Coronavirus: Council takes out £60m loan on Luton airport
BBCA council is set to take out a £60m loan to help support an airport it owns.
Luton Borough Council approved the loan on Monday despite councillors' fears Luton Airport, which owes the authority close to £400m, now has "sacred cow status".
Opposition leader David Franks said the loans are "unsecured".
The council said it had to "protect the company and make the best of it for the people of Luton".
It is currently facing a £49m financial shortfall, partly because it is set to lose out on £37m revenues from the airport after a huge drop in passenger numbers during the coronavirus crisis.
Liberal Democrat Mr Franks said: "The airport has sacred cow status. There are dangers.
"The company is in financial difficulties because anything to do with aviation is bound to be at the moment."
He said the £60m loan takes the total amount loaned to the airport "close to £400m".
The money "is effectively an unsecured loan", says Mr Franks, as the assets against which it is secured are effectively owned by the council already through its ownership of London Luton Airport Limited.
Council member for finance Andy Malcolm, said taking out the loan was "about stewardship".
"We own the airport on behalf of the people of Luton. I'm chairman of the Board of directors and I have to act in the best interests of the company," he said.
"We have to protect that company and make the best of it for the people of Luton."
The Labour-led borough council has projected a £37m drop in revenue from the 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.
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