Select Committee on Public Accounts Minutes of Evidence



Examination of witnesses (Questions 20 - 39)

MONDAY 18 DECEMBER 2000

SIR JOHN BOURN, KCB, MR BRIAN GLICKSMAN, MR ROBIN YOUNG and SIR MICHAEL PEAT, KCVO

  20. The £26 million is out-of-date according to the NAO figure. They have given us a revised figure which shows £28 million, but we are not going to argue over the odd million.
  (Sir Michael Peat) That is the expenditure from the income collected. Of that about £14 million comes from the Buckingham Palace summer opening and all the money from the Buckingham Palace summer opening went to the fire restoration and the balance, which is a little less than £14 million, has come from the Windsor Castle precincts. All the money from the Buckingham Palace summer opening has gone to the fire restoration but not all the money from Windsor Castle has gone to the fire restoration. The reason for that is that charges were made for entry to Windsor Castle before the fire. Before the fire the Royal Collection charged for entry to the State Apartments, St George's Chapel charged for entry to the Chapel, and the Privy Purse Charitable Trust charged for entry to the Dolls' House. So those three entities have kept the balance of the charges for entry to Windsor Castle and used the money for the purposes for which they had always used the money.

  21. They kept all the money from Windsor Castle despite the fact the charges were intended to be towards the fire?
  (Sir Michael Peat) No, they have kept the same proportion that they had before. How the formula works—

  22. Could we have the figure? Rather than go into the detail, it would be interesting if we could have the figures of to what they were adding receipts prior to the fire and how this peculiar formula has been arrived at. Perhaps we could have that written into the Report.
  (Sir Michael Peat) Let me take the largest of them, which is the Royal Collection Trust. They received from Windsor last year £1.888 million. The way that is determined is that it is the amount they had received in 1993, adjusted firstly by retail price inflation and, secondly, by the movement in the tourist index, the formula agreed by the Treasury. So, effectively, they receive exactly same, subject to adjustment by indices, as they received before the fire, and it is the same in principle for the other two recipients.

  23. We will have a look at the figures and the way in which the share for the Trust is drawn up, which includes changes in visiting numbers to a basket of tourist attractions in and around London, since there is a difficult relationship with the historical income of the Trust. Perhaps you would be good enough to let us have the information prior to the fire and since then?
  (Sir Michael Peat) If I can say so, that is very sensible, it is a point we raised. The Royal Collection Trust received a certain amount of money in 1993 and if tourist numbers increased, as they have done substantially since 1993, it is for them to benefit from that. The formula is scrupulously fair. Similarly, if tourist numbers go down the Royal Collection Trust share should go down. It could not be a fairer formula.

  24. We will have a look at that.
  (Sir Michael Peat) The Treasury have already had a look at it, and the Department have looked at it.

  25. I have had years of unravelling figures from the Department, and its predecessor. You will remember the first time we met I was told—and I have a Parliamentary Answer to it—that rents were being paid at six per cent. It turned out to be nonsense, as you explained at the meeting, but that was with Parliamentary Answers. For the first year I was asking questions they maintained that there were about 100 less grace-and-favour houses than, in fact, there were. I am not in the least satisfied with figures that have come from the Department, which is one of the reasons why I think it is incredible that the Department made its decision to allow the money to go to the Trust. The Buckingham Palace money was specifically for the fire, what has happened to it since?
  (Sir Michael Peat) It goes to support the Royal Collection, to maintain the Royal Collection. The Royal Collection is one of the largest collections of works of art in the country.

  26. It always was, and it did not have that 14 million.
  (Sir Michael Peat) We look after it better than we did before.

  27. This was money that was charged for entry to one of our, the taxpayers', Palaces. These are the taxpayers' Palaces, they are State assets, not personal assets, the Queen has her own Palace.
  (Sir Michael Peat) Agreed.

