Mayor takes action on payouts for senior staff

12 February 2019

The Mayor of London, Sadiq Khan, today announces changes to how pay agreements are reached with senior staff across the GLA Group in moves to improve transparency and ensure value for money for London taxpayers.

 

Changes include reducing notice periods and increasing the scrutiny around severance agreements, with a warning from Sadiq that ‘unjustified’ payouts risk undermining public trust.

 

The new moves come alongside the release of Dawn Jarvis’s independent review into the terms of future contracts for senior staff across the GLA, including the Metropolitan Police, the Mayor’s Office for Policing and Crime (MOPAC), Transport for London, the London Legacy Development Corporation (LLDC) and the London Fire Brigade.

 

The review by Dawn Jarvis, the public sector human resources expert, was commissioned by the Mayor in 2018 following concerns about the high cost of severance payments to departing senior TfL staff. In commissioning the review, Sadiq said he wanted to ensure the GLA remained ‘sharply focused’ on ensuring Londoners’ taxpayer money is well spent.

 

The findings of the review conclude that, in general, GLA organisations have ‘satisfactory and appropriate’ policies around exit payments for senior officers, but recommends a number of areas where procedures could be strengthened to ensure best practice is followed in every case.

 

These included asking all GLA organisations to agree the appropriate definition of ‘senior’ staff, and reviewing whether notice periods of over three months remain appropriate.

 

Following discussions, the Mayor has already taken action to ensure Dawn Jarvis’s recommendations are implemented across the GLA.

 

Changes already agreed include TfL reducing the notice periods they must give their senior staff from 12 months to six months for future managing directors, and reducing the period for directors from six months to three months.

Moreover, TfL’s Remuneration Committee will now approve all settlement agreements of senior staff reporting directly to the TfL Commissioner, with the committee being consulted on any proposed settlement payments over £100k.

 

Within the GLA, while the Head of Paid Service is the decision-maker in law, the GLA will also set up its own advisory remuneration committee with responsibilities for senior staff exit pay.  At LLDC, the notice period for senior roles will be reviewed when the posts become vacant.

 

The action now being taken by groups across the GLA is to ensure that pay and severance arrangements for senior staff are fully transparent and that the necessary processes are in place to ensure best practice is followed and appropriate agreements reached in every case.

 

The Mayor of London, Sadiq 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.” 

 

Dawn Jarvis said:

 

“It was a privilege to be asked to carry out the review as it is important to check that the public sector is using the money they are custodians of to get the best possible value.  It was pleasing to see that this was generally the case across the GLA group and I’m glad that my recommendation to tighten some processes has been taken up. This will provide even more transparency and help ensure that best-practice approaches are being taken.”

 

Notes to editors

 

The review’s findings will not impact on any existing employment contracts, which the Mayor does not have the legal powers to amend unilaterally.

 

Dawn Jarvis’ review looked at the terms for future contracts of employment for senior staff across the GLA Group, including MOPAC, the Met Police, LLDC, London Fire Brigade, OPDC and TfL – looking at arrangements for new employees on salaries above around £100K.

 

Dawn Jarvis has worked in the public sector for 27 years, working across six central government departments including the Department for Education where she was Director of People and Change. Dawn has also been Executive Director of a large Foundation Trust in the NHS, and worked as Turnaround Director at Doncaster and Bassetlaw Teaching Hospitals (DBTH) NHS Foundation Trust.

 

The salaries of top TfL executives have been frozen until 2020, and the number of TfL staff on a salary of more than £100,000 was 11 per cent lower in 2017/18 than the previous year. Overall, senior management at TfL has been cut by 13 per cent since 2016 as part of our work to make TfL more efficient, which has included merging functions and role reductions of 2,700 over the last two years.

 

This has been part of the biggest overhaul in the organisation’s history. TfL delivered operating cost savings of more than £500m over the last few years and will further reduce like-for-like costs in 2018/19. Under the previous Mayor TfL’s operating costs rose every year.