The missing dividend is only part of the story, the other bit they are keeping quiet about.
The council own 100% of the airport via its airport company London Luton Airport Ltd. LLAL fund many of its projects by taking out loans from the council. As the council has no money they then borrow the money themselves. The airport dividend to the council would be substantially more if it wasn’t for the interest payments on around £330m of debt. Not only can LLAL not pay a dividend they don’t seem to be able to pay the interest payments either meaning the council will now have to pick up the bill.
The Dart is a classic example of how the council spends money. As the airport reached capacity without the Dart it is only needed for an expanded airport. Expansion is not guaranteed so the Dart has to be seen as a project just for the existing terminal. The airport operator LLAOL has refused to put money into the project while the airport passengers are not paying for it either in the form of a levy. This leaves the council taxpayer to fund it except they will not benefit from the Dart.
There is also the Terminal 2 access road. This is costed at £124 million and the council want to build it before they know the outcome of any government decision on airport expansion. This time the council will fund it themselves rather than lend the money to LLAL as it is more tax efficient.
The pie chart for council income shows the airport dividend to be 10% of the councils budget but they are now claiming lost revenue from the airport is actually costing the council 38% of its budget.
While the airport has indeed been a good income stream for the council the council could now end up in special measures because of the airport as it hadn’t diversified its commercial activities.
Last edited by LTNman; 19th May 2020 at 05:00.