Councillors in Luton have agreed an investment totalling £119m, plus a contingency of £20m, to help stabilise the council’s airport company following the Covid-19 pandemic, also providing additional capital investment.
At a meeting, councillors heard how the future prosperity of the town for generations to come was at stake unless action was taken.
The sums are repayable, will come at no net cost to the taxpayer and will have no negative impact on Council Tax, services or the authority’s reserves.
The money is being borrowed by the council on behalf of London Luton Airport Limited (LLAL), a company owned by the council, and is not money that could otherwise be used to fund regular services.
Luton Council said there is confidence that demand for aviation will return, as people are able once again to visit their families and friends living abroad and to take well-deserved holidays.
They also said that the loans can be settled from future airport revenues.
Commenting, Luton Council’s Portfolio Holder for Finance, Councillor Andy Malcolm said:
“We had no choice but to hear the item about financial support to LLAL in private during the Executive meeting because of commercial sensitivities, there are many jobs at stake here.
“But I am keen that the people of Luton understand what has been agreed and why, because these are large sums of money.
“Coronavirus has very sadly had devastating impacts on communities across the world and Luton is no different.
“It is our duty as councillors to ensure our town recovers in the best way possible.
“Our airport has been our biggest success story over the last two decades, providing financial support for frontline services, countless partners in the community and the charity sector.
“Agreeing these funds will ensure that’s the case for the next 20 years and beyond.
“Throughout this process, I have been very conscious of how history will view the decisions we are making today, how future generations will feel we reacted to this challenge.
“Without agreeing these loans, the council would be left with little choice but to sell its most valuable asset at a time when it couldn’t achieve a fair, let alone optimum price.
“We are absolutely not alone in facing this challenge. A number of airlines and airports across the UK, including Heathrow, Gatwick and Manchester have had to increase borrowing significantly in order to navigate the impacts of the pandemic.”
Luton Council also said that agreeing this package means the airport can continue to support services and people in need in the borough for years to come.
