Sadiq Khan announces shakeup of severance pay for departing TfL staff

Sadiq Khan has announced a shakeup of Transport for London (TfL) pay agreements after £51m was paid out to departing staff last year.

City Hall has said it will reduce notice periods, in which those made redundant can claim pay, from 12 months to six months for future managing directors and from six months to three months for directors. 

TfL’s remuneration committee will now approve all settlement agreements of senior staff reporting directly to the TfL Commissioner,  Mike Brown, and the committee will be consulted whenever there is a proposal to pay settlement payments over £100,000. 

The mayor announced the pay review, carried out by independent consultant Dawn Jarvis, early last year, after it was revealed in TfL's annual accounts that over £50m was spent on departing staff over the course of the year.

However, the review’s findings will not affect any existing employment contracts.

Khan said: “It is vital that organisations across the GLA continue to attract the very best skills and talent. However, at the same time, pay agreements for senior staff must be transparent and offer value for money for the London taxpayer.

“In reviewing the long notice periods agreed for future senior appointments and ensuring more formal scrutiny is in place, I want the GLA to follow best practice and guard against unjustified pay-outs that could risk undermining trust in our organisations.”

However, Caroline Pidgeon, chair of the London Assembly's transport committee, said: "The mayor needs to explain why he has held onto this report for so long. It should have been published back in September when it was concluded.

“Far from meeting his pledge to lead the most open and transparent administration ever Sadiq Khan has been exposed once again as repeatedly holding back information that should be immediately in the public domain."

A spokesperson for the mayor said the review took longer because the "mayor took action straight away, by asking organisations across the GLA group to come back to him with proposals for how they would implement the findings of the review".

The salaries of top TfL bosses have already been frozen until 2020 and the number of senior managers has been cut by 13 per cent as part of the mayor's pledge to trim a "flabby" TfL.

TfL has also made operational cost savings of more than £500m, and at the end of last year it announced that it has reduced its £968m deficit by £200m.

However, the delay to the £17.6bn Elizabeth Line will cost the transport body £200m this year.