Appendix 3

London Assembly (Plenary) – 13 June 2007

Consultancy Agreement between Transport for London and Bob Kiley – Question and Answer Session with the Chair of the Transport for London Board

Sally Hamwee (Chair): We now move to questions to the Mayor in his capacity as Chair of Transport for London. The lead off question from me is to ask you if you can tell us the purpose of the consultancy agreement between TfL and Bob Kiley, and how it offers value for money?

Ken Livingstone (Mayor of London/Chair of the Transport for London Board): When Bob Kiley decided that he intended to retire, I was determined that we should retain his advice. He has, I think, certainly in the English speaking world, a reputation as being the most successful transport operator over a period of some decades, and the record he had in terms of turning round a pretty dysfunctional transport system in London speaks for itself.

We were also coming up to the negotiations for the second tranche of the PPP (Public Private Partnership) contracts, and I certainly wished to have him advising us on that. We particularly wanted his continuing advice on the issue of Crossrail, but also just on day-to-day other issues. I think I have told the Assembly before that when I was getting wholly conflicting advice about the level of cost overruns that should be budgeted for in the Olympics, I could have commissioned Parsons Brinckerhoff or KPMG, no doubt, for tens if not hundreds of thousands of pounds to give advice. However, I was able to talk to somebody in the form of Bob Kiley who had the record of the transformation of both Boston and New York systems and his work here in London, and that was what determined the position I took in the negotiations round all that. Therefore I was determined we retain that advice.

I was also aware that if we did not retain his advice somebody else might very well do so. If we just said, ‘Bye, bye, Bob, that’s it’ and he had then been retained by Metronet to advise them in the negotiations you would all have been saying I had been a complete fool because he would take all that information and knowledge with him. One of the key parts of this contract is to be in a position where he cannot serve those who have an adversarial relationship with us, which is certainly the situation with the PPP companies.

Sally Hamwee (Chair): There might well be questions from colleagues about the lack of a restrictive covenant in the original employment agreement. I will not comment further on that at this point. Can you provide evidence as to the value for money, now looking back over the period since the start of his consultancy?

Ken Livingstone (Mayor/Chair of the Transport for London Board): The advice I have had from him I have found worthwhile. As I say, if I had had to go to outside consultants to get that advice about cost overruns it would have cost us a considerable amount of money. I very much hope that if he recovers fully and gets back into work, that he will be able to advise us in the future on the PPP negotiations which do, of course, involve the sum of about £1 billion per annum.

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Sally Hamwee (Chair): You have previously told this Assembly about advice on the contingency budget which I think you almost characterised as, ‘He came into my office and said, ‘Just stick to a lower figure for the contingency’’ so it was very short advice but worth many thousands of pounds.

Ken Livingstone (Mayor/Chair of the Transport for London Board): I followed the debate you had with the two officers of TfL. This is a retainer. It is not a piece rate contract. He is not paid by the number of letters he writes or the number of pizzas he delivers. You are accessing a lifetime of accumulated expertise from someone who has a record of delivery and success. There would be very few people at that level - well there is nobody in the British transport industry at that level - you could employ with that record.

Sally Hamwee (Chair): Thank you. We all understand retainers.

John Biggs (AM): Would it be a reasonable and charitable interpretation of what you said that a large part of this £750,000 over two years is in order to buy his continuing silence and loyalty?

Ken Livingstone (Mayor/Chair of the Transport for London Board): No. I do not doubt for one minute that, even if he had been approached, Bob would not have accepted to work for firms he was quite dismissive and contemptuous of. However, we needed his advice. He had been there through all those early negotiations, he has all that accumulated knowledge and expertise, and we would be fools to cut ourselves off from it.

You have asked me before, ‘Was there a gagging clause?’ The first thing I said was, ‘I hope you write a book about your experiences in public life, and particularly in turning round TfL, because it would be a useful guide for many thousands of other people coming into public service’. I have no desire to buy loyalty. Bob has been incredibly loyal to this city and loyal to TfL, and continues to be so.

John Biggs (AM): You made a very strong assertion about the value for money during his time as Commissioner. Perhaps you could add a little bit more about how you can reassure Londoners how they are getting value for money during this latter two year period?

