'Extremely difficult cuts' underway as Luton Borough Council bewails devastating financial impact of Covid-19

Luton Borough Council has described the projected shortfall of £49m due to coronavirus as "devastating" for its finances.

Plans are underway to prepare an emergency budget in the summer where councillors will be forced to agree to extremely difficult cuts to key services unless the council’s desperate plea to the government for immediate cash is successful.

With passenger numbers decimated, the council’s airport company London Luton Airport Ltd is no longer receiving air passenger income which makes it impossible to pass on dividends to the council.

Leader of the council, Cllr Hazel Simmons MBE, said: “The council uses money from the airport to fund crucial services to everyone, particularly the most needy in the town.

"With this key source of income obliterated, the council is compelled to consider painful solutions which will drastically affect services and have a profound, long-lasting and bleak impact on the lives of many in the town.

“Luton faced huge challenges throughout the period of government austerity and the council sought to encourage growth of the airport as a key driver in balancing the books and stimulating the wider economy.

"Since 2010 the authority has had to make savings of £138m due to reduction government funding and the administration has fought tirelessly and successfully to ensure essential services are maintained.

“While all councils are suffering at this moment in time, Luton has had to rely heavily on the aviation industry due to the reductions in our grants from government, which has left it uniquely impacted and without emergency funding from the government - the town and its residents will suffer much more so than in other areas."

A recent study by the Centre for Cities identified Luton as one of the country’s most financially vulnerable regions to the Covid-19 crisis, with 40% of jobs dependent on revenue from the aviation and motor industry.

The council adds that the current crisis has led to huge increases in demand for assistance and a significant drop in fees, charges and other income. The authority has stated that the shortfall could end being even worse than the predicted £49m loss.

Cllr Simmons added: “I am not overstating this when I say Luton is currently staring at a nightmare scenario. I joined politics to make a difference to people’s lives but these huge financial losses will impact countless individuals whose lives are already being disastrously affected by this dreadful situation.

“I want to make another plea to Boris Johnson, Rishi Sunak and colleagues across Whitehall to please take a look at what has happened to Luton above and beyond other areas and please think about the thousands of local people who must not suffer any more than they already are.”

Robin Porter, Chief Executive of the council, added: “I have sent out many messages over the last seven weeks thanking and praising the way people have responded to the crisis by going out of their way to help others.

"I’ve seen so much of this this first-hand and I have never felt so proud to lead an organisation in this wonderful town.

“However it’s also been the hardest seven weeks of my life seeing what this disease has done to people across the town and the further misery it could cause once the dust is settled and the financial impact is felt.

“The government assistance to date has been appreciated, but it is only a drop in the ocean of what is required to get the town through this.

"We’ve already spent much more than our allocation on vital things such as support for the vulnerable, emergency housing, financial and business support and providing a temporary mortuary for those who have sadly succumbed to the virus."

The public can email questions and propose funding ideas to [email protected].