Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 100 - 119)



  100. One obvious management technique for establishing whether what you are doing represents good value for money is looking at what other monarchies do, whether monarchies in Europe or indeed other heads of state's offices in republics like Germany or Italy or indeed Prime Ministers' or head of governments' offices. What benchmarking have you done and what have been the results of that?
  (Sir Michael Peat) We have looked very carefully at this because I should be fascinated to know what it cost government or even the private sector or even other heads of state. I have to say that no-one, other than the British Royal Family, even produces total costs let alone costs analysed by journey. We cannot compare against anyone else because no-one has the same disclosure as us.

  101. Could you not look at the Danish monarchy or Dutch monarchy?
  (Sir Michael Peat) We have asked them all. We have sent letters. They do not do it and they do not disclose it.

  102. What about the republics like Germany.
  (Sir Michael Peat) Yes, we have been on to them, we have done a fair bit of work on this, not just on travel costs needless to say but on all costs to do with the monarchy and I am afraid no-one else has the same standards as we do here in terms of transparency.

  103. What about governments, what about ministers?
  (Sir Michael Peat) No, none of them does it either. We have asked everyone. It is just us, I am afraid.

  104. Perhaps that will change. It is something we might take up with the NAO. Could I ask you about the scheduled services? On page 20 it says there is a limited use of scheduled services. There are only 58 journeys. What scope do you think there is for increasing these scheduled services?
  (Sir Michael Peat) It is not that bad. It was 60. We use scheduled services for more than 15 per cent of all journeys. We were 60 in 2000-01 on scheduled rail and we were 22 on scheduled air, so that is 82 out of a total of 484, so it is getting towards 20 per cent. It is not bad.

  105. Do you think there is scope for increasing that further?
  (Sir Michael Peat) Yes, there always is. We always look at it and we have this option form system so that for every journey which is made we have to consider all the options very much including scheduled.

  106. You said one of the advantages of the royal train, apart from the accommodation and changing and dining and all that, was that it enabled you to arrive not only in the centre of town, but enabled you to arrive at a given destination at a certain time with certainty. Could you say how you get the train to arrive on time?
  (Sir Michael Peat) One of the reasons is because it travels in the middle of the night when there are not so many other trains using the railways.

  107. It says on page 21 that the costs and expenditure of the train are down considerably. Could you just go into what are variable and what are the fixed costs? Do the variable costs include paying the track owner?
  (Sir Michael Peat) Yes; absolutely. We have to pay for track access and track scheduling and all this sort of thing.

  108. I think you said the rolling stock which was sold got £235,000 and Sir Richard said that what is left of the train is worth perhaps £1 million.
  (Sir Richard Mottram) I was guessing. We would have to try to sell it. It might be worth nothing.
  (Sir Michael Peat) Yes; probably.

  109. Indeed. Presumably if it is an old train it will not be worth that much. Nevertheless there are quite substantial fixed charges. What are they?
  (Sir Michael Peat) In the fixed charges is first of all the shed in which the train is kept for security purposes. Secondly, there has unfortunately to be quite a bit of routine maintenance nowadays for railway safety, not only for the Queen but for other users of the railway, which has to be done on a time basis rather than a mileage basis. One of the things we have done is to look terribly closely at transferring costs from time basis across to mileage basis and we have been very successful in that and it is one of the reasons the costs have come down. It is a good question. The more we can get into variable, the better because then they are only incurred when we use it, but we have to have quite a bit of maintenance done, we have to have the security, we have to have people there to look after it and protect it when it is not in use.

  110. A lot of people would be surprised that the cost per mile is substantially higher than by air. As you said earlier, that has something to do with how little it is used compared with air.
  (Sir Michael Peat) Yes.

