Luton Council sunk by airport investment: fight for funding, not speculation!
Mark Pickersgill, Stevenage Socialist Party
Labour-controlled Luton agreed drastic cuts to services at a full council meeting on 14 July. These are a direct result of a dramatic decline in dividend payments from the Bedfordshire borough's commercial interests.
This includes a £37 million shortfall from a drop in Luton Airport revenue during the Covid-19 lockdown. The council receives more from trading and investments, including the airport, than it does from council tax. Passenger numbers at Luton Airport are not expected to return to normal until 2023.
Luton Council has the country's second-highest proportion of income from commercial investments - after the City of London, home to the capital's finance district.
But more and more councils have attempted to offset the fall in central government funding by gambling on commercial investments. The National Audit Office reported in February - before the lockdown - that many local authorities were badly exposed in the event of a recession or property crash.
Luton's cuts include scrapping the council-run school meals service, outsourcing it to private companies and individual schools, putting up to 365 jobs at risk. There will be cuts in travel concessions, children's centres, youth services, and reduced funding for social care and mental health services.
There will be reductions in the council tax support scheme, affecting many low-paid workers. And with a council tax increase not ruled out on top, these measures will have a profound impact on the wellbeing of many working-class and vulnerable people.
Labour councillor Andy Malcolm, who holds the borough's finance portfolio, commented that "the coronavirus has broken our defences against austerity." But Labour councils offered no defence against austerity even before this. Councils including Luton have passed on the Tories' cuts without a fightback, resulting in job losses, while selling off valuable assets and indulging in property investments.
Malcolm adds that "the government hasn't provided sufficient support, despite our repeated requests since March and the 10,000 strong petition signed by the people of Luton." But rather than just pleading with the Tories or sending off petitions, Labour councils should be defending these jobs and services.
Competing for a limited pool of business investors, and throwing money at market ventures instead of jobs and services, were never going to solve the problem. This is doubly true during an economic downturn.
The Socialist Party demands that Labour councils pass no-cuts budgets by using financial reserves and borrowing powers. But this is just the start - above all what is needed is a mass campaign involving the unions and local community to fight for the needed funding from the Tory government.
In The Socialist 22 July 2020:
No going back
Trade Unionist and Socialist Coalition