Maintaining the Occupied Royal Palaces - Public Accounts Committee Contents



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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