Skip to main content
Luton Borough Council

11/12/2020 - Luton Council in strong position to deal with financial challenges

Further savings of £4million are needed in Luton Council’s budget during the 2021/22 financial year to help deal with the impact of the coronavirus pandemic.

​The council acted swiftly and decisively to pass an emergency budget in July with initial savings of £22million needed to balance the budget following a devastating loss of commercial income which the council was reliant upon to fund services. 

This has put the authority in a strong position to deal with the fall-out but regrettably has already involved making difficult decisions over the future of some of the council’s services and the support we provide to the town. The council is continuing to lobby central government for support to help ease the acute financial difficulties. 

While many other local authorities are also facing severe financial difficulties as a result of the pandemic, Luton’s early and decisive action has ensured we are on track to be on a sustainable footing, something with which other areas are struggling. 

A key factor affecting the council’s budget has been the massive impact of the pandemic on the aviation industry with the council-owned London Luton Airport suffering a catastrophic loss of income.

The council’s financial position had already changed significantly since 2010 - during the years of austerity - with reductions in central government support for the council, it has had to grow its commercial income, including increased revenue from the airport in order to fund vital services to the public.

Further difficult decisions will still need to be made over the next few months as the council seeks to find another £4m in savings to balance the budget for 2021/22. It is yet unclear what the effect the economic downturn will have on business rates and council tax – two other crucial streams of revenue that the council needs to pay for public services.

The council will be drawing up a revised budget next month and is focussed on planning for the aftermath of the pandemic. Last month it launched its Luton 2020-2040 Vision – a place to thrive, a unifying mission to make the town a healthy, fair and sustainable town where everyone can thrive and no-one has to live in poverty. The strategy has become even more relevant due to the impact of the pandemic and a recent downsizing of the council’s senior management team has resulted in a new structure focused on delivering on this vision.

Councillor Andy Malcolm, portfolio holder for finance, said: “There is no escaping the fact that we will be continue to deal with the financial impact of the pandemic these challenge for some time to come and we will continue to face very difficult decisions. We will continue to work extremely hard to meet this challenge and to ensure that we minimise the impact on our services and our residents.

“We are yet to witness and experience the full economic impact but very regrettably we know that businesses and jobs will be lost. With the devastating effect of the pandemic on the airport’s finances, there will be some really difficult decisions to be made and times ahead continue to look incredibly tough. 

“However know that the people of Luton are both determined and resilient, as they have shown throughout this public health emergency. We are equally focussed on ensuring that we recover as a town and will continue to invest our efforts wholeheartedly in serving the public and maintaining a stable financial foundation upon which we can build as we emerge from this pandemic.”

Council chief executive Robin Porter said: “We are confident that the council has dealt with the crisis as well as we could, and we are in a better position than a lot of councils across the country. 

“We were the first local authority to push through an emergency budget, and while that involved taking some tough decisions earlier in the year it is the reason why we are not in the perilous financial situation now being experienced by other councils.

“More difficult choices will need to be made but I feel sure that with the support and dedication of everyone in Luton Council we will emerge on the other side of this in a position to continue to serve the people of our town.”
© 2021 Luton Council, Town Hall, Luton LU1 2BQ