Mayor commits to pay cut as he outlines almost £500m cost of Covid-19

17 June 2020

 

  • Local authorities across the UK and GLA face unprecedented financial black hole because of sharp fall in business rates and council tax income

 

  • Metropolitan Police, London Fire Brigade, Transport for London and Greater London Authority face budget shortfall of up to £493m

 

  • Mayor commits to immediate 10 per cent pay cut - on top of the 11 per cent saving to taxpayers since 2016 because of his decision not to take a pension

 

  • Mayor freezes pay for all Mayoral Appointments in his senior team

 

  • Sadiq calls for urgent Government financial support and for ministers to deliver on their promise of no return to austerity

 

  • He warns failure to act will undermine Government plans to recruit 20,000 additional police officers and implement post-Grenfell Tower fire service reforms

 

The Mayor of London, Sadiq Khan, has today warned that he will be left with no choice other than to make significant cuts across the Metropolitan Police, London Fire Brigade, Transport for London and the Greater London Authority - unless the Government urgently acts to support local and regional authorities across the UK.

 

The Mayor called on ministers to keep their promise that there would be no new era of austerity as a result of the coronavirus - and warned that failure to act now would undermine the Government’s pledge to recruit 20,000 new police officers across the UK and efforts to transform the London Fire Brigade in the aftermath of the Grenfell Tower fire.

 

Overall, the GLA Group faces a forecast £493m budget shortfall over the next two years as a result of an unprecedented loss of business rates and council tax income, caused by Covid-19, that is hitting every local authority in the country. This is in addition to significant emergency costs already incurred by the GLA Group through schemes to support Londoners during the pandemic.

The Mayor has said these cuts would come at the worst possible time – when we need to be investing in policing to suppress a rise in violent crime as lockdown is eased and as the London Fire Brigade is making changes following the Grenfell Tower tragedy. He has also warned that the cuts could hamper the recovery effort to boost the economy, support jobs, invest in skills and help Londoners get back on track.

Sadiq today promised that he will do everything possible to protect frontline services. He has committed to take an immediate 10 per cent pay cut - and to freeze the salaries of his 15 direct appointments. This comes on top of the 11 per cent saving to taxpayers arising from the Mayor’s decision in 2016 not to take a pension, unlike his predecessors.

 

Sadiq's decision to cut his own pay shows the Mayor leading from the front and is also an act of solidarity with frontline workers and all those affected by Covid-19.

 

The Mayor will shortly publish new Budget Guidance, which will outline the request for the GLA, Transport for London (TfL), the Metropolitan Police Service, the London Fire Brigade, the London Legacy Development Corporation, Old Oak and Park Royal Development Corporation to report back by the end of November 2020 on how they could deliver significant savings while continuing to support London’s recovery as much as possible.

 

The Mayor of London, Sadiq Khan, said:

 

“Londoners did the right thing to tackle Covid-19 by following the rules, staying at home and helping to save lives. But now the Government is punishing them with a new era of austerity.


“Covid-19 has had a devastating impact on London’s public finances which were in great shape before the pandemic. TfL’s fares income has dropped by more than 90 per cent and local business rates and council tax income has fallen off a cliff.

 

“This is the worst possible time for a return to austerity – just when we need to invest in London’s recovery.

 

“Unless Ministers act, the current number of police officers will need to be reduced and it will be impossible to tackle youth violence or make the changes to the London Fire Brigade that are desperately needed after the awful Grenfell Tower tragedy.

 

“I didn’t enter politics to administer government austerity, and I will do everything in my power to persuade ministers not to force another era of austerity on local and regional government.

 

“Whatever happens I will protect the frontline services that Londoners depend on as much as possible - and it’s only right that I should volunteer for an immediate pay cut in these extremely difficult circumstances and continue not to take any pension contributions. In addition, I have taken the decision to freeze the salaries of my political appointments at City Hall.”

Notes to editors

The shortfall in council tax and business rates receipts is due to forecast reductions in the number of firms paying business rates and people not able to keep up with their council tax bills.

 

The Mayor will publish his Budget Guidance shortly. This will contain expected savings for each organisation within the GLA Group according to three potential scenarios.

 

Sadiq Khan's current salary is £152,734. The salary of the Mayor is set in accordance with the 2009 recommendations of the Senior Salaries Review Body, which recommended that it be increased each year in line with the national local government settlement. 

 

The senior appointments affected by the pay freeze are the Mayor's chief of staff, his four mayoral directors and his 10 deputy mayors.

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