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House of Commons Hansard
Impact of COVID-19 on Luton Borough Council
20 July 2020
Volume 678

The Petition of residents of Luton,

Declares that the COVID-19 crisis has radically impacted upon the operation of London Luton Airport, resulting in a significant drop in commercial income, which in turn has impacted upon Luton Borough Council’s provision of vital services; notes that in 2018-19 London Luton Airport Ltd paid £20.2 million in dividends to Luton Borough Council to support its funding of vital services; further notes that Luton is facing a £49 million impact on its 2020-21 budget due to the reduction in revenue from its airport, a drop in council tax and business rates, and other costs due to the crisis; further notes that Luton Borough Council has been forced to produce an emergency budget to find savings of £22 million this financial year; and further notes that a related petition calling for additional funding to Luton for essential services has over ten thousand signatures.

The petitioners therefore request that the House of Commons urge the Government to review the level of support provided to Luton Borough Council to ensure there is no reduction in vital services.

And the petitioners remain, etc.—[Presented by Rachel Hopkins, Official Report, 7 July 2020, Vol. 678, c. 943.]


Observation from The Minister of State, Ministry of Housing, Communities and Local Government (Mr Simon Clarke):

The Government recognise the additional costs and pressures finances councils are facing as a result of the current covid-19 crisis. We have made available a £4.3 billion package of support for expenditure pressures, including £3.7 billion of un-ringfenced grants and the £600 million infection control fund. Of this £3.7 billion, Luton Borough Council has received £13.4 million, on top of a £9 million increase in core spending power this financial year even before emergency funding.

As part of the Secretary of State’s recent announcement, we also confirmed that we will extend the period over which councils must manage shortfalls in local tax income relating to 2020-21, from one to three years, and we will announce further details of how we will support local authorities to manage tax losses at the comprehensive spending review later in the year.

The Government also announced that a further component of its comprehensive approach to support councils in addressing their income losses will be a co-payment scheme to cover irrecoverable sales, fees and charges income in 2020/21. The scheme compensates for irrecoverable income losses experienced by local authorities above the level they could have been expected to plan for. The scheme applies to income which is defined as a sale, fee or a charge and is attached to local service delivery, for example, car parking income or receipts from owned cultural assets. The scheme will not compensate for lost commercial investment income. This is because commercial income losses are more complicated in nature, and Government recognise that there are a complex set of variables relating to commercial income sources including recoverability.

We recognise that some councils with strategic investments, such as airports, are put in an exceptional position by this crisis. We will continue to work closely with Luton Borough Council to help them navigate through what is undoubtedly a difficult situation, as they support their communities through this national emergency.