Royal VAT bill: £1.4m

The Royal Household's property maintenance bill would be cut by £1m if VAT on repair, maintenance and improvement (RMI) work was reduced to 5%.

Details of the costs of maintaining the occupied royal palaces were made available for the first time last week with publication of the Civil List and Grant in Aid Annual Reports for the year to 30 April 2002. They show that the Royal Household spent £15.5m (an increase of 1.8% over the previous year) on the maintenance and conservation of 360 buildings, with a combined floor area of 160,000m2.

These include: Buckingham Palace; St James Palace; Clarence House; Marlborough House Mews; the residential and office areas of Kensington Palace; the Royal Mews and Paddock at Hampton Court; and Windsor Castle and buildings in the Home and Great Parks at Windsor.

The proportion of the bill in respect of VAT was £1.4m.

Major projects undertaken at Buckingham Palace in the past year included the redevelopment of the kitchens at a cost of £3.2m and the building of the new Queen's Gallery for the Golden Jubilee, which cost approximately £25m (not all funded by the Civil List).

Future costs include: the repair of fire damage caused by the blaze at Buckingham Palace on 2 June for approximately £70,000; upgrading services, fire compartmentation and internal redecoration at Clarence House; restoring the stone of the East Fa‡ade of Buckingham Palace; and renewing the Picture Gallery rooflight at Buckingham Palace.

Even the Royal Household abides by Key Performance Indicators (KPIs). It met 12 of its 15 KPIs. However, the redevelopment of the Buckingham Palace kitchens over-ran its planned cost by more than 10%, because of "factors including the delivery of asbestos and lead paint". The Royal Household has set itself targets of completing 70% of its construction projects with cost over-runs of no more than 5%, and 100% of construction projects with cost over-runs of no more than 10%.

However, it beat its supplier payment targets, ensuring that 89% of its suppliers were paid within 30 days of receipt of invoice, 97% within 40 days, and 98% within 50 days.

For the full report and accounts, see: www.royal.gov.uk.

Royal warrant holders - those companies which enjoy a "substantial trading relationship with the Royal Household" - in the building and maintenance category include: AC Bacon Engineering; Amec Facilities; David Palmer Building Contractors; EC Hallam Engineering (Leicester); Hall & Tawse; Richard Irvine Building Services; Twyford Bathrooms; and Wolseley Centers.