Examination of Witnesses (Questions 80-99)
ROYAL HOUSEHOLD
AND DEPARTMENT
FOR CULTURE,
MEDIA AND
SPORT
26 JANUARY 2009
Q80 Mr Davidson: You can give us
a partial report; you can give us what you have got. Can I just
turn to the information in paragraph nine?[6]
This is a point that some of my colleagues have picked up before
which is about sharing the income from visitors. Emphasis has
been placed to us on the fact that any proposals about income
coming into the maintenance budget would have to be agreed by
the Royal Collection Trust themselves. It was not until I asked
the National Audit Office that I discovered exactly who the trustees
were of that. Clearly it is all figures at and around the Palace.
Sir Alan, are you a member of that?
Sir Alan Reid: Yes.
Q81 Mr Davidson: You will know your
colleagues better than I do then. You are in a difficult position
in a sense because you are on both sides of the argument. You
are part of the Royal Collection Trust not wanting to give money
to Buckingham Palace but you are involved with Buckingham Palace
wanting to get money out of yourself.
Sir Alan Reid: I do not think
it is fair to say that the Royal Collection Trust does not want
to give money to Buckingham Palace. They know they benefit greatly.
The key point is that Royal Collection is a separate legal entity
and the trustees of that charity have responsibilities to the
Charities Commission.
Q82 Mr Davidson: It is a difficult
position for you, is it not, having to wear two hats?
Sir Alan Reid: Not necessarily.
It can actually lead you to looking at issues from a more equitable
point of view.
Q83 Mr Davidson: You are bearing
up very well. You mentioned that there had been a process of discussion
and negotiation about this for quite some period and that various
things have been considered. Has all that information been made
available to the National Audit Office?
Sir Alan Reid: We have not kept
them from it. Is this the correspondence between me and the Department?
I would have thought they would have asked for it if they had
wanted it.
Mr Davidson: Maybe I could ask the National
Audit Office to ask for all of that then and to clarify all of
the process and tell us whether or not you are satisfied that
it is being pursued as assiduously as possible in terms of wanting
to get the money for the maintenance.[7]
Q84 Chairman: Providing notes to this
Committee is a very serious business. There are various conventions
surrounding it. You know what notes you have promised Mr Davidson,
do you? In particular we want to have a note on this inventory,
what have been the problems that you have encountered, when are
we going to have it because we have been asking it for many years
now? If you do not have it, how do you know if anything is missing?
Sir Alan Reid: We will certainly
supply you with the information we have got. There was a two year
delay from the people developing the computer programme. I have
not been aware that you have been asking for this for several
years because I have never received a request in my time.
Mr Williams: I have asked for it in previous
hearings with you; not with yourself but with your predecessor.
Q85 Chairman: Are we going to get
it now? If we are not going to get it we want to know when we
are going to get it.
Sir Alan Reid: You will get what
we have.[8]
Q86 Mr Davidson: I have a final point
on paintings. There was only one picture that I recognised when
I went round and that was the team photo of Glasgow Rangers Football
Club which I was very surprised to find pasted up in a section
of the Palace. Since that is my local team then I will go back
and tell my constituents that they are not forgotten in the Palace.
Sir Alan Reid: You may look in
the inventory in vain for that one; it may have been privately
owned.
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 Millet. Richard Bacon?
Q87 Mr Bacon: I must say that thought
the picture gallery was lovely. I think the Glasgow Rangers thing
looked like it was cut out of the Daily Mirror to be honest.
Sir Alan, I would just like to pick up on the last thing you said
to Mr Davidson about the Royal Collection having trustees, being
a charity and having responsibilities to the Charity Commission
which we understand, in fact we have had the Charities Commission
before us. Obviously they have to act in a fiduciary in relation
to their responsibilities and so on. However, the very fact that
they have this income that is arising from the visits to Buckingham
Palace—they then have to choose what they do with it carefully
bearing in mind their responsibilities as charitable trustees—is
only because there was an agreement that they should get it. Referring
back to something the Chairman asked at the very beginning (which
I still do not really understand following the visit although
there was a comprehensive attempt to explain it to us), if the
revenues arise as a result of the visits to Buckingham Palace
why is that the Household does not get the revenues in the first
place. The answer seems to be, "Well, because the Royal Collection
needed to spend a lot of money on refurbishing themselves"
(you mentioned £23 million) and presumably that will increase
the number of visitors and enable the Royal Collection to do more
in terms of displays and this kind of thing. Nonetheless, they
are only exercising those responsibilities in light of the agreement
that was reached.
Sir Alan Reid: I will try not
to make this a long answer but there are two parts to it. The
Queen owns, on behalf of the nation, buildings—being the
palaces—and she also owns on behalf of the nation art—being
the pictures et cetera—managed by the Royal Collection.
One way or another funding has to be achieved for both of those.
If it goes to the art it means less money for the properties;
if we diverted it all to properties there would be a need for
funding for the arts. There is a national funding issue 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 going into Windsor Castle. So there has been a history
of a hundred years whereby this income was going into what was
called the Royal Palaces Presentation Fund which is really the
predecessor body to the Royal Collection. So that had been happening
for almost a hundred years (90 at the time of the Windsor fire)
so when the money stopped being diverted into the fire restoration
it was simply a case that the decision had already been made a
hundred years ago that that money would continue to go back into
the Royal Palaces Presentation Fund which by that stage had become
the Royal Collection Trust. The Treasury agreed to that at the
time but it was not a brand new decision; it was the way it had
always been.
