Khan squandered £828m on TfL pension scheme, claims Tory rival
SADIQ KHAN has been accused of squandering money on a “gold-plated” pension scheme costing three times more than others while London’s transport body runs headlong into financial crisis.
Conservative mayoral candidate Shaun Bailey has claimed Mr Khan has failed to manage Transport for London’s finances efficiently during his time in office. Mr Bailey pledged yesterday to overhaul what he described as TfL’s overly generous staff pensions and bring them into line with other publicsector pension schemes.
TfL is now trying to negotiate a bailout from the Government to cope with the black hole in its finances caused by the pandemic and the loss of commuter fares. Ministers are demanding the extension of the congestion charge zone and more fare rises as part of the £1billion plan to rescue TfL for the second time this year. More than 26,000
TfL staff are on unreformed pensions, with staff contributing 5 per cent while the employer contributes 31 per cent.
In the Local Government Pension Scheme, the average employer contribution is 13 per cent for staff pensions, including local government, education, police staff and even City Hall and London Fire Brigade employees.
Mr Bailey claims that since Mr Khan has been in office, TfL has paid £1.4billion in employer pension contribution payments. Had the 13 per cent public sector average been used, the employer contributions would have totalled £588million, he said.
Mr Bailey claimed that means the Mayor overpaid by £828million in pension contributions – the equivalent of funding almost 14,000 police officers.
He promised to cut TfL’s employer contribution from 31 per cent to 13 per cent for all new employees and explore if existing workers can be moved on to the lower rate of contribution, in defiance of their trade unions. Mr Bailey said: “TfL has one of the most extravagant pension systems in the public sector, along with some of the highest-paid employees. This makes no sense. With TfL in financial difficulty, taxpayers’ money should go towards services – not gold-plated pensions.”
A London Labour spokesperson said: “Sadiq Khan has spent four years cleaning up the financial mess that Boris Johnson created at TfL. While Boris Johnson was mayor, fares increased by 42 per cent, but TfL’s operating costs went up every year, its debt increased by £7 billion, millions were wasted on vanity projects like the Garden Bridge and TfL’s government grant was given away with no plan to replace it.
“In stark contrast, Sadiq brought TfL’s net deficit down by 71 per cent over four years and increased its cash balances by 13 per cent – all while freezing fares. The pandemic is the sole cause of the financial difficulties facing TfL and other transport providers across the world.”