In the three years since the Royal Household took over responsibility for managing its own air and rail travel, the cost of such travel has reduced by two thirds. However, as a result of the National Audit Office’s enquiries, the basis of charging by the Ministry of Defence for royal use of the RAF’s 32 (The Royal) Squadron is to be changed.
According to today’s report to Parliament by head of the National Audit Office Sir John Bourn, expenditure by the Household since April 1997 on air and rail travel has totalled some £39 million, falling from £17.3 million in 1997-98 to an estimated £5.4 million in 2000-01 – a reduction of 69 per cent. Since 1997, the Royal Household has administered a grant-in-aid1, until recently from the Department of the Environment, Transport and the Regions and now from the Department for Transport, Local Government and the Regions, to cover the cost of royal travel by air and rail.
Key findings of the NAO report are as follows.
- Ninety per cent of expenditure, and savings since 1997-98, relate to expenditure on air travel, which was reduced from an initial budget of £17.2 million in 1997-98 to £7.5 million in 1999-2000. Over the same period, the number of miles travelled by air by members of the Royal Family fell by six per cent.
- The savings were achieved by replacing RAF helicopters by the Household’s own helicopter service; switching from the larger more expensive BAe146 aircraft of 32 Squadron to the smaller BAe125 aircraft; and a reduction in the Ministry of Defence’s charges for the use of both aircraft types flowing from improvements in its accounting systems and economies in the cost of operating the Squadron.
- Since 1997-98 the Household has been charged the full costs of using aircraft from 32 Squadron. In September 1999, the MOD formally confirmed that the primary purpose of the Squadron was to support military operations; and that any royal or other use of spare capacity was secondary. Other non-military users of the Squadron, such as government ministers and senior officials, are already charged only variable costs. The MOD, the Department and the Treasury agreed to change the basis of charging for royal use of 32 Squadron aircraft, as a result of the National Audit Office’s enquiries. A change to variable cost charges (ie. excluding overheads) will benefit the taxpayer, because it allows the Household to use 32 Squadron when the variable cost of 32 Squadron is lower than the costs of a charter.
- Expenditure on scheduled and chartered flights was broadly constant, at £1.4 million a year, between 1997-98 and 1999-2000. The Household has established effective arrangements for procuring chartered and scheduled flights, at prices which compare favourably with industry norms.
- Expenditure on royal travel by train has fallen by nearly 60 per cent, from an original budget of £1.8 million in 1997-98 to expenditure of £0.8 million in 1999-2000, and the cost per royal mile travelled fell by 71 per cent. These savings result from a reduction in the number of carriages maintained and operated, from 14 to nine, rationalisation of coach maintenance, and renegotiation of planning and co-ordination charges. Sale of the surplus coaches raised £235,000 for the Exchequer. The royal train was used on 60 occasions in these three years.
- The Household and the Department introduced systems to better administer royal travel, including a system for taking cost into account and comparing travel options for more expensive journeys.