Ken Livingstone (Mayor/Chair of the Transport for London Board): Well he does not just advise me, his advice is there for Peter Hendy [Commissioner, Transport for London] and anybody else at a senior level in TfL, and is also available to the Assembly and its Committees if you need it. I have here a 26 page transcript of the session when you questioned Bob about the consultancy and I think it was made quite clear then that that is the situation.

On Crossrail we have moved to a point where, following his advice on Crossrail about finding alternative funding mechanisms that were outside the normal envelope of what we have had in British public life, we are virtually there on that funding deal for Crossrail. Largely that is the impact of the advice Bob has been putting in before the consultancy into the Crossrail project. Were he now fit, he would be advising me, at this stage, on what is emerging from the final negotiations from the Treasury, and it is very sad he is not in a position to do so.

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John Biggs (AM): I could by the way ask you whether you are prepared to waive, with suitable blotting out of confidential personal details, that barring of us seeing the compromise agreement. I will ask you that in passing.

Ken Livingstone (Mayor/Chair of the Transport for London Board): Although anyone reading the Evening Standard would assume that my powers are dictatorial and I can do things at whim, I am bound by the legal advice that I get. If I am told by TfL that I cannot release the document to you - and there have been many occasions when I thought they were documents you should have - for commercial or personal confidential reasons we cannot do it. I might very well one day decide to overrule legal advice on something of massive political importance, and take the legal risk that goes with that, but I think where you are dealing with individuals’ contracts and that is not something where I would do that.

John Biggs (AM): OK, in which case we have to resort to pulling together what fragments of information we can get from other places, and it appears that the compromise agreement includes keeping the house for another couple of years, a termination payment and a termination bonus, and that seems to be the sum of it. There might be other bits but we do not know about those. Is it the case that the consultancy agreement is effectively part of the compromise agreement? It is part of the deal that you did in your office upstairs or somewhere in order to secure this?

Ken Livingstone (Mayor/Chair of the Transport for London Board): No, no, it is not. I would have retained Bob as a consultant under any circumstances. Bear in mind this is somebody I worked with for five years. Occasionally we disagree; as you know he was not as fond of the West London Tram as I was and he was not as fond of the extension of the Congestion Charge, so we had our disagreements. However, I have never worked with any official in public life whose advice was so consistently good and crisp and concise. I have had a lifetime dealing with waffly bureaucrats. Here was someone who simply approached a problem on the basis of, ‘How do I deliver?’ I never heard Bob come to me complaining that he could not do this or he could not do that. He got on and did things. That is why TfL has been transformed out of all recognition to the shambles we inherited.

John Biggs (AM): My final question then - my colleagues may have others - is, given that he is apparently not able to perform his duties at present, is it reasonable that he should continue to be paid for them? Do you have a position on that?

Ken Livingstone (Mayor/Chair of the Transport for London Board): I have made it quite clear; I think he is entitled to be paid whilst he is capable of working. He is not capable of working at the moment and therefore, knowing Bob as I do, I do not expect him to submit an invoice, and if he did we would not pay it.

If you look at the documents you have been given, here is a man who has had a consultancy for the last 18 months or so who could have racked up vast expenses. He has submitted a total expenses bill of just over £700, £712. This is not somebody who has gone looking to chisel little bits of money here and there and rack up the expense accounts. Here is somebody who is mainly driven by the desire to get on and do the job.

I have to say it is a lot lower than some of yours, those who are sniggering at the moment. 3

Roger Evans (AM): There are no expenses because he is not doing anything!

Ken Livingstone (Mayor/Chair of the Transport for London Board): Neither do all of you do the work you are paid for, given you are paid £50,00 a year to come in and do a full day’s work. Most of you are not doing that and you are taking the money. Frankly that is almost fraudulent on the Council Tax-payer. So before any of you start casting aspersions against anybody else, start doing a full day’s work in this building rather than carrying on in the House of Lords or your borough council or your private business!

Angie Bray (AM): He’s trying to divert attention.

Sally Hamwee (Chair): It will not divert attention, I can assure Assembly Members, because those listening to it will draw their own conclusions as to why that was said.

Ken Livingstone (Mayor/Chair of the Transport for London Board): You can keep on drawing your money, Sally.

