Bus queues at Liverpool Street
(Picture: Jeremy Selwyn)The two strikes that virtually shut the Tube earlier this month cost Transport for London an estimated £13 million in lost fares, Sadiq Khan has revealed.
It came as a review of TfL’s staff pension scheme — one of the issues that sparked the first network-wide strikes in five years — found reforming it could save TfL up to £182.4 million a year.
However, changes would take “years not months” to implement and it could be even longer before any savings were realised, the review said.
The two 24-hour strikes by the RMT union shut more than 200 stations and resulted in passenger numbers falling to just four per cent of normal.
This equated to just 160,000 journeys on March 1 and 170,000 on March 3 – while the day following each strike saw just over 50 per cent of normal ridership.
Last week Mr Khan was accused by his Tory critics on the London Assembly of failing to do enough to prevent strikes “crippling” London – while awarding 15,000 Tube staff an 8.4 per cent pay rise from April.
Asked by Caroline Pidgeon, a Lib-Dem assembly member, to outline the scale of TfL’s losses from the strikes, Mr Khan said: “Overall, Transport for London estimates that London Underground fare revenue was around £13 million lower across the week as a result of the strike.”
The pensions review was ordered by the Department for Transport as a condition of TfL’s bailout.
It costs TfL about £375 million a year in pension contributions — though this reached £401 million last year.
The latest review did not recommend a “precise route forward” but set out a series of issues to be considered by TfL, the pension trustees and ministers.
It said the pension scheme was likely to record a “modest surplus” for 2021 and was not under “immediate financial pressure” but “longer-term pressures and uncertainties persist for TfL”.
At present, TfL staff pay in five per cent of their salary – while TfL contributes 26.9 per cent.
When the pension scheme launched, employer contributions were 2.5 times those of employees, but this has grown to around 5.5 times – leading to concerns about the cost to TfL.
The review said modifying the final salary scheme could save between £79.3m to £182.4m, while switching to a “CARE” (Career Average Revalued Earnings) scheme could save up to £154.4m – or could increase TfL’s costs by up to £23.1m.
It said the cost of the final salary scheme could be reduced by increasing the normal retirement age, for example by linking it to the state pension age of 68 by 2046, limiting the amount of any pay increase that is pensionable or increasing member contributions.
But it warned that the pension scheme was “just about the only benefit of employment above and beyond employees’ salaries and travel concessions” and it was highly valued by staff.
The TSSA union said the fact that “no change” remained on the table highlighted the fact that the Government had been “politically motivated” in ordering the review.
Manuel Cortes, TSSA general secretary, said: “The independent review has shown what we knew all along – that TfL’s pension fund is viable and there is no need to slash workers’ pensions.
“We’re absolutely clear – any move to get rid of TfL’s pension scheme, any ask for workers’ to pay more for less, is a red line and we will ballot for strike action.”
