The London Mayor is forking out huge amounts of cash into the scheme which costs three times more than other public sector pensions while the city’s transport network faces an unprecedented financial crisis, according to Tory Conservative mayoral candidate Shaun Bailey. The pensions row erupted as the Government agreed to extend its financial support of Transport for London (TfL) for two weeks while negotiations on a new bailout continue.
A spokesman for Mr Khan said: “The two-week extension will enable TfL to continue running safe, reliable and frequent transport services – which is more critical than ever as the capital enters Tier 2 and with COVID cases on the rise.
“Sadiq will continue to fight for appropriate longer-term funding for TfL, and a fair deal for Londoners.”
But Mr Bailey has accused Mr Khan of failing to manage the TfL finances efficiently during his time in City Hall and has vowed to overhaul what he described as overly generous staff pensions to bring them in line with other public-sector schemes.
More than 26,000 TfL staff are on pensions where staff contributing 5 percent of their salary while the employer contributes 31 percent.
The Local Government Pension Scheme (LGPS) has an average employer contribution of 13 percent for staff pensions including employees in education, police, London Fire Brigade and City Hall.
Mr Bailey claims TfL has paid out £1.4 billion in employer pension contribution payments since Mr Khan took office, a figure which would have come to £588 million under the LGPS average.
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He 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 to towards services — not gold-plated pensions.
“Sadiq Khan could have fixed this at the start of his term and saved almost £1 billion.
The Mayor’s Office has dismissed Mr Bailey’s accusation and blamed Mr Khan’s predecessor Boris Johnson for presiding over a regime of financial mismanagement.
A London Labour Party spokesman 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 percent, but TfL’s operating costs went up every year, its debt increased by £7billion, 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 percent over four years and increased its cash balances by 13 percent – all while freezing fares.
“The pandemic is the sole cause of the financial difficulties facing TfL and other transport providers across the world and anyone claiming otherwise simply does not understand the facts.”