TfL 'must slash £200m bill for telecommunications contracts'

The mayor’s spending watchdog has branded Transport for London’s telecommunications contracts as “not fit for purpose” and said its £200m a year bill must be slashed.

TfL has myriad deals with major firms such as CityLink Telecommunications, Fujitsu and BT and has repeatedly missed opportunities to make “substantial savings”, according to the annual inspection report from IIPAG pinpointing problems in rail and Underground.

The report was seized upon by the RMT union which is fighting TfL’s plans to cut costs by closing most Tube ticket offices with the loss of 1,000 staff.

TfL has had to find 12.5 per cent savings on its operational budget in the wake of chancellor George Osborne’s austerity cuts last year.

The report said: “The fragmented model for telecommunications at TfL is not fit for purpose..a fundamental lack of clarity about the demarcation between the different disciplines of Information Management and Telecommunications has not yet been addressed and IIPAG is concerned that the fragmented approach remains and that opportunities for improving value are still being missed.”

It pinpointed:

An unknown, but certainly significant, extent of duplication of infrastructure and services;

Duplication of design effort across programmes and lack of standardisation;

Too many suppliers of similar things and a likelihood of suppliers with multiple contracts; and

Advantages of scale and commercial synergy being poorly exploited.

Mick Cash, RMT Acting General Secretary said “RMT has said for a long time that there are major problems with the management of Transport for London right at the top and that while they are planning to axe safety critical staff and ticket offices key aspects of their operation have descended into chaos.

“Two key areas of this report shine a light on the problems at the top – fragmentation and a proliferation of contractors and suppliers. Very similar issues undermine our rail services and TFL need to refocus on their duty as a public service to the people of London.”

London Assembly transport committee chair Caroline Pidgeon said: “TfL needs to show real urgency in tackling what appears to be significant waste in telecommunications. It seems that these savings are low lying fruit which TfL should have picked a long time ago. The public would be far more understanding about changes that directly affect them, such as ending cash fares on buses, if significant internal waste had truly been eradicated first.”

A Transport for London (TfL) spokesperson said:“We support IIPAG’s assessment that there are opportunities to make savings and deliver value for money through the management of telecommunications. We are actively investigating how this can best be delivered while continuing to ensure our day to day operational needs are met.”