John Biggs (AM): Just to finish this off absolutely then. From your point of view, as the Chair of TfL, you will not endorse TfL making a payment against this contract for such period as Bob appears to be incapable of performing the contract?

Ken Livingstone (Mayor/Chair of the Transport for London Board): Absolutely not. I do not expect him to submit an invoice for times when he cannot work.

Sally Hamwee (Chair): Can I just pursue one thing which John [Biggs] raised which is disclosure of the compromise agreement which is subject to a confidentiality provision. We have been here before with Capita and you persuaded them, I believe, that it was the right thing to do to put it in the public domain. Would you, therefore, when Mr Kiley is well enough, be prepared to raise with him that this would be a very good thing.

Ken Livingstone (Mayor/Chair of the Transport for London Board): I will be delighted, the next time I talk to Bob to say you would like to see it and as long as you redact the personal details, my advice to him to let you have it. In giving you the consultancy agreement there is nothing in that that has been shocking, and there is certainly nothing in the compromise agreement.

Sally Hamwee (Chair): Thank you.

Jennette Arnold (AM): I have a couple of questions for clarification. You said that you had a conversation with Mr Kiley where he said he was going to retire and then you made him an offer that he did not refuse; neither would many sensible people. It seems you then entered into the negotiation and did the deal, signed the papers and then did not take much advice. Can you take us through the sequence? When did you take legal advice? When did you speak to Members of the Board of TfL? We were told earlier that under your Standing Orders at TfL clearly you had the Chair’s action, but surely you took advice, surely you spoke to your Board Members, and did you get unanimous support in terms of the actions that you then signed up?

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Ken Livingstone (Mayor/Chair of the Transport for London Board): I cannot point to exactly the point when I decided that I would want to retain Bob on a consultancy when he stood down as Commissioner. It certainly was no more than a year after his initial appointment. I rapidly realised, working with Bob that this was a person who when he retired from the day-to- day administration of TfL was someone we would inevitably wish to retain on a consultancy, so for several years that was at the back of my mind. We, having come to the end of his four year contract, granted another one but with the change that it would be basically on an annual basis so that we would look at the end of each year about at what point he would stand down. Once he had taken that decision my recollection is that we had about ten days to two weeks of negotiation, in which I spoke to the then Head of Law at TfL and I spoke to Howard Carter - who was still here at the GLA - to get another perspective on that. I talked to Members of the Board, some of them on several occasions, and then, as the details of the package emerged, I personally phoned all Members of the Board that you could physically get hold of. It was a clear two thirds. There were some that we physically just could not raise. I did that - the actual contacting of the Board Members at the end of the day, explaining the deal to them- over a period of about two days.

Jennette Arnold (AM): So you had the full support of those Board Members that you spoke to, and when this went to the Board for ratification of your actions, was there then unanimous support for the action?

Ken Livingstone (Mayor/Chair of the Transport for London Board): My recollection of this is that some of the people coming from a private sector background thought this was not a terribly generous exit package. Dave Wetzel [Vice Chair, Transport for London] thought no one should be on anything other than a worker’s wage. Taking Dave’s [Wetzel] position, which is a bit unique, I think there was one other Member of the Board that thought it was too generous.

Jennette Arnold (AM): Did you have to provide them with the information about the comparators? Were you saying if Mr Kiley was going to be bought in from a company like KPMG you would have to pay more? Did you have to evidence that to the Board Members?

Ken Livingstone (Mayor/Chair of the Transport for London Board): Many of the Board Members I was talking to who come from a private sector background were aware of the going rates. I think it was Howard [Carter] who said to you earlier that £500 an hour when you are dealing with the elite in the field is now not unusual. Now, like you, I have a touch of Dave Wetzel about me. I think what has happened to salaries is bizarre. When we appointed Bob Kiley he was the highest paid public official in Britain, and he was earning the equivalent of people at the top of the private sector in the transport industry. Now we would have to double that salary to get him to the equivalent level for people in the private sector; John Armitt, who has just stepped down from Network Rail, was earning twice what Bob Kiley was, and some of the people running the rail companies even more than that. I do not think that is right. I do not like it. However, it is the world we live in; if you want world class leadership, you have to pay.

