Luton Borough Council proposes cuts to plug £22m shortfall

A council said it was proposing cuts to front-line services to avoid bankruptcy due to the impact of Covid-19, unless the government could bail it out.

Luton Borough Council said its income from Luton Airport "has all but dried up". It faced a £50m shortfall and needed to save nearly £22m.

Without "adequate emergency funding" the authority "will be forced to implement extreme savings", it said.

The government said it was giving councils "unprecedented support".

As the majority shareholder in Luton Airport, the council usually benefits from an annual dividend of about £27m, but it said with aviation at a virtual standstill since March, it had been placed "in the painful situation of having to propose severe cuts to a number of key front-line services".

The proposals include stopping the school meals service, reductions in highways maintenance, charging for green waste collection and reduced funding for adult social care and mental health support services.

They also include the loss of at least 365 posts, but they would also be scrapping vacant posts and offering voluntary redundancies.

The council has received £11.2m in emergency government funding, but as well as the airport money, other income streams "have also been hard hit", so it has asked the government for a further £50m in emergency funds.

Labour council leader Hazel Simmons said: "The council has repeatedly called on central government to provide adequate emergency funding, but so far these pleas have fallen on deaf ears.

"If they continue to adopt this stance of indifference we will be forced to implement extreme savings measures to avoid the possibility of bankruptcy, which itself would have an even more destructive impact on services."

The MP for North East Bedfordshire, Richard Fuller said last month that the council should sell 25% of the airport which would provide it with "more than enough money to plug its gap" and the government had every reason to refuse to bail it out.

He said it had used its airport income to "cover additional annual expenditure" while other councils "relied on local rates, council taxes and central government funding" to provide services.

"Councils should be treated on an equivalent basis in meeting their additional costs. Replacing money from commercial ventures should be excluded," he said.

The Ministry for Housing, Communities and Local Government said its "unprecedented package of support" for councils included £3.2bn emergency funding.

"Luton Council will receive £11.26m of this to deal with the pressures of coronavirus, while its core spending power rose by £8.94m this financial year even before additional emergency funding was announced," a spokesman said.

"We recognise that some councils with strategic investments, such as airports, are put in an exceptional position by this crisis. We'll continue to work closely with Luton Council to help them navigate through what is undoubtedly a difficult situation, as they support their communities through this national emergency."