Luton's emergency budget plans described as 'a detailed and really sad story' by councillor

"But it does looks like we could have hope for the future," according to Conservative Bramingham councillor John Young.

The council's scrutiny finance review group met on Thursday night to discuss the emergency budget, following the devastating impact of coronavirus on the local authority's finances.

Funding proposals include more than 365 job losses in the pipeline.

These redundancies will be managed as far as possible through transfers, vacancy deletions, reduced hours, flexible retirement and VSS (the council's voluntary separation scheme).

Councillor Young, chairman of the review group, said: "With the Covid-19 disasters, Luton really has suffered the worst or second worst in the UK.

"The airport is virtually closed down and no income coming from it.

"When you consider how much income in various tranches the airport provides, we really need to scrutinise the budget and see whether it's a safe one."

The council has pleaded with the government to provide a £50m emergency funding package, but without success so far.

"The total gross Covid-19 impact is in the region of £70m," finance and audit service director Dev Gopal told the review group.

Senior management have conducted a line by line examination of departmental expenditure to see where savings might be achievable.

A thorough review of the council's finances uncovered a £22.2m budget gap.

Government support so far totals £11.2m with a further £6.3m anticipated to cover lost income during the pandemic.

A London Luton Airport Limited (LLAL) stabilisation plan accounts for in the region of £31m.

That leaves the budget gap to be met by additional savings within the local authority.

Luton will be affected by a loss of dividend through its airport company LLAL from the prolonged fall in passenger numbers at Luton Airport.

Other areas of lost income include parking, licensing, trading activities and commercial income, as well as fees and charges.

Increases in bad debt on council tax and business rates are anticipated, along with reductions in the collection rate and a rise in demand on the council tax support scheme.

The impact of the pandemic has a significant effect on the 2020/21 budget, but began near the end of the last financial year.

This showed an overall net overspend of £0.195m for 2019/20 after deploying the full £5.9m of general contingency, the review group heard.

Financial pressures remain from children's and families' social care, including special educational needs transport, at £4.7m and homelessness at £3.5m.

The borough council expects to "at least fully recover" the cost of borrowing by LLAL, tabled as £60m for 2020/21 and £23m for 2021/22.

LLAL will use its own reserves as part of the stabilisation plan, the review group was told.

The council is diverting £1.9m a month of its reserves because of Covid-19 related costs and loss of income.

A revised capital spending programme has been drawn up with several projects postponed until 2021/22.

These include the Century Park access road into London Luton Airport, a planned multi-story car park in Crawley Road, the Vauxhall Way dualling scheme and town hall improvements.

The council has outlined key issues going forward, including whether government support continues after lockdown, the impact of unemployment on council finances, and the influence government debt could have on the next spending review.