By bringing in new skills and resources, the new body will be able to build on the Agency's notable success in conserving the palaces and making them enjoyable for visitors. The ownership of the palaces will be unchanged, and the secretary of state for culture, media and sport will remain fully accountable to parliament for their care and presentation. With the greater flexibility the new body will have to generate income, for example from donations and sponsorship, the palaces will in time cease to require funding from the public purse.
In a written answer to a parliamentary question, Mr Smith said:
'The Historic Royal Palaces are currently managed by an executive agency of my department, which has progressively reduced its call on Exchequer support since its establishment in 1989. I have given careful consideration to ways of building on that performance and bringing an end to Exchequer support, while safeguarding the fabric of the palaces and maintaining the quality of visitors' experience. I have concluded that these benefits will best be realised through establishing the historic royal palaces as a non-departmental public body.
'The new body would be established under a Board of Trustees to bring a wider range of expertise to the running of the historic royal palaces. I propose that the board comprise three members appointed
by the Queen and five appointed by me. The chairman would be appointed by the Queen on my advice.
'I can reassure the current staff of the agency, who have done so much to secure its success, that their terms and conditions of service will be protected on their transfer to the new body. New pension arrangements, broadly comparable to those under the Principal Civil Service Pension Scheme, will be put in place. The chief executive of the agency will now take forward discussions with staff representatives on the detailed implications of the proposed arrangements.
'Exchequer funding is set to reduce to some£4m in 1998-99, but I expect the new body to continue the agency's success in increasing income and that its new status will give greater financial flexibility and open up fresh sources of income, so that the need for Exchequer funds can be brought rapidly to an end.
'I should emphasise that the new arrangements would apply only to the historic royal palaces, which are currently managed by the Agency, and do not affect the Palaces which remain in use and are managed on my behalf by the Royal Household. The changes would not alter the ownership of the Historic Royal Palaces or my responsibility for their management. I shall remain answerable to parliament for their care and presentation.
'The new body would operate on the basis of an annual plan and agreed performance targets. The National Audit Office would continue to have full rights of access, both to carry out the annual audit of the accounts and to undertake value for money studies. Annual reports and accounts will be presented to parliament and the chief executive will be liable to be summoned to appear before the committee of public accounts and other select committees of this house.
'Subject to the approvals to which I have referred, the new body would be established to take over the management of the historic royal palaces from 1 April this year.
'The Historic Royal Palaces Agency has been a highly successful executive agency. It has achieved major improvements in the conservation and presentation of the palaces, while reducing the call
on taxpayers' support. I want to build on that success, bringing in new skills and resources to enhance the palaces and their attractions still further for millions of future visitors.'
1. The Historic Royal Palaces Agency is an Executive Agency of the
Department for Culture, Media and Sport. It is responsible for the
care, conservation and presentation to the public of the Tower of
London; Hampton Court Palace; Kensington Palace State Apartments,
Court Dress Collection and Orangery; the Banqueting House in
Whitehall; and Kew Palace with Queen Charlotte's Cottage. The
Palaces are owned by the Sovereign in right of the Crown.
2. Since its establishment as an Executive Agency in 1989, Historic
Royal Palaces has (at current prices):
spent£60m on conserving and improving the Palaces;
contributed£20m to the cost of the Royal Armouries'Museum at Leeds;
increased the gross annual turnover from its operations from£15m to£50m;
reduced the proportion of its expenditure borne by the taxpayer from 35 percent to 17 per cent;
created 200 new jobs;
reduced payroll costs from 50 per cent to 37 per cent of expenditure; increased visitor numbers by 9 per cent;
won the Heritage Attraction of the Year Award in 1995 and the Visitor Attraction of the Year Award in 1996 for Hampton Court Palace.
3. The Historic Royal Palaces Agency's exchequer grant for 1997-98
4. The new body will be an independent charitable trust, managed by a board of trustees established by Royal Charter.