Q88 Mr Bacon: Mr Stephens said earlier
that he thought that the Household was doing quite well given
the declining revenue in real terms that you have available. Having
listened to what Mr Sharpe and Mr Stevens said during our visit
it was quite clear that they have an enormous range of challenges
and not enough income to deal with it. I think you cut straight
to the quick in your last answer: you do not have enough money
coming in for the things that you need to do. One of the reasons
for that is because Mr Stephens is so stingy and does not give
you enough; the other is because you do not have enough income
coming in from visits. I will come onto Mr Stephens in a minute
but on the income side you said that it would be very difficult
to increase the number of days of visits for Buckingham Palace
because of the official, state and royal engagements. The Chairman
mentioned that we, in this Palace—which is also a royal
Palace—are open all year round and we have a lot of visitors.
We have over half a million visitors a year; Hampton Court has
600,000; the Tower of London has two million visitors (obviously
the Tower of London is a major tourist attraction with the Crown
Jewels and is open largely for that purpose). One appreciates
it is different in Buckingham Palace but nonetheless you made
it 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 your estimate of the extra revenue
you would get by being open for longer?
Sir Alan Reid: I do not know a
precise number but it is small.
Q89 Mr Bacon: You said the business
case does not stack up. If you know that the business case does
not 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 business case, the business case was evaluated
from the point of view of having a separate opening at other times
of the year, during the Christmas period and during Easter when
The Queen is away. Those were obvious times to open the palaces.
Unfortunately for the infrastructure that goes into establishing
the Buckingham Palace summer opening we pay something like £200,000
for temporary buildings and security systems. To implement that
for a short period at those times of the year when visitor numbers
are much lower, the business case would not stand up.
Q90 Mr Bacon: Surely that is all
the more reason to leave it up permanently then you spread the
capital costs over a greater number of visitors.
Mr Stevens: That would be the
ideal situation. Unfortunately if we were to establish those buildings
they would be in parts of the Palace that have other functions
at other times of the year. We are able to put those temporary
buildings—our ticket office, our security searching channels—in
parts of the Palace that are not used during the summer period.
As Sir Alan mentioned, we recruit a lot of students to help us
out during the summer opening—seasonal staff—and those
students all return to university in October.
Q91 Mr Bacon: When I was a student
myself I worked in October, November and December in London; I
am sure you would find people who could work throughout the year.
The White House in Washington DC has visitors throughout the year.
They do not actually charge, I do not think, but they have head
of state function, they have a lot of official state engagements
going on throughout the year, official visitors, there is a very
high security issue and yet they still manage to be open for much
longer. I just find it difficult to be persuaded that you have
done all that you could do.
Sir Alan Reid: The White House
has reigned back with heightened security levels as well. I guess
people come into the House of Commons to watch their MPs at work.
Q92 Mr Bacon: Also to do tours. Look
behind you, it is not full. Most of them come in to do the line
of route tour actually.
Sir Alan Reid: We could have a
state visit going on in October and we cannot have the public
wandering around watching the President of Mexico with The Queen
in the middle of a state function.
Q93 Mr Bacon: They would probably
pay quite a lot for that actually. Let us move onto Mr Stephens
and his stinginess. Politically it is always going to be difficult
in good economic times when there are so 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-in-aid?
Mr Stephens: The core grant-in-aid
is £15 million.
Q94 Mr Bacon: That is for the maintenance.
Mr Stephens: No, £15 all
in for the running costs and the maintenance.
Q95 Mr Bacon: Have you got a rough
figure for the base cost of the total running costs if you add
in the civil list and the travel? The civil list is £12 million,
the travel is £6 million; buildings grant-in-aid is £15
million. Excluding the police, the army and the security, what
is the rough cost of the entire shooting match?
Mr Stephens: I am not responsible
for all those.
Q96 Mr Bacon: I did not ask you if
you were responsible; somebody must know roughly what it is.
Sir Alan Reid: It is £40
million.
Q97 Mr Bacon: My guess was that it
would be under £50 million. The security, army and police
element is obviously on top of that and it is significant. On
the other hand you would have to factor in the number of tourists
who come to London to watch the Changing of the Guards if you
were to get an accurate picture. Am I right, Mr Stephens, that
the reason the civil list and the grant-in-aid work the way they
do is because an agreement was reached between the Royal Household
and Her Majesty The Queen and the Treasury whereby the monies
from the Crown Estate were paid over and then the monies to run
the Royal Household and Family and Estates were paid out of public
funds. Is that right?
Mr Stephens: Yes.
Q98 Mr Bacon: If you look at the
Crown Estate revenues last year it was £211 million pounds
paid directly to the Treasury. In fact the chairman, Mr Grant,
said "I am delighted we have returned £211.4 million
to the Treasury in the form of our net revenue surplus".
If you just add up the last five years it is nearly a billion
pounds that the Treasury has received. It is in this context,
I think, that one has to examine your stinginess because actually
there was a deal that these monies would be handed over in return
for the state looking after the head of state function. You are
failing in your responsibilities, are you not?
Mr Stephens: No, I certainly do
not accept that we are failing our responsibilities. The overall
condition of the Palace is good and the Household is doing a very
good job under tight constraints. Priorities have to be determined
within our budget and the DCMS does not get the benefit of the
income from the Crown Estate.
Q99 Mr Bacon: Sir Alan, it may be
that you have these numbers available easily or perhaps with the
National Audit Office they can be assembled, but is it possible
that you could send us two schedules side by side, one showing
the revenue surplus that has been paid over by the Crown Estate
to the Treasury for the last 10 years and then the various costs
of the Royal Household—be it civil list, travel and so on—over
the last 10 years?
Sir Alan Reid: We produce a document
on the second, including all government department expenditure
on us except for security and police and we publish it every year
so I will happily send you that.
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