Royal employees spent pounds 1m decorating own apartments

Two senior royal employees have spent more than pounds 1m on refurbishing their Kensington Palace apartments, according to evidence given to MPs. Fran Abrams, Political Correspondent, says the Public Accounts Committee will call for a curb on public subsidies of accommodation inside the Royal Palaces.

A row over the Royal Family's reluctance to disclose its affairs has caused a five-year delay in publication of the final report on property services, salaries and accommodation in its palaces. Hearings were held two years ago but letters and questions have been going back and forth ever since.

Finally the PAC is ready to produce its report but, under a Conservative chairman, it will stop short of demanding that the Royals should hand back one or more of their five publicly owned and funded palaces. However, Labour members who have campaigned for greater openness and accountability will call for further action.

Evidence submitted to the committee has revealed that two senior royal employees have spent more than pounds 1.1m doing up their own personal apartments.

Michael Peat, the Royal Household's director of finance, and John Tiltman, its director of property services, have both moved into the accommodation in Kensington Palace. Mr Peat pays pounds 338 per week in rent, while Mr Tiltman's job comes with a salary reduced by pounds 230 per week in lieu of rent. Neither has to pay council tax or other bills.

Before moving into the palace, Mr Peat lived in Wandsworth and Mr Tiltman in Croydon. Mr Peat was given pounds 115,000 from the public purse for furniture.

The report will say the accommodation given to relatives, employees and pensioners of the Royal household is so valuable that if market rents were charged most could never afford to live there. It is also expected to raise the question of how the occupants can pay the tax which should be chargeable on the dwellings, which are regarded by the government as taxable benefits.

The Royal Family has promised to cut down the number of grace and favour homes, employees' residences and pensioners' apartments which are maintained by the public.

But since 1994 the number has remained steady at 285. The Royal Household has promised to reduce that to 205 as they became vacant, but there has been no change.

The Royals object to the use of the term "grace and favour," saying almost all the accommodation is for royals, employees and pensioners. In evidence to the committee officials said in the next generation the only family members with the right to accommodation would be the Queen's four children and Princes Harry and William.

Many of those who live in the palaces have only nominal duties. For example, 13 military knights of Windsor Castle are given homes because they are required to attend weekly services in ceremonial dress.

When evidence was given to the committee two years ago, eight apartments were occupied by royals, 226 by current employees, 27 by former employees and four through "grace and favour" arrangements.

The Royal Family receives pounds 7.9m a year from the Civil List, which pays the salaries of major royals and 296 staff, plus pounds 20.6m in grant-in-aid which is used for the upkeep of the royal palaces. In return, revenues of around pounds 80m are returned to the state.

The rents and salary abatements on the apartments come to pounds 400,000 per year - half the annual cost of maintenance.

One Labour member of the committee, Alan Williams, has been a long-term campaigner against excessive funding of the royals. He has also asked how the accommodation is properly taxed if it has never been valued. The last Chancellor, Kenneth Clarke, said the flats and houses were taxable benefits like any other.

Mr Williams said the Royal family should be made to give back Kensington Palace, St James' Palace and Clarence House - once the Queen Mother had died - to the state. They could live quite comfortably in Buckingham Palace and Windsor Castle, he said.

A Buckingham Palace spokeswoman said there had never been any question of Mr Peat or Mr Tiltman benefiting personally from the refurbishment of their flats. The money would be recouped in rent over a 30-year period, she said, and much of it was required for fire safety reasons.

"No grace and favour accommodation has been granted since 1991, and as they die it will become vacant. We made it clear that there are no plans to move members of the family who are currently there out."

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