Jennette Arnold (AM): Do you have any more retainers like this within TfL?

Ken Livingstone (Mayor/Chair of the Transport for London Board): There may very well be some people who have been retained at some more junior level, I do not know. I think you 5 are dealing with someone so unique in Bob Kiley. We are never again going to be able to appoint somebody who has successfully modernised two of the three oldest transport systems in the world and then done what he has done here in London. If you looked for an equivalent area; if, say, we were looking to retain somebody to give advice to myself and Sir Ian Blair [Commissioner, Metropolitan Police Service] you would be looking at someone like Commissioner Bratton from Los Angeles, or Commissioner Timoney [Chief of Police of the Miami Police Department] from Miami, and you would most probably be talking about figures of this sort of level. In the same way, Mayor Giuliani [Rudy Giuliani, ex-Mayor of New York] became a consultant after he gave up being Mayor, consulted on crime reduction, and was making several million pounds a year. I share what I suspect would be your view, that this is all completely wildly over the top, but this is sadly the world in which we now live.

Jenny Jones (AM): When you were talking earlier about some Members of the Assembly not doing a full day’s work for a full day’s pay -

Ken Livingstone (Mayor/Chair of the Transport for London Board): I know; some of you are very good. Others are not.

Jenny Jones (AM): First of all, you were not including the Greens.

Ken Livingstone (Mayor/Chair of the Transport for London Board): No, I was not thinking of the Greens. I was thinking of the Tory floor where it is like the Marie Celeste most days! You would be surprised how many times I pop down to see what is going on on your floor.

Jenny Jones (AM): This is something you obviously care about and deep in your socialist heart you must feel some guilt about the fact that Bob Kiley gets so much money for so little, and yet cleaners on the tube have to strike for a living wage. That is not fair is it? How can you square it with your conscience?

Ken Livingstone (Mayor/Chair of the Transport for London Board): I cannot square it with my conscience because I am not in control of what the low paid are paid. What we have done is move to bring in the London Living Wage, and I will do any lobbying I have to on this Assembly in the next couple of weeks to make certain that LFEPA (London Fire & Emergency Planning Authority) pays its cleaners the living wage. It is an absolute disgrace that there are Members of this Assembly whose Conservative candidate, Steve Norris, paid lip service to this and then you are stabbing it in the back.

Jenny Jones (AM): Going back to Bob Kiley, you did say earlier that now he is too ill to work and that you do not expect him to put in an invoice. Will you speak to him and urge him not to do that, or do you think that that is something he will do without?

Ken Livingstone (Mayor/Chair of the Transport for London Board): As soon as he is out of hospital I will talk to Bob . At the moment he is in hospital, which is why he is not here. Bob always enjoyed his time being questioned by the Assembly. I hope when he writes his book he will tell you what he really thought of you all as well!

Jenny Jones (AM): Thank you. 6

Mike Tuffrey (AM): Just to be absolutely clear, you are now saying that he is too ill to work currently? However, you have paid him; you paid him £146,250 on 1 January 2007 for the six months’ work to 30 June. Therefore, he is being paid and he is not capable of working.

Ken Livingstone (Mayor/Chair of the Transport for London Board): The contract is payment in advance on a six monthly basis. When that invoice was submitted he was fine. I met him shortly before the Evening Standard story, which came as much as a surprise to me as it did to everybody else. I met him shortly before that to discuss sending him to Mumbai. He has agreed to go to Mumbai on my behalf to do an analysis of the transport situation for the city authorities which I would then have discussed with them on my visit to Mumbai in November. So, as late as early this year, he was still planning to undertake a major expedition overseas to analyse the transport situation in Mumbai.

Mike Tuffrey (AM): I understand that. My point is that you have paid him and he cannot work. Therefore it is not a question of not paying him in the future; you are currently paying him.

Ken Livingstone (Mayor/Chair of the Transport for London Board): No, we are not currently paying him.

Mike Tuffrey (AM): You have paid him for this current period, and he cannot work.

Ken Livingstone (Mayor/Chair of the Transport for London Board): Let us get the point clear. We do not pay him on a weekly basis. He submits an invoice six months in advance. He was perfectly healthy and doing work for us, and specifically work for me, and planning work for me, when he submitted that invoice. We are coming up to early July which is when we would have expected the next invoice. I know Bob well enough to know I am not expecting to have an invoice while he is in his present condition.

