By Robert Verkaik
Queen tried to use state poverty fund to heat Buckingham Palace
Ministers were asked if money earmarked for schools, hospitals and low-income families could be used to meet soaring fuel bills
The Queen asked ministers for a poverty handout to help heat her palaces but was rebuffed because they feared it would be a public relations disaster, documents disclosed under the Freedom of Information Act reveal.
Royal aides were told that the £60m worth of energy-saving grants were aimed at families on low incomes and if the money was given to Buckingham Palace instead of housing associations or hospitals it could lead to “adverse publicity” for the Queen and the Government.
Aides complained to ministers in 2004 that the Queen’s gas and electricity bills, which had increased by 50 per cent that year, stood at more than £1m a year and had become “untenable”.
The Royal Household also complained that the £15m government grant to maintain the Queen’s palaces was inadequate.
In search of more money-saving schemes, the Queen’s deputy treasurer wrote to the Department for Culture, Media and Sport to ask whether the Royal Household would be eligible for a grant to replace four combined heat and power (CHP) units at Buckingham Palace and Windsor Castle.
He asked: “Community Energy can fund up to 40 per cent of the capital costs of implementing a community heating scheme… Since we are already grant-in-aid funded [the Queen receives £15m a year for the upkeep of her palaces] we would like to know whether the Household [would] be able to benefit from these grants. I look forward to your comments.”
Click the following links to see the Palace request for a poverty grant: Page 1 | Page 2 | Page 3 | Page 4 | Page 5 | Page 6 | Page 7
Under this scheme administered by the Environment department, schools, hospitals, councils and housing associations have been awarded £60m for heating programmes which benefit people on low incomes.
Taxpayers already contribute £38m to pay for the Royal Family. Yet some of the buildings which would have benefited from the energy grant were occupied by minor royals living in grace and favour accommodation on the royal estates. Surprisingly the Government offered no resistance to the proposed application and cleared the way for the Queen to take advantage of the handout.
But by August 2004 the documents show that Whitehall officials had changed their minds and poured cold water on the whole idea. In an email sent to the Palace it was diplomatically explained that the funds were aimed at people on “low incomes”.
The official wrote: “I think this is where the Community Energy Funding is directed and ties in with most allocations going to community heating schemes run by local authorities, housing associations, universities etc. I also feel a bit uneasy about the probable adverse press coverage if the Palace were given a grant at the expense of say a hospital. Sorry this doesn’t sound more positive.”
The Palace had more joy when it sought permission to find a more affordable contractor to supply the Queen with her gas and oil. Documents show that the Royal Household’s gas bill had risen from £319,000 in 2002 to £526,000 in 2006. Electricity had increased by an even bigger margin, jumping from £249,000 to £513,000 over the same period.
In an email to the DCMS, palace officials wrote in September 2005: “As mentioned [in our telephone conversation today], the commercial market position for utilities has become untenable with price rises of over 50 per cent when we went out to tender last year … The position is that all our contracts for gas and electricity will mature on 30 September 2006. I do not want to go out to tender next year and find the prices have risen significantly again but, given the recent position of energy markets, I suspect that they will.”
In its proposal the Palace suggested a move towards a wholesale contract under a single tender with Inenco which also serves the gas and electricity needs of the Prison Service and Channel 4.
But ministers were concerned that by using a single tender, rather than going to the open market place, the Palace might be in breach of EU contracting rules which govern deals worth more than £306,753. The issue centred on whether the Royal Household was a “public sector contracting authority” for the purpose of the EU regulations.
Preliminary advice from the Treasury was that the Royal Household was a public body but the Palace argued that it wasn’t.
The Whitehall memo concludes: “If they [the Royal Household] are convinced of their view, and since we have no definitive advice to the contrary, then they can proceed.”
The switch was finally approved by DCMS officials who noted that the new contract will “undercut” traditional fuel companies by 6-8 per cent. If they had thought of it two years earlier, they could have saved £144,000.