A report going to the Labour Executive on Monday confirms that Luton Council underspent by £5.5 million last year – just as large rises in Council Tax bills are set to kick in.

The news has been seized on by Liberal Democrat Councillors as outright proof of their view that Labour’s huge 4.8% increase in Council Tax bills was far too high.

Labour increased Luton Council Tax bills by 4.8% this year despite one of the most generous Grant rises awarded by the Government anywhere in the country – nearly 6 per cent, which was three times the rise received by many Councils.

The rise also meant that in their very first Budget, the Labour administration immediately discarded their Manifesto promise to keep rises at or below the national average.

Liberal Democrat councillors, whose Budget proposals would have seen the Council rise set at just 2.25 percent, told Labour finance chief Robin Harris during the Budget debate that he was due for a massive underspend, that he was keeping far more money than needed in reserves, and that the burden on residents did not need to be so high.

Cllr Harris was unrepentant, said he was proud of his Budget, and replied in answer to Liberal Democrat questioning that the rise would compare “very well” with other areas.

Councillor Martin Pantling, Liberal Democrat Finance spokesperson, says “This huge underspend is proof if any were needed that the Labour Council Tax rise that people will start paying this month is a case of Daylight Robbery.”

“Five and a half million pounds is equivalent to a 10 per cent rise in Council Tax. Yet what do residents see? Nothing – not even plans for the promised swimming pool, which despite the massive hike Labour failed to put any money aside for.”