England, and that it would provide socio-economic benefits, such as job creation.
However, they felt that the harms this application would bring, including additional noise pollution; increased greenhouse gas emissions and other noxious substances; increases in road traffic; effects on the Chiltern Area of Outstanding National Beauty — now called Chiltern National Landscape, far outweighed any hypothetical potential economic benefits. There would also be, what they classed as less than substantial harm to heritage assets; the openness of the green belt; health and community harms; harms to species and habitats of principal importance; and from landscape and visual effects.
This Decision shows that the efforts and representations of all the opposition groups and Local Authorities, was a success. All those involved, should be immensely proud that their dedication and hard work helped in some part, to enable the ExA to see through the Green-Washed falsehoods and spectacularly over-optimistic, and extremely expensive application by Luton Rising (LR). Let us also not forget, that the circa £80 million costs of this Application, have all been funded with public money, borrowed on their behalf by Luton Borough Council (LBC)
So why did The Secretary of State ignore the ExA recommendation?
The answer to this appears to be very simple. Both The Prime Minister, and The Chancellor of The Exchequer have spoken in favour of airport expansion to boost the coffers of the UK, so it looks as if they told The Secretary to pass it no matter what?
The Department of Transport operates a system called WebTAG. https://www.gov.uk/guidance/transport-analysis-guidance-tag – introduction
WebTag is guidance and a toolkit designed to assess the impacts of Transport Policy Proposals and Projects. It provides tools, software, and methods for appraising and developing transport interventions, enabling analysts to build evidence for business cases and investment decisions. Essentially, it helps to understand the potential effects of transport changes before they are implemented.
Projects or studies that require government approval are expected to make use of this guidance in a manner appropriate for that project or study. For projects or studies that do not require government approval, it should serve as a best practice guide.
LR only used WebTAG when looking at their surface access strategy – more on this later.
The ExA did not believe that WebTAG was appropriate, as the expansion was to be funded with profits from the airport operations. The Secretary of State agreed with that opinion.
In their Application, LR state that they will be entering into negotiations with the current Airport Operating Concessionaire, to fund developments. If no agreements can be reached, they would seek new commercial partnerships, or seek funding themselves, through LBC, from commercial markets.
As we all know, LR is wholly owned by LBC; they already have a circa £700 million debt stream from them, which they themselves have borrowed from The Public Works Loans Board, a Government Body.
We have referenced before how both LBC and LR love to spin the idea that LR are a socially responsible organisation. An organisation whose sole role is to maximise the financial benefits from the airport, putting them back into improving the lives of the people of Luton. However, when it comes to being transparent about the financial aspects of LR and their relationship with LBC; and how they put money into LBC coffers, the shutters come down, and all that information becomes “commercially sensitive”.
It was during the financial year 2013/14 that LR started changing their profile from a rent collector for the airport, to an Airport Developer. In that year, the passenger throughput was 9.7 million and the Concession Fee Income was £28.6 million, of which £13.5 million was donated to local charities. A Dividend of £11 million was paid to LBC.
For the financial year 2023/24, the passenger throughput was 16.3 million, just short of the highest figure of 17.4 million in 2019/20. Concession fee income was £61.9 million, charity donations were £7.7 million, and for the fourth consecutive year, no and Dividend was paid to LBC.
Hard evidence from LR accounts lodged at Companies House shows that a 68% increase on passenger numbers has seen an increase in the Concession fee received, but massive cuts to charity donations, and the stopping completely of Dividend Payments to LBC coffers.
Yet The Secretary of State for Transport, and The Chancellor of the Exchequer, both believe that a 68% increase in airport passengers from 19 to 32 million per annum, will deliver a massive boost to the national, regional and local economy?
All this begs the question, as LBC are of course Government, why wasn’t WebTAG used from Day 1, to categorically show and undeniably confirm that the financial benefits are unequivocally proven, when history shows otherwise?
Maybe the Exchequer having looked at the financial mess that is LBC, the debts of LR mentioned above, the continuing audit issues stemming from 2018/19 on the valuation of the airport, and how indeed this Application has actually been allocated in those accounts, and decided that the only way they could see of getting all the monies they are owed back, is to say yes and hope that the money does roll in eventually.
We can only hope that when this risk strategy spectacularly fails, that The Exchequer bails out a financially destitute LBC, and does not place that burden on the Council Tax paying residents of the town.
Let us now pick a few more pointers from the approval.
This DCO officially starts from the 24th April 2025. LR will have to Lodge an Article 44 notice with the Department for Transport, and from that date LR have five years to dig a hole in the ground to show Phase 1 has commenced.
Phase 2 will not start until 2032, as that is when the new Concession is due for start, or the other circumstances mentioned previously to fund it are explored.
However, before LR lodge the Article 44 Notice, they will have to undertake one year of monitoring aircraft noise, air quality, greenhouse gas emissions and surface access trends.
This is an intriguing point, as in the ExA report they make a very interesting statement.
The Green Controlled Growth (GCG) aspect of this DCO includes a Surface Access plan for staff and passengers. The ExA noted that the limits listed for Phase 1, are already being exceeded by current traffic levels. LR’s response was that they are expecting Public Transport usage to return to pre Covid levels, and this would allow them to lower levels to meet those Phase 1 GCG targets. However, they acknowledged that if those levels remain above the GCG framework limits, the airport would not be able to grow.
Both the ExA, and The Secretary, saw that if monitoring was not undertaken before the Article 44 expansion clause was enacted, the breach in the GCG limits would not have been noticed for a considerable amount of time, and of course whilst growth was actually happening. What also concerned them was the lack of sufficient evidence that levels could then be reduced to those Phase 1 limits.
Requirement 21 was subsequently amended by the ExA, in respect of Surface Access, that a monitoring report is provided before the Article 44 notice was served. The Secretary agreed with this, as they could see how early monitoring would help LR identify trends in surface access mode share, and therefore only serve the Article 44 Notice, when conclusive evidence existed that those Phase 1 GCG limits would not be breached.
Remember, WebTAG was only used on the Surface Access Strategy part of this DCO.
We can see how it showed the major flaws in that Strategy, so were LR terrified of using it for the financial benefits side of things, because they saw that that would fail spectacularly as well?
So, what happens next?
Well opposition groups are taking Legal Advice on the next steps, and when a plan of action becomes apparent, we will inform you further.
If you wish to peruse the ExA report, and The Secretary of States Approval Letter, they can be found via this link:
https://national-infrastructure-consenting.planninginspectorate.gov.uk/projects/TR020001