Transport for London (TfL), the authority in charge of the
UK capital’s Underground and bus networks, has announced it will place 7,000
staff on furlough after London mayor Sadiq Khan said the firm might run out of
money to pay employees by the end of the month.
TfL, like major rail operators, has been hit hard by the
government’s advice for people to stay home and avoid using public transport
where possible. It has maintained a reduced service on a daily basis to help
essential workers such as nurses, doctors and grocery store staff to get to
their place of employment, but Tube journeys have fallen by 95 per cent and bus
traffic by 85 per cent since the start of lockdown measures on 23 March. London’s
transport commissioner Mike Brown said this has seen revenue from fares drop 90
per cent.
Fares on London’s transport network earned TfL £4.9 billion
in 2019-20, representing 47 per cent of its income, but the firm says it
invests everything earned from fares back into the network through improvement
works, salaries and other initiatives.
Now the authority says furloughing 7,000 staff – 25 per cent
of its workforce – under the government’s coronavirus job retention scheme will
save it around £15.8 million every four weeks. Under the scheme, the government
will pay 80 per cent of an employee’s wages up to £2,500 a month, and TfL said
it will pay the remainder of these employees’ salaries and continue to pay
pension contributions while they are on furlough.
“This will partly reduce the huge financial impact of
coronavirus whilst constructive discussions with government on the wider
revenue support that TfL will need to continue the effective operation of
London’s transport network,” it said in a statement.
Brown said: “The transport network is crucial in the fight
to tackle coronavirus and it will play a similarly vital role in supporting the
country’s economy as it recovers from the pandemic.”