Compton3Bravo -
You are correct in one respect - the M1 widening was a Government decision; nothing to do with LBC. It's one of the few things Governments should do - build roads. Unfortunately they even get simple decisions like them wrong - viz scrapping the M1 widening scheme from J10 to Milton Keynes.
In the 80s, the Government failed to force the full privatisation of all the airports from Government/Municipal ownership. They did much that was good but failed to go far enough.
The concession granted by LBC was flawed because it made an attempt to retain the airport in LBC's ownership. This was bound to mean that investment would only be made at the start of the concession period, to allow a private operator to maximise their return before handing the asset back to its owners. We now have the situation where LBC owns an asset but has prevented it from being fully developed because it doesn't suit their narrow political aims (return for Luton ratepayers during foreseeable electoral cycles). A more far-sighted commercial owner would have seen the opportunities available from expanding into Hertfordshire, and made the investment. LBC were so fixed on their short-term political objectives, and hamstrung by classic local government parochialism that they have effectively stifled the next phase of development.
If LBC had had the true long-term interests of Luton ratepayers at heart, they would have sold the freehold as soon as it became clear that they were not the airport's optimum owner. Luton could have been rate-free for years!!!