Coronavirus: Luton Borough Council faced with 'stark' savings

A council which is facing a £49m black hole in its finances is set to make £22m cuts in an emergency budget.

Luton Borough Council said it was in response to financial pressures brought on by the coronavirus crisis.

The authority expects to lose out on £37m revenues from Luton Airport due to a huge drop in passenger numbers.

Finance portfolio holder Andy Malcolm called the position "stark" and said the cuts were "not going to be pleasant".

He said the situation was "like when Vauxhall went combined with the global crisis for Luton".

Vauxhall Motors shed 1,900 jobs at its Luton car plant in 2002, while years of government austerity followed the financial crash of 2008.

The borough council is set to make the cuts as part of an emergency budget in July.

It has projected a £37m drop in revenue from the council-owned airport, including a £16m annual dividend.

Additional costs of £10m have been accrued from dealing with the coronavirus pandemic, as well further shortfalls in tax, rents, fees and charges.

The government has offered councils more than £3bn to deal with Covid-19, including just over £11m to Luton Borough Council.

However, the authority says even with this money it still faces a £49m shortfall.

Mr Malcolm said: "It is huge. It is going to have a stark impact.

"I think we are going to be able to make up these savings, but it is not going to be pleasant."

A Ministry of Housing, Communities and Local Government statement said the funding provided would help councils "tackle the immediate pressures they have told us they're facing".

It said Luton Borough Council's "core spending power rose by £8.94 million this financial year" even before the additional £11m had been granted.

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