Mike Tuffrey (AM): Are the facts here not this: Here you have a contractor that you are paying £750,000 to; giving a house worth millions; he is not required to work; when asked what work he is doing you do not know; nobody in TfL knows how much. It turns out Mr Kiley is too ill even to say how much work he is doing or has done. He is too ill now to work. Is this not a scandalous waste of public money?

Ken Livingstone (Mayor/Chair of the Transport for London Board): No, what is scandalous the lies you have just said. We have not given him a house; you know we have not given him a house.

Mike Tuffrey (AM): You have given him the use of a house.

Ken Livingstone (Mayor/Chair of the Transport for London Board): No, no, you said that. You casually use words to smear someone who is a giant compared with a midget like yourself, frankly. Say the truth. Admit it. He has not been given the house. It will be sold next summer. You will find actually that we make more money from the increase in the value of the house than we have paid for the consultancy.

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Mike Tuffrey (AM): I will absolutely accept a slip of the tongue; I should have used the words, ‘use of a house’ and that is absolutely the case.

Ken Livingstone (Mayor/Chair of the Transport for London Board): Perhaps if you asked one question at a time there would not be so many slips.

Mike Tuffrey (AM): I hope you will accept that this is a scandalous waste of money.

Ken Livingstone (Mayor/Chair of the Transport for London Board): No. We have retained someone who was advising me to the early part of this year, was advising Peter Hendy to the early part of this year, and was preparing for what will be very intense and difficult negotiations over the renegotiation of the PPP contracts. I have never worked with anybody in public life who was worth the money to the degree that Bob Kiley is.

Roger Evans (AM): We had a long and friendly exchange on this matter, Mr Mayor, back in October where I was asking you how many days Mr Kiley had worked and you repeatedly failed to answer that question, despite the fact I posed it to you in about three or four different forms. Why did you not at that point just tell us that he was on a contract which required him to be available for a period of time which he would be paid for in advance? Were you embarrassed about that? Did you think it was something the Assembly should not know about?

Ken Livingstone (Mayor/Chair of the Transport for London Board): If you cannot phrase the question so that you get the answer you want, that is not my fault. He is not retained on a piece rate basis, anymore than you are. You would not want to be retained on a piece rate either. The reality is we are retaining him for his advice. He gives it to me, he gives it to Peter Hendy, and I am sure he has given it to other officials inside TfL. He has to read and keep on top of all the documents and Board papers of TfL so he can give that advice which is why we provided him with PA support. There is nothing out of line here with any organisation in the private sector where their Chief Executive stands down, they find some way of retaining access to their advice and guidance in the years that follow.

Roger Evans (AM): On 24 May you told LBC that Mr Kiley only submits an invoice for the days he has worked. That is a quote from you. That is not the case though is it?

Ken Livingstone (Mayor/Chair of the Transport for London Board): If Bob was not working the 90 days, I do not believe Bob would submit an invoice for not having done any work. We retain him for up to 90 days. I worked with this guy for six years. He is not someone who is chiselling around, like some other Americans I know, not paying their dues or paying their taxes; he gives you a fair day’s work for his pay.

Roger Evans (AM): You said the Evening Standard interview came as a surprise, and he said to the Evening Standard, we all know this quote off by heart by now, ”If you ask me what I actually do to earn my consultancy I would have to tell you, in all honesty, ‘not much’”. That suggests he feels he got the better of you does it not?

Ken Livingstone (Mayor/Chair of the Transport for London Board): No. If you go on and read the rest of the interview he says at the end it is just him being flippant. What is disgraceful about the Evening Standard is that whilst they carried that comment when they first 8 had the interview, virtually every other story they have written since they have the flippant comments without the disclaimer afterwards. That is as dishonest as you can get from someone like Wadley [Veronica Wadley, Editor, Evening Standard].

Roger Evans (AM): What he is effectively saying is that Londoners have had a bad deal because you have not got very much.

