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. 1 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. 2 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.