House of Commons Public Accounts Committee
Maintaining the Occupied Royal Palaces
Twenty-fourth Report of Session 2008–09
Report, together with formal minutes, oral and written evidence
Ordered by the House of Commons to be printed 27 April 2009
HC 201 Published on 2 June 2009 by authority of the House of Commons London: The Stationery Office Limited £0.00
The Public Accounts Committee
The Committee of Public Accounts is appointed by the House of Commons to examine “the accounts showing the appropriation of the sums granted by Parliament to meet the public expenditure, and of such other accounts laid before Parliament as the committee may think fit” (Standing Order No 148).
Current membership Mr Edward Leigh MP (Conservative, Gainsborough) (Chairman) Mr Richard Bacon MP (Conservative, South Norfolk) Angela Browning MP (Conservative, Tiverton and Honiton) Mr Paul Burstow MP (Liberal Democrat, Sutton and Cheam) Mr Douglas Carswell MP (Conservative, Harwich) Rt Hon David Curry MP (Conservative, Skipton and Ripon) Mr Ian Davidson MP (Labour, Glasgow South West) Angela Eagle MP (Labour, Wallasey) Nigel Griffiths MP (Labour, Edinburgh South) Rt Hon Keith Hill MP (Labour, Streatham) Mr Austin Mitchell MP (Labour, Great Grimsby) Dr John Pugh MP (Liberal Democrat, Southport) Geraldine Smith MP (Labour, Morecombe and Lunesdale) Rt Hon Don Touhig MP (Labour, Islwyn) Rt Hon Alan Williams MP (Labour, Swansea West) Phil Wilson MP (Labour, Sedgefield)
The following member was also a member of the committee during the inquiry: Mr Philip Dunne MP (Conservative, Ludlow)
Powers Powers of the Committee of Public Accounts are set out in House of Commons Standing Orders, principally in SO No 148. These are available on the Internet via www.parliament.uk.
Publication The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the Internet at http://www.parliament.uk/pac. A list of Reports of the Committee in the present Session is at the back of this volume.
Committee staff The current staff of the Committee is Mark Etherton (Clerk), Lorna Horton (Senior Committee Assistant), Pam Morris (Committee Assistant), Jane Lauder (Committee Assistant) and Alex Paterson (Media Officer).
Contacts All correspondence should be addressed to the Clerk, Committee of Public Accounts, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 5708; the Committee’s email address is [email protected].
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Contents
Report Page
Summary 3
Conclusions and recommendations 5
1 Managing the Estate 9
2 Generating income from visitors 12
3 Making use of accommodation on the Estate 15
Formal Minutes 17
Witnesses 18
List of written evidence 18
List of Reports from the Committee of Public Accounts 2008–09 19
3
Summary
The Occupied Royal Palaces Estate (the Estate), which includes Buckingham Palace and Windsor Castle, is held in Trust for the Nation and used to support the official duties of The Sovereign. The Department for Culture, Media and Sport (the Department) is accountable to Parliament for the upkeep of the Estate, but has delegated day to day responsibility to the Royal Household (the Household). The Department gives the Household an annual grant to maintain and run the Palaces, which has remained at around £15 million since 2000–01 (a 19% real terms reduction). An increase in running costs over the same period means there has been a 27% fall in maintenance expenditure to £11.1 million in 2007–08. The Department has set the Household an objective which focuses on the condition of the Estate, but none of the key indicators measures performance against it, and the Household does not have a comprehensive analysis of the condition of the Estate. In addition, despite our warning in 2001, the Household has reported that a £32 million maintenance backlog has built up. As a result, important work such as the repairs to the Victoria and Albert Mausoleum has been deferred. The Department and the Household have yet to agree criteria for assessing the backlog and develop a plan for managing it. In addition, the Household does not have a strategy for managing its Estate. The Royal Collection Trust (the Trust) is responsible for the works of art held in Trust for the Nation, but is not accountable to Parliament. The Trust manages visitor admission to the Palaces and receives the income generated, which in 2007–08 totalled £28 million. The Trust shares some of the Windsor Castle income with the Household (£1.8 million in 2007–08), and, eight years after we first recommended it, the Trust plans to share income from visitors to Buckingham Palace with the Household from April 2009. In contrast to Windsor Castle, which is open to the public virtually all year, Buckingham Palace is open for 63 days because of the number of official engagements and the costs involved. Other buildings such as the White House and Houses of Parliament manage to open for most of the year, despite similar obligations and security concerns. The Household uses the Estate to accommodate some members of the Royal Family, 139 current and 32 former staff, and has 36 properties available to let. Since 2001, the Household has increased the rent received from £418,000 to £1 million. In the absence of a strategy the Household assesses the suitability of properties to let on a case by case basis. Despite our recommendations eight years ago, the Household has only moved one member of staff to within the secure perimeter, although there are 28 vacant properties within it. On the basis of a report by the Comptroller and Auditor General,1 we took evidence from the Department and the Household. In addition, we visited Buckingham Palace, Clarence House, St James’s Palace and Windsor Castle to see a selection of the Household’s maintenance projects.
1 C&AG’s Report, Maintaining the Occupied Royal Palaces, HC (2008–09) 14
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5
Conclusions and recommendations
1. The Household has reported that there is a £32 million backlog of maintenance work but this is not supported by rigorous analysis. In the absence of a consistent approach to assessing the condition of the Estate and calculating the backlog, and without an assessment of the practical consequences of the backlog, the Department and the Household cannot be sure how big the problem is or what to do about it. The Household should define criteria for inspecting the condition of the Estate, agree with the Department the basis for calculating the maintenance backlog and, before the end of 2009, set out a plan for managing it.
2. It is a scandal that the Victoria and Albert Mausoleum, the resting place of Queen Victoria and Prince Albert, is on English Heritage’s Buildings at Risk Register. Work required to repair the Mausoleum, a monument of national importance, has been outstanding for 14 years and its condition is getting worse. Repairing the Mausoleum would cost around £3 million but resource constraints mean the Household has no plans to do the required work. Ultimately, the condition of the estate is a matter for the Department, which should identify how the restoration of the Mausoleum can be funded without impacting on the Household’s resources for maintaining the rest of the Estate.
3. The Department for Culture, Media and Sport is accountable to Parliament for the upkeep of the Occupied Royal Palaces but does not have a firm grip on its responsibilities. The Department has set the Household an objective for the condition of the Estate, but does not measure the Household’s performance, and has allowed a maintenance backlog to build up despite our warning that this might happen. The Department should establish performance measures that keep it appraised of the condition of the Estate starting in the 2009–10 financial year.
4. In 2007–08, the Royal Collection Trust received over £27 million from visitors to the Occupied Royal Palaces, of which just £1.8 million was passed to the Royal Household to top up the resources available to maintain the Palaces. The arrangement by which money paid by visitors to the Palaces goes to fund the Royal Collection Trust dates from 1850, but times have changed. More Palaces are now open to the public and hundreds of thousands of tourists visit them each year, yet only a fraction of the income generated is used to maintain the Palaces. The amount paid over to the Household is at the discretion of the Royal Collection Trust, but some staff of the Household are also involved with the Trust and have potential conflicts of interest. The Department should:
• work with the Household and Royal Collection Trust to revise the arrangements for the collection and distribution of visitor income to reflect the fact that visitors come to see the Palaces, as well as the works of art in them, and
• assure itself that the revised arrangements are equitable for the Household.
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5. The way the Royal Collection Trust manages its resources is not subject to scrutiny by the Comptroller and Auditor General. We can see no constitutional justification for the Comptroller and Auditor General being denied access to the Trust. The Royal Collection Trust looks after a vast number of priceless works of art on behalf of the Nation, and its commercial success impacts directly on the amount of resources available to maintain the Occupied Royal Palaces, but the Trust is not accountable to Parliament. As we have recommended previously, the Comptroller and Auditor General should be the auditor of the Royal Collection Trust.
6. Buckingham Palace generated income of over £7 million from visitors in 2007–08 despite being closed to the public for over 300 days a year. It may be more difficult to open areas of Buckingham Palace to the public when there are other events taking place and when members of the Royal Family are in residence, but it does not follow that the whole Palace needs to be closed. The Household should work with the Royal Collection Trust to assess the practicality and cost effectiveness of extending the opening times, starting in 2009. The review should examine how other organisations, such as the White House and the Houses of Parliament, manage visits by members of the public alongside state business and the associated security considerations.
7. In 2001, we recommended the Royal Household move its staff to accommodation within the secure perimeter of the Palaces to allow more properties to be let commercially, but since then only one member of staff has been moved. With 18 staff and pensioners accommodated outside the secure perimeter and 28 vacant properties inside, there is scope to reduce the subsidy of over £200,000 being provided by public funds. The Royal Household should relocate staff and pensioners accommodated outside the perimeter to properties inside as soon as is practicable, while taking into account age and health considerations. The Household should also investigate whether adjustments to the secure perimeter can be made, without compromising the safety of the Royal Family, to allow more properties currently within the perimeter to be let at market rents.
8. Without a comprehensive estate management plan, the Royal Household risks managing the Estate too reactively and thereby missing opportunities to improve value for money. The Royal Household should prepare a forward looking strategy for the Estate within the next six months setting out:
• the operational needs of the Household, including which members of staff need to be accommodated;
• how the current assets, including the principal buildings such as Kensington Palace, will be used to support those needs, and
• alternative uses for properties likely to be surplus.
9. The Royal Household has not provided all of the additional information requested by the Committee. We expect witnesses to provide full responses to our requests for information. The Royal Household has not provided all the notes we asked for, and, without explanation, those received do not provide all the information we requested. We also expect the Royal Collection Trust to provide the National Audit Office with inventory data by April 2010. The Treasury should make
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clear to all potential witnesses the importance of providing detailed and thorough notes where commitments have been given during the hearing.
10. Since 1998–99, £1.7 billion in hereditary revenues of The Sovereign has been surrendered to the Exchequer in return for funding of £376 million, producing a net surplus for the Exchequer of over £1.3 billion. The hereditary revenues of The Sovereign, based on a £7 billion property portfolio, are surrendered to the Exchequer in exchange for funding to meet the cost of The Sovereign’s official duties. We conclude that the hereditary revenues of The Sovereign provide a surplus for the Exchequer which is sufficient for the Department to meet its responsibilities in funding the work of The Sovereign.
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1 Managing the Estate
1. Since 1760 it has been customary for The Sovereign to surrender hereditary revenues to the Exchequer in return for funding to meet the cost of The Sovereign’s official duties.2 In 2007–08 £211 million was surrendered and the Exchequer funding included the £15.7 million grant-in-aid to maintain and run the Occupied Royal Palaces. It also comprised the Civil List (£7.9 million), a Parliamentary annuity paid to the Duke of Edinburgh (£0.4 million), the grants-in-aid for Royal travel (£6.4 million), communications (£0.5 million) and other costs met directly by other Government Departments (£4.9 million).3 Since 1998–99, £1.7 billion in hereditary revenues has been paid over to the Exchequer in return for funding of £376 million (Figure 1), producing a net surplus for the Exchequer of over £1.3 billion.4
Figure 1: Hereditary revenues surrendered to the Exchequer and funding received from 1998–99 to 2007–08 250
200
150
£ million 100
50
0 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Hereditary revenue Exchequer funding
2. The annual grant-in-aid to maintain and run the Occupied Royal Palaces Estate (the Estate) is paid by the Department for Culture, Media and Sport (the Department). Since 1991 day to day responsibility for planning and managing the maintenance of the Estate has rested with the Property Section of the Royal Household (the Household). The Department, however, is ultimately accountable to Parliament for maintaining, and providing services to, the Palaces.5
2 The Hereditary revenues consist of the annual revenue from the Crown Estate, a property portfolio worth over £7bn that was formerly the property of The Sovereign but is now managed by an independent organisation headed by the Crown Estate Commissioners and accountable to Parliament. 3 Qq 93–102; The Crown Estate Annual Report 2008; Royal Public Finances, Annual Reports 2007–08 4 Ev 24 5 C&AG’s Report, para 2
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The Occupied Royal Palaces Estate
The Estate is Buckingham Palace, Buckingham Palace Mews and Gardens, St James’s Palace (including Clarence House), Windsor Castle and Windsor Castle Royal Mews, buildings in Windsor Home Park, Hampton Court Mews and Paddocks, and residential areas of Kensington Palace.
Source: Comptroller and Auditor General’s Report HC (2008–09) 14, Box 1 3. In setting the level of grant-in-aid, which has been around £15 million since 2000–01 (a 19% reduction in real terms over the period), the Department considers other demands on its resources as well as opportunities for the Household to generate income from other sources—£2.8 million in 2007–08.6 In 2007–08, the Household spent £11.1 million on maintaining the Estate, after meeting running costs (such as utilities, security, fire prevention and health and safety) of £7.4 million. The effect of the real terms reduction in grant-in-aid, coupled with rising utility and security costs, has been a 27% real terms fall in maintenance expenditure since 2000-01 (Figure 2).7
Figure 2: Maintenance expenditure (in real terms) from 2000–01 to 2007–08 16.0
15.0
14.0
13.0
12.0 (£m) 11.0
10.0
9.0
8.0 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Year
Source: Analysis of the grant-in-aid for the maintenance of the Occupied Royal Palaces in England Annual Report and Accounts 4. The Department has set the Household the objective of maintaining the Estate to a standard consistent with the Household’s operational requirements, and with the royal, architectural and historic status of the buildings.8 While the Department considers it has a good understanding of the condition of the Estate and commissions consultants to advise it, none of the key performance indicators reported by the Household to the Department measures performance against this objective. In addition, although the Household inspects the condition of around 70% of the Estate annually, its assessment criteria are not clear and are open to interpretation, and the inspections do not result in a comprehensive analysis of
6 Qq 14–15, 20; C&AG’s Report, paras 6–7, Figures 1–2 7 Qq 20–21, 60–63; C&AG’s Report, paras 12–13, Figures 4–5 8 Q 8; C&AG’s Report, para 2
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the condition of the Estate. The Household is now reviewing how other organisations responsible for maintaining heritage assets measure and report on condition.9
5. In 2001, we highlighted the risk of a backlog building up if maintenance expenditure was reduced. The Department assured us at the time that it would ask its consultants to check whether a backlog was developing, but only did so in July 2008 after the Household stated in its annual report and accounts that it had a £32 million maintenance backlog.10 The Household attributes the backlog to its grant-in-aid and visitor income not increasing as expected, and its running costs increasing by more than anticipated. In addition, some maintenance projects, such as the repairs to the Buckingham Palace façade, have been brought forward for health and safety reasons, resulting in other work being deferred.11
6. The Department and the Household have yet to agree criteria for assessing what should be included in backlog, assess the practical impact of deferring work and develop a plan for managing it. Meanwhile, repairs to buildings of national importance have been deferred. The need for work on the Victoria and Albert Mausoleum, which is on English Heritage’s Buildings at Risk Register, was identified 14 years ago and the Household estimates the work would cost around £3 million. When we visited the Estate we saw how much the condition of the Mausoleum had deteriorated. We also saw some of the other work which needed to be carried out, for example, in the State Rooms. Despite this, we recognise the dedicated job the Household’s front-line staff do in maintaining the Estate given the range of challenges they face and a decreasing grant-in-aid.12
7. When looking to get the best value for money from available resources, it is important that an organisation has a strategy for managing its assets. A good estate strategy matches an organisation’s operational needs with the property it manages, and without a clear strategy an organisation may miss opportunities for improving value for money. The Household, however, does not have a strategy setting out a management plan for the Estate.13
9 Qq 8, 10, 17–18, 49–51, 53, 146; C&AG’s Report, paras 27, 31, 33 10 Committee of Public Accounts, Eighth Report of Session 2000–01, Maintaining the Royal Palaces, HC 77, para 5; Treasury Minute on the Eighth Report of Session 2000–01, Maintaining the Royal Palaces, Cm 5201; C&AG’s Report, para 39 11 Qq 9, 12, 103; C&AG’s Report, para 37 12 Qq 9, 88, 102–105, 141, 146; C&AG’s Report, paras 36, 40 13 Qq 32–39, 41–44; C&AG’s Report, paras 16–17
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2 Generating income from visitors
8. Buckingham Palace and Buckingham Palace Mews, Clarence House, Windsor Castle and Frogmore House in Windsor Home Park are open to paying visitors at times during the year. The Royal Collection Trust (the Trust) manages visitor admission to the Palaces. The Trust is responsible for maintaining and conserving the collection of works of art held in trust by The Sovereign for the Nation, and a new inventory is being prepared.14 The Keeper of the Privy Purse explained that it would be inadvisable to attempt to produce a full inventory listing for the Committee from the current system given the age and fragility of the hardware, and that all information is shortly to be transferred to a new Collections Management System which has been in development for over 10 years. The Keeper of the Privy Purse expected the new system to be fully operational by April 2009.15 The continuing delay is unsatisfactory, and we expect the Trust to provide the National Audit Office with inventory data by that time.
