Moving Tube maintenance in-house to save £80m, as Mayor targets waste

24 August 2016

In a move that will save TfL tens of millions of pounds, the TfL board has announced that it will now manage maintenance work on the Jubilee, Northern and Piccadilly lines through its own in-house management team.

 

The announcement is part of Sadiq Khan’s drive to cut waste and improve efficiency within TfL, and pay for a freeze in all TfL fares over the next four years. 

 

The Mayor, Sadiq Khan, said he was ‘proud’ that TfL would be bringing underground maintenance work back into the public sector.

 

For the past 13 years the private company Amey has been contracted to manage maintenance work across the three lines – a legacy of the Public-Private Partnership (PPP) contract that previously existed between Tube Lines and London Underground.  However, the arrangement will now be brought to an end at the end of next year – the earliest possible point the contract allows.

 

The move is expected to save at least £80 million over the next decade in expensive management fees.

 

In June, shortly after taking office, the Mayor Sadiq Khan ordered a root and branch review of TfL which will look across the board at ways of working more efficiently, getting value for money for Londoners. This includes eliminating unnecessary duplication in its operations, obtaining greater value from its vast procurement activity, and significantly cutting reliance on expensive agency staff.

 

London Underground already has experience of managing operations in-house following the demise of Metronet in 2007. Since then costs have reduced and performance has improved compared to the PPP era. Reliability on the Tube has improved by 38 per cent since 2011 alone.

 

In total, managing the work in-house is expected to save at least £80 million over the next decade. TfL and LU do not make a profit, with all savings and revenue put back into modernising the transport network and freezing TfL fares for Londoners.

 

The Mayor of London, Sadiq Khan, said: “I’m really proud to announce that TfL will bring underground maintenance work back in-house.

 

“I’ve asked TfL to carry out a root-and-branch review of all its business operations, and the decision to bring underground maintenance work in-house will save tens of millions of pounds to invest in our transport network and pay for my freeze in TfL fares.

 

‘London Underground already has experience running successful maintenance operations in-house, and we’re making the changes as soon as the contract allows. I want TfL to be the best in the world while staying in public control.

 

“Londoners still pay some of the highest fares in the world. I will continue to work with TfL to cut waste and inefficiency, and deliver the affordable and world-class transport system Londoners deserve.”

 

Mark Wild, London Underground’s Managing Director, said: “We are carrying out a root-and-branch review of our business to cost less and make transport in London more affordable for our customers.  As part of this, we are using our in-house maintenance expertise to save tens of millions of pounds. There will be no impact on our extremely high standards of maintenance and we will be working closely with Amey over the next 18 months to ensure a smooth transition.”

 

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