Ken Livingstone (Mayor/Chair of the Transport for London Board): No. You have a man here who was clearly drunk when he was interviewed by the Evening Standard. I think it is disgraceful that when someone has a health problem like that you intervene at that stage. They were not really going after Kiley. What this is all about is trying to get me. They are quite prepared to damage a person who is struggling with a particular problem in order to do that.

Roger Evans (AM): You told us in December 2005 that Bob Kiley had agreed to represent you on the Crossrail Board, and you said, ‘I think is absolutely crucial because we want to keep the Government’s focus on that’. Yet Kiley resigned from the Crossrail Board on 31 January, a month after you said that. Does that not prove that really you were not getting what you paid for? Maybe you have not thought about it.

Ken Livingstone (Mayor/Chair of the Transport for London Board): No, no. We are moving towards - and I am not going to pre-judge the next Prime Minister’s announcement on this - a different structure for carrying forward the Crossrail project than has been talked about in the past. I really cannot say more than that at the present time.

Roger Evans (AM): Yes, but that slightly avoids the question which I asked you does it not?

Ken Livingstone (Mayor/Chair of the Transport for London Board): If Bob Kiley is fit by then, he will be advising me on Crossrail.

Roger Evans (AM): You did not know back in 2005 the Government would be in this position now. Therefore you effectively said Bob would do this for you, then a month later he stopped doing it for you, and you take the view two years later, in retrospect, that maybe that was OK. You are paying him in advance and justifying him in hindsight.

Ken Livingstone (Mayor/Chair of the Transport for London Board): At my meetings with him during his consultancy period we still discussed the Crossrail project and the best way of taking it forward. That information is feeding into my thinking about the exact structure we now negotiate with the Treasury and Department of Transport for the structure that will carry the Crossrail project to completion in 2016.

Roger Evans (AM): What about his advice on PPP? Peter Hendy was quoted early on as saying it was of, ‘inestimable value’. Bearing in mind that his last advice got you into a legal confrontation which you lost over PPP, is that not a questionable statement?

Ken Livingstone (Mayor/Chair of the Transport for London Board): No. There were three legal challenges and we lost two. The third one we withdrew following an undertaking from the Government to meet the full cost of the PPP. Now, given that is £1 billion a year, that would otherwise have gone on fares or the Council Tax, I thought that was a very good strategy. 9

Very often a court case is initiated not on the assumption it will ever be heard, but that it will force the person you are negotiating with to come up with some substantial sum of money. That is what we did. The result of Bob’s legal strategy was to get the Government to undertake to pay the full cost of the PPP; not a penny has gone on the fares, not a penny has gone on the council tax, it has all come from central government grant. That was a wonderful strategy. That saved us £1 billion a year, each year, for 30 years. I think that is very good value from one person.

Roger Evans (AM): Is your estimation of his value not more to do with the fact that he agreed with your points of view than the actual forensic value of the advice that he is giving you?

Ken Livingstone (Mayor/Chair of the Transport for London Board): I am not aware of anybody who supported the PPP outside a small group of mandarins in the Treasury. Every transport person or official, I think every Member of this Assembly, none of them supported the PPP. You would have to go some to find somebody who did, and certainly we would not have paid him any money.

Roger Evans (AM): We might not all have led you into a legal challenge you would lose, though, and you certainly would not have paid any of us that sort of money to take you there.

Ken Livingstone (Mayor/Chair of the Transport for London Board): Hang on. There were three legal challenges, and each of those put the Government on the spot. The final one was withdrawn on the undertaking the Government put up £1 billion a year. I think that is a very good deal. I wish I could fund everything else like that. The costs of one small court case, perhaps £100,000, you get £1 billion rate of return, I wish I could get that rate of investment on my own money.

Angie Bray (AM): I do think there is a question that has been hanging over us since we heard about his fantastic work for you as Commissioner. Can you remind us why did you let him go then?

Ken Livingstone (Mayor/Chair of the Transport for London Board): He recognised his ability to manage, coming up to the age of 71, an organisation of that size and that detail was going to start to decline. He did not want to hang on to the point where I had to come to him and say, ‘I do not think you are up to the job any more, Bob ’. He said to me, ‘I think it is time for me to go’.

Angie Bray (AM): So it was entirely him that took the decision to end that particular contract?