9. Under an arrangement which began in 1850 when Windsor Castle was first opened to the public, the Trust receives the income generated from visitors to the Palaces and sales of merchandise, which in 2007–08 totalled £28 million (Figure 3).16
Figure 3: Visitor admissions to the Palaces and gross income generated in 2007–08
Income from visitor Income from Total income Visitor Numbers admissions shop sales (£000) (£000) (£000)
Windsor Castle and Frogmore 1,003,000 10,004 2,325 12,329 House
Buckingham 360,000 4,952 2,214 7,166 Palace
The Queen’s 158,000 1,133 1,636 2,769 Gallery
The Royal Mews 155,000 798 765 1,563
Clarence House 25,000 172 101 273
Palace of 285,000 2,174 1,241 3,415 Holyroodhouse
Total 1,986,000 19,233 8,282 27,515
Source: Analysis of The Royal Collection Trust Annual Report for the year ended 31 March 10. At the discretion of the Trust some of the income from Windsor Castle now supplements the grant-in-aid for maintaining the Estate. Under a formula negotiated with the Trust, the Household received £1.8 million in 2007–08.17
14 Qq 75–79; C&AG’s Report, paras 1, 7 15 Ev 23 16 Q 87
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11. As there was no equivalent arrangement for the Household to benefit from income generated from visitors to Buckingham Palace, in 2001 we recommended that consideration be given to using a proportion of the receipts at Buckingham Palace to meet costs that would otherwise be borne by the grant-in-aid. The Keeper of the Privy Purse told us that the Trust had proposed sharing the Buckingham Palace income with the Household when it had reduced the borrowing used to refurbish the Queen’s Galleries to £10 million.18
12. We wanted to know if the Trust’s proposed sharing of Buckingham Palace income had been assiduously pursued. On further enquiry, our understanding is that the Keeper of the Privy Purse put proposals to the Department in February 2004 and received an inconclusive response almost a year and half later in July 2005. In addition, while the Trust’s published accounts show that its borrowing had fallen to £6.7 million by March 2007, the arrangement to share the income from visitors to Buckingham Palace with the Household was deferred to April 2009—at least two years later than was originally proposed.19
13. There is a potential conflict of interest for those officials who have responsibilities for managing the grant-in-aid and also serve the Trust. The Keeper of the Privy Purse looks after the grant-in-aid and the management of property services for the Occupied Royal Palaces, but is also a trustee of the Royal Collection Trust and is therefore required to serve the interests of the Trust. Similarly, the Household’s Finance Director manages the property services grant-in-aid and is also Finance Director of the Trust.20
14. The Palaces generate income when they are open to the Public. Windsor Castle is open to visitors some 360 days a year, with occasional closures for events such as state visits. In contrast, Buckingham Palace is open to paying visitors for 63 days a year during July, August and September, generating £7 million in 2007–08 (Figure 3), although private tours of the Palace are now available during January and April.21 Tours of Buckingham Palace Garden will also be available from April 2009 and a share of the income will go towards maintaining the Estate.22
15. In the Household’s view, the ability to extend the periods when Buckingham Palace is open to visitors is constrained by members of the Royal Family being in residence and the number of official state and royal engagements, such as state visits, investitures and receptions, which are held at the Palace. The Queen was in residence at Buckingham Palace on 111 days in 2008. We note that a number of other high profile public buildings such as the White House and the Houses of Parliament are open to the public for most of the year while carrying out state business and maintaining security.23
17 C&AG’s Report, para 7 18 Qq 1–2, 25; Committee of Public Accounts, Eighth Report of Session 2000–01, Maintaining the Royal Palaces, HC77, para 5 19 Qq 3, 25, 83; Royal Collection Trust, Annual Reports 2005–2007 20 Qq 77, 80–82; C&AG’s Report, para 2 21 Qq 6, 123, 127, 129–130 22 Q 6; C&AG’s Report, para 9 23 Qq 6–7, 88, 91–92, 120–121, 127, 131–135; Ev 25
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16. The Household told us that when the Trust last considered extending the times Buckingham Palace was open to visitors, it judged that the business case did not support opening at other times of the year because of the set up costs involved. Although we asked to receive the original business case that informed this decision the Household has provided an updated business case, which assesses the costs and benefits of opening Buckingham Palace for 28 days in winter 2009 when The Queen is away at Sandringham. The revised business case assumes that around 93,000 people would visit the Palace in January compared to 150,000 during September 2008 and concludes that income from visitor admission in winter would be insufficient given the set up costs involved, resulting in a deficit of around £150,000. The business case, however, does not examine the scope for extending the current summer opening.24
17. The Royal Collection Trust is responsible for the works of art held in trust for the Nation. The commercial activities of the Trust bear directly on the resources available for maintaining the Palaces in that they generate income which is used in part for this purpose. The Trust, however, is not accountable to Parliament and, contrary to our previous recommendations, the Comptroller and Auditor General neither audits the Trust nor has the right of access to examine its books and records.25
24 Qq 5, 7, 89; Ev 17–21 25 Committee of Public Accounts, Eighth Report of Session 2000–01, Maintaining the Royal Palaces, HC 77, para 5
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3 Making use of accommodation on the Estate
18. The Estate has around 217 self-contained properties which are available for use as residential accommodation for some members of the Royal Family and current and former employees. In addition, the Household generates commercial income from letting properties on the Estate not required for official purposes.26
19. Of the 217 properties on the Estate, the Household uses six to accommodate members of the Royal Family. The Household receives rent for The Prince and Princess Michael of Kent’s apartment in Kensington Palace; the other members of the Royal Family receive rent free accommodation in return for carrying out official duties.27
20. We visited Kensington Palace in 2002 to see firsthand the type of property maintained by the grant-in-aid and how it was being used as residential accommodation. Since then some apartments have been handed over to the Historic Royal Palaces, and our understanding is that apart from those members of the Royal Family who were accommodated at the Palace at the time of our visit—The Prince and Princess Michael of Kent, The Duke and Duchess of Gloucester, and The Duke and Duchess of Kent—no further members of the Royal Family currently have apartments at Kensington Palace. We recall that the Household intended to review its use of Kensington Palace as apartments occupied by members of the Royal Family became available, but the Household had no record of such a commitment.28
21. The Household accommodates 139 staff and 32 pensioners on the Estate. The Household prefers to use accommodation to house staff and offset costs through salary abatements rather than leave it empty and open to decay. The financial arrangements for staff who occupy accommodation vary. Staff entering their contract of employment before 1991 generally pay 16.7% of their net salary, although staff employed more recently pay between 22% and 28% of their gross salary. Of the 139 staff in accommodation on the Estate, 130 have their salary abated or pay rent. Of the 32 pensioners accommodated on the Estate, 15 do not contribute to the cost of their accommodation. We asked the Household for a note setting out the rationale behind which pensioners paid rent and which did not, but have not received such a note.29
22. The Household also lets accommodation on the Estate to generate income. Although the Household aims to maximise its commercial income, it does not have a documented, long-term strategy for how it uses the Estate (Paragraph 7) and assesses alternative uses for properties on a case by case basis as they become available. One building outside the secure
26 C&AG’s Report, paras 19–20 27 Qq 137–138; C&AG’s Report, Figure 7 28 Qq 136–138 29 Qq 26, 72; C&AG’s Report, para 23, Figure 7
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perimeter of the Royal Mews at Hampton Court is occupied rent free by the Horse Rangers Association Charity.30
23. We asked the Household to provide details of all properties that generate less than the commercial rent they would attract on the open market so that we could estimate the effective subsidy to staff and charitable organisations. The note we received considers properties outside the secure cordon rather than the whole Estate, but even so the estimated subsidy amounts to over £200,000 a year.31
24. In 2001, we recommended that the Household explore the scope for moving staff to accommodation within the secure perimeter of the Estate to free up more properties for commercial lets.32 Since then the Household has relocated only one member of staff to a vacant property within the perimeter, despite having ten pensioners and five staff in properties outside the perimeter and 28 vacant properties inside the perimeter. The Household told us that some pensioners in properties cannot be moved because of age and ill health and that it was mothballing some vacant properties inside the perimeter because of the level of funding required to bring them up to standard.33
25. Since we reported in 2001, the Household has increased the number of properties available to let from 16 to 36 and the total annual rent received from letting properties from £418,000 to £1 million, representing a 96% increase in real terms. As the secure perimeter means the Household cannot let those properties located within it at commercial rates, for 12 properties inside the perimeter the Household charges a negotiated rent to organisations with the necessary security clearance. Of the remaining 24 properties which are all outside the perimeter, the Household:
• has let 12 properties through agents at market rates; • lets seven properties under negotiated terms, and • expects to let five properties, which are currently being refurbished, at market rates.34
30 Qq 32–34, 37–41, 69; C&AG’s Report, paras 17, 22 31 Q 69; Ev 22 32 Committee of Public Accounts, Eighth Report of Session 2000–01, Maintaining the Royal Palaces, HC 77, para 5 33 Qq 11, 27, 139; Ev 31 34 Q 69; C&AG’s Report, paras 20–21
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Formal Minutes
Monday 27 April 2009
Members present:
Mr Edward Leigh, in the Chair
Mr Richard Bacon Dr John Pugh Mr Paul Burstow Geraldine Smith Mr Ian Davidson Rt Hon Don Touhig Mr Nigel Griffiths Rt Hon Alan Williams Rt Hon Keith Hill
Draft Report (Maintaining the Occupied Royal Palaces), proposed by the Chairman, brought up and read.
Ordered, That the draft Report be read a second time, paragraph by paragraph.
Paragraphs 1 to 25 read and agreed to.
Conclusions and recommendations read and agreed to.
Summary read and agreed to.
Resolved, That the Report be the Twenty-fourth Report of the Committee to the House.
Ordered, That the Chairman make the Report to the House.
[Adjourned till Wednesday 6 May at 3.30 pm
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Witnesses
Monday 26 January 2009 Page
Sir Alan Reid KCVO, Keeper of the Privy Purse and Treasurer to The Queen, Mr Michael Stevens CVO, Deputy Treasurer to The Queen and Director of Finance, Royal Collection, Mr Graham Sharpe, Director of Property Services, Royal Household and Mr Jonathan Stephens, Permanent Secretary, Department for Culture, Media and Sports Ev 1
List of written evidence
1 The Royal Household Ev 17 2 National Audit Office Ev 25
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List of Reports from the Committee of Public Accounts 2008–09
First Report Defence Information Infrastructure HC 100 Second Report The National Programme for IT in the NHS: Progress since 2006 HC 153 Third Report Skills for Life: Progress in Improving Adult Literacy and Numeracy HC 154 Fourth Report Widening participation in higher education HC 226 Fifth Report Programmes to reduce household energy consumption HC 228 Sixth Report The procurement of goods and services by HM Prison Service HC 71 Seventh Report Excess Votes 2007–08 HC 248 Eighth Report Ministry of Defence: Chinook Mk 3 HC 247 Ninth Report Protecting the public: the work of the Parole Board HC 251 Tenth Report New Dimension—Enhancing the Fire and Rescue Services’ capacity to respond to terrorist and other large-scale incidents HC 249 Eleventh Report The United Kingdom’s Future Nuclear Deterrent Capability HC 250 Twelfth Report Selection of the new Comptroller and Auditor General HC 256 Thirteenth Report Department for Work and Pensions: Handling Customer Complaints HC 312 Fourteenth Report HM Revenue and Customs: Tax Credits and Income Tax HC 311 Fifteenth Report Independent Police Complaints Commission HC 335 Sixteenth Report Department for International Development: Operating in insecure environments HC 334 Seventeenth Report Central government’s management of service contracts HC 152 Eighteenth Report Investing for Development: the Department for International Development’s oversight of CDC Group plc HC 94 Nineteenth Report End of life care HC 99 Twentieth Report Ministry of Defence: Major Projects Report 2008 HC 165 Twenty-first Report The Department for Transport: Letting Rail Franchises 2005–07 HC 191 Twenty-second Report Financial Management in the NHS: Report on the NHS Summarised Accounts 2007–08 HC 225 Twenty-third Report Mathematics performance in primary schools: getting the best results HC 44 Twenty-fourth Report Maintaining the Occupied Royal Palaces HC 201
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Committee of Public Accounts: Evidence Ev 1 Oral evidence
Taken before the Committee of Public Accounts
on Monday 26 January 2009
Members present: Mr Edward Leigh, in the Chair
Mr Richard Bacon Geraldine Smith Mr Ian Davidson Mr Don Touhig Nigel GriYths Mr Alan Williams
Mr Tim Burr CB, Comptroller and Auditor General, Ms Gabrielle Cohen, Assistant Auditor General, and Mr Keith Hawkswell, Director, National Audit OYce, gave evidence. Ms Paula Diggle, Treasury OYcer of Accounts, HM Treasury, gave evidence.
REPORT BY THE COMPTROLLER AND AUDITOR GENERAL (HC14) MAINTAINING THE OCCUPIED ROYAL PALACES
Witnesses: Sir Alan Reid KCVO, Keeper of the Privy Purse and Treasurer to The Queen, Mr Michael Stevens CVO, Deputy Treasurer to The Queen and Director of Finance, Royal Collection, Mr Graham Sharpe, Director of Property Services, Royal Household and Mr Jonathan Stephens, Permanent Secretary, Department for Culture, Media and Sports, gave evidence.
