Examination of witnesses (Questions 1
MONDAY 18 DECEMBER 2000
BOURN, KCB, MR
YOUNG and SIR
1. This afternoon we are taking evidence on
the Comptroller and Auditor General's Report on Maintaining the
Royal Palaces. The Report dates from 22 June 2000, so you have
had plenty of time to prepare your answers, gentlemen. The witnesses
are Robin Young, Permanent Secretary at the Department of Culture,
Media and Sport, and Sir Michael Peat, the Keeper of the Privy
Purse at the Royal Household. Welcome, gentlemen. Can I start,
Sir Michael, with you. I want to start with paragraph 3.9 which
tells us that some of the £11.4 million maintenance backlog
which you inherited in 1991 has not been cleared. Why is this
work still outstanding after that many years and how long is it
going to take to clear?
(Sir Michael Peat) It has all now been cleared. The
work in question was the repairs to the external fabric of St
James's Palace and there was a lot of work to do which was phased
over a number of years.
2. At this point how much was still outstanding?
(Sir Michael Peat) There was about £600,000 worth
outstanding which was cleared last year.
3. That is all done, good. Let us move on. Paragraph
4.9 is my next question. It tells us that you do not generally
carry out post-project reviews. Why do you not feel that it is
necessary and have you introduced them yet? If so, what lessons
have you learned?
(Sir Michael Peat) We did carry out post-project reviews
previously because they are an important part of undertaking any
project, but we did not document them in a way that was useful
for external reviewers and, indeed, was useful for ourselves to
ensure that the lessons were learnt. I introduced the documentation
process about two years ago. We have now undertaken ten which
are formally documented and two more are due, one this month and
one more next month. So we have now got a good rolling programme
of formally documented reviews. With respect to what we have learned,
we have learned that things generally are going pretty well. No
major problems have been identified as a result of these reviews.
Obviously perfection is never achieved, there is never any room
for complacency and we do learn things and there are things that
we should do better. Areas where we have learned lessons in the
recent past are in terms of the design which could have been improved
in one or two instances and, in particular, communication between
users and those who undertake the work. It is always essential
that this is clear and timely. When we run into problems, on occasions,
it is often because the users of the space concerned feel that
their requirements have not been adequately translated when the
work is undertaken.
4. In managing the Royal Palaces you must be
one of the largest managers of historic buildings in the country.
Do you have any lessons for other people about historic buildings
from what you have learned in the last year or two?
(Sir Michael Peat) Yes, I hope so. We have set up
a group where we work together with other people involved in looking
after historic buildings and we do try and disseminate the lessons
we have learned to others. We give seminars to people at our Palaces,
and they come in and we have lectures. I think you are absolutely
right, Chairman, it is important that lessons are passed on. We
do not know everything and we want to learn lessons from others
as well and we are working on that.
5. Can you give the Committee some practical
examples of the sorts of lessons you have learned and been able
to pass on?
(Sir Michael Peat) Specifically when looking after
historic buildings, I think the main thing you learn to be a bit
tentative about is that you never know what you are going to find
when you take up the floorboards. When people have been messing
around with buildings, sometimes for a thousand years, you can
get a bit of a shock and so you have to be flexible. You have
to take great care that you use the right materials that match
the existing materials. You have to make sure that you get the
right advice. Generally the main lesson, which does not just apply
to historic buildings, is that managing building projects is difficult.
It is not something that is usually done well and you really do
need to keep on your toes and keep your wits about you. Not a
good reply I am afraid, Chairman.
6. Regrettably, getting a shock when you lift
the floorboards is not just confined to historic buildings! Let
us move on to Robin Young and Figure 8. Given the significant
reduction in maintenance expenditure since 1991 that you have
had, can you tell us why you did not seek specific assurances
from your consultants on whether reducing maintenance expenditure
has had any implications for the backlog?
(Mr Young) Because there was no evidence from the
quinquennial surveys that that was the case. As you know Chairman,
we have now agreed to do so. We have regular discussions with
our consultant and with the Household about the rate of progress
that they are making in addressing the problems thrown up by the
quinquennial reviews. We believe that had there been a building
up of a backlog of uncompleted maintenance work, we would know.
Nevertheless, I think it is fair to point out, as the Report does,
that we had not specifically asked our consultants to look at
this question and we have now done so. They are going to start
by looking at the last Quinquennial Review for Buckingham Palace
completed in 1998 and check whether everything identified in there
as necessary maintenance work has since become part of the rolling
programme of work.
