GO
Loading...

Queen's crumbling palaces need $80 million refit

Tuesday, 15 Oct 2013 | 7:26 AM ET
Prince Charles, Prince of Wales, Queen Elizabeth II, Prince William, Duke of Cambridge and Catherine, Duchess of Cambridge stand on the balcony of Buckingham Palace during the annual Trooping the Colour Ceremony on June 15, 2013 in London, England.
Max Mumby | Indigo | Getty Images
Prince Charles, Prince of Wales, Queen Elizabeth II, Prince William, Duke of Cambridge and Catherine, Duchess of Cambridge stand on the balcony of Buckingham Palace during the annual Trooping the Colour Ceremony on June 15, 2013 in London, England.

U.K. taxpayers have received a shock, with lawmakers revealing the full extent of the costs involved to refurbish the poor condition of the Queen's residences.

Alan Reid, the keeper of the privy purse and the treasurer to the Queen was grilled by politicians in a House of Commons committee hearing and admitted that 39 percent of the royal estate was below "target condition". The public bill could be in the region of £50 million ($80 million).

"It would be a good indication," Reid told the Public Accounts Committee. "Initial work has been done to make it dry and safe."

(Read More: Queen's property portfolio 'should invest abroad')

Gritty details of the poor state some of the Queen's palaces were laid bare with repairs not made to Buckingham Place for sixty years. Rain water leaks into the Queen's picture gallery, it was said. It also pointed to cracked lead slates in the roofing and crumbling walls. The "antiquated" heating systems are over 60 years old, the electrical wiring has not updated since 1949 and £800,000 needs to be spent on removing asbestos.

The Queen's sovereign grant - the amount of taxpayer money provided by the Government to the Royal Household in support of The Queen's official duties - will increase in the next few years to pay for these repairs.

(Read more: Princes William and Harry hit the trading floor)

In the last tax year the grant stood at £31 million. This will increase to £36.1 million this year, and then £37.9 million in 2014/2015 - a 22 percent rise in three years. Around half the amount of money from these increases will go towards the refurbishment, Reid said, indicating that in ten years' time "major inroads" could be made with the work needed.

Lawmakers castigated Reid, and his deputy Mike Stevens, over what they perceived as poor management of finances, opting to dip into reserves, freeze wages for low income workers and letting buildings deteriorate instead of making genuine efficiency savings. They also chastised Reid over a 15 percent increase in utility bills in the last year, a cost he put down to a cold snap and the increased activity with the Diamond Jubilee celebrations.

It might also be the end of the line for the royal train, which has been a permanent fixture for the British monarchy since 1842. The current train used by Queen Elizabeth to travel the length and breadth of the country has between five and ten years left, Reid said, after beginning its lifespan in 1970.

(Read More: Queen of England Makes Record Profit From Property)

"The rolling stock is very old indeed, and it probably doesn't have too many more years of life," he told lawmakers. "It's not luxurious by any stretch of the imagination."

He added that it would be a "major decision" to replace the train and the numbers involved would be "staggering".

By CNBC.com's Matt Clinch. Follow him on Twitter @mattclinch81

Featured

Contact Europe News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More

Europe Video

  • Jan Dunning, CEO of St Petersburg-headquartered hypermarket chain Lenta, says the situation in Ukraine has had no impact on the group, as consumer confidence remains unaffected in Russia.

  • Vincent Deluard, European strategist at Ned Davis Research Group, says the strong euro is a problem for the region's companies, especially for the large exporters.

  • European shares closed higher on Thursday as investors brushed aside concerns regarding Ukraine and focused instead on Wall Street earnings and the latest U.S. jobs data.