Q1 Chairman: Good afternoon. Welcome to the You have visitors now. Would it not be entirely Committee of Public Accounts where today we are sensible for the money you make from visitors to be considering the Comptroller and Auditor General’s applied to the maintenance? Report on Maintaining the Occupied Royal Palaces. Sir Alan Reid: We were in discussion with the We welcome to our Committee Mr Jonathan Department on this topic and we reached an Stephens who is the Accounting OYcer and agreement round about 2004—a letter from me to Permanent Secretary of the Department for Culture, the Department—for a basis on which to transfer Media and Sport, and Sir Alan Reid, Keeper of the some of the share of admissions surplus at Privy Purse. I would like to thank Mr Michael Buckingham Palace to the property grant-in-aid. In Stevens and Mr Graham Sharpe for showing us that letter I explained that the Royal Collection was around Buckingham Palace and Clarence House last spending a huge amount on refurbishing and week. Unfortunately we did not get out of the renovating The Queen’s Gallery in Buckingham basement of Clarence House but I suppose that is Palace and The Queen’s Gallery at Holyrood in appropriate for a downstairs Committee like this. Scotland, as a result of which they had very We are now going to look at how you maintain the substantial borrowings of about £20 million.1 We upstairs as well as the downstairs, Sir Alan. I have a said we were very happy to start paying as soon as few questions for you, if I may. We reported on this those borrowings reduced to the £10 million level in 2001 and if you look at our report at paragraph and the Royal Collection was in surplus itself. I nine you can see that we have said that consideration should say those buildings form part of Buckingham should be given to applying a share of the income Palace and Holyrood and therefore the £23 million from visitors to Buckingham Palace to meet costs of funds was going from Royal Collection into that would otherwise be borne by the grant-in-aid. taxpayer owned assets so eVectively there has been a This has not happened in all these years since; why £23 million transfer of funds from Royal Collection not? into the property side of the Royal Household. As it Sir Alan Reid: This is the Royal Collection takings happens, we did move into overall surplus a couple on Buckingham Palace where you want to transfer of years ago and the borrowings reduced to below some to supplement the grant-in-aid. £10 million and therefore we would normally have triggered payments at that stage. Q2 Chairman: If people are visiting Buckingham Palace it seems entirely appropriate that the money Q3 Chairman: This is a very long answer, but let us you get from these visitors should be applied to try to keep it simple. All we want to know is whether maintenance. I should say that on our visit it was income from visitors to Buckingham Palace is going quite clear, even to a casual observer, that the straight across to try to help with the maintenance. condition is not fantastic in many of these state That is all we want to know. It is a simple question apartments—the wallpaper is somewhat faded, and we want a simple answer. there are other problems—and we were shown all this. We will go into much more detail later but there 1 Note by witness: The Royal Collection’s maximum is clearly a problem with the maintenance backlog. borrowings were actually £14 million. Processed: 22-05-2009 20:02:04 Page Layout: COENEW [E] PPSysB Job: 425164 Unit: PAG1
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Sir Alan Reid: A share of the surplus will go across Q8 Chairman: Mr Stephens, I would like to ask you next year but in the meantime £23 million— about how you measure whether these works are being achieved. If you look at paragraph 27 you will see that “none of the Key Performance Indicators Q4 Chairman: Is that for Windsor Castle or is it for measures the outcomes achieved”. If you look across Buckingham Palace as well? at figure eight you will see there is the objective to Sir Alan Reid: Windsor Castle already goes across; maintain the Palaces to a standard consistent with Buckingham Palace will start in 2009–10. operational requirements. That is quite a clear objective, but if you look at the Key Performance Q5 Chairman: My other question is that if you have Indicators across the page it is not quite clear to me this problem of maintenance why do you not open how you are meeting your first objective. Buckingham Palace for longer? Mr Stephens: The performance indicators do focus Sir Alan Reid: It is quite diYcult to actually achieve on achieving value for money in the individual decent surpluses in opening longer.2 At the present projects. In terms of assuring ourselves that the time it is open through the summer. We have huge individual projects are delivered and delivered to a numbers going through. A lot of those visitors quite good standard that is why we have our independent possibly,if the Palace were open longer, might spread expert advisors, Watts and Co. They do a sample of their visits and we may not actually see more income. projects and audit those on a regular basis. In terms of assessing the overall condition of the Palace both Q6 Chairman: Have you done a proper business case we and the Household have a strong interest in this. The Household has taken significant strides in recent on this? After all the tourist season now is quite long, V from Easter right through to October. All the other years in improving the e ectiveness and regularity of grand houses in England have long since had to open the inspection process so that most of the Palace is for most of the tourist year. Is there any reason why now inspected on an annual basis and our expert Buckingham Palace should not remain open for advisors have access to the results of that. Overall we longer? have a good feel, with the Household, of the Sir Alan Reid: Yes, there is. A lot of those houses do condition. not have all the oYcial state and royal engagements going on. We have a very busy programme during Q9 Chairman: You tell us that but we warned you the year. The costs of actually setting up the Palace way back in 2000 that a maintenance backlog might to make sure that people going through do not add build up (paragraph 39). We now know that there is to our maintenance burden is very significant indeed a maintenance backlog of £32 million. If you are so and cannot simply be set up for a weekend. We also well informed why have we got problems, for train 250 student wardens in order to do a very good instance, with the Victoria and Albert Mausoleum job of wardening. There is a lot of administration cost around it. What we have done is open up for which apparently is on the at risk register? It seems private tours during the winter where it is not open to me that you do not have an entirely firm enough access to the Palace but they are guided round by a grip on what is going on in this immensely important warden. This year we are also opening up the garden Estate in terms of national importance. You do not from April to June to summer private tours. We are actually know what is going on. If you did know trying to do what we can with the rest of the year what was going on why have you allowed such a consistent with a very busy activity in the Palace large backlog to build up? itself and not adding to the maintenance burden. Mr Stephens: In the case of the Mausoleum, the Mausoleum has been outstanding in various forms as the NAO Report itself says for well over 10 years. Q7 Chairman: This Palace, for instance, is open It has been in the backlog, if you like, for some time. throughout the year. We have the entire executive of There is not a direct read-across, as the NAO Report the Government in it at various parts of the week. also makes clear, between the backlog and the There are many, many functions going on but we impact of not doing projects in the backlog on the manage to keep a large part of the Palace open condition of the Estate. The existence of the backlog throughout the year. I would have thought it might first of all assumes that a certain amount was already be possible, with a bit of ingenuity, to open the in the backlog from more than 10 years ago. It is also Palace for longer despite the fact that, as we know, constructed on the basis of what will be the backlog you have functions in it throughout the year. We are in 10 years’ time on certain assumptions about only talking about the State Apartments here. funding. Of course there is a further distinction to be Sir Alan Reid: I understand but there are a lot of functions which go on in the State Apartments. It is made between whether projects actually happen in our interests to generate more income; we are not and, as the NAO Report says, what impact they against doing that but the business case does not have on the overall condition. stack up to generating the level of income that we get from the current opening. Q10 Chairman: Did you actually see this backlog developing? We read again in paragraph 39 that 2 Note by witness: Opening longer in this context means at “The Department told the Committee that it asks it other times of the year, rather than opening Buckingham Palace for a longer period during the summer, which is consultants to look at whether a backlog of work is constrained by The Queen’s programme. developing”. Did you actually see this coming? Processed: 22-05-2009 20:02:04 Page Layout: COENEW [O] PPSysB Job: 425164 Unit: PAG1
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Mr Stephens: As I said, we discuss regularly with the before you. The reason it has built up since then is Palace what the condition of the Estate is. We had that when he gave you that statement four diVerent discussions around the time of the last spending things have happened. One is that he anticipated an review. The overall condition of the Estate, assessed increase possibly along retail price index levels in the by the Palace and endorsed by English Heritage, is grant-in-aid which has not happened. He also that it remains in good condition but there are some expected a significant increase in tourism which the long term projects which are being delayed or rest of the industry expected as well. That did not deferred. happen. If it had happened then the Windsor share of precincts income for the property grant-in-aid Q11 Chairman: Can I ask about the accommodation would have been about one million pounds a year higher. Energy costs increased by greater than he now? If you look at figure 7, Sir Alan, this is the V number of people who are living inside the secure might have expected—as we all have su ered—and perimeter and outside the secure perimeter. It makes also with an increased level of security necessary obvious sense to try to move people inside the secure from about 2001 onwards it is actually more perimeter so that you can let the properties expensive for us to do work inside the palaces commercially outside. We made various because of the level of clearances for contractors, recommendations that you should move as many et cetera. people as possible inside the secure perimeter. Apparently since 2001 only one person has moved. Q13 Mr Williams: Thirty-two million seems an If we look at this figure you will see that inside the inordinate sum to have built up over so short a secure perimeter you have no less than 25 vacant period when the backlog had, as your predecessor properties and you also have 18 people living outside claimed, been cleared. the secure perimeter. There are 25 vacant properties Sir Alan Reid: On the face of it it does but he had within, 18 people living outside; why do you not built into that statement the fact that the 10 year have a more businesslike approach to moving your activity plan was going to do a lot of the things that people inside the secure perimeter then we could free are now in the backlog. Due to the lack of income we up properties outside and we can let them at what have not been able to do them. He knew those issues would be very high commercial rents. were there but he thought he had the funding coming Sir Alan Reid: First of all we have a businesslike along in order to deal with them. It is not such a great approach to this. We have more than doubled our surprise and it is not a rapid deterioration in the commercial rent income from the whole estate since building that has led to that. we last appeared before you. The 25 vacant properties inside also include a number of properties Q14 Mr Williams: It is still a formidable sum of which are eVectively turning over. They have had an money. Mr Stephens, how do you justify this static occupant and there will be another occupant going grant-in-aid? in. They also include some that we have had to Mr Stephens: We set the grant-in-aid taking into mothball because we simply do not have enough account of course need, taking into account money to bring them back up to a decent standard. priorities across other areas of the DCMS budget The average age of the 13 pensioners who live and taking into account also the opportunities for outside is significantly older than normal pensioner generating income. It is worth making the point, of population because they were allocated this course, that maintenance spending only accounts for accommodation many, many years ago before our about half of the total grant-in-aid. Ultimately these policies changed and we are now much more are matters for ministerial decisions. stringent in allocating pensioner accommodation. So their average age is about 80 and we do not Q15 Mr Williams: However, 19% is a formidable believe it is fair to move them at that age into other loss. accommodation as some of them are not terribly Mr Stephens: I think the Household have done very well. They are diminishing, it is sad to say, at quite a well in increasing value for money and eYciency as rapid rate and since this Report has been published I am sure everyone will want to see them do. two of the 13 have died and one has moved into a nursing home. Those three properties will come Q16 Mr Williams: You referred in an answer to the vacant and we will look to commercially let them. Chairman to expert advice you have had. Are these We very much have your guidance in mind on that outside consultants? I do not know what they cost a but we are doing it at the pace at which these people year, but are they expensive? move out of the accommodation. Mr Stephens: The company is Watts and Co which Chairman: Thank you very much. Alan Williams? is a professional firm with expertise in heritage assets. We pay them about £16,000 a year. Q12 Mr Williams: May I apologise because I have to leave shortly to chair another meeting; it is no Q17 Mr Williams: What have they been advising discourtesy to my colleagues or yourselves. Sir Alan, you? Have they not been telling you that it is possibly what was the backlog of maintenance when you false savings if you are allowing this enormous took over? backlog to build up? Sir Alan Reid: It was not calculated at that time. I Mr Stephens: The advice they have been giving us is took over in 2002. I am aware my predecessor said consistent with the assessment that has been that there was no backlog last time he appeared published which is that the overall condition is good, Processed: 22-05-2009 20:02:04 Page Layout: COENEW [E] PPSysB Job: 425164 Unit: PAG1
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Royal Household and Department for Culture, Media and Sport that the Palace is watertight and all that you would should pay more to you from their visitor income, expect but, as I said earlier, there are some long term why is it that it has only recently been decided to projects that are now being deferred or delayed. increase it? Sir Alan Reid: The formula I put to the Department Q18 Mr Williams: Have your consultants suggested in 2004 (which I understood they agreed with) was to you that you should have key performance that we would start making payments across to the indicators on the condition of the Estate? grant-in-aid from the Royal Collection Trust when it Mr Stephens: The consultants have been working was in overall surplus and when it had reduced its closely with the Household to develop together a borrowings down below £10 million. Those system for assessing the condition. This has led to borrowings have been incurred to spend a lot of the process of inspection that is now in place. I think money on tax payer owned buildings. The tourism the NAO Report contains some useful suggestions trade has actually been very diYcult for a lot of this for developing it still further. decade and it was only a couple of years ago that the overall surplus was reached and the borrowings Q19 Mr Williams: It is interesting that the NAO was could be reduced below £10 million. There was also able to reveal all these facts after a very short inquiry, a pension payment that came in two years ago that whereas with constant support from your deferred further payments until next year. It has consultants you seem to have been oblivious to always been the intention of Royal Collection to them. make these payments and to show good faith in that Mr Stephens: I do not accept that. I think most of I would draw your attention to the fact that we these facts have been published. unilaterally approached Royal Collection trustees to make bigger payments to the property grant-in-aid Q20 Mr Williams: You just chose to ignore them based on the Windsor precincts income where, instead. Sir Alan, we come to you. You have had to because it was not generating the sums that we put up with the misfortune of having a 19% real fall thought it should, we revised the formula and as a in income but you reduced maintenance spending by result there is about half a million pounds a year 27%, that is half as much again. Why? more going into the property grant-in-aid and Sir Alan Reid: It is an arithmetical calculation that supplementing the property grant-in-aid from the leads to that, I am afraid. A lot of the grant-in-aid Royal Collection. goes in just running the palaces: fire, health and safety, energy and such like. If those costs go up then it leads to a diVerent percentage reduction in what is Q26 Mr Williams: Your predecessor told us that he left for maintenance. I am afraid the reduced planned—that was, I think, his word—to reduce the amount that is left for maintenance as a direct result number of private secretaries and oYcials housed of increases in other costs and a fixed grant— from 39 to 11. All these years later, instead of going down by 28, it has gone down by six. Why? Q21 Mr Williams: So maintenance is at the end of Sir Alan Reid: We changed the policy. First of all we the queue. changed the gradings so that although we have Sir Alan Reid: Yes. We have no choice. We need to private secretaries we do not have people called heat and light the palaces; we need to protect them oYcials any more and we have a more from going up in flames again. straightforward, less status oriented grading system. The fact of the matter was that these people were Q22 Mr Williams: You are working on information, living inside the secure area and if we moved them we are told in paragraphs 46 and 47, that is out of out of the accommodation there was little that we date and does not reflect reality. So how can you be could do with it other than mothball it. Everyone sure that you are making the right decision? who has been appointed fairly recently who is in Sir Alan Reid: Are you quoting from the paragraph? Palace accommodation has eVectively a rental payment on an abatement of salary which can vary Q23 Mr Williams: That is an interpretation. from 22% to 28% of their gross pay.It is better, in our Sir Alan Reid: Can I ask Mr Sharpe to deal with that view, to save the tax payer money by having these particular point because he is best placed to answer people living in accommodation and the civil list or you? whoever having a reduced salary cost than simply to leave the property empty and subject to decay. It was Q24 Mr Williams: I do not mind who answers. a commercial decision to reduce the cost to the tax Mr Sharpe: I think you are referring to the accuracy payer and therefore it is a changed policy from what of the initial budget. The NAO Report takes a my predecessor reported to you. sample of projects and you can see that some of them are under and some of them are over. On a sample of our projects in 2007–08 let tenders were about 16% Q27 Mr Williams: On the other hand, as the above the initial budgets so it is not the 49% that is Chairman has said, there was a recommendation quoted in the National Audit OYce Report. that you should take people from outside the perimeter and put them inside the perimeter. Why Q25 Mr Williams: Sir Alan, as the Chairman has have you not done that? already touched on, eight years after the PAC Sir Alan Reid: We only have five staV members recommendation that the Royal Collection Trust outside left now and 13 pensioners. Processed: 22-05-2009 20:02:04 Page Layout: COENEW [O] PPSysB Job: 425164 Unit: PAG1
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Q28 Mr Williams: They are highly rentable Sir Alan Reid: There tend to be, yes. For example, properties, are they not? the change of reign would bring about dramatic Sir Alan Reid: Some of those outside are not that circumstances in the property situation; I cannot dramatically expensive properties or high rental by possibly plan for that. We do not know when that any stretch of the imagination. That is why will happen; hopefully it will not happen in my time. pensioners are in them. It did not make a lot of sense There are a lot of other issues around uncertainties to move an old pensioner out of their house into the of when certain events are going to happen. It is not confines of a Palace from what is, in most cases, quite like the commercial world from that point of relatively modest accommodation. view.