Ken Livingstone (Mayor/Chair of the Transport for London Board): Yes. It is one of the points where my recollection is slightly different from Bob’s testimony to you at his last meeting where he said, ‘The Mayor was not lying across the door trying to stop me’.

Angie Bray (AM): He said he gave you a little more time to consider it, ie he did not necessarily want to go at that stage?

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Ken Livingstone (Mayor/Chair of the Transport for London Board): If you let me finish you will hear the answer. I was in favour of him staying on for another year or two.

Angie Bray (AM): Why did you not throw yourself in front of the door then?

Ken Livingstone (Mayor/Chair of the Transport for London Board): If someone like Bob takes a decision, he has made his mind up, he is going to go.

Angie Bray (AM): If it was his decision to take himself off at that stage, why would the compensation kick in for the ending of the contract? It seems to me that all this money that was given to him because the contract was terminated early, if that was done from his own decision, why does that justify him getting all that money?

Ken Livingstone (Mayor/Chair of the Transport for London Board): Built into the contract right back at the start was a recognition you are bringing someone in from the private sector at that level. There will be a compensation package when they go. That compensation for loss of office, the performance bonus, the termination bonuses; they were ones that we clearly were not in a position not to pay.

Angie Bray (AM): Thank you.

Damian Hockney (AM): There are two things really I want to ask; one relates to what I think is the lack of transparency that we have had over the last year and a half and that has, to some degree, caused the slightly ill tempered nature of this. We have had to drag the information out. I hear what you say about the Evening Standard but it is only because, once again, a piece in the Evening Standard has thrown this into sharp relief that has allowed us, effectively, to have this consultancy contract, which previously we had been denied. I asked Peter Hendy last year, and he seemed very willing to be more transparent and to give the Assembly more information. That is one aspect I am asking you to back up and to say can we have that in future?

The second thing is this; this is a kind of retainer contract where Mr Kiley can be paid almost £750,000 and there is no real obligation on him to do any work. Now I put on record to you, here, that our Group is fully prepared to support paying international market rates for a Commissioner, no problem with that under any circumstances, but your comment just now that Bob Kiley does a fair day’s work for a fair day’s pay I think, in this circumstance with the consultancy, could come back and haunt you.

Finally, in June 2008 this consultancy ends just after the Mayoral election. What is it that he is going to write in any book that is so concerning? This consultancy has ‘pay-off’ written between every line. I am sorry; that is how it appears.

Ken Livingstone (Mayor/Chair of the Transport for London Board): It does not have ‘pay-off’ written on it. I made absolutely clear to you earlier that I had no doubt that in that first year of working with Bob Kiley this is someone who when he was no longer managing the organisation we would want to retain for his advice. It is just so good. It has been so helpful to me and various strategies that we have unfurled and so on. I regret the legalistic nature of all this stuff. I broadly agree that you should have access to all these things. I do deplore that 11 somebody who is clearly struggling with a problem with alcohol is used by the media in the way that he was. Basically if somebody is in that position we should respect it, not use it as a way of getting at me. The Evening Standard was not getting at Bob Kiley; it was trying to damage me but it was prepared to damage Bob Kiley to do it.

Damian Hockney (AM): But he was being paid out of public money.

Ken Livingstone (Mayor/Chair of the Transport for London Board): And doing work for it. I made it absolutely clear. Had he not hit this health problem he would most probably be just coming back from Mumbai with the outlines of a transport plan because they are on the verge of having to decide whether to go down the road of extensive road building with people using cars, and I said we would send Bob to make the alternative public transport case. Now that would have been a huge and difficult and complex bit of work, and he would have to take staff with him to do it. That is what we were talking about shortly before he had this problem; it is a health problem.

Damian Hockney (AM): However, just like Tony Blair was blaming the press on other fronts, it is very easy to blame the press because they always write things that we do not like, on all of us. What I am saying is had that not appeared then would we be seeing a credit for £150,000 for his work? I just do not think so.

Ken Livingstone (Mayor/Chair of the Transport for London Board): If the Evening Standard had not run their piece, I have no doubt Bob would not have submitted an invoice in July given he had been out of action for much of the last few weeks and might be for several weeks more. You have had a debate but it has not materially changed the fact. I do not have the slightest doubt Bob would not have submitted an invoice when he is not able to work.

