Who’s REALLY Paying for the Kensington Palace Renovation?
Recently, there’s been a lot of negative press about the fact that British taxpayers are footing a 1million GBP bill for renovations being made to Apartment 1A in Kensington Palace, ahead of The Duke and Duchess of Cambridge moving in later this year.
The general public of Great Britain, as well as - it seems - the press, seem to think that these expenditures are unfair and should, in no way, be footed by the taxpayers.
Anyone who thinks that clearly hasn’t looked into the matter much, so I’ve broken it down for you. First - I was inspired to write this because of what is happening HERE, a conversation between another blogger at Refinery 29 and myself.
This blogger seems to think that the Crown Estate should be responsible for the renovations. Unfortunately, that’s impossible. Here’s why:
- It’s true, the Crown Estate does make millions each year.
- The land of the Crown Estate (and all artifacts, etc) are not property of Her Majesty, nor are they the property of the government. They’re essentially held in trust for the monarch and can’t be sold off or used private by the monarch.
- The income generated by the Crown Estate - all of those millions of dollars each year - are given by the Crown Estate to the government. (Actually, HM’s Treasury is the primary stakeholder in the income, so there isn’t any “handing over” of funds or anything. No one is writing a giant check. But whatever.)
- The money generated by the Crown Estate - and again, it’s given by the Crown Estate (which is NOT Her Majesty, or her household) to the government, is used to determine how much will be put aside for the Sovereign Grant (which replaced the Civil List and Grants-In-Aid).
- The Sovereign Grant is the money used by Her Majesty for maintenance of residences, travel, staff salaries, state visits (to and from other countries), public engagements, and official entertainment (such as the Jubilee celebrations, and entertaining other heads of state).
- But how MUCH of the Crown Estate money goes to the Sovereign Grant?
- Well, the Sovereign Grant is equal to 15% of the annual net income of the Crown Estate from two years prior. (Example: In 2012, the Sovereign Grant was equal to 15% of the Crown Estate income from 2010.)
- To review: Her Majesty gives 100% of the Crown Estate income over to the government, and gets the value of 15% from two years ago back to run her offices, and pay her official expenses.
- The royal family DOES have its own private income, which is the money they use to run their private estates (Sandringham and Balmoral, for example), buy their clothing (in most cases - I believe parliamentary annuities [more on those later] are used to purchase some clothing), etc. This money comes from inheritances, stock portfolios, investments, etc.
- Kensington Palace is NOT a part of the Crown Estate. The private residences are maintained by the Royal Household, but the public state rooms, offices, the building itself, and the land are a part of the Historic Royal Palaces, a non-profit organization which maintains uninhabited royal residences. The Crown Estate may generate money that is given to the government and then, in some round about way, goes back to the Royal Hosuehold, but they can’t just take a huge chunk of the Crown Estate and earmark it for renovations to any of the royal residences - inhabited or otherwise.
- As private residences within Kensington Palace, the renovations are being funded/overseen by the Royal Household.
- The funding from the Royal Household comes from… you got it! The Sovereign Grant.
Now, Parliamentary Annuities. It should be noted that Her Majesty refunds ALL monies provided to her and her family from Parliamentary Annuities every year, out of her own private income. So - she gets 15% of the income from two years ago from the Crown Estate for the Sovereign Grant, and she and members of the royal family are given Parliamentary Annuities - which she then refunds. In full. From her own PRIVATE income. Actually, she seems kind of generous, no?
So - if the renovations can’t be paid for by Historic Royal Palaces, because it is an inhabited space, and it can’t be paid for by the Crown Estate because… it just can’t. Where would the money come from?
In theory, it would come from the Sovereign Grant (okay yes, technically that means it could come from the Crown Estate). But, to that end, that means the cuts would need to be made elsewhere in Her Majesty’s budget. A budget, that for 2013 is 15% of the income from 2011 - when there was a huge recession… remember? Should Her Majesty begin docking royal employees pay? Perhaps she should tell the diplomats that she is charged with entertaining and receiving that no, sorry - the UK simply can’t engage in world politics right now. No, that doesn’t seem like a great idea. Her Majesty has 15% of the 2011 income to spread around a LOT of different offices, expenditures, etc.
I know, next you’re going to say that she should pay for them from her own private funds. Why? It isn’t a building that she privately owns. I wouldn’t expect to pay for a new roof on my apartment building - I don’t own it. Sure, I live here - and I paid for my furniture and stuff. But it isn’t MY building and I am not responsible for the structural upkeep.
Again, Kensington Palace managed (not really “owned”) by two separate entities that Her Majesty has nothing to do with, other than the fact that one of them simply provides her with an allowance. The royal family is footing the bill for the aesthetic renovations, and the interior decorating that will take place - paint, furniture, etc - from their private accounts, of course. But why should they foot the bill to make structural, electrical, and safety updates to a building that they do not own, and that they do not receive any income from anyway?
Historical Royal Palaces can’t afford the renovations on their own, which is unfortunate. They are a non-profit organization. But the renovations had to happen eventually anyway. They are not aesthetic, the renovations the public are paying for are structural, electrical, and safety oriented. They are necessary.
And - keep in mind - the Duke and Duchess of Cambridge will pay rent on their residence. Prince and Princess Michael of Kent also live at KP, and pay (well, Her Majesty pays on their behalf) 120,000 GBP per year in rent. Since The Cambridges residence is the largest in the palace, I imagine their yearly rent will be much more. And it will be paid from their private funds.
At the end of the day how much money per tax-paying person is 1million GBP? Well, apparently (I just did a quick Google search) within the whole UK there is 26million people that report income tax every year (and there’s 60million people of age to be taxed - so… yeah). That means each taxpayer is paying 0.36 cents each. LESS THAN 1 PENNY.
So really - if you want them to throw down the 1million GBP for the structural renovations, then the people of the UK should probably consider allowing the monarchy to privately own the residences again. You can’t have it both ways - it can’t be property of the country and private property at the same time.
(Also, no one seems to be making a fuss about the fact that it just cost UK taxpayers 100,000 GBP to refurbish a bathroom at Whitehall… LINK)
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- minimiddleton said: Wait, what? I’ve always thought W&K don’t need to pay rent at KP since they’re in line to the throne. Anyhow, great job on this, as always! :)
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