Q29 Mr Williams: I saw in the notes that the Prince’s Q36 Mr Touhig: I understand that. I understand you Charities are now paying rent of a million a year are dealing with the residence of the Head of State instead of the half million they were paying before. and I understand all the diYculties and so on; you What led to a doubling in the fees of the rent for are right to point those out. However, there are charities? plenty of successfully run stately homes, as the Sir Alan Reid: I am sorry, I do not recognise the Chairman pointed out, and I am sure there are figures you are quoting. If it is the property that we lessons to be learned. I am not suggesting for one are renting to the Prince’s Charitable Foundation, minute that you have a safari park or a theme park the rent on that is about £66,000 a year. in the corner of the grounds of Buckingham Palace, but I think you are getting the message. There are Q30 Mr Williams: Since the Committee last reported ways in which you could be generating more income the rent from letting properties on the Estate, much more eVectively to help overcome the huge including that rented by the Prince of Wales’ problems you have now with maintenance. Charities, has increased. Sir Alan Reid: Yes, and we are open-minded on that Sir Alan Reid: Yes, our commercial rents have and we did have the eVect of a theme park with the increased from under £500,000 to a million pounds. Children’s Literary Garden Party a couple of years ago for The Queen’s birthday. We are very happy Q31 Mr Williams: What about the charities? to try to meet the National Audit OYce’s Sir Alan Reid: The charities are included in that. We recommendation here and document it as far as charge the Prince of Wales’ Charities £66,000 a year. possible so that others can trace through what our commercial rationale has been and is for looking at Q32 Mr Touhig: In the Property Section there seems property. to be no overall strategy or even a target for Mr Stevens: If I may inform the Committee of some generating income. That seems to be symptomatic of of the initiatives that we have been taking to the whole approach. Why are there no targets for generate income, for instance we generate around generating income? Why are there no strategies? about £80,000 a year from plant sales from the Sir Alan Reid: We do have strategies. We have a very gardens at Windsor. We make use of the facilities clear objective to maximise our commercial income. there and sell them through the farm shop and I think what the NAO had concerns about was that through various wholesalers. We have been looking we had not written that down and it is not fixed. to introduce tours of the Buckingham Palace gardens from this year. They are very, very popular; Q33 Mr Touhig: There is no strategy in the Property there is enormous demand. That is going to generate Section, at least that is what the NAO tell us. in the region of around about £30,000 for the grant- Sir Alan Reid: What I am referring to is the Property in-aid; these are very small amounts. Unfortunately Section. Our objective is to maximise commercial these aspects of our income generating strategy are income, but we cannot make firm decisions on that, not in a documented plan. we cannot necessarily say that in a particular month or in a particular year something definitely will happen. Our organisation has to be very flexible to Q37 Mr Touhig: I understand that and I understand diVerent scenarios and in that context we respond as that these are small amounts but I do appreciate the flexibly as we can and as commercially as we can to huge task you have got. However, you are saying you diVerent situations. We have a housing committee so do have a strategy and you do have targets, so why that if a house becomes available we will look at it have you accepted the NAO Report which says that and made a decision as to whether it should be you do not have a strategy and you do not have commercially let or whatever. any targets? Sir Alan Reid: I think their wording was not particularly inaccurate. We have not written it down Q34 Mr Touhig: How far ahead can you plan then and it is not fixed so that we can say that on a with all the restrictions you seem to imply you have particular day we are going to sell this building. placed upon you? Sir Alan Reid: In some cases we will plan several years ahead. Q38 Mr Touhig: It is not possible to write it down and fix it. Q35 Mr Touhig: You have said there are diYculties Sir Alan Reid: We will attempt to write it down but in planning too far ahead. it will need to be flexible. Processed: 22-05-2009 20:02:04 Page Layout: COENEW [E] PPSysB Job: 425164 Unit: PAG1
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Q39 Mr Touhig: Alternative uses for properties are Q45 Mr Touhig: It is not rocket science. looked at on a case by case basis and this seems to Maintenance costs can be massive. My youngest son suggest that there is no strategy for managing the works for a company that maintains domestic assets of the Estate. Colleagues have referred to properties and other properties for the Diocese of people within the secure perimeter and others Monmouth and LlandaV and he often comes home without and so on. Do you really have a strategy for and tells me about the huge problems they have on managing the assets of the Estate? discovering, when going into a rectory or something, Sir Alan Reid: Yes, we do. An example would be that that it is going to cost the diocese a fortune to put if a property becomes vacant and it is extremely right and yet it seems to me that the Department expensive to get it back into a fit condition because does not learn the lessons of dealing with a it has probably got asbestos and re-wiring needing to maintenance problem, getting an estimate for it and be done, we may well choose to mothball it unless we then cross-referencing that with the actual cost. The can get a proper rate of return for the money we are Report tells us that you do not seem to do that. going to spend from the grant-in-aid. That rate of Sir Alan Reid: The maintenance is firmly in Graham return would be determined either by commercial Sharpe’s focus. rent or by the abatement of salary in the savings to Mr Sharpe: I think we do learn the lessons from some other tax payer funded grant from doing that variations. We carry out post completion reviews on building. In that situation we will mothball it. If it those projects that have had diYculties encountered does have a payback then we will go forward on a in them to try and learn those lessons across the commercial basis. When Princess Margaret died we board. We have had presentations from our staV could not think of a sensible use of that by us so with who have carried out those projects to other the Departments’ agreement we transferred that to members of the team for that very purpose, to learn Historic Royal Palaces and relieved this grant of those lessons. that.
Q40 Mr Touhig: There are parts of Kensington Q46 Mr Touhig: I appreciate you talk to your staV Palace that have been empty for 10 years, since the about it. We are told here that a test check of projects Prince of Wales and his late wife lived there. showed that initial cost estimates tended to be Sir Alan Reid: That is now occupied. optimistic but the Property Section does not routinely check the accuracy of these estimates against the final costs. That is kind of basic, it seems Q41 Mr Touhig: In a previous incarnation, Sir Alan, to me. I was a councillor and I chaired something called Mr Sharpe: We do record them. Gwent County Council Estates responsible for 6000 acres of county farmland mainly small holdings and we discovered the tax payers of Gwent were Q47 Mr Touhig: So the NAO have got this wrong subsidising it. We turned the whole operation round then. by reviewing rents, increasing rents, by getting a Mr Sharpe: No. We have a financial record which proper management plan for the estate, reorganising goes from inception to completion. We record the it, disposing of assets we did not need and so on. Do initial cost which, in some cases, will have been you have that sort of approach, this over-arching produced five years before the project has even approach, bearing in mind the diYculties you say started up in design. We do not choose to review you have in planning too far ahead? those initial estimates. We think it is important to Sir Alan Reid: We do have that overarching maintain that as a marker. What we do not do at the approach but I think, to satisfy the National Audit OYce, we would be happy to try to document it moment is record the reasons why there have been more clearly. increases in costs. For example, has inflation been higher than expected over the period of the five year plan? If you take lead roofs, the cost of lead has gone Q42 Mr Touhig: When would you do that? up hugely, way in excess of inflation. We would seek Sir Alan Reid: In the next few months. to revise our forecasts as a result of those sorts of changes. Those are lessons we perhaps ought to document a bit more clearly. Q43 Mr Touhig: You could do that. Sir Alan Reid: Yes. Q48 Mr Touhig: Do you have your own workforce Q44 Mr Touhig: You think you could have an doing this maintenance or do you use contractors? overall plan which would give you a basic Mr Sharpe: For project work we tend to use outside management plan for developing the Estate long consultants. We have a small core team that is there term. From my experience we found that it was to manage, if you like as client representative on sensible not to wait for a property to become empty these projects. They also act as staV to keep the but to indicate long term how we would want to deal Estate maintained, reacting to repairs, placing with it. orders and that sort of thing. They would not tend Sir Alan Reid: Yes, it will have a number of to carry out the larger projects themselves; they contingencies in it. would use consultants to do that. Processed: 22-05-2009 20:02:04 Page Layout: COENEW [O] PPSysB Job: 425164 Unit: PAG1
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Q49 Mr Touhig: Mr Stephens, I see the Department Q53 Chairman: I put it to you that they are not sets objectives for the Property Section, however you any use. do not seem to know whether or not they have key Mr Stephens: We have three objectives listed in table performance indicators. Do they have key eight, all of them one way or the other—as I am sure performance indicators which report back to you? the Committee would expect—are about value for Mr Stephens: Yes they do. The current set of key money and the key performance indicators give us a performance indicators are listed in the NAO range of insights into how the Property Section is Report in table eight on page 15. We are currently delivering value for money which is very important. revising those and we will take into account the very What I am not disagreeing with is that if we could helpful comments from the NAO Report. develop a performance indicator that indicated change in the condition of the Estate that would be Q50 Mr Touhig: The Property Section has a very valuable measure. Generally we are currently introduced this risk based approach and inspection reviewing our performance indicators. of the conditions of properties in recent time but has not defined any criteria by which to look at this Q54 Chairman: So you are going to do it now, are work, it is open to interpretation. Is that not rather you? confusing and rather loose, if you do not actually Mr Stephens: We have just had some discussion have a proper measurement of what you are seeking about what measures might be available. Assessing to achieve? the condition of a historic estate is not a simple or Mr Sharpe: There are no industry standards for straightforward matter. We are happy to look at the doing so. Organisations like ourselves will use opportunities. specialist consultants—surveyors, architects and the Chairman: Good; we are making progress. Ian like—who would use their judgment to assess the Davidson? condition of the buildings they are looking at. Their assessment of good or excellent can vary but not Q55 Mr Davidson: Could I start oV by clarifying significantly I would suggest across the profession. something? You have mentioned a couple of times in That said, we were not aware of any software that relation to these buildings that they are tax payer could do this for us until we met Defence Estates owned assets. Is that the position as you recently as a result of the National Audit OYce understand it? recommendation. We were impressed with the Sir Alan Reid: In my view they are owned by The system that they have been running on 60-odd Queen on behalf of the nation just like Parliament is thousand buildings in their Estate where they have owned by the Government. a framework, a series of descriptions by which they analyse the conditions of their buildings. Q56 Mr Davidson: That is slightly diVerent; that is Mr Touhig: I should stop you there because I am not tax payer owned assets, it is owned by The Queen running out of time and I was the Minister in trust for the nation. responsible for Defence Estates, so I will end on a Sir Alan Reid: It is a very similar form of state high. ownership.
Q51 Chairman: Mr Stephens, if you do not mind me Q57 Mr Davidson: When people raise things with us saying so, your answer to Mr Touhig about as being tax owned assets it means that they want performance indicators I thought was a bit money but if they do not want us to have access to disingenuous because you claim that you have them them then they are something else and I just wanted but there was a question I was putting to you earlier to clarify that that is exactly the same here as well. that they do not bear any relation to the objectives. You mentioned that the business case for increased This is brought up by the Report in paragraph 27: access to Buckingham Palace did not stack up. Can “None of the Key Performance Indicators measures I just ask the National Audit OYce whether or not the outcomes achieved”. I put this to you again: here you have seen that business case? you have your high level objectives (they are set out Mr Hawkswell: No, we have not seen it. in figure eight) and the key performance indicators—the number of staV, the supply of Q58 Mr Davidson: Can you make that business case payments made within 30 days—do not actually tell available to the National Audit OYce so that they us how you are meeting your objectives; they are not can examine it and see whether or not they agree. much use. That is why I put to you that you have a Sir Alan Reid: We can certainly make it available, lack of grip on this and that is why I think you have yes.3 allowed this £32 million backlog to develop. Mr Stephens: I certainly was not seeking to be Q59 Mr Davidson: Why was it not made available disingenuous. before? Sir Alan Reid: The point was not raised. Q52 Chairman: No, I am sure you were not; perhaps I am being unfair but I did not think that your Q60 Mr Davidson: And you did not volunteer it. I answer was as full as it might have been. understand. Can I just clarify the points that you Mr Stephens: The suggestion was put to us that we made in relation to the way in which the did not have any performance indicators but we do have performance indicators. 3 Ev 17, 26 Processed: 22-05-2009 20:02:04 Page Layout: COENEW [E] PPSysB Job: 425164 Unit: PAG1
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Royal Household and Department for Culture, Media and Sport maintenance budget has gone down by more than Mr Stephens: This is rightly and properly a decision the budget overall has gone down? I was astonished for the Household. by your answer because it seems to suggest that maintenance just gets what is left after you have Q68 Mr Davidson: They took the decision and you spent all the other money that you want to spend on noted it. Can I clarify the question of income? I am running costs. Like some of my colleagues I used to anxious about income foregone. Rather than go be involved with a local authority; we had budgets through them one by one maybe I could ask if you and we decided how much we were going to allocate could let us have a paper via the National Audit to maintenance. Are you saying to me that you did OYce about the properties mentioned in box one not have that and that maintenance simply got the where there is anything less than the commercial rent residual? being charged for accommodation or oYces in order Sir Alan Reid: I should probably clarify that there that we can total it. It seems to me that eVectively the are two diVerent types of maintenance in my view. properties are subsidising a whole number of other One is the day to day maintenance that obviously operations by either under-charging rent or not continues as before because we have to keep these charging rent at all. I think it would be helpful if you palaces in an operational state. There are then other could clarify the extent of that. Is that possible?4 aspects of maintenance which are perhaps much Sir Alan Reid: I would be very happy to provide it more substantial and more like refurbishment and however it might be helpful if I explained some of the those are the ones that tend to take the brunt because other cost areas of the civil list. the other costs are ones that we cannot actually avoid. Q69 Mr Davidson: No. Maybe you could come back to that in your time but I have a limited amount of Q61 Mr Davidson: In paragraph three it does time right now. There is a charity mentioned here, mention that spending on maintenance projects has the Horse Rangers Association Charity, and I am reduced by 27% and that the budget overall was not sure of the extent of the subsidy they are down by 19%. Who took that a decision? receiving and whether or not, if that was a public Sir Alan Reid: It was not a decision. It is a fact of life policy decision, we would agree with that. I think we that if we have levels of expenditure on the running would want to have all of that clarified. Have you costs— not done that before, itemised the properties, what the real rent would have been, how much of a Q62 Mr Davidson: No, no, no. Of course it is a subsidy you are providing and how much therefore decision; even if it is a decision not to take a decision the cross-charging subsidy is? it is still a decision. You obviously decided to let the Sir Alan Reid: We are certainly aware of that where running costs run and the residual then went to the properties are outside the secure zone. Inside the maintenance. secure zone it is an academic exercise because we Sir Alan Reid: We let the running costs run because cannot rent them commercially. not to do so may well have led to redundancies and reduced staV. Q70 Mr Davidson: It does relate, of course, to the amount of money that you have available. Taking Q63 Mr Davidson: That is a decision. the example of charities, as I understand it a number Sir Alan Reid: To that extent yes. of charities are receiving essentially subsidised rent which was a decision taken by yourselves to give them money which is then not available to maintain Q64 Mr Davidson: Was it reported to the the buildings. If they were paying the real rent then Department that you were taking such a decision the money would be available. and that the result was that this backlog was going Sir Alan Reid: The abatements on rental that we give to build up? to staV were originally calculated by the Treasury Sir Alan Reid: Yes, it is very clear from what we were based on similar percentages in local government. stating— Q71 Mr Davidson: I am not disputing that they are Q65 Mr Davidson: Can I just clarify with Mr fair, I just want to know how much it is. Stephens, were you aware that these decisions were Sir Alan Reid: We follow that and we can certainly being taken and was it referred to you as boldly as tell you how much it is. The other one is where there that? is a Ministry of Defence let or the Princes’ charities; Mr Stephens: We get a regular quarterly report. they are the best guess at as reasonable a rent as we can get given that it is not a purely commercial Q66 Mr Davidson: That was not what I asked you. situation. I asked you whether or not you were aware that the decision was being made in such a formalised way Q72 Mr Davidson: It would be very helpful if we and were you happy to let it go? could have that. I am not entirely sure about the Mr Stephens: We discuss the annual report with the rationale behind some of the decisions on Palace on a regular basis. pensioners, for example. Maybe you could give us a note indicating how it has been decided which Q67 Mr Davidson: Is that a “yes” then? 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Royal Household and Department for Culture, Media and Sport pensioner should have no rent and which pensioner Mr Stevens: The Royal Collection Trust has should pay. I have here, for example, a very helpful embarked on a five year project to replace its paper where the press secretary to Elizabeth, The inventory system. At the same time it is continuing Queen Mother, has three reception rooms, five with the cataloguing of its inventory. There are over bedrooms and does not pay rent whereas a former half a million items at the moment and although we photocopy operator does pay rent. The retired expect to be able to publish the inventory at some accountant of the Privy Purse does not pay rent; a stage in the future—that is why we have built in liveried porter does pay rent. A cousin of The Queen functionality into the existing database—we are not (I am not entirely clear who that is but perhaps you in a position to publish it at the moment. Items from can clarify that) and the Principal of the Foundation the inventory are published on the Royal of St Katherine (I am not quite sure who that is and Collection website. it would be helpful to have that clarified), neither of them pay rent yet the widow of a carriage cleaner Q78 Mr Davidson: For as long as I have been on the does. On the other hand, the widow of a Royal Mews Committee and I think longer we have been getting groom does not. Is there a system behind all that?5 told that there was an inventory in the process of Sir Alan Reid: The system is not the one that you are being drawn up but we have never, ever seen it. If you implying; it is generally one to do with the timing of are saying to me that it is now in a form that can be their retirement. Up until about 1991 it was the released to the National Audit OYce and made policy for pensioners that were accommodated not available then that is welcome and we will come back to pay rent. The Queen tended to make those to that. decisions. Mr Stevens: Unfortunately it is not in a form that can be released to the National Audit OYce at this Q73 Mr Davidson: Again it is a question of how particular point. much of a subsidy that is to the individuals involved and therefore how much money is foregone. If they Q79 Mr Davidson: So despite all the years that we were being charged then presumably the money have been asking for this and you have been would not actually be paid by them directly, it would promising it, it is still not available. be paid out of the civil list which would mean Mr Stevens: As I said, we have been working with a eVectively that there would be more money available contractor for about five years now to deliver the for maintenance. new inventory system. It is a very, very complex Sir Alan Reid: Pensioners since 1991 do pay rental system and I am pleased to say that we have and it is set at a percentage of their pension. contracted on a fixed price basis so that we have managed the risk of that contract but unfortunately Q74 Mr Davidson: Can I just turn to the question of it has taken longer to deliver. the Royal Collection Trust which, again using your term, could be considered tax payer owned assets if Q80 Mr Davidson: You can give us a partial report; you are asking for money but not if you are not. you can give us what you have got. Can I just turn Sir Alan Reid: The assets managed by the Royal to the information in paragraph nine?6 This is a Collection Trust are owned by The Queen on behalf point that some of my colleagues have picked up of the nation. before which is about sharing the income from visitors. Emphasis has been placed to us on the fact Q75 Mr Davidson: You are not asking for money for that any proposals about income coming into the them so they are not tax payer owned assets. Do you maintenance budget would have to be agreed by the have a catalogue of those items? Royal Collection Trust themselves. It was not until Sir Alan Reid: There is an inventory and we have a I asked the National Audit OYce that I discovered new computerised inventory system going in at the exactly who the trustees were of that. Clearly it is all present time. figures at and around the Palace. Sir Alan, are you a member of that? Q76 Mr Davidson: So you will be able to provide the Sir Alan Reid: Yes. National Audit OYce with a copy of that inventory and catalogue and a list of where they are. Q81 Mr Davidson: You will know your colleagues Sir Alan Reid: It is possibly a bit early. We could better than I do then. You are in a diYcult position provide the old inventory. in a sense because you are on both sides of the argument. You are part of the Royal Collection Q77 Mr Davidson: Could you let us have what you Trust not wanting to give money to Buckingham have and clarification as to when we might get the Palace but you are involved with Buckingham whole thing. Palace wanting to get money out of yourself. Sir Alan Reid: Before I commit Mr Stevens is also Sir Alan Reid: I do not think it is fair to say that the Finance Director of the Royal Collection Trust Royal Collection Trust does not want to give money which is part of where we have been trying to save to Buckingham Palace. They know they benefit money in sharing his services between two bodies. greatly. The key point is that Royal Collection is a He may be able to give you a more accurate separate legal entity and the trustees of that charity commitment as to what we can provide. have responsibilities to the Charities Commission.