Damian Hockney (AM): Peter [Hulme Cross], my colleague on the One London Group, asked a year ago about value for money and asked about dates, and so did Roger Evans. I asked Peter Hendy last March, ‘How many days has Bob [Kiley] worked for you, what has he done?’ and Peter [Hendy] said, ‘I have been here 56 days and I have not heard from him, I have not discussed anything with him, he has done no consultancy’. My real problem is it looks just like, over this last couple of years, that nothing has happened, so that is why it looks like a pay-off.

Ken Livingstone (Mayor/Chair of the Transport for London Board): The situation is that Peter [Hendy] had just taken over and was up to his neck in the changes he was making. I know that once that initial period had passed, Peter was relying on Bob for advice, as I was relying on Bob for advice all the way through that period. Bob cannot just sit there, having been out of the loop for 18 months, and give us real advice. He has to have the Board papers, all of them. He has to be able to be on top of those. He has to see how the organisation is developing, how the transport situation in London is developing. That is what makes the advice still relevant. We are not just paying him for what he learned before, it is what he is continuing to keep on top of, and that is why he is notionally paid for up to 90 days a week because there is a real and vast amount of effort of the information he has to absorb.

Damian Hockney (AM): He still invoiced right at the outset of that period for £150,000, though?

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Ken Livingstone (Mayor/Chair of the Transport for London Board): But he was fine at the outset of that period. I do not know how many days before the Evening Standard he had had the problem with alcohol and it flared up. His wife was away; that was most likely an aggravating factor; there was not anybody for him to turn to. Since then he has not been able to give us advice or work for us. I suspect he will not be submitting an invoice in July.

Damian Hockney (AM): Thank you.

Angie Bray (AM): Can I just clarify something. We have been told that these invoices are submitted for work to be done in a future period. Therefore, the invoice was submitted in January for these last few months when clearly he has been too ill to be working. If you are suggesting he will not be submitting an invoice in July, that will not be because he failed to deliver work previously, it will indicate that he is not expecting to do any work in the following six months. Can I just be clear that I am right in thinking that?

Ken Livingstone (Mayor/Chair of the Transport for London Board): The retainer is six months in advance. Quite clearly in January when Bob submitted it he was not thinking, ‘Well, I am going to have a real old alcoholic problem about March’. He was assuming he was going to be healthy; he was planning with me the visit to Mumbai; he was talking about a major programme of work.

Angie Bray (AM): I appreciate that. What I am saying is, if he is not going to submit in July, that is saying he does not anticipate that he is going to be capable of doing any work for the next six months, because it is payment ahead, not payment after the fact. Are we to assume that there will not be an invoice submitted next month and that means that Mr Kiley will not be making himself available for health reasons for the subsequent six months?

Ken Livingstone (Mayor/Chair of the Transport for London Board): I have not been able to talk to him since the problem arose. Therefore I am making assumptions based on my knowledge of the man’s character. I suspect he would take the view, just based on my knowledge of his character, that as he had not been able to do the work he had been contracted for before, he would not submit an invoice now, but I would expect him, as soon as he is fit, to start giving us advice again.

Angie Bray (AM): If he does not submit an invoice in July, we can therefore reasonably assume that he is not well enough to work for the next six months or however long that may be, and that means, does it not, that given that he has not been working very effectively for the last three or four months, is it not time to completely review the contract because he has taken himself out of operation for a considerable period of time?

Ken Livingstone (Mayor/Chair of the Transport for London Board): There is July and then January. There are only two more invoices to be submitted. If he does not submit the one in July and if he is still unwell I imagine he would not submit the one in January. Effectively the contract remains basically void; not being activated, not being paid on.

Angie Bray (AM): Thank you.

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Sally Hamwee (Chair): I would like to conclude this part of the meeting firstly by thanking you, Mr Mayor, and , secondly - and I have not consulted anybody on this - but I would like to say something I have felt for some time, what has happened to Mr Kiley I regard probably as little short of a tragedy and I would like it to be on record that the Assembly wishes him very well very soon.

Ken Livingstone (Mayor/Chair of the Transport for London Board): When I speak to him I shall convey those wishes.

Sally Hamwee (Chair): Thank you very much.

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