Royal palaces cost taxpayer pounds 6.7m

Upkeep of the historic Royal palaces, including the Tower of London (below) and Hampton Court, cost the taxpayer pounds 6.7m last year. The bill for new facilities - which will mean tourists can get a cup of tea at the Tower for the first time - helped to send the Government body running the palaces further into the red.

The annual report and accounts of the Historic Royal Palaces agency, presented to Parliament yesterday, shows a net operating deficit of pounds 7.5m in 1997, compared with pounds 4.5m in 1996.

However, the agency has raised the amount of income generated from pounds 12m to pounds 29m in the seven years it has been responsible for the palaces. It has also halved the proportion of its expenditure borne by the taxpayer from 35 per cent to 17 per cent.

Chief executive David Beeton said: "The palaces have always required subsidy from the taxpayer and [the] subsidy for last year is significantly lower than the subsidy that we inherited."

He added that there was "a possibility" the agency might not have to draw upon the taxpayer by the turn of the century, providing the tourist industry remains buoyant and fears of a recession prove unfounded.