Sadiq Khan takes 10% pay cut and urges Boris Johnson to bail out bankrupt councils

Local authorities are facing huge budget pressures due to coronavirus

Sadiq Khan has taken a voluntary salary cut of more than £15,000 as part of austerity measures aimed at balancing London’s books amid the coronavirus.

The mayor of London on Wednesday called on Boris Johnson to bail out local authorities, which are facing unprecedented budget pressures due to the Covid-19 crisis.

As well as extra costs related to the emergency public health response, local authorities are facing a shortfall in business rates, as well as households being unable to pay their council tax bills.

In the capital the situation is particularly acute, with a collapse in public transport journeys destroying fare revenue and crippling the finances of Transport for London, which receives no operating subsidy.

“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,” Mr Khan said.

“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.”

Mr Khan is taking an immediate cut to his £152,734 salary, a 10 per cent reduction of around £15,300.

He has also frozen pay for his senior appointments at City Hall. The moves are a symbolic drop in the ocean compared to the financial pressures on local authorities, however.

While the government has provided local authorities some extra funding, they say it is not enough to cover their expenses and the shorfall in revenue.

The Mayor of London was due to face an election in May but the contest was postponed due to the coronavirus crisis. Polls have suggested he would be re-elected convincingly.

A Government spokesperson said: "We have given London an unprecedented package of support to ensure they have the resources they need to provide services for their communities during the pandemic.

“The GLA has received an extra £18.5 million of emergency funding and an additional £1.6 billion for Transport for London. This is on top of an increase in core spending power of over £88 million to over £2.27 billion while the Metropolitan Police is receiving £2.9 billion in funding this financial year, the most substantial police funding increase since 2010.

"We have given London councils £518 million in additional emergency funding as part of a total of over £5.3 billion of government support for communities and businesses across the city during the pandemic.

“We are working on a comprehensive plan to ensure councils’ financial sustainability over the year ahead and we will update as soon as we are able.”