Cash-strapped council agrees £50k payment to support Luton BID

A larger amount of £175,000 was asked for by the BID, according to a report to the council's executive committee last week.

The council has been a keen supporter of Luton BID, “which plays an important role in the local economy”, said the report.

“It’s anticipated that the sum forward funded to the Luton BID can be recovered by future levies to be collected by the organisation.

“Consideration was given to the current cash flow situation and the action needed to support the Luton BID for the next three months.”

Council leader and Labour Lewsey councillor Hazel Simmons, the corporate director, place and infrastructure Laura Church, and service director of finance and audit Dev Gopal agreed the funding, which was approved by the executive.

“The current cash flow position for the Luton BID has been significantly impacted upon by Covid-19,” explained the report.

“To secure the future of the Luton BID, allow it to continue to operate and to fulfil its essential contractual obligations it’s necessary to forward fund the project.

“Other funding options have been explored including the business interruption loan scheme.

“However, BIDs do not currently qualify for the scheme because they don’t generate income through sales.

“Requests have been made to the government seeking relief to businesses on paying the BID levy and to pay the BIDs the equivalent sum which would have been collected, or to underwrite any shortfall in BID levy payments.

“But the government has not made any commitments as yet to giving businesses BID levy bill relief or to underwriting any shortfall in revenue to BIDs resulting from the failure to pay levy bills.

“While the government has created a new £6.1m BID resilience fund, it’s expected that the sum to be paid to Luton wouldn’t address the current projected cash flow shortfall,” added the report.

“The future ability of businesses to pay the levy is currently unclear and uncertain given the economic impact of Covid-19.”

Businesses in Luton town centre voted in favour of plans to renew the BID, securing a further £2m to be spent on improving the area, said the organisation’s website.

The renewed BID plan came into effect on January 1, with a potential collective fund of more than £2m to spend over the next five years on projects across four agreed priority areas.

The executive considered it vital to support the Luton BIDs current cash flow projections to allow it to continue to operate and meet its contractual obligations.

“A signed letter between the council and the BID has been put into place for recovery of the funding by March 31, 2021,” said the report to councillors.

“If the Luton BID requests a deferral of the payment or extra funding, a review date of July 31 has been put in place to consider the impact of Covid-19 and its income.

“If any changes are required this will be referred back to the executive for consideration.”