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Q82 Mr Davidson: It is a diYcult position for you, is Q87 Mr Bacon: I must say that thought the picture it not, having to wear two hats? gallery was lovely. I think the Glasgow Rangers Sir Alan Reid: Not necessarily. It can actually lead thing looked like it was cut out of the Daily Mirror you to looking at issues from a more equitable point to be honest. Sir Alan, I would just like to pick up of view. on the last thing you said to Mr Davidson about the Royal Collection having trustees, being a charity and having responsibilities to the Charity Q83 Mr Davidson: You are bearing up very well. You Commission which we understand, in fact we have mentioned that there had been a process of had the Charities Commission before us. Obviously discussion and negotiation about this for quite some they have to act in a fiduciary in relation to their period and that various things have been considered. responsibilities and so on. However, the very fact Has all that information been made available to the that they have this income that is arising from the National Audit OYce? visits to Buckingham Palace—they then have to Sir Alan Reid: We have not kept them from it. Is this choose what they do with it carefully bearing in mind the correspondence between me and the their responsibilities as charitable trustees—is only Department? I would have thought they would have because there was an agreement that they should get asked for it if they had wanted it. it. Referring back to something the Chairman asked Mr Davidson: Maybe I could ask the National Audit at the very beginning (which I still do not really OYce to ask for all of that then and to clarify all of understand following the visit although there was a the process and tell us whether or not you are comprehensive attempt to explain it to us), if the satisfied that it is being pursued as assiduously as revenues arise as a result of the visits to Buckingham possible in terms of wanting to get the money for the Palace why is that the Household does not get the maintenance.7 revenues in the first place. The answer seems to be, “Well, because the Royal Collection needed to spend Q84 Chairman: Providing notes to this Committee is a lot of money on refurbishing themselves” (you a very serious business. There are various mentioned £23 million) and presumably that will conventions surrounding it. You know what notes increase the number of visitors and enable the Royal you have promised Mr Davidson, do you? In Collection to do more in terms of displays and this particular we want to have a note on this inventory, kind of thing. Nonetheless, they are only exercising what have been the problems that you have those responsibilities in light of the agreement that encountered, when are we going to have it because was reached. we have been asking it for many years now? If you do Sir Alan Reid: I will try not to make this a long not have it, how do you know if anything is missing? answer but there are two parts to it. The Queen Sir Alan Reid: We will certainly supply you with the owns, on behalf of the nation, buildings—being the information we have got. There was a two year delay palaces—and she also owns on behalf of the nation from the people developing the computer art—being the pictures et cetera—managed by the programme. I have not been aware that you have Royal Collection. One way or another funding has been asking for this for several years because I have to be achieved for both of those. If it goes to the art never received a request in my time. it means less money for the properties; if we diverted Mr Williams: I have asked for it in previous hearings it all to properties there would be a need for funding with you; not with yourself but with your for the arts. There is a national funding issue predecessor. whichever way you go on this. Windsor Castle was first opened to the public in 1850 by Queen Victoria and in 1902 King Edward VII started charging for Q85 Chairman: Are we going to get it now? If we are going into Windsor Castle. So there has been a not going to get it we want to know when we are history of a hundred years whereby this income was going to get it. going into what was called the Royal Palaces Sir Alan Reid: You will get what we have.8 Presentation Fund which is really the predecessor body to the Royal Collection. So that had been Q86 Mr Davidson: I have a final point on paintings. happening for almost a hundred years (90 at the time There was only one picture that I recognised when I of the Windsor fire) so when the money stopped went round and that was the team photo of Glasgow being diverted into the fire restoration it was simply Rangers Football Club which I was very surprised to a case that the decision had already been made a find pasted up in a section of the Palace. Since that hundred years ago that that money would continue is my local team then I will go back and tell my to go back into the Royal Palaces Presentation Fund constituents that they are not forgotten in the which by that stage had become the Royal Palace. Collection Trust. The Treasury agreed to that at the Sir Alan Reid: You may look in the inventory in vain time but it was not a brand new decision; it was the for that one; it may have been privately owned. way it had always been. Mr Davidson: I am not sure I am going to get the complete inventory anyway. Chairman: You can have that and I will have the Q88 Mr Bacon: Mr Stephens said earlier that he Millet. Richard Bacon? thought that the Household was doing quite well given the declining revenue in real terms that you 7 Ev 27 have available. Having listened to what Mr Sharpe 8 Ev 23 and Mr Stevens said during our visit it was quite Processed: 22-05-2009 20:02:04 Page Layout: COENEW [O] PPSysB Job: 425164 Unit: PAG1
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Royal Household and Department for Culture, Media and Sport clear that they have an enormous range of challenges work throughout the year. The White House in and not enough income to deal with it. I think you Washington DC has visitors throughout the year. cut straight to the quick in your last answer: you do They do not actually charge, I do not think, but they not have enough money coming in for the things that have head of state function, they have a lot of oYcial you need to do. One of the reasons for that is because state engagements going on throughout the year, Mr Stephens is so stingy and does not give you oYcial visitors, there is a very high security issue and enough; the other is because you do not have enough yet they still manage to be open for much longer. I income coming in from visits. I will come onto Mr just find it diYcult to be persuaded that you have Stephens in a minute but on the income side you said done all that you could do. that it would be very diYcult to increase the number Sir Alan Reid: The White House has reigned back of days of visits for Buckingham Palace because of with heightened security levels as well. I guess people the oYcial, state and royal engagements. The come into the House of Commons to watch their Chairman mentioned that we, in this Palace—which MPs at work. is also a royal Palace—are open all year round and we have a lot of visitors. We have over half a million Q92 Mr Bacon: Also to do tours. Look behind you, visitors a year; Hampton Court has 600,000; the it is not full. Most of them come in to do the line of Tower of London has two million visitors (obviously route tour actually. the Tower of London is a major tourist attraction Sir Alan Reid: We could have a state visit going on with the Crown Jewels and is open largely for that in October and we cannot have the public wandering V purpose). One appreciates it is di erent in around watching the President of Mexico with The Buckingham Palace but nonetheless you made it Queen in the middle of a state function. sound in your answer that even if you were open for longer it would be a zero sum game; the tourists would just be spread over a larger period. What is Q93 Mr Bacon: They would probably pay quite a lot your estimate of the extra revenue you would get by for that actually. Let us move onto Mr Stephens and his stinginess. Politically it is always going to be being open for longer? Y Sir Alan Reid: I do not know a precise number but it di cult in good economic times when there are so is small. many other priorities to justify extra expenditure of this kind and we are not in good economic times. Remind me, Mr Stephens, what is the total grant- Q89 Mr Bacon: You said the business case does not in-aid? stack up. If you know that the business case does not Mr Stephens: The core grant-in-aid is £15 million. stack up you must know why it does not stack up and the extent to which it does not stack up? Mr Stevens: If I may just qualify the issue about the Q94 Mr Bacon: That is for the maintenance. business case, the business case was evaluated from Mr Stephens: No, £15 all in for the running costs and the point of view of having a separate opening at the maintenance. other times of the year, during the Christmas period and during Easter when The Queen is away. Those Q95 Mr Bacon: Have you got a rough figure for the were obvious times to open the palaces. base cost of the total running costs if you add in the Unfortunately for the infrastructure that goes into civil list and the travel? The civil list is £12 million, establishing the Buckingham Palace summer the travel is £6 million; buildings grant-in-aid is £15 opening we pay something like £200,000 for million. Excluding the police, the army and the temporary buildings and security systems. To security, what is the rough cost of the entire implement that for a short period at those times of shooting match? the year when visitor numbers are much lower, the Mr Stephens: I am not responsible for all those. business case would not stand up. Q96 Mr Bacon: I did not ask you if you were Q90 Mr Bacon: Surely that is all the more reason to responsible; somebody must know roughly what it leave it up permanently then you spread the capital is. costs over a greater number of visitors. Sir Alan Reid: It is £40 million. Mr Stevens: That would be the ideal situation. Unfortunately if we were to establish those buildings Q97 Mr Bacon: My guess was that it would be under they would be in parts of the Palace that have other £50 million. The security, army and police element is functions at other times of the year. We are able to obviously on top of that and it is significant. On the Y put those temporary buildings—our ticket o ce, other hand you would have to factor in the number our security searching channels—in parts of the of tourists who come to London to watch the Palace that are not used during the summer period. Changing of the Guards if you were to get an As Sir Alan mentioned, we recruit a lot of students accurate picture. Am I right, Mr Stephens, that the to help us out during the summer opening—seasonal reason the civil list and the grant-in-aid work the V sta —and those students all return to university in way they do is because an agreement was reached October. between the Royal Household and Her Majesty The Queen and the Treasury whereby the monies from Q91 Mr Bacon: When I was a student myself I the Crown Estate were paid over and then the worked in October, November and December in monies to run the Royal Household and Family and London; I am sure you would find people who could Estates were paid out of public funds. Is that right? Processed: 22-05-2009 20:02:04 Page Layout: COENEW [E] PPSysB Job: 425164 Unit: PAG1
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Mr Stephens: Yes. Q103 Geraldine Smith: I feel quite positive about what you are doing actually because I think you are moving in the right direction with tours around Q98 Mr Bacon: If you look at the Crown Estate Buckingham Palace. I think that gives people a great revenues last year it was £211 million pounds paid deal of pleasure. Perhaps we can get a bit petty at directly to the Treasury. In fact the chairman, Mr times. When we look £32 million seems a lot of Grant, said “I am delighted we have returned £211.4 money but at the end of the day over a number of million to the Treasury in the form of our net revenue years it is not that much when you are looking at surplus”. If you just add up the last five years it is unexpected maintenance and things that might nearly a billion pounds that the Treasury has occur during the time. Do you find that that received. It is in this context, I think, that one has to happens? I know with my own home—a very small examine your stinginess because actually there was a house—you find things go wrong that you do not deal that these monies would be handed over in expect. return for the state looking after the head of state Sir Alan Reid: It is exactly like that and it is a similar function. You are failing in your responsibilities, are reaction. You get very depressed when you suddenly you not? find that you need to rewire your house. When the Mr Stephens: No, I certainly do not accept that we fac¸ade in the back courtyard of Buckingham Palace are failing our responsibilities. The overall condition crumbled we knew that work needed to be doing at of the Palace is good and the Household is doing a some stage but it was extremely depressing to realise very good job under tight constraints. Priorities have it had to be done right there and then because that is to be determined within our budget and the DCMS what the crumbling was telling us. does not get the benefit of the income from the Crown Estate. Q104 Geraldine Smith: Also there are health and safety issues if there are pieces of rock falling and Q99 Mr Bacon: Sir Alan, it may be that you have potentially hitting people. these numbers available easily or perhaps with the Sir Alan Reid: It is certainly a public liability issue. National Audit OYce they can be assembled, but is it possible that you could send us two schedules side Q105 Geraldine Smith: I think there has to be some by side, one showing the revenue surplus that has balance is well. It is good that you are opening up the been paid over by the Crown Estate to the Treasury gardens of Buckingham Palace; again I think there for the last 10 years and then the various costs of the will be a great deal of interest in that. I also think the Royal Household—be it civil list, travel and so on— Royal Garden Parties give people a great deal of over the last 10 years? pleasure. I know any constituents of mine who have Sir Alan Reid: We produce a document on the managed to get a ticket have always talked about it second, including all government department for years. I think the tax payer does benefit from all expenditure on us except for security and police and these things not to mention all the receptions. we publish it every year so I will happily send you Sir Alan Reid: The Garden Parties are an issue in that. terms of opening Buckingham Palace because probably we could get the most tourists possibly in in July but that is the peak season for the Garden Q100 Mr Bacon: Between you could you send us, as Parties. People who are invited to a Garden Party do a Committee, both of them, including the monies value the invitation hugely.This is a decision we keep that you, Ms Diggle, get in. I reckon that you do facing: do we want to squeeze that in order to get quite well out of this as well. more paying public through or should we have Ms Diggle: We certainly try to. regard to the emotional and reward element that people coming to the Garden Parties feel? Q101 Mr Bacon: Over the last 10 years the costs have Geraldine Smith: As you say, I think it is a question been £400 or £500 million and the revenue has been of balance. You are in danger of almost devaluing it a billion and a half or something like that. Would if you open it up too much and there is too much that be fair, roughly? access. Certainly I do not think we should be petty Ms Diggle: They make a surplus of about £200 about the redecorating costs. I find it quite sad really million. when some of the state rooms become a little bit faded and the work cannot be done immediately. Certainly on this Committee I remember well one Q102 Mr Bacon: The Crown Estate does, yes. Sir occasion when the Home OYce had spent £30 Alan says he costs £40 million. If you add in the million on an asylum centre that was never built; the police and the army and everything else it is not grass was not built on, nothing happened. To me going to be £200 million is it? that is a huge waste of money. When we visited the Ms Diggle: I would not like to comment; I do not Palace we could see for ourselves the work on the have a figure for that. roof that needed to be carried out just to make it Mr Bacon: I think you do very well out of it. safer for people working up there if they have to be Anyway, I look forward to receiving the note, on that roof and also maintenance of the boiler thank you.9 room; all that is very expensive. Do you sometimes get a bit annoyed when people seem to be picking 9 Ev 23–24 fault very much? Processed: 22-05-2009 20:02:04 Page Layout: COENEW [O] PPSysB Job: 425164 Unit: PAG1
