SUPPLEMENTARY
MEMORANDUM FROM
NATIONAL AUDIT
OFFICE
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.
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 staff 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 offices
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 offer in the Palace and access
to the garden would be limited.
Costs
— The majority of costs for setting
up temporary buildings and staff are fixed.
— Between 12 and 19 fewer staff would
be required per day compared to the summer opening.
— Although 30% of staff should have
experience of summer opening, staff 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 staff 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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