Sir John Bourn, head of the National Audit Office, reported to Parliament today that new arrangements giving the National Audit Office direct access to the accounts and records of the Royal Household have worked well. This first examination found that good value for money had been achieved from the £7.2 million a year the Royal Household spends on major property maintenance work.
Previously, the National Audit Office had reported on this expenditure based on access to the Household’s papers provided to them via the Department without being able to carry out fieldwork at the Palaces directly. The Government, responding to recommendations made by the Committee of Public Accounts, introduced new arrangements for the National Audit Office to have direct access to the Royal Household’s books and records to examine expenditure from the grant provided by the Department.
In undertaking their examination the National Audit Office received full co-operation from the staff of the Royal Household. They were able to examine all the records they requested and visited maintenance works at Buckingham Palace, St James’s Palace, Windsor Castle, the Royal Mews and Windsor Home Park.
The National Audit Office found that the Royal Household’s property maintenance programme is well organised. There are strong arrangements in place for reviewing maintenance needs and standards, and for setting priorities and measuring achievements. Virtually all of the work is awarded to contractors following competition. And the Department, who provide most of the money, use independent experts to review the Royal Household’s plans. Together these features point firmly towards the achievement of value for money.
The National Audit Office examined 16 large projects in detail, representing nearly 60 per cent of the major project expenditure in 1998-99. Overall, the Royal Household have contained their expenditure within the limits set by the Department, although performance in delivering individual projects to time and cost was variable. On six of the 14 completed projects examined, there were cost increases of over £5,000 or delays of over a month. The two main causes were: structural work identified once projects started and areas were opened up; and decisions to add minor maintenance work to projects, to minimise disruption to the Palaces. It is important to recognise that the Palaces are historic buildings making it particularly difficult to determine the extent of work required until existing surfaces have been removed. Also, the Palaces are working buildings in daily use, placing constraints on when work may be carried out.
The National Audit Office made recommendations which relate primarily to ways in which the Department monitor the Household’s performance, which the Department and the Royal Household have accepted: on improving the Department’s monitoring of expenditure from the grant; on better verification by the Department of the amount of income from visitor receipts available to supplement the grant; and on extending performance reporting by the Royal Household to cover the large number of small projects.