“Commercial success” of Sandringham should be emulated at Buckingham Palace, MP says

Afternoon sunshine lights up Sandringham House. Picture: Ian Burt Afternoon sunshine lights up Sandringham House. Picture: Ian Burt

Tuesday, January 28, 2014
10:45 AM

The Queen’s treasurer should look to the “commercial success” of the Sandringham Estate in Norfolk as it tries to plug a gap in the Royal household finances, the chair of the influential Public Accounts Committee has said.
Margaret Hodge said that “from all one could see as a visitor” to the West Norfolk tourism hotspot it “undoubtedly makes money”.

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The comments came during an evidence session about The Sovereign Grant - the deal between the Royal family and the taxpayer.

The settlement, which represents 15pc of the net surplus income of the Crown Estate - holdings which generate money for the Treasury - replaced the civil list.

The Sandringham Estate is managed privately on The Queen’s behalf and is therefore not included in any grant.

But during a public questioning of the keeper of the Privy Purse and Queen’s treasurer Sir Alan Reid and deputy treasurer Mike Stevens were told by Ms Hodge: “That (Sandringham) to me, as a visitor to it, seems to be a resounding commercial success. Is that not something you could think about talking to them about? They not only open the house; they have all sorts of other things. I know it is completely different and they are massive grounds and things like that, so it is a slightly different kettle of fish, but from all one can see as a visitor going round, it undoubtedly makes money.”

Sir Alan said they would love to open Buckingham Palace for more days, but there were restraints on what they can do.

“Sandringham works the way you have seen it work because the Queen is not there very often. She is only really there in December and January, so it is easy enough to open it for the rest of the year. Buckingham palace is much more difficult, because of the number of activities that go on there.

“There is a big set-up cost for our summer opening, in terms of protecting the works of art from these—something like—550,000 visitors, as we had this summer, over the 75 days that we referred to. It is not easy to do set-up just for the weekend, when Buckingham palace is empty of members of the royal family.”

A report by the Public Accounts Committee said that the Queen’s royal household could be doing more to reduce its costs and increase income, and needed to get a firmer grip on a backlog of property repairs.

The household also needs to plan and manage its budget better for the long term, the report said.

Ms Hodge also criticised the Treasury for failing to be more actively involved in reviewing the household’s financial planning and management.

Ms Hodge said “there is scope for the household to generate more income and reduce its costs further”.

She went on to praise it for increasing its income during the last financial year, but added: “However, we think it could do more. Since 2007-08, the household has cut its net costs by 16pc in real terms, but 11% of that was achieved by increasing income, and just 5pc by reducing expenditure.

“With better commercial expertise in place, we think there is room to do more with less, reducing costs further and supporting the Queen’s programme more effectively.”

The document stated that the household’s staffing levels had remained largely static at just over 430 people, during the past seven years, to allow it to maintain the Queen’s programme.

But this contrasted with the public sector which had seen employee numbers cut during the same period, and yet the sector was still expected to increase efficiency with fewer workers.

Ms Hodge also highlighted the large amount of work needed to maintain “nationally important heritage properties”.

The report gave the example of the Victoria and Albert Mausoleum, a monument of national importance, which has been waiting 18 years for repair work. The document said when assessed in 2012, 39% of the royal estate’s buildings were below what the household thought was an acceptable condition - and the current position is likely to be worse.

The PAC chairman said: “The household must get a much firmer grip on how it plans to address its maintenance backlog.

“It has not even costed the repair works needed to bring the estate back to an acceptable condition, and the Treasury did not require an estimate. Again, the Treasury has an oversight role here.”

The PAC report stated that the household intends to allocate between 50pc and 60pc of the increase in Sovereign Grant funding in 2013-14, and in future years, to addressing the maintenance backlog, and was “belatedly” developing a 10-year maintenance plan.

Ms Hodge added: “...we feel that the Queen has not been served well by the household and by the Treasury, which is responsible for effective scrutiny of the household’s financial planning and management.

“We believe that the Treasury has a duty to be actively involved in reviewing the household’s financial planning and management - and it has failed to do so.”

Commenting on the ability of the Queen’s staff to plan for the future, she said: “The household needs to get better at planning and managing its budgets for the longer term - and the Treasury should be more actively involved in reviewing what the household is doing.”

A Buckingham Palace spokeswoman said: “The move to the Sovereign Grant has created a more transparent and scrutinised system, which enables the royal household to allocate funding according to priorities. This has resulted in a more efficient use of public funds.

“The royal household was charged by the PAC in 2009 to generate more income to supplement the funding it receives from Government. This has been done successfully. In 2012-13 the Household generated £11.6 million in comparison with £6.7 million in 2007-8. Work on income generation continues.

“A significant financial priority for the royal household is to reduce the backlog in essential maintenance across the occupied royal palaces. Recent examples of work include the renewal of a lead roof over the royal library at Windsor and the removal of asbestos from the basement of Buckingham Palace. The need for property maintenance is continually assessed.”

A Treasury spokesman said: “The new arrangements established by the Sovereign Grant Act have made the royal finances more transparent than ever while providing the long term stability necessary for good planning.

“The PAC’s report has failed to properly account for these changes.”

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