7. Is it now a position of zero backlog?
(Sir Michael Peat) Yes.
8. So that is a good position to manage from?
(Mr Young) Indeed, and worth checking too.
9. My next question relates to paragraphs 3.5
and 3.6 which tell us that the Department allowed the agreements
to verify the amount of money which was available from Windsor
Castle precincts' receipts for property services to lapse. That
is quite a big number. Why did this happen and have these arrangements
now been reinstated?
(Mr Young) They have. We allowed them to lapse because
we did not think that a belt and braces were necessary. We have
now agreed with the NAO's suggestion and put in belt and braces.
There already were audited amounts checked and certified, by the
external auditors of the Royal Collection Trust. What we have
done is to ask the external auditors of the Trust to give us a
separate Certified statement of the amounts. We were basing our
judgment on the externally audited amounts, but we now have a
separate Certified statement.
10. I guess it is more a question of transparency
than belt and braces in the sense that all of your improvements
over the last few years have been great improvements in transparency
and these numbers could be quite large, over £2 million.
(Mr Young) They could. We have now had the checks
for the years 1998-99 and 1999-00 and we have had those figures
checked and audited.
11. My next question relates to paragraphs 3.14
and 3.16 which tell us that the Royal Household performance targets
do not take into account changes in the scope of projects or report
the performance in delivering the project on time. Without this
information how do you know that the annually agreed programme
has been delivered?
(Mr Young) I missed the reference.
12. 3.14 through to 3.16.
(Mr Young) We set the Household 15 performance indicators/figures
to produce for us which together are designed to give us the necessary
reassurance that we need to sign off their programmes, and they
are doing very well against those targets. We think that portfolio
of targets is the right one to set and correctly gives the reassurance
that we need.
13. So would you know if there was a shortfall
in a given project that you have allocated money for?
(Mr Young) Yes, we would. That would be reported to
us in our quarterly returns and discussed with us by the Household.
Chairman: Others may want to come back on that
one but that strikes me as fine. Let us widen things out and go
straight to Mr Alan Williams.
14. Welcome again, Sir Michael. I understand
from the Report that, of course, the National Audit Office does
not have access to the Royal Collection Trust finances and accounts
and does not audit them. That is correct, is it not?
(Sir Michael Peat) Yes, but it is not public money.
15. We will see in a moment; I think you will
find you are wrong. Because, of course, as the Chairman has just
indicated, for some mysterious reason, by a decision of a Secretary
of State, I suspect at the behest of a certain (?), the funds
from the receipts from the visitors to the Palaces have been given
to the Trust, which puts them outside public monitoring. That
is true, is it not?
(Sir Michael Peat) The receipts from admission to
the Palaces have been received by the Sovereign since the 18th
Century and the Sovereign has passed them over to a charitable
trust which is subject to monitoring, like all charitable trusts,
by the Charity Commissioners.
16. By everyone but Parliament. We have had
the Charity Commission before us and they did not impress us one
little bit so we do not find that slightly reassuring. I want
to press this a little bit further because we see from Figure
7 that in the heading to it it says, in addition, almost £28
million of expenditure on the castle has been provided by income
collected from visitors to Buckingham Palace and Windsor Castle.
This is the updated version of the Report.
(Sir Michael Peat) Alright.
17. That is £28 million. As I understand
it, there is a formula, is there not, which decides how much of
the money from the receipts goes to the Palace and how much goes
to the Trust and how much goes to the Department. That is correct,
is it not?
(Sir Michael Peat) A formula for Windsor Castle receipts,
not for all of them.
18. We will come to Buckingham Palace receipts
afterwards; that is another issue. Taking the Windsor receipts,
if we take the year 1997-98, of the £6.8 million income from
visitors to Windsor Castle, only £23 million, one-third,
went to the fire restoration. If that proportion is true of the
whole, if from the receipts from the visitors to the two Palacesand
remember Buckingham Palace was specifically for the fire, that
is why it was opened upif over the years £28 million
has gone for fire restoration, that suggests that £56 million
has been kept by the Palace via the Trust. Is that correct?
(Sir Michael Peat) No, that is not correct.
19. How much is it then?
(Sir Michael Peat) The figure I recognise is £26
million and of that £26 million round about £14.5
2 Note: See Evidence, p.2-7. Back