  111. Do you think there is a possibility that if in the Jubilee Year the train is used a lot when you do the review the Chairman referred to that might result in your deciding that you should be using the train a lot more?
  (Sir Michael Peat) Yes, very much. We discussed this earlier and I had no views to put forward on it. There are problems with the train. Because the rolling stock is so old it cannot go very fast which means you cannot use it much on the main lines during the day. If you do, other trains come up behind it and either they have to wait—and we would not want trains to wait—or the royal train has to pull into sidings the whole time which means it never gets there. So we have trouble there. It cannot go through the Channel Tunnel because it is old and if it could do that it could increase its use. It is mainly just sleeping accommodation and if it had nice meeting rooms and a nicer dining area, it might mean that when we are trying to encourage people to invest in the country and taking them to the North East or Wales or somewhere by train government users could use it for that. If we could use it more it would bring down the cost substantially.

  112. I was not aware until I read this report that it is possible to hire the train. Paragraph 2.32.
  (Sir Michael Peat) Oh, yes.

  113. What do you do to advertise the fact that somebody can rent the train?
  (Sir Michael Peat) Because we would mainly let it out for reasons of national interest the Department have very kindly looked after that for us and have sent round memos to all other departments and have tried to encourage other departments to use the train, but it has only been used on one occasion by others so far.

  114. It says that in 1999-2000 there were no expressions of interest in using the royal train. Do you think that if you did not have a ghastly 1960s aluminium Formica train of the kind you described, but if you had a nice Virgin train with TVs and everything, you might get more private sector interest?
  (Sir Michael Peat) We might well.

  115. I am actually making a serious point. Have you thought of possibly leasing a new bit of rolling stock and making it something you can hire out?
  (Sir Michael Peat) When the Chairman asked me earlier about after the Jubilee Year, obviously these are the sorts of issues we shall want to consider. It becomes clearly a matter of cost, clearly a matter of who would want to use it, but the future of the royal train, if it is going to be economic, does lie with more people using it. No question about that.

  116. May I turn to aircraft and chartering? In paragraph 2.22 it says that for these larger overseas visits when you charter an aircraft there are very few airlines with a sufficiently large fleet to be able to do it to the standards you require with reconfiguring and so on. It begs the question. I suppose it would not be the case that it would ever be worth leasing a very large aircraft, but I notice that the number of journeys made with the smaller ones, the 146 and the 125, is much higher. Have you looked at the possibility of leasing a smaller BAe aircraft on the same basis that you do the Sikorsky helicopter?
  (Sir Michael Peat) Yes. We have had two very extensive studies into this and looked at it in huge detail, as you would expect, following the success of the helicopter. The problem is that the helicopter meets a fairly well defined need which is basically travel in the UK, and because of that it has a substantial requirement. For fixed-wing aircraft the requirement varies enormously. Sometimes you have quite large parties, sometimes you have quite small parties. Sometimes you are travelling a long distance, sometimes you are travelling a short distance. It is very difficult to find one aircraft which will meet a big enough proportion of the requirement to make it economic to lease it. In many ways you do better to charter a variety of aircraft, each of which is a better fit with your requirements.

  117. One more question about the Crown estate. I was sent a copy of the report and accounts recently and it shows very substantial assets and a substantial income which I understand is paid over to the Exchequer in return for the Civil List. Have you recently examined the possibility of going back to the old arrangement, that the Crown finances itself out of income from the Crown estate?
  (Sir Michael Peat) No, we have not and I do not think we want to. It has always been the case that the immediate official costs of the sovereign should not be met by the taxpayer, but should be met from the revenue from the Crown estate and that is a good system. The taxpayer has quite a burden already and it was always felt that it was not right that it should include the immediate official costs of the sovereign. That continues. However, our view is that with a constitutional monarchy, it is a good thing that the Crown estate money is passed through Parliament and that Parliament, as you are doing today, has a chance to express a view and to opine on how well it is spent and how much of the Crown estate money should be handed back to the Queen. We are content with the system and feel it rests well with the Queen's position as a constitutional monarch.


  118. You did not tell Mr Bacon how much you would charge him for the royal train.
  (Sir Michael Peat) We can discuss that later. I hope he has some savings.

Mr Steinberg

  119. May I just say that the North East is still in the UK.
  (Sir Michael Peat) Excellent.

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