Sadiq Khan cuts his pay by 10% as he warns of £500million black hole in London’s finances

Sadiq Khan today declared he is slashing his pay by 10 per cent as he warned coronavirus has caused a £500million hole in London‘s finances.

The mayor is reducing his salary by more than £15,000 as he threatened cuts to police, fire services and the Tube unless the government bails the capital out.

The call came amid mounting concerns about the impact of lockdown on the economy, with fears GDP will plunge by a third this quarter as the UK endures the worst recession in 300 years.

Mr Khan has been heavily criticised for slow progress in getting transport services in the capital to full levels, with images of workers packed in to carriages.

The government has already offered a £1.6billion injection to shore up Transport for London, while slamming the ‘pre-existing poor condition’ of its finances.  

But Mr Khan said the GLA, in common with other authorities across the country, faces a £493million budget shortfall over the next two years, due to loss of business rates and council tax income from coronavirus.

There have also been costs to ‘support Londoners during the pandemic’, he insisted.

He suggested the shortfall will undermine the government’s efforts to recruit 20,000 new police officers across the UK and overhaul the London Fire Brigade after Grenfell.

Mr Khan is currently paid £152,000 a year, and his decision to take a cut could heap pressure on ministers to follow suit. Politicians in New Zealand have taken a temporary cut. 

The mayor’s  15 direct political appointments will also have pay freezes.

Mr Khan claimed London’s finances were in ‘great shape’ before the pandemic – something hotly disputed by his critics – but have been ‘devastated’.

He 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.

‘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.’

Chancellor Rishi Sunak dodged questions last month over whether ministers should take a temporary pay reduction in solidarity with millions of workers on furlough, many of whose jobs might never return. 

A Government spokeswoman 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 £18.5million of emergency funding and an additional £1.6billion for Transport for London. This is on top of an increase in core spending power of over £88million to over £2.27billion while the Metropolitan Police is receiving £2.9billion 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.’