Mayor Sadiq Khan launches severance pay review after Transport for London (TfL) reveals £51m staff payouts
London mayor Sadiq Khan has launched a review into senior staff severance pay as Transport for London (TfL) newly published annual report reveals over £50m being spent on departing staff over the past year.
The transport body paid 224 people one-off voluntary severance payments that took their total remuneration above £100,000 for the last financial year – nearly double the number of people recorded for the year before.
Overall, TfL paid out £51.4m in exit packages – the second year in a row the cost topped £50m. Among the exit packages given out, two were in the region of £350,000 to £400,000, while one – the managing director, surface transport – received £444,598.
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The mayor has commissioned a review into notice periods and severance arrangements for senior staff across the General London Assembly group to see if changes are needed to ensure they are in the best interest of the capital’s taxpayers.
Overall, the number of TfL staff, excluding Crossrail workers, who received six-figure pay packages was 564, up nine per cent from the 12 months before. Including Crossrail, that came in at 617 people, up from 576 the prior year.
The transport body has been slashing operating costs, and has been tasked with shedding management layers and cutting its reliance on agency workers on the mayor’s orders. Khan has previously pledged to trim “a flabby TfL”, and the transport organisation said it had cut the number of contractors earning six-figure sums by 60 per cent to 107 in March this year.
TfL has also been cutting costs as part of an effort to turn around a near £1bn operational deficit looming next year.
The report for 2017/18 showed that TfL had cut its year-on-year operating costs for the second year on the trot, with total savings of £608m. The capital’s transport body plans to keep cutting management to stay on track to deliver an operating surplus by 2021/2022.
Khan said:
TfL has taken huge strides in cutting its year-on-year operating costs and reducing the number of senior staff is an important part of this. We have to abide by pre-existing contractual commitments, but I want to ensure that future contractual arrangements for senior staff are in the best interests of Londoners.
The number of TfL staff with a base salary of more than £100,000 was cut by 11 per cent to 169 people in 2017/18, compared to 189 the year before.
TfL meanwhile, said 19 of those people have now left the organisation, and many won’t be replaced.
Ben Story, chair of TfL’s remuneration committee, said:
TfL has a huge challenge of delivering the mayor’s ambitious transport strategy while enabling 31m daily journeys to be made in and around London safely, reliably and efficiently.
It has great significance to the national economy and overseas and key to its success is having the right management team with the capability of leading the organisation to deliver that enormous agenda.
Among the big earners are TfL commissioner Mike Brown whose total remuneration for the year was £374,959, and Crossrail boss Andrew Wolstenholme, who collected £736,157.
TfL has though, said that independent research by pay consultants has found the total pay package for Brown and his his chief officers is below the market level.
A TfL spokesperson said: “We will continue with our massive programme of investment in the transport network; modernising and boosting capacity, delivering healthier safer streets and providing affordable and accessible transport that will support London’s economic growth.
“This is being achieved as we cut our year-on-year operating costs for the second year running, with total savings of £608m. This was a result of our continued drive to reduce costs across the organisation and capitalise on commercial opportunities. We will continue on this trajectory to achieve an operating surplus by 2021/22.”
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