Why the Mayor of London must stop the outsourcing of London Underground’s cleaners
If the Mayor does not take control of what his TfL executives are doing, more than 2,000 cleaners who work on London’s iconic Underground will be outsourced once again.
Sadiq’s pledges:
In July 2020, during the Covid pandemic, the Mayor told the Transport Select Committee ‘our cleaners have saved lives’. He also pledged to review the contract to see whether it should be insourced:
‘Whenever a contract comes to an end, we always look at whether there is a business case and it offers a better-quality service to bring it in or to continue to tender it. It happens with all our contracts and we will do so with that contract as we do with the others.…You are right to ask the question, and we will look at the contract when it ends to see whether it makes sense to bring it in or not.’ Sadiq Khan, Transport Select Committee, 22 July 2020.
His 2021 Manifesto included a pledge that said:
“I’ll look, when opportunities arise, to bring services back in house. I’ve already started by bringing the failing Woolwich Ferry back in house. I will instruct TfL to review its cleaning contract with ABM, including an assessment of extending the free travel cleaners receive whilst at work to their journeys to and from work.”
In September 2022, the Mayor extended free travel facilities to ABM cleaners among others and asked TfL to ‘look into whether sick pay standards for low-earning workers could be improved, and to ‘conduct work early next year to assess TfL’s ability to bring cleaning services in house.’1
TfL’s prejudiced reviews
TfL have been directed to review the contract three times since that date. Each time, RMT has had to raise concerns that the reviews were prejudiced to generate a single outcome. Firstly, TfL executives have delayed conducting reviews until there was pressure to re-tender the contract. Secondly, they have conducted one-sided reviews where the outcome was predetermined and RMT evidence was either ignored or dismissed. RMT believes that TfL senior executives are resolutely opposed to insourcing and have worked to ensure that the reviews have one outcome
1 https://www.theguardian.com/uk-news/2022/sep/25/tfl-cleaners-caterers-and-security-staff-to-getfree-transport-in-london
and that time runs out before contracts have to be re-tendered. This raises serious questions about democracy and is one of the reasons why the union has called on the Mayor to take greater control of TfL.
What will happen to the cleaners if the Mayor allows TfL’s executives their way?
2,000 cleaners, many of whom worked through the Covid pandemic to ensure that the Underground kept running and were described as heroes by the Mayor, will continue to be scandalously exploited in the capital. We can see what will happen to them by looking at what the previous outsourcing company did.
1) StaffcutsandrisingworkloadstomaximisedividendstotheUSA:
Under the previous contract, TfL built in a financial reward to the company if it could cut costs. The company achieved this in part – and maximised its profits in the process – by cutting the number of staff on the contract and driving up the cleaners workloads. Between 2017 and 2023, the number of cleaners was cut from 2,314 FTE to around 2,150 by 2022. 79% of ABM workers responding to an RMT survey in 2023 reported that their workloads had increased, while 86% report coming under management pressure to take on more work.
ABM staff FTE on London Underground and company profits 2017-22
£20,000,000
£12,000,000 £14,000,000 £16,000,000 £18,000,000
£10,000,000
£8,000,000
£6,000,000
£4,000,000
£2,000,000
£0
2) Nosickpay
One of the ways outsourcing companies hold labour costs down is to deny hem occupational sick pay. This leaves cleaners with the choice of taking time off unpaid and losing desperately needed money, or coming into work while sick. 80% of outsourced rail cleaners in a recent RMT survey said they had come into work while sick because they could not afford to take time off without pay.
3) Stagnatingpay
Pay for ABM cleaners is linked to the London Living Wage (LLW). This sounds like a good thing, but the reality is more complex. Firstly, the LLW has not kept pace with the rising cost of living. The LLW has lagged behind the rising cost of living consistently and ABM cleaners spent a particularly difficult time during years of acutely rising prices as substantial uplifts were delayed until 2023. In fact, the situation is worse than the graph below shows, because the Living Wage Foundation and TfL give contractors until May the following year to implement their changes and most contractors make use of this facility, meaning that uplifts announced are not implemented till
6 months later. Outsourcing companies like ABM then refuse to negotiate anything on top of the London Living Wage uplift, making it in effect a new wage ceiling. RMT is now in dispute with ABM on precisely these grounds.
