Budget cuts reviewed as coronavirus leads to cash flow crisis in Luton Borough Council's coffers

Talks are taking place between corporate directors and service officers over what measures might be needed to counter a drop in forecast income.

A letter was sent to the government to outline the extent of the problem the local authority faces.

Liberal Democrat opposition group leader councillor David Franks estimates a cost to the council of between £30m and £35m for the financial year 2020/21.

A dramatic drop in passenger flights from London Luton Airport and lost business rates are two of the immediate concerns for the borough council.

A 12-month business rates holiday for retail and other businesses could be reimbursed eventually.

But the short-term headache remains over the ability of council taxpayers to keep up with payments if they have lost their jobs or had their income reduced because of the current crisis.

The extent of the impact on Luton’s budget became clear during talks about the council’s travel assistance services at an administration and regulation committee meeting.

Staffing arrangements which were billed as a cost neutral proposal caught the attention of Labour South councillor Paul Castleman.

“As an executive member, I am aware there are talks between the passenger transport unit and social services regarding this issue.

“We’re now in a situation where we need to put a hold on this one until the review of the budget because this is another £85,000 that we haven’t actually got until we sort out our finances.

“So I would like to park it for the time being until we know what happens with our budget cuts. We should defer it until July.”

Councillor Castleman, who’s the executive member for planning and transport, raised similar concerns about a report on changes to the council’s building and technical services business delivery and development team.

Criticising aspects of the report, he told the committee: “We’re actually having a review of budgets coming through to the executive in June.

“All I am asking is because I know full well what the executive will be discussing in April and May, regarding budget control.

“We’ve all been caught out with what’s happening at the moment, especially finance wise.

“So that’s why I am not happy approving anything that’s going to put an extra cost on the council when I know full well we haven’t got it.”

He proposed to defer the report “until after budget talks” have been completed.

Councillor Castleman added: “My understanding is the corporate directors are working very hard at the moment, with all the other pressures that we’ve been given, looking at the budget.

“I would prefer to have it deferred until July, unless the executive have had that meeting. But I just can’t see it.

“There’s an awful lot of work for the officers and the directors to do.”

He suggested pushing a future committee agenda item back from June to July, saying: “It’s quite possible, with some of the cuts we’ve got to look at, that might be one that we’re wasting administration time on.

“I’m not one hundred per cent sure because nothing’s been agreed.”