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Chairman: I hope you are not referring to me. half million pounds a year less money than was expected and that accounted for something like £10 Q106 Geraldine Smith: Obviously we do have a duty million lost money. to ensure that money is well spent. Sir Alan Reid: We understand that we have to be Q111 Nigel GriYths: How many members of the accountable. team have graduate qualifications in marketing? Chairman: Very diplomatic, Sir Alan. Sir Alan Reid: Can I ask you which team you mean? Y Q107 Geraldine Smith: Can I just ask a little bit Q112 Nigel Gri ths: Anyone involved in making about the Royal Collection as well? What sort of sure that we maximise the revenues for visitor benefits do tax payers get from that? numbers. Mr Stevens: One of the benefits for the tax payer is Sir Alan Reid: That would be the marketing side of that the admissions to all of the palaces comply with Royal Collection. the gift aid regime that was introduced for Mr Stevens: Can I just comment on that? We have a admissions to museums, galleries, et cetera and team of about half a dozen people in the marketing visitors are able to come back as many times as they department responsible for the Royal Collection PR like throughout the year. Compared to the cost of and marketing strategy. I think the key point is that admission to many other comparable attractions the marketing team would never have anticipated many of our visitors get very good value for money. the developments in the tourist sector that occurred The investment in The Queen’s Galleries both in from 2001 onwards. London and in Edinburgh have greatly increased the amount of exhibition space that the Royal Q113 Nigel GriYths: Like what? Collection now has and has a much greater Mr Stevens: Like 9/11, foot and mouth. programme of changing exhibitions which means that more of the Royal Collection can be seen. It can Q114 Nigel GriYths: Hang on, in 2007 it was a be brought out of the palaces which, in the case of record year; volume was up to 32.8 million people Buckingham Palace, is only open for a couple of from abroad visiting which was 8% up over two months a year, and members of the public can see years. The increase in income was up to £16 billion, more of the Royal Collection. There is enormous 9%. So whatever happened in 2001 was certainly benefit from that investment for the tax payer. cancelled out and indeed allowed organisations like Geraldine Smith: Your consultants’ fees are not that the British Museum and the National Gallery to high. I guess they would look high to anyone outside massively boost their numbers. Why did the ones this room but compared to figures I have seen I think you preside over fail to mirror those? they are pretty modest and I hope you can keep them Mr Stevens: Hopefully that is reasonably easy to that way. explain. One of the reasons why organisations like Chairman: Thank you Mrs Smith. Your last the British Museum and the National Gallery were questioner is Nigel GriYths. able to boost their numbers was of course the introduction of free admission to museums and Q108 Nigel GriYths: The reasons you believe you do galleries. The second point is that if one looks at, say, not have enough money to maintain the Estate to a the performance of the Royal Collection where we standard you would like are two-fold. As figure one have seen a reduction in visitor numbers— shows there has been a flat lining of the grant and particularly at Windsor Castle which is really what secondly Sir Michael Peat’s anticipated increase in we are referring to here—of around 300,000 per tourist income has not come about since 2002. annum from 1.25 million in the 1990s to about Sir Alan Reid: Yes. 950,000 on average post 2000, that is not so dissimilar to the performance we have seen at other visitor attractions, for example Hampton Court and Q109 Nigel GriYths: You told the Committee the Tower of London, where they have seen a basically that you are straining some of these to reduction in their average visitor numbers of nearly capacity in getting people in at the moment, is that 20% over the same period. Our performance is very, right? very similar. Sir Alan Reid: It was capacity at Buckingham Palace through this summer; it has not necessarily been Q115 Nigel GriYths: You seem to be almost capacity at Windsor. benchmarking yourselves against the losers and not the winners and I would like to know why. Q110 Nigel GriYths: Is that where Sir Michael Peat Mr Stevens: Benchmarking ourselves against thought in 2002 the anticipated income was going to organisations which are in the heritage sector we are go up? very, very similar in the oVer in our tourist market. Sir Alan Reid: I think he was here in 2000 and that There are areas where the Royal Collection has done is certainly one of the areas where he was expecting well during that period and noticeably at visitors. The way the allocation is structured Buckingham Palace. One of the reasons for that is eVectively the property grant-in-aid was the equity that the Royal Collection has had to invest very owner of the Windsor Castle receipt so any increase heavily in mounting special exhibitions each summer in tourism above a certain amount almost all went to in order to compete with the many other visitor the grant-in-aid. So there has been one to one and attractions that are on oVer these days. Processed: 22-05-2009 20:02:04 Page Layout: COENEW [E] PPSysB Job: 425164 Unit: PAG1
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Royal Household and Department for Culture, Media and Sport
Q116 Nigel GriYths: That is probably why, if you do the way that they operate. One of the key things compare like with like, we have seen a dramatic rise about any development of the opening of in the number of visitors to the National Gallery, the Buckingham Palace is that we would have to consult British Museum and elsewhere. Have you consulted very closely with security and the Home OYce Neil MacGregor, Director of the British Museum because they do have a considerable input into the about how to boost numbers and maximise your opening of the Palace each summer and considerable assets? cost as well. Sir Alan Reid: The key feature there is that that is benchmarking against places that have free Q122 Nigel GriYths: How do you get a private tour admission. of Buckingham Palace? Mr Stevens: You can apply through the Royal Q117 Nigel GriYths: My question was, have you Collection website and you can call the ticket sales consulted Neil MacGregor? I am just looking for a and information oYce at Buckingham Palace. yes or a no. Mr Stevens: Our marketing department have not Q123 Nigel GriYths: It is as available as that, is it? necessarily consulted Neil MacGregor but they Mr Stevens: Absolutely. We also have begun to consult with their peers at other museums and market the private tours; they are private from the galleries and with VisitBritain and so we share the point of view that they are exclusive; you go round intelligence of what is working in particular with a guide, that is the element of being private. organisations. Q124 Nigel GriYths: How many of these roughly are Q118 Nigel GriYths: I am puzzled that something available in the course of a season? like the Tate Modern which, after all, is just a pile of Mr Stevens: As we have opened the Palace now in bricks in an old power station, can break all records January and April there are 50 for anything up to by getting 4.5 million visitors and yet you are getting groups of 60 (they go round in two groups) and then slumps in facilities that have been household names during the summer when the Palace is open most for centuries. evenings there would be another 50 or 60 tours then, Sir Alan Reid: Can we compare the revenue from again they could be up to 60 people. Those tours are admissions of both those organisations? taken round by a curator.
Q119 Nigel GriYths: You can do what you want. Q125 Nigel GriYths: The British Museum and Sir Alan Reid: There is no charge. others have corporate sponsorship for those sorts of evening events, have you considered that? Q120 Nigel GriYths: Yes, I am sure you are getting Mr Stevens: The only sponsorship that the Royal more. In terms of the White House which Mr Bacon Collection has had in the past has been sponsorship raised I certainly was not satisfied with the answer. for its publication programme. It has not really been The White House is open year round. The booking deemed appropriate to consider sponsorship for procedures have become slightly tighter and the other activities. security has been put in, but the notion that ordinary members of the public in America would not have Q126 Nigel GriYths: Do you not think that that is access to the White House is anathema to their possibly a massively lucrative area of income that democracy. We seem to take a slightly diVerent you are missing out on? attitude to Buckingham Palace. Mr Stevens: If you had asked me that question two Mr Stevens: I think the analogy of the White House or three years ago I would have said that we may well is quite interesting because the visitor experience is be missing out. In the current economic environment very,very diVerent. When you go to the White House I think many sources of corporate sponsorship are the security means that all your bags are confiscated, probably drying up. Again it is something to look at you have to book a considerable time in advance. It in the future. is not a case of just turning up for a visit and of Chairman: There are a couple of supplementaries course it is free as well. It is diYcult to compare a fee from Mr Touhig and Mr Bacon. charging attraction. Q127 Mr Touhig: Mr Bacon and Mr GriYths have Q121 Nigel GriYths: I accept that and I am not pressed you about the issue of the number of days going to press that point. The point I will press is that the Palace is open to members of the public. You you are likely to be there at the same time as the have explained that there are times when the Palace Mexican Prime Minister or President and the White is being used in terms of state visits et cetera. I fully House does not have problems with that. I think understand all that, but this place is flexible in the there are separate doors. You seem to know about sense that we meet at diVerent times and on a the White House; have you been over to the White Wednesday and Thursday we meet in the mornings House to ask them to solve this problem? Have you so it is not possible to go round the whole Palace. consulted anyone specifically to say, “How do we Surely that is not a problem; you could overcome solve the problem of Buckingham Palace?” (That that. If you had a visit from the President of Mexico sounds like a new TV quiz.) on a Wednesday afternoon the Palace could be open Mr Stevens: I do not think we have consulted anyone in the morning. I would not want in any way to put specifically at the White House but we are aware of a stop to the Royal Garden Parties because people Processed: 22-05-2009 20:02:04 Page Layout: COENEW [O] PPSysB Job: 425164 Unit: PAG1
Committee of Public Accounts: Evidence Ev 15
Royal Household and Department for Culture, Media and Sport love to go, it is a great privilege to go, but in the Chairman: It may be one or other member of the mornings it would be possible to have visits. Not all Royal Family is there for 300 days a year but you state banquets et cetera are held at the Palace; others cannot close the entire Palace because the Duke of are held at Windsor. How many days a year is the York is sitting in his flat upstairs. We just want a Royal Family actually in the Palace? reasonable answer.10 I think Mr Davidson has a Sir Alan Reid: First of all, Windsor Castle is open supplementary. pretty much every day of the year—about 360 days—and needs to close occasionally for state visits Q136 Mr Davidson: Following on from Mrs Smith’s or whatever. Buckingham Palace is maybe a lot point about moving in the right direction, I think we busier with activities than people realise. Three or would agree that you are moving in the right four days a week The Queen may well be giving direction but the last time I heard that phrase used it audiences to a variety of people; there are was describing a glacier and I think the speed of investitures for 22 days as well as over a hundred movement leaves a great deal to be desired. I wanted receptions going on. to ask about Kensington Palace and the occupation thereof. The last time we were there we were told that Q128 Mr Touhig: Would it not be possible to open the whole question of the occupation of Kensington the Palace and cut out certain areas that are being Palace could not really be questioned in any way used at that time? because Princess Alice was there. She was an elderly Sir Alan Reid: We have taken the view that if you are lady and it would be impossible to think about not giving people a tour around the whole of what moving her out, they would not want to do that and they can see in the summer you might well have to so on and so forth, the implication being that when have a reduced charge for other times. By the time she passed on that would all be re-examined. Well you do have that the extra money you get from it, she did and it was not. I think we have the impression with extra security and protecting the Palace so that that you provide answers to us at a particular the maintenance bills do not go you end up with very meeting—like the question of the Royal Collection little gain. and when it is being inventoried—then you go away and do not really do a great deal about it and you Q129 Mr Touhig: How many days a year is the only move when pressure is applied. In relation Palace open to the public? particularly to the question of reviewing the use of Mr Stevens: Sixty-three days. Kensington Palace, can you clarify what exactly has been done to re-examine that? We were particularly Q130 Mr Touhig: How many days is the Royal interested in assessing whether or not much more of Family in occupation at the Palace in a year? that could be used for other purposes. Mr Stevens: It is 63 days and then the Palace is open Sir Alan Reid: I have never heard of any implication for private views during certain periods. that when Princess Alice died the whole thing was open to review. Q131 Mr Touhig: How many days is the Royal Family actually in residence? Q137 Mr Davidson: I think we need to pursue that. Sir Alan Reid: There could well be a member of the I think we need to check with the National Audit Royal Family there for up to 300 days a year. OYce whether or not that was said at the time, whether or not we have records of that and, if we Q132 Mr Touhig: Yes but they are not. have—I am pretty certain we have—why has that Sir Alan Reid: I meant that one or other member of not been communicated to yourself? There is no the Royal Family may very well be there, adding up point in us meeting you as an individual if there is to 300 days a year. not an inherited memory of the organisation. I think that is one of the worries that we have had about Q133 Mr Touhig: So you do not have precise figures dealing with yourselves for a long period. to tell us how often the Royal Family is actually in Sir Alan Reid: It is such a significant point I am residence. surprised it has never been mentioned to me if it was Sir Alan Reid: We do not monitor when they come actually stated. Since you made that visit Princess in and out I am afraid. Margaret died and we handed that apartment and a couple of others over to the Historic Royal Palaces Q134 Mr Touhig: I do not mean that they are so we did not add to the Royal Occupancy at that popping down to Tesco to do a bit of shopping; I stage. The Duke and Duchess of Gloucester and the mean they are actually at Sandringham or they are Duke and Duchess of Kent still live there; The in Balmoral or somewhere else. Queen has always intended that they should live Sir Alan Reid: I know exactly when The Queen and there as long as they are doing oYcial duties which the Duke of Edinburgh are there because we can they continue to do. I have never been aware of any track that through diaries et cetera. implication that they would be leaving when Princess Alice died. Q135 Mr Touhig: Could you perhaps give us the figures of how often the principle members of the Q138 Mr Davidson: The discussion about where Royal Family are in residence in a year? some of these royals should be was brought on the Sir Alan Reid: The Queen, Duke of Edinburgh, Duke of York? Yes. 10 Ev 25 Processed: 22-05-2009 20:02:04 Page Layout: COENEW [E] PPSysB Job: 425164 Unit: PAG1
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Royal Household and Department for Culture, Media and Sport basis that Princess Alice was there and therefore you Q143 Mr Bacon: But it is historically enormously were going to have all the rest of those properties and important. You are basically making arguments as you had to fill them with somebody. That is why they to why it should be funded especially by the were there rather than anywhere else. Department. Sir Alan Reid: What has been on my agenda has Mr Stephens: In the context of other buildings on the been the situation of Prince Michael and Princess at risk register for which there are funds more widely Michael. I understand you expressed concern that available but quite limited funds no rent was being paid when they were not doing oYcial duties and we dealt with that point. As far as Q144 Mr Bacon: So what is the answer to my I am concerned we have dealt, not at a glacier pace, question? with the points that I was aware of. There is no Mr Stephens: The answer is that we are currently intention of the other members of the Royal Family assessing the condition; the Household is currently leaving Kensington. assessing the condition. Q145 Mr Bacon: The assessing has been going on Q139 Mr Bacon: Sir Alan, of the 25 vacant now for 14 years; how much more assessing is apartments within the secure perimeter that are needed? referred to in the Report that were vacant in 2008, Mr Stephens: It has to be considered in the light of how may are vacant now? other priorities, including other at risk buildings. Sir Alan Reid: I think we may have to send you a Those who know the Mausoleum—I have not yet note on that. had the opportunity to visit—tell me that there have been problems with the building for a hundred years or more that are inherent to the design of the Q140 Mr Bacon: You said they were rotating. You building, so putting it right is not an easy matter. made it sound as if none of these were vacant for very long. Q146 Chairman: Gentlemen, thank you; that Sir Alan Reid: I think my answer covered rotation concludes our hearing and we will obviously now and also mothballing. have to reflect on our report. My own personal view is that clearly the front line staV do a dedicated job Q141 Mr Bacon: In our note perhaps you could and I am lost in admiration for the work of The explain how many of those that are mentioned in the Queen, but I am not really lost in admiration for the National Audit OYce Report as being vacant in July professional management of these priceless national 2008 are still vacant or have been occupied recently. assets, I have to say,Mr Jonathan Stephens. I am not Mr Sharpe: There are 27 currently vacant but they sure that there is a strategy for the Estate; I am not are diVerent.11 sure there is certainty about the size of the Mr Bacon: Are they all diVerent? Perhaps you could maintenance backlog or the priorities for dealing explain it in a note that would be very helpful.12 with it. I am not certain about the performance Finally, Mr Stephens, the Victoria and Albert indicators relating to the objectives. I am not certain Mausoleum is a national treasure that is at risk about the inspection arrangements being guided by according to English Heritage. Your Department is clear criteria for the condition of these assets and I responsible ultimately for the nation’s heritage, am not certain that we have best of class Estate when is it going to be fixed? It has been waiting for management arrangements for what are, by any 14 years, when are you going to make sure it gets account, priceless national assets. I have made my fixed or are you just going to let it fall into disrepair? point, Mr Stephens, so I think it is only fair that I give you the final say to comment. Mr Stephens: I would repeat simply that overall the Q142 Chairman: We are going to see it in the next Royal Palaces are in good condition. I think the month; will you fix it before then? Royal Household is delivering very good value for Mr Stephens: I fear not. It is of course one of a money against a declining grant and declining number of buildings on the at risk register. I think income from other situations. The National Audit English Heritage estimate that it would take some OYce in their Report says that they have the key £400 million to put right all the things on the at risk elements of a sound maintenance strategy in place. register. It is not, of course, in the highest category We strongly support their eVorts to seek to increase of risk; the category of risk it is in is slow income from other sources and of course we attach deterioration with no agreed solution. As a result of enormous importance to the maintenance and that the Household is now monitoring the condition operation of the Palaces in their key role providing with a view to assessing what scope there may be for an appropriate and dignified setting for the Head of measures to arrest any decline. I think it is fair to say State. I think I should just finally add, Chairman, that this is outside the normal operating costs of the that you failed to repeat what I will certainly put on Royal Household. It is not an operational part of the my CV for applications for future accounting Y Palace; it is not one to which staV or members of the o cers, namely the description of me as stingy public have routine access. which is one which a number of my colleagues will doubtless think is one that should be a qualification Y 11 Note by witness: There were in fact 32 properties vacant as for an accounting o cer. at that date. Chairman: Thank you very much, Mr Stephens; 12 Ev 25 thank you gentlemen. 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Memorandum from The Royal Household Questions 57–58 (Mr Davidson): Business case for increased access to Buckingham Palace.