London Living Wage Growth vs RPI inflation 2021-25
4) Povertyinretirement:
ABM pay the legal minimum in pension contributions to their cleaners, which is 3% of salaries. A cleaner who working full time for ABM who wanted to retire in 10 years’ time at the age of 60 could expect to retire with an ABM pension giving them £660 per year, a little over £50 per week. If that worker was insourced and enrolled in the TfL pension scheme, they would have a pension of £3,435 per year or £286 per week. As an outsourced cleaner, they are 6 times worse off in retirement than someone directly employed by TfL.
It is also worth noting that this workforce is subject to the structural racism that accompanies many outsourcing contracts. The ABM workforce is disproportionately composed of Black and Minority Ethnic workers, mainly from Africa and Eastern Europe. Such workers are far more likely to be outsourced and to suffer structural detriment as a consequence of their employment.
Summary:
This is what awaits the 2,000+ cleaners if the Mayor allows the re-tendering of this contract once again. He will be condemning people he publicly described as heroes to 5 more years of this kind of treatment. Many of the cleaners working on the Underground now will never get decent sick pay and never get a decent pension, relying on pension credits to keep them going.
Who are the companies bidding for the contract?
RMT understands that the two companies bidding for TfL’s contract are the current contractor ABM and Mitie Plc. We’ve already seen what ABM have done with their tenure on the Underground, but here are some more facts about both companies.
1) ABMInc.
• ABM facilities UK is a subsidiary of a US facilities management company, ABM Inc.
• The profits that ABM UK make from TfL’s contract, funded by Londoners’ tickets and taxpayers’ money, will flow overseas to the United States. In 2024, ABM paid a £30 million dividend to their US parent company in 2024. TfL’s contract represents 41% of ABM’s turnover in the UK, so this dividend extraction has been substantially funded by TfL. The dividend payment also took place after the contract was renewed for the second time. This is money that need never have been lost to London but could have been spent on frontline services for passengers. Instead, it’s gone to the US.
• ABM’s US parent has a turnover of more than $8 billion and paid a dividend of $56 million to its owners last year.2
• ABM’s owners authorised the company to spend $150 million buying back its own shares this year. This is a way of ramping up the company’s share price and creating even greater wealth for some of the richest people in the world.3
• ABM’s CEO, Scott Salmirs took home a total compensation package for the year ending in 2024 of $8.7 million. That’s £6.5 million. That is 230 times the salary of one of his Underground cleaners.4
• While ABM is very good at creating wealth for the richest in society, it’s not so good for the people who work for it. ABM’s US parent and UK subsidiary between them appear 124 times in GoodJobsFirst’s‘Violations Tracker’ website between 2010 and 2025, mainly for employment or safety related offences, paying out £8.7 million in penalties.5
£25,000,000
£20,000,000
£15,000,000
£10,000,000
£5,000,000
£0
2) Mitieplc
• Mitie is a UK facilities management giant. It has a turnover of £5 billion and an estimated 13% share of the entire UK outsourcing market.
• Mitie is 76% owned by ‘institutional investors’, but in practice this tends to be large investment banks and their investment funds. 53% of Mitie’s stock is owned by 10 investment funds like Blackrock, Vanguard, and JP Morgan. 24% of its stock is owned by US investors.6
2 https://investor.abm.com/static-files/7fee5c9e-83da-4511-a1bd-476c73d0fd11
3 https://investor.abm.com/static-files/57a759a0-8688-4493-87ee-18316f150666
4 https://aflcio.org/paywatch/ABM
5 https://violationtrackerglobal.goodjobsfirst.org/parent/abm-industries
6 https://uk.marketscreener.com/quote/stock/MITIE-GROUP-PLC-9590156/company-shareholders/
• Mitie has paid out £342 million in dividends since 2014 and in recent years has been pushing up distributions to its investment banks owners. Last year it paid out £54.5 million in dividends, its biggest payment in over 12 years.
• Like ABM, Mitie also splashes the cash in buying back its own shares. Last year it spent a whopping £104 million buying back its own shares to ramp up the value of the remaining ones to their owners. In the last three years, it’s spent over £200 million on share buybacks.
• So well has Mitie done for its shareholders that as a special reward it paid its CEO a package of £16 million in 2024.7 This would pay the salaries of 570 cleaners on the Underground.
• Mitie has appeared 41 times in GoodJobsFirst’s‘Violations Tracker’ website between 2010 and 2025, mainly for employment or safety related offences. It has paid out £2,000,000 in penalties.
7 https://www.mitie.com/wp-content/uploads/2024/06/Mitie-Annual-Report-2024.pdf
Mitie dividends and share buybacks 2014-2025
Dividends paid Share buyback