Select Committee on Public Accounts Minutes of Evidence

Examination of witnesses (Questions 120 - 139)



  120. Outside the cordon?
  (Sir Michael Peat) Yes.

  121. What sort of rents are you looking at on those?
  (Sir Michael Peat) For some of them in Central London we might get £50,000 a year plus, more than that, a lot of money.

  122. The ones inside the cordon where you have got this pool, how many of them are there and what rent do you charge?
  (Sir Michael Peat) The highest rent for one inside the cordon is £45,000 a year.

  123. Am I right to say that the National Audit Office has not got access to any of these figures?
  (Sir Michael Peat) Yes, they have got access to all of these figures.

  124. Moving to close really, just to come back on this issue of Windsor Castle. Have I got this right, that the basic idea was the money was being charged for entry specifically for restoration following the fire and you have essentially argued that is true but that is not what you are doing, in some sense some of the money gets paid back into your trust fund? That is correct, is it not?
  (Sir Michael Peat) No. We introduced a new charge for Windsor Castle to pay for the fire restoration and, now the fire restoration is paid for, that continues to be available to offset the grant-in-aid.

  125. Can I ask Mr Young something very briefly. I understand from the report that the department's arrangements for verifying visitor income at Windsor Castle have lapsed in some sense. A lot of the questions we have been asking are about the level of disclosures from the Royal Household and your department has essentially allowed less to occur. Why is that?
  (Mr Young) What happened was we accepted the audited accounts from the Household of the receipts from the Windsor precinct income. We dropped the requirement for a separate Certified statement. We did not cross-check them with the external auditor. Egged on by the NAO's Report we have indeed now asked for and received statements, certifying the calculation of the amounts involved for 1998-99 and 1999-2000. We have done that double check which the report suggested.

  126. I understand that you do not specifically require your consultants to establish whether there is a maintenance backlog, rather simply to look and check that everything is not completely falling down. Why is that?
  (Mr Young) That was the position. We have now asked our consultants to check the contents of the quinquennial surveys at each Palace and then cross-check the things that need to be done that are written out in those quinquennial surveys and to make sure that they are included in the five year work programme. We are now filling that gap. The reason we did not before was because we thought, and indeed we might have been right, that in the normal discussions between the Household, the department and our respective advisers these things would have been thrown up in the normal course of business.

  127. My original question to Sir Michael Peat was about how the maintenance had reduced faster than the grant, hence there might be underneath this an emerging increase in the backlog.
  (Mr Young) It is a possibility, which is why we have asked our consultants. It is not, if I may say so, the flavour of our discussions with the Household. We do not sense that they are not coming forward with necessary maintenance work and so far in the quinquennial reviews there has not been that sort of suggestion. It is not that sort of outfit where you feel they are skimping on the necessary maintenance.

  128. When you talk about flavours and senses, I am wondering whether there is actually a hidden backlog emerging that they are prioritising in a different way and you do not know.
  (Mr Young) We have asked our consultants to start so they are now examining the Buckingham Palace quinquennial review, which finished in 1998. They are going through a list of every piece of work which that quinquennial review flagged up as needing to be done and checking that it is in their five year work programme. So we are doing it exactly as you are suggesting.

  129. You do not know yet whether there has been an accumulating backlog that at the front of it looked like everything was going well and the costs were going down?
  (Mr Young) No, we do not, but in the report there were two pieces of work. If you look at page 26 they talk about what is being done to ensure the Palaces are being maintained to an appropriate standard. "The Royal Household also seek independent assurance that the Occupied Royal Palaces are being maintained to the appropriate standard..." and you will see in the example quoted of Windsor "The general structural condition of all the buildings surveyed is good..." So there is plenty of evidence about good structural surveys being done and no evidence so far of a backlog building up, but we are checking and our consultants are on the case.

  130. There could be a picture emerging there that everything seems all right, the numbers are going down, the share of grant maintenance has gone done, and the maintenance backlog was the reason for the fire. Instead of investing in the basic structure we may be investing in sticking plasters in terms of fire precautions rather than maintenance. Is that not a worry of yours?
  (Mr Young) It is a worry but I think not one that I am losing sleep about in the sense that we feel these things are well maintained. The report goes on to say, in paragraph 2.9 on page 12, that everything flagged up as being needed to be done urgently has been done.

  131. My worry here is I am sure if I asked Sir Michael Peat the same questions he would say "do not worry, trust me". I am not saying we do not trust Sir Michael obviously but the difficulty is the NAO having access to the accounts and you having access and it seems from the replies you are giving that you have not got complete access to some of these issues about the possibility of emerging backlogs that still need to be checked out as far as you are concerned.
  (Mr Young) It is not an access issue at all. We have now asked Watts & Partners, our consultants, specifically to check the question that was raised here and we will get those results. Because we have asked them that does not mean we are expecting the answer "yes", I am expecting to find the answer that these places are well maintained.

  132. Can I ask Sir Michael to comment about the backlogs, the hidden backlogs?
  (Sir Michael Peat) Yes. I can say unequivocally that the buildings have never been in better condition from the day they were built and are probably in better condition now than the day they were built. The reason for my confidence on this is because the quinquennial surveys are undertaken not by ourselves but by independent practices and independent surveyors, giving a number of layers of review.

  133. Are they elves?
  (Sir Michael Peat) Their reports are that big. Yes, the size of elves. Also, English Heritage are very, very closely involved with the estate, they attend all our programme meetings and go through it all. We have got our own property section who take great pride in the buildings. Remember there are getting towards two million visitors every year, the Queen has 80,000 guests, and there are a thousand people who work in the Palaces, people would spot it if they were falling to pieces. So you have got the independent quinquennial surveys, you have got English Heritage, you have got our own people, you have got the visitors, and now you have got, in addition, the department's surveyors too. We have got a number of belts and a number of pairs of braces.

  Mr Davies: All you need now is Alan Williams. Thank you very much.

Mr Davidson

  134. I wonder if I could follow up the questions that were asked earlier about access to the flats and you gave us the numbers. In terms of the pensioners, I do not quite understand how it is decided that some people end up as pensioners living on the Royal Estate and others do not. Are these gardeners, electricians and the like?
  (Sir Michael Peat) Yes. The guideline is, if it is available, that you are entitled to pensioner accommodation if you have been housed for 20 years, if you do not have your own house and if your pension from the Queen is less than, at present, £10,900 a year, which is increased by inflation. So if you fall within those three criteria then you are eligible to be considered for pensioner housing.

  135. So there is nobody who was previously earning more than £10,900?
  (Sir Michael Peat) That is the pension. It depends how long you have been there.

  136. If you are a pensioner on £10,900, you would be on a finishing salary of what?
  (Sir Michael Peat) It is usually about two-thirds. It is going to be about £16,000 or £17,000.

  137. So say it was £20,000, nobody who was earning more than £20,000 would be in a pensioner's house?
  (Sir Michael Peat) That is the present rule that we have implemented since we took over in 1991. There are still some pensioners, as I was saying before, probably ten or so, who do not meet those criteria because they were put into the pensioner accommodation before the Household were responsible for it.

  138. And they have just hung on?
  (Sir Michael Peat) That was the condition on which they went in.

  139. I understand that. My local authority has a policy to try to move people who under-occupy large properties into smaller properties.
  (Sir Michael Peat) Pensioners do not get large properties. There are no large properties for pensioners. They are special properties for pensioners.

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