Pan­demic makes a £35 mil­lion hole in the Queen’s purse

The Timaru Herald - - World -

The Queen is fac­ing a £35 mil­lion (NZ$68m) short­fall in her fi­nances as a re­sult of the pan­demic, but her staff need not fear for their jobs.

Buck­ing­ham Palace has re­vealed that in­come will fall by £5 mil­lion a year for the next three years be­cause Windsor Cas­tle and other tourist at­trac­tions were forced to close dur­ing lock­down.

The Queen will also re­ceive £20 mil­lion less for the ren­o­va­tions to Buck­ing­ham Palace, a ten-year project that was ex­pected to cost £369 mil­lion. In­stead the palace ex­pects to have to carry out the work for £349 mil­lion or less.

De­spite the short­fall the palace said it had no plans to lay off staff and hoped to cover losses with ef­fi­ciency sav­ings.

The palace’s day-to-day fi­nances have been hit be­cause of a fall in in­come for the Royal Col­lec­tion Trust (RCT) from a pro­jected £77 mil­lion to £13 mil­lion. The trust runs the public open­ing of the Queen’s of­fi­cial res­i­dences, in­clud­ing Buck­ing­ham Palace, Windsor Cas­tle and the Palace of Holy­rood­house in Ed­in­burgh, and con­trib­utes £14 mil­lion a year to the palace cof­fers. The sum is part of the £20.2 mil­lion that the palace re­ceived in sup­ple­men­tary in­come from out­side sources in 2019-20, up from £17.8 mil­lion a year ear­lier.

Over the past 20 years the trust has con­trib­uted £80 mil­lion to the royal house­hold fi­nances, said Sir Michael Stevens, who as Keeper of the Privy Purse is ef­fec­tively the Queen’s chief fi­nan­cial of­fi­cer.

Launch­ing the an­nual re­view, Sir Michael said: ‘‘We are ex­pect­ing a sig­nif­i­cant re­duc­tion in in­come from the Royal Col­lec­tion Trust due to the im­pact Covid-19 has had on their vis­i­tor num­bers. This forms the bulk of a pro­jected short­fall in in­come which we es­ti­mate will be around £5 mil­lion per year for the next three years.’’

A sec­ond short­fall is a re­sult of a fall in com­mer­cial rents be­cause of the pan­demic. The Queen’s tax­payer in­come, the Sovereign Grant, is cal­cu­lated on the ba­sis of the prof­its of the Crown Es­tate. In nor­mal times the grant is set at 15 per cent of the prof­its. If the Crown Es­tate prof­its de­cline the Sovereign Grant is not al­lowed to fall and in­stead re­mains at the pre­vi­ous year’s level. The bud­get for the palace build­ing works was based on the as­sump­tion that Crown Es­tate prof­its would con­tinue to rise.

Sir Michael said that the Crown

Es­tate re­ported a slight in­crease in its prof­its for 2019-20, mean­ing that the Sovereign Grant for 2021-22 would be £86.3 mil­lion – a core grant of £51.8 mil­lion and a re­ser­vic­ing grant of £34.5 mil­lion. The grant for 2019-20 was £82.4 mil­lion.

The re­duc­tion of royal ac­tiv­ity be­cause of the pan­demic, in­clud­ing over­seas tours, would help to off­set some of the short­fall, a royal source said. – The Times

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