PROPOSAL TO OPEN THE STATE ROOMS AT BUCKINGHAM PALACE DURING SANDRINGHAM AND EASTER COURT (updated December 2008) Objective To increase public access to Buckingham Palace and the works of art in the Royal collection by opening the Palace during The Queen’s absence in Sandringham and Windsor at Christmas and/or Easter, thereby generating additional income from visitor admissions.
Factors to Consider In determining the feasibility and profitability of opening the State Rooms at Buckingham Palace at a time outside the existing summer opening period a number of factors need to be considered. These include the uninterrupted period of time available and costs involved in providing the required infrastructure, the recruitment and training of staV and the Property Section’s maintenance programme at the Palace during The Queen’s absence. The proposal outlined below is based on known costs from the existing summer opening but on a reduced daily staYng requirement, on the assumption that visitor numbers will be fewer outside the peak season (see visitor number assumptions under Financial Summary). Where possible the infrastructure has been reduced, eg a smaller waiting area at the Visitor Entrance, no shop (visitors will be directed to the Royal Collection shops on Buckingham Palace Road) and no special exhibition. This slightly reduces the set up time and costs. In certain areas, such as uniform purchase, maintenance and ticketing hardware, costs have been reduced on the basis that these would be incurred annually for the Summer Opening. However, it should be noted that the majority of the costs involved in setting up and staYng the opening of the Palace for large numbers of visitors are fixed. This proposal excludes existing guided private tours that are currently carried out in the evenings during this period.
Set-up Timetable Temporary buildings: The temporary structures needed to provide the required facilities for large numbers of visitors to the Palace are as follows: — Ticket oYce. — Covered queuing and waiting area. — Security search area for airport style security. — Baggage check-in. — Audio guide distribution area (audio guides are included in the cost of admission so are given to each visitor). The period required for building and fitting out these structures is 17 days from starting on site to completion. This is three days less than the Summer Opening set-up timetable which requires additional time for changing the buildings over from their garden party usage and the construction of a larger visitor waiting area. All other buildings and walkways can be built and fitted out within this time frame as follows: — Lavatories 7 days — West canopy (for audio guide returns and baggage collection) 3 days — Quadrangle walkway and viewing platform 3 days
State Rooms, Operations oYce and staV changing and locker rooms In addition to temporary structures, certain measures are taken to make the State Rooms ready for large numbers of visitors. These activities require ten days to carry out and include: — installing discrete Perspex coverings on doors and staircases to protect the gilt decoration; — installing temporary handrails to the staircases inside and on the West Terrace for health and safety requirements; — the provision of a temporary platform lift to provide access for a large number of wheelchair users (the existing stair-lift is not suYcient for the number of projected visitors even on reduced daily visitor numbers); Processed: 22-05-2009 20:02:04 Page Layout: COENEW [E] PPSysB Job: 425164 Unit: PAG1
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— the provision of a temporary hoist to enable visitors luggage and pushchairs to be taken to the exit for them to collect as they depart. (Visitors are not permitted to carry large bags through the State Rooms for security and safety reasons); — laying protective runner carpets in some areas either to protect floors or to even out the flooring to prevent slips and trips; — lifting and storing antique carpets and replacing with modern equivalents; — the re-positioning of large pieces of antique furniture to ensure visitor flow through the rooms is not disrupted, putting out ropes and stanchions to protect the artwork (many paintings are unglazed and the porcelain is fragile); — putting out plants and flower arrangements to enhance the presentation of the rooms; and — the set up of a temporary staV changing and locker room for over 100 staV, an operations control oYce and first aid facilities in areas that are normally in use by the Royal Household. Further to the installation of the infrastructure, one day is required for the installation of IT, security equipment etc and, at the very least, a further day’s on-site training for staV.
Number of Days Available to Open in 2008–09 January opening (Sandringham Period)—4 to 31 January This proposal is based on The Queen’s diary and events taking place in the State Rooms for 2008–09. The last events in the State Rooms prior to The Queen’s departure to Sandringham are as follows. 17 December Chapel Royal Carol Concert in the Ballroom 18 December Investiture Work on setting out the interior of the Palace for public opening could commence from Friday 19 December for a period of 10 days and complete on 30 December. This assumes that no work would take place on Christmas Day and Boxing Day when the entire Palace is closed. Construction of the temporary buildings for the summer opening takes place prior to The Queen’s departure as it does not generally conflict with the work of the Household inside the Palace. This proposal is based on the assumption that the same approach could be adopted for a January opening. Therefore, work on the temporary buildings would commence 17 days earlier on Friday 12 December (again, excluding working on Christmas Day and Boxing Day). Installation of equipment would take place on 31 December and snagging would take place on 1 January. (NB No specific allowance has been made for any additional bank holiday working costs in the outline budget). On-site training for staV in the temporary buildings would take place on 2 and 3 January. This proposal assumes the availability of St James’s Palace for two days in the last week of December for classroom training for 120 people (or a similar sized and priced venue). On the basis of the above set up timetable, the Palace would be ready to open to the public on 4 January.
Exhibition A key element of the Summer Opening each year is the special exhibition in the Ball Supper Room or the Ball Room. This is a central feature of the marketing strategy to encourage repeat visitors, and provides PR and media opportunities to remind people that the Palace is open. Work on setting up the special exhibition normally commences at least 3 weeks before opening and access to the Ball Room would not be possible until 19 December and to the Ball Supper Room until 18 December. The earliest date of opening if an exhibition were to be mounted would therefore be 7 January, ie 4 fewer days open to the public. The cost of mounting the display is in the region of £150–200,000 depending upon the subject matter. In view of the likely constraints over the amount of set up time available and the reduction in the number of days available, the cost of mounting the display and the need for additional resources within the exhibition team, it is unlikely that the January opening would be able to mount a special display. This will have a consequential impact on the PR and marketing strategy and as a result, visitor numbers (see Financial Summary).
Decant timetable In 2009 The Queen returns to Buckingham Palace on 6 February. Using that template, the Palace could be re-instated as follows: 1 February—Equipment removed. 1–6 February: rooms re-instated for The Queen’s return. 2–11 February: temporary buildings removed. Processed: 22-05-2009 20:02:04 Page Layout: COENEW [O] PPSysB Job: 425164 Unit: PAG1
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Days Open On the basis of the set up and decant timetable the Palace would be open for 28 days (compared with 63 days in the summer).
Easter Opening Easter has been discounted as a potential opening period based on The Queen’s current usage of Buckingham Palace. In 2009 the last event to be held in the State Rooms is a charity dinner on 26 March. The Queen goes to Windsor on 27 March but returns for the G20 summit and the State visit of the President of Mexico from 1 to 3 April. The Queen returns to Buckingham Palace on 27 April. Even without the complication of the G20 Summit and State Visit this year the potential time for opening would be only 14 days and therefore not commercially viable.
Daily Staffing The projected minimum daily staYng level of 87 is 19 fewer people per day than during the summer. This is based on the following assumptions — there will be fewer visitors so fewer security channels will be required; — there will be no special exhibition; — less of the garden will be open; and — there will be no family activity room (as in September). This staYng level would need to increase by seven at weekends to allow for a second security arch and additional admissions staV on the assumption that visitor numbers would be higher at weekends. In addition there would be a requirement for 37 Ticket Sales and Information OYce (TSIO) staV to deal with telephone, internet and on the day ticket sales
Recruitment Based on our experience of recruiting staV for a 10-12 week contract over the past 14 years recruiting the required number of staV for a one month fixed-term contract, outside of university holidays, would be extremely challenging. Despite a number of initiatives to recruit more non-students during the summer period through targeted advertising, the majority of our staV are students or recent graduates. The proposed period of opening would cover about one to two weeks of the university holiday but thereafter students would return to university (in many cases, to mid year exams). We would therefore need to recruit students from London Universities and Colleges who could train during the Christmas holidays and thereafter work part-time for the rest of January whilst they continue to study. It is likely, therefore, that we would need to increase the proportion of staV on part-time contracts. To ensure the required security and pre-employment checks can be carried out in time advertising, shortlisting and interviews would have to be carried out during August and September. Additional resources would therefore be required as the Visitor Services and TSIO teams are fully stretched during this period with running the Summer Opening. For the Summer Opening recruitment 15 half days are set aside for the recruitment of Warden staV (two sessions per half day ie 30 group interviews per year) and nine half days (18 sessions) are set aside for TSIO interviews. As fewer staV are required and it would be hoped that some summer staV would also work in January we would require at least ten half days (20 sessions) in September. In addition a further two full days would be required for interviews to recruit the 12 supervisor positions.
Training A minimum of four days training per person would be required (on the assumption that 30% of staV are returners with experience of the Summer Opening).
Opening Times The Palace would open to visitors at 9:45am as in the summer. Visitors would need to exit the State Rooms from the West Terrace via the garden. The Quadrangle is not considered acceptable from a security point of view. It would not be safe or secure for visitors to leave through the garden after dark so the last admission time would need to be 2.30pm to ensure that the majority of visitors leave the garden prior to 4pm when it will be dark. Processed: 22-05-2009 20:02:04 Page Layout: COENEW [E] PPSysB Job: 425164 Unit: PAG1
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Ancillary Costs Additional resources would be required in the Personnel and Security Liaison departments to deal with the increased volume of security clearance, pre-employment checks, reference checking or bridging references for returning staV
Additional resources would be required in the Visitor Services team to cover the recruitment, training, admin and set up period together with management of the opening for the month of January. As this team are not permitted to take holiday during July, August or September holiday needs to be taken and covered outside this period. This period is also the time spent on planning and budgeting for the coming year and carrying out staV performance and development reviews. These activities could not be carried out together with the additional opening without increased headcount.
In addition there would be the need for an additional Duty Manager and Operations Supervisor during January to provide the required management cover.
Property Section Works Programme Since the opening of Buckingham Palace to the public in 1993, the Property Section have had to programme most of the maintenance in the State Rooms into the Sandringham and Easter Court periods. The introduction of Private Evening Tours of the State Rooms and Garden Tours during the day has placed further constraints on the programme. This proposal may not therefore fully consider the impact on the Property Section’s ability to achieve its objectives.
Financial Summary VISITOR NUMBERS
January 2009 September 2008
Daily average Weekday 3,000 4,600 Weekend 4,000 7,300 Total Month 93,000 150,000
By comparison the Tower of London has receives 90,000 visitors in January (average of last two years).
Pricing Admission prices could not realistically be maintained at the summer level due to the following:
— there would be no special display;
— there would be limited access to the Garden;
— there would be no catering provision;
— the retail oVer would be from The Queen’s Gallery, the Royal Mews and Buckingham Palace Road shops.
It is anticipated therefore that admission prices would be discounted as follows: January Opening Summer Opening
Adult £11.50 £15.50 Senior/Student £10.50 £14.00 Child £6.50 £8.75 Family £30.50 £39.75
The lower pricing may have an impact on overall visitor numbers as some domestic visitors may take the opportunity to visit in January at a lower price. Furthermore, in view of the Royal Collection’s oVer of unlimited admission, some visitors may also visit the Palace in the Summer to see the special exhibition for free. The income projections do not include any allowance for loss of income.
Private Evening Tours could be oVered each day ie an additional three or four days per week to those oVered currently in January. (this has not been factored into the income projections). Processed: 22-05-2009 20:02:04 Page Layout: COENEW [O] PPSysB Job: 425164 Unit: PAG1
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Operating Surplus/(Deficit) The detailed financial budget has been prepared on the basis of the assumptions outlined above, and is set out below. The expected outcome of a Winter Opening of Buckingham Palace is a deficit of £154,000.
Summary Although opening Buckingham Palace in January, on a scale similar to that in the summer, would meet the Royal Collection Trust’s objectives of increasing access to the Royal Collection, the additional demands on staV and the financial outturn, do not justify a Winter Opening.
Recommendation Consideration should be given to: (a) extending the Buckingham Palace Summer Opening by opening earlier in July or opening later into October (both subject to The Queen’s diary), thereby making use of the infrastructure for a longer period; or (b) extending the number of Private Tours throughout the year that do not require an infrastructure on the scale of the BPSO, when The Queen is away and other members of the Royal Family are not using the State Rooms.