  28. The cost of maintaining them is met by the grant-in-aid, which is Government money.
  (Sir Michael Peat) Yes.

  29. The money that comes from the entry to our Palaces, which we maintain at the taxpayers' expense, should go to the Department, not to the Trust. Far from being transparent, what is happening is there is now a concealment of how much money is now going into the Palace, which in some way helps to explain the rather flattering presentation that was made about the cost of maintaining the Palace.
  (Sir Michael Peat) Let me explain that to you, Mr Williams. The Royal Collection is seen, just in the Palaces alone, by 5.56 million visitors a year, who enjoy seeing the items. That is at no cost to the taxpayer. We generate all of the money to preserve the collection, to maintain it, to display it, and to write books about it. If you take four other national museums that have roughly similar numbers of visitors, all of which have some charges, the cost to the taxpayer for them is over £60 million a year. The V&A has 1.3 million visitors a year, and it gets £30 million from the taxpayer.

  30. The fact is there is 14 million raised from allowing the public access to a State Palace. That money is now not going to its original purpose, which is to deal with the fire at another State Palace, but has now been pocketed by the Trust. They are getting £14 million that they were not entitled to before, and I would suggest they are not entitled to it now.
  (Sir Michael Peat) They are using the money to conserve very important parts of our national heritage.

  31. Unaccounted.
  (Sir Michael Peat) No. They publish an annual report. They are subject to control by the Charity Commissioners. Everything is transparent, everything is in the annual report.

  32. No, it is not.
  (Sir Michael Peat) If we did not pay for them to be maintained the taxpayer would have to pay for them, like they do with the National Gallery, the Tate Gallery, and the Victoria and Albert Museum. The taxpayer pays tens and tens of millions, the Queen does it all herself.

  33. The difference is that the 14 million that came from the taxpayer would be accountable to this Committee. This 14 million has been siphoned off to the Trust, which made itself even more unaccountable by setting up Enterprises Limited, being a company which is also outside the ambit of this Committee. What is happening is increasing sums of money are sliding into the Royal Palaces in a way which is not accountable to Parliament. At a time when this Committee is fighting for greater accountability I find that utterly unacceptable. We will see when the report comes out whether the Committee feels the same.
  (Sir Michael Peat) If you are saying that the PAC should control charities rather than the Charity Commissioners, that is not a subject on which I can comment. If that is your point of view it might be a fair point of view, but it does not only apply to the Royal Collection Trust, it applies to all other charities across the length and breadth of the country.

  34. They are not receiving public contributions. These are entry fees to state assets.
  (Sir Michael Peat) Like many, many other charities it receives admission payments, and it sells souvenirs to the public. Lots of charities do that.

  35. It is like the Civil List, it takes it outside the accountability of this Committee. You may smile but, of course, it was only recently that people discovered there was a 20 per cent non-contributory pension for all members of the Royal Household, not many people knew that. Interestingly, it is now being put into the Civil List, which is seen as being a favourable move, but the reality is to make sure it cannot be looked at.
  (Sir Michael Peat) It was only recently that the Royal Household assumed responsibility and asked for it to be disclosed. Why it was not disclosed before the Royal Household were in charge is a matter on which I cannot comment. I can say that as soon as I was in charge it was disclosed.

  36. It became available in the—
  (Sir Michael Peat) In the Royal Trustees Report.

  37. It has increased from 18 per cent to 20 per cent. Most people here would be delighted, including those in the audience, if they are not already members of the Household scheme, if they had the possibility of a 20 per cent non-contributory pension, all at the cost of the taxpayer.
  (Sir Michael Peat) It is the Civil Service scheme.

  38. In the same Royal Collection Department 14 members have accommodation in the Palaces.
  (Sir Michael Peat) Yes.

  39. Some as much as four reception rooms and four bedrooms or three reception rooms and five bedrooms, and only half of them pay rent. There are 14, and seven pay rent.
  (Sir Michael Peat) Yes.


 
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