Friday, August 22, 2014
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Shades of Downton: Queen's royal reserves being drained

A House of Commons report says reserves for running the royal household are at their lowest level in years. (AP file, June 26, 2012, Britain´s Queen Elizabeth II)
A House of Commons report says reserves for running the royal household are at their lowest level in years. (AP file, June 26, 2012, Britain's Queen Elizabeth II)

The House of Commons is not amused.

Buckinham Palace leaks, threatening valuable paintings. Prince Harry took a very nice trip courtesy of taxpayers, thank you. And the old royal train is too expensive to replace.

A recent report by the House of Commons suggests public money to support the royal life is not always wisely spent and that the staff of Queen Elizabeth II needs to cut back on trips and other spending – even suggesting more ‘royal courtesy’ trips by car rather than plane - given reserves that have dipped to 1 million pounds ($1.6M U.S.).

In other words: Share the pain like everyone else in the U.K.

The report by the Committee of Public Accounts says that the royal household needs to be put on a path to “a stable and sustainable basis” given that it uses public money to finance its comings and goings. (Read the report in full here)

“We would like to see further action on both increasing income and reducing costs. It is not clear to us that the Treasury is sufficiently challenging in its scrutiny of the Household’s financial affairs, or that the new funding arrangements sufficiently incentivize the Household to find greater efficiency savings,” the report states.

It continues: “We are also concerned that the Household has reduced its balances to such an extent that it could be unable to cover its expenditure on any unforeseen events that might affect The Queen’s programme. It needs to get a much firmer grip on how it plans to address its backlog of property maintenance.”

The 1 million pound contingency fund is at a historic low. The Queen’s household has reduced costs since the recession, but only by about five percent. The monarch’s Privy Purse is funded by an account called the sovereign grant – the financial system funding the monarchy.

Household staffing had stayed steady at about 430 people since 2007, the report states. But it also notes that about 40 percent of the buildings in the royal household’s control are in worse condition than hoped and would only worsen.

"The household must get a much firmer grip on how it plans to address its maintenance backlog,” Margaret Hodge, the committee chair, was quoted as saying in The Guardian newspaper. 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.”

In all, the royal household spent almost $45 million pounds ($74.5 million U.S.) in 2012-13. The staff has been under a pay freeze since 2010-11.

In short, the royal household has its problems just as the nobility in the fictionalized Downton Abbey. But perhaps the most interesting part of the reports comes from a question and answer session between the committee and Sir Alan Reid, Keeper of the Privy Purse, and Mike Stevens, Deputy Treasurer to the Queen.

Some tidbits:

-Royal income is up largely from charging more people to see the royal collection. For example, to help cover building costs, Buckingham Palace increased the number of days the public could pay to visit, from 63 to 78 days – and about 550,000 visitors took advantage of that. The palace has also opened to private tours in which participants pay a premium.

-While the lower workers in the pecking order have had wage freezes, three out of five top managers got a raise. Most top managers make more than 100,000 pounds ($166,000 U.S.). The average salary is 32,000 pounds, or $53,000 U.S.

-It took 350 part-time workers through a caterer to cover the opening garden party for the Queen’s London home over the summer. Many of them were university students.

-To save money, the staff has allowed buildings to deteriorate. For example, leading at Buckingham Palace, which was built in 1705, was cracked, allowing rain to filter down onto expensive paintings in the picture gallery. But restoring some of the damaged rooms to a high standard would be “phenomenally expensive.”

-The cost of the queen’s helicopter went from 1.2 million pounds in 2007-08 to 1.6 million pounds in 2012-13. The queen and her family were required to travel more last year because it was her diamond jubilee.

-The royal household budget for 2014-15 is projected at about 40 million pounds, a 20 percent increase over the current budget. That did not sit well with the committee.

-Windsor Castle has a new hydroelectric facility and smart meters are being installed throughout the queen’s estates to try to save energy costs given rising utility expenditures in what’s been a very cold winter.

- The wiring at Buckingham Palace was installed in 1949. (Downton Abbey fans know that electrification is a running theme this season). The heating system at Buckingham Palace, the royal residence, is 60 years old and needs to be replaced.

-Public money paid for about 3,000 “royal engagements” – or visits by the royal family – last year. Those included trips by the Queen and Duke, the Prince of Wales (Charles) and Duchess of Cornwall (Camilla), Duke and Duchess of Cambridge (Prince William and Kate Middleton), Prince Harry, etc. Sir Alan Reid agreed with the committee that more visits should be conducted by car rather than air to save costs.

-The committee was not happy about a three week paid trip for Prince Andrew to travel to Indonesia and Vietnam, with a side trip through the U.S., in which there was, “a little of work” and “quite a lot of holiday.”

--Staff is being pressured to cut costs associated with the royal train – a rail system that is privately managed by a contract. The rail cars are from 1970 and “not luxurious”. But it is deemed a safe and secure way to travel. But the cost of a new royal train would be prohibitive, meaning more air travel could be in the future for the royals.

Frank Kummer PHILLY.COM
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