WINTER OPENING OF BUCKINGHAM PALACE STATE APARTMENTS Profit and Loss Review
2008 Summer 2009 Winter Non Financial Information Days Open 63 28 Individual Visits 287,696 65,013 Cash Groups 25,299 6,543 Credit Groups 78,946 21,444 Number of Visitors 391,941 93,000
2008 Summer 2009 Winter ££ Income Admissions 5,628,372 935,067 Cost of Sales 336,152 68,612 Gross Profit 5,252,796 866,455
StaV Costs Admissions staV Salaries and Wages 538,633 195,548 TSIO staV costs 173,197 118,132 Other StaV Costs 130,459 58,985 842,289 372,665
Operating Costs Contracted services—Cleaning and Security etc) 161,572 70,600 Marketing costs 190,061 117,000 Temporary building costs 234,949 231,134 Other operating costs 532,416 135,854 Insurance and other finance charges 50,918 12,458 Irrecoverable VAT 135,638 80,718 1,305,554 647,764
Net surplus/(deficit) 3,104,953 (153,974)
Income per visitor £14.36 £10.05
Costs per visitor £6.34 £11.71 Processed: 22-05-2009 20:02:04 Page Layout: CWMEM1 [E] PPSysB Job: 425164 Unit: PAG1
Ev 22 Committee of Public Accounts: Evidence 72,000 0 72,000 163,392 24,523 138,869 £££££ Est/rent per Est. Average EstAnnual Curr. Annual Grand total 235,392 24,523 210,869 ££££££ Rent Rent mthly rent rent Rent Rec’d Variance Est Weekly Est Monthly Est. Average EstAnnual Curr. Annual ce purposes the area has been estimated for net internal area (NIA) Y Property Location Area-sq ft Location Area-sq ft at Hampton Court in poor condition that could be refurbished for commercial letting, with an estimated combined annual rental of £60,000. ces, V Y PROPERTIES OUTSIDE THE SECURE CORDON NOT RENTED AT A COMMERCIAL RATE normally be sold when vacated, with income arising reverting to the DCMSLodge Mews should be returned to the Crown Estate when vacated Windsor not Windsor known Great Park 2,525 1,100–1,200 1,150 1,100–1,300 13,800 1,200 3,522 14,400 10,278 0 14,400 use) and listed building consent Hampton Court Mews 4,000 15–20 18 72,000 0 72,000 Gross internal areas (GIA) were provided. Please note for o % Area 1 Cumberland Lodge Mews3 Cumberland Lodge Mews4 & 5 Cumberland Lodge Mews All properties at Cumberland 6 Cumberland Lodge Mews7 Cumberland Lodge Mews8 Cumberland Lodge Mews10 Cumberland Lodge Mews Windsor Great Park Windsor Great Park 1,400 Windsor Great 1,650 Park Windsor Great Park Windsor Great Park Windsor Great Park 2,225 950–1,100 1,600 1050–1250 1,600 2,100 1,000 1,100 1,100–1,300 12,000 13,200 950–1,100 1,100–1,300 950–1100 1,200 1,671 1,000 0 14,400 1,200 1,000 11,529 12,000 12,000 14,400 12,000 2,367 12,033 3,405 0 0 10,995 12,000 12,000 Horse Rangers Association Possible refurbishment as o 1 Marlborough Road2 Marlborough Road9 St. Mark’s Place DCMS property—would St James’s Palace St James’s PalaceIn addition, there are two residential properties occupied by sta 640 560 500–600 500–600 2,383 2,383 28,596 28,596 6,537 7,021 22,059 21,575 Commercial Property(Charity) NotesResidential Property subject to planning Notes (change of ApproxThe costs of refurbishment are likely to be £200K and £300K (excluding relocation costs), giving sq payback ft of over 10 years. mthly rent rent Rent Rec’d Variance Processed: 22-05-2009 20:02:04 Page Layout: COENEW [O] PPSysB Job: 425164 Unit: PAG1
Committee of Public Accounts: Evidence Ev 23
Questions 74–80 (Mr Davidson): Royal Collection Inventory.
The Royal Collection Inventory The Royal Collection Trust and the National Trust have been working together since November 1997 on the development of a Collections Management System which will replace the Royal Collection Inventory System originally implemented in June 1991. The introduction of the new system has taken longer than originally anticipated, but Acceptance Testing is currently in progress and is expected to be complete by the end of April 2009. In preparation for transfer of information to the new system in early March 2009, the existing Royal Collection Inventory System has been frozen and is now only available for searching. The present custodial inventory is structured principally for on-screen use by trained inventory staV to document and manage the Collection (for example, for the administration of loans made by The Queen to museums and galleries in the UK and around the world), to answer public enquiries and assist external researchers. Partial printouts are only ever produced for cyclical inventory checks. In view of the age and fragility of the hardware supporting the existing inventory system and the imminent transfer of information to the new system, Royal Collection management consider it inadvisable to attempt to produce a full inventory listing from the existing system as this may compromise the data transfer and jeopardise the successful implementation of the new Collections Management System. It should also be noted that even if a full listing could be produced from the existing system it would probably be of limited value to anyone other than a trained member of the inventory team as the information that the present system contains is without images, limited in content and designed principally for inventory checking. Once the new Collections Management System is in place and fully operational, Royal Collection management will continue to investigate options for providing appropriate and helpful external access to the full Collection. In the meantime the Royal Collection will continue with its project to publish the most significant works in the Collection with full descriptive information and images through the on-line gallery. It is anticipated that the new system will have been successfully implemented and all outstanding software development will have been completed to the satisfaction of the National Trust and the Royal Collection within 12 months of implementation. It is proposed therefore that we discuss with the NAO what information they would wish to see from the new Collections Management System at that time.
Questions 93–102 (Mr Bacon): Revenue surplus paid over by the Crown Estate to the Treasury for last 10 years.
Background to Civil List and Hereditary Revenues Since the accession of George III in 1760 it has been customary for each succeeding Sovereign to surrender hereditary revenues to the nation for the term of his or her life, in return for an annual income known as the Civil List and other financial support. Under the terms of the Civil List Act 1952 and subsequent Civil List Acts, The Queen surrenders the income from The Crown Estate and other hereditary revenues, in return for (a) the provision of an annual Civil List to meet her most immediate oYcial expenses, (b) the provision of Annuities for other Members of the Royal Family and (c) Government Departments, by convention, meeting other expenditure incurred in support of the Monarchy directly from their annual voted supply. The statutory authorities that govern the Civil List are the Civil List Acts of 1952, 1972, 1975 and the Civil List Audit Act 1816. Processed: 22-05-2009 20:02:04 Page Layout: CWMEM1 [E] PPSysB Job: 425164 Unit: PAG1
Ev 24 Committee of Public Accounts: Evidence £m £m £m £m £m £m £m £m £m £m £m 2007–08 2006–07 2005–06 2004–05 2003–04 2002–03 2001–02 2000–01 1999–2000 1998–99 Total CROWN ESTATE SURPLUSES AND HEAD OF STATE EXPENDITURE 1998–2008 Head of State ExpenditureThe Crown Estate Surplus RevenueNet Surplus to HM TreasuryHead of State Expenditure as % of Crown Estate surplus 19.0% 19.0% 211.0 19.9% 40.0 200.0 19.8% 171.0 21.3% 188.0 38.0 162.0 21.2% 185.7 37.4 150.6 21.5% 173.0 36.7 149.0 23.6% 171.0 136.2 28.4% 36.8 164.0 33.7% 134.8 36.2 148.0 22.1% 128.7 35.3 133.0 113.1 126.0 34.9 95.2 1,699.7 37.8 83.6 1,324.20 42.4 375.5 Processed: 22-05-2009 20:02:04 Page Layout: COENEW [O] PPSysB Job: 425164 Unit: PAG1
Committee of Public Accounts: Evidence Ev 25
Questions 130–135 (Mr Touhig): How many days is the Royal Family in occupation in a year?
NUMBER OF DAYS THE QUEEN IS IN RESIDENCE AT BUCKINGHAM PALACE—2008
February 13 March 11 April 2 May 13 June 16 July 12 October 14 November 19 December 11 Total 111
Questions 139–141 (Mr Bacon): Vacant apartments within the secure perimeter.
Vacant Self Contained Residential Properties At the time of the PAC Hearing, there were 32 vacant self-contained residential properties, compared with 27 at the time of the NAO Audit at the end of July 2008. Of these 32 properties, 28 are within the secure cordon (25 at the end of July 2008). Three of the properties outside the secure cordon are being refurbished for commercial letting while the other is being returned to the Crown Estate. Four of these properties have been mothballed because the costs of refurbishment are too high. 17 of the 28 vacant properties within the secure cordon were yet to be allocated at the time of the hearing. 10 of these were also unallocated at the end of July 2008, but three of these have now been allocated to staV. Six properties (three inside, three outside the secure cordon) have been vacated by pensioners since the end of July 2008, all of which were previously occupied rent-free. 18 February 2009
Memorandum from the National Audit OYce
Mr Davidson asked about the role of the Military Knights and the former occupations of pensioners provided with accommodation on the Royal Estate.
Military Knights Background The Military Knights of Windsor were formed by King Edward III. Known as the Alms Knights, they formed part of the College of St George which was created to support the establishment of the Most Honourable and Noble Order of the Garter. 26 “Poor Knights”, mirroring the 26 Garter Knights, were given accommodation in the Lower Ward of Windsor Castle in exchange for daily prayer in St George’s Chapel on behalf of the Sovereign and the Garter Knights. King Henry VIII reduced the number of Knights to 13, and in accordance with his will, Queen Elizabeth I improved the accommodation of the Knights so that they were housed individually in the Lower Ward, with one of their number appointed as Governor. The Knights are all retired Army OYcers and preference is given to applicants who are in needy circumstances and are married. Military Knights must be appointed before the age of 65. Apart from a small stipend, Military Knights are not paid for their duties. Military Knights are accommodated free of charge in the Lower Ward of Windsor Castle in exchange for duties carried out.
Role The duties of the 13 Military Knights include being on parade nearly every Sunday and during state visits at Windsor Castle. The main event in the calendar is the Garter Ceremony when the Military Knights head the procession through the Castle precincts and into St George’s Chapel, the spiritual home of the Order of the Garter. Additionally, there are four “obits” (Remembrances of College Benefactors) in the year, plus the occasional military funeral and the laying up of a deceased Garter Knight’s Banner. Most of these duties are linked to St George’s Chapel and only very occasionally are the Knights on parade away from Windsor. Processed: 22-05-2009 20:02:04 Page Layout: COENEW [E] PPSysB Job: 425164 Unit: PAG1
Ev 26 Committee of Public Accounts: Evidence
Positions Formerly Held by Pensioners Accommodated on the Estate,Details of Accommodation and Whether or Not Rent is Paid as at July 2008
July 2008 Reception Rent Paid Position when employed Rooms Bedrooms Y/N
Photocopy Operator (was Deputy ChauVeur)* 2 3 Y Liveried Porter 1 2 Y Information OYcer (was Head Warden)* 1 2 Y Travelling Yeoman (was Senior Footman)* 1 2 Y Chief Upholsterer 1 2 Y Queen’s Page 1 3 N Widow of Carriage Cleaner 1 2 Y Courier 1 2 Y Widow of Royal Mews Groom 1 2 N Royal Mews Groom 1 2 N Security OYcer, Royal Mews 2 1 Y Girl Groom 1 2 N Horse Box Driver 1 2 Y NannyL 12N Gardener 1 1 Y Polisher/Gilder 2 3 Y Gamekeeper 2 3 N Widow of Gatekeeper 2 2 N Stud Groom 2 2 N Principal, Foundation of St CatherineL 23N Secretary to the Private Secretary 1 3 Y Cousin of The QueenL 33N Administrative OYcer 1 3 Y Personnel OYcer 1 3 Y Palace Attendant 1 1 Y Head Coachman 1 2 N Widow of Stud Groom 1 2 N Widow of Caretaker 1 2 N Accountant, Privy Purse 1 2 N Comptroller of Stores 3 4 Y Press Secretary to Queen Elizabeth The Queen Mother 3 5 N Assistant to the Master of the Household Branch 2 3 Y L Not previously an oYcial employee (ie provided with grace and favour accommodation) * Text in brackets indicates other positions held during the course of employment Total paying rent 17 Total rent free 15 Total pensioners in accommodation 32
23 January 2009
Supplementary memorandum from National Audit OYce Questions 57–58 (Mr Davidson): Analysis of the business case for opening Buckingham Palace at other times of the year Mr Davidson asked us to examine the business case which informed the decision not to extend the times Buckingham Palace is open to the public and see whether or not we agree with the Keeper of the Privy Purse that “the business case does not stack up”.
The updated business case provided by the Keeper of the Privy Purse in February 2009 evaluates proposals to open Buckingham Palace at other times during the year when The Queen is away at Sandringham and Windsor.
The business case does not, however, assess the costs and benefits of opening the Palace earlier in July or extending the summer opening into October. The business case discounts the possibility of opening the Palace when The Queen goes to Windsor at Easter because the Palace could only open for a maximum of 14 days. The business case concludes it would not be commercially viable to open during Easter, although it does not include any detailed analysis to support this assertion. Processed: 22-05-2009 20:02:04 Page Layout: COENEW [O] PPSysB Job: 425164 Unit: PAG1
Committee of Public Accounts: Evidence Ev 27
The evaluation focuses on the costs and benefits of opening the Palace for 28 days in January 2009 and includes a description of the factors considered and a high level analysis of potential income and expenditure. The business case concludes that additional demands on staV and the expected financial deficit of £154,000 do not justify opening the Palace in January. Without the detail underlying the analysis of costs and income it is hard to come to a conclusion on whether the business case is robust. The key assumptions in the business case are listed below:
Days open — The Palace would open for 28 days (4–31 January) when The Queen is at Sandringham, allowing time to set up and take down temporary buildings such as ticket oYces as well as make State Rooms ready for visitors.
Income — Visitor numbers would be similar to those visiting the Tower of London in January at 93,000 people compared to 150,000 in September during summer opening. Visitor numbers would be lower because the January opening would not include special exhibitions. — Admission prices would be around 25% lower than during summer opening as there would be no special exhibition, catering or retail oVer in the Palace and access to the garden would be limited.
Costs — The majority of costs for setting up temporary buildings and staV are fixed. — Between 12 and 19 fewer staV would be required per day compared to the summer opening. — Although 30% of staV should have experience of summer opening, staV would need a minimum of 4 days training. — Additional resources would be needed in August and September to deal with the security clearance, employment checks and to cover recruitment of staV in preparation for the January opening.
Questions 80–83 (Mr Davidson): Proposal to share receipts from visitor admission to Buckingham Palace with the Royal Household’s Property Section Mr Davidson asked us to look at information relating to the process of discussion and negotiation around sharing income from visitors to Buckingham Palace with the Royal Household and say whether the arrangement was being “pursued as assiduously as possible”. The correspondence we have reviewed indicates there was an 18 month delay between the Keeper of the Privy Purse writing to the Department on this subject and the Department’s response. In February 2004, the Keeper of the Privy Purse wrote to the Permanent Secretary for the Department setting out in detail his understanding of the agreement reached with the Department over how any net surplus from admissions income from the Buckingham Palace summer opening would be shared between the Royal Household and the Royal Collection Trust. The letter set out that 20% of the annual net surplus would be transferred directly to the Royal Household’s Property Section. The letter, however, also referred to concerns raised by the Trustees of the Royal Collection Trust about the timing of the arrangement and therefore asked the Department if it would be prepared to delay the start of the arrangement until the Trust’s overdraft and loan obligation fell to £10 million. The Department responded around 18 months later in July 2005 to ask if there was anything the Keeper of the Privy Purse wanted to change or update from his earlier letter. The Department’s letter refers to discussions held with the Keeper of the Privy Purse but stops short of agreeing to the proposals set out in the February 2004 letter. We have requested all correspondence and are not aware of any further communication between the Department and the Keeper of the Privy Purse on this subject. According to the Royal Collection Trust’s published accounts the Trust’s borrowing had fallen below £10 million by March 2007. The Keeper of the Privy Purse confirmed to the Committee that the arrangement to share receipts from visitors to Buckingham Palace will begin in April 2009. 11 March 2009
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