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Kensington Palace formerly occupied by Princess Alice, which had been empty for
twenty years, for the use of Mr (now Sir Michael) Peat; £280,000 was spent on
furnishings and decor, of which £100,000 was just for carpeting. The total for the
redecorating of this apartment and one for Peat’s deputy next door was reputed to be £1
million. Moreover, at the time, Peat’s rent for this apartment was £450 per week, as
compared with £2,000 plus paid for similar housing in the area (today the rent is
reported to be £880, as compared to a local rate of £3,600). Since then, as a result of
reforms instituted by Sir Michael Peat in the wake of the Public Accounts Committee
report, the grace-and-favour system has been drastically reduced. Only pensioners, the
Military Knights of Windsor, and members of the royal family pay no rent. Palace
employees pay 16.7 per cent of their salaries in rent; the ‘cottages’ at Kensington
Palace, formerly inhabited by high-ranking household officials, are now rented out to
corporate clients.
Royal officials forecast that Peat’s economies would make savings in the running and
maintenance of the palaces that would amount to more than £50 million by the end of
the twentieth century, and there have been dramatic reductions in the cost of the
monarchy over the period 1991–2001. The total cost (excluding security) has been
reduced from £66 million in the year 1991–1992 to £37 million in 2000–2001, a
reduction in real terms of 55 per cent. The most striking savings have been in the costs
of royal travel: the royal yacht Britannia was decommissioned in December 1997 and has
not been replaced, and there have been major changes in the pattern of royal travel,
principally in reduced use of the RAF-run aircraft of the Queen’s Flight, which is also
used by the Government and the Ministry of Defence. Royal use of the Flight – 32 Royal
Squadron – is down to around 10 per cent of flying time since leasing of commercial
planes and helicopters has proved to be considerably cheaper. Overall, in real terms,
expenditure on royal travel by air and rail has been reduced by 58 per cent since 1997.
The changes in the royal household itself over the past decade have been the most
swingeing since its reorganization by Prince Albert in the mid-nineteenth century. There
is now a Director of Personnel to cope with the wave of employment legislation –
minimum wage, working hours, etc. The changes have not been universally popular:
chambermaids in the royal household found their wages actually reduced in the Peat
reforms. The domestic staff have resented the clerical employees getting higher wages
than they do and feel that performance-related pay is unfair and impossible in the
circumstances of their own employment. The official response is that change was long
overdue and in any case is always unpopular. That is true, but one could question the
wisdom of damaging an ethos built up over the years: the sense of being a community
and of belonging to a family which royal service has engendered. Elizabeth is a
traditionalist; although she has agreed to the reforms, people question how much she is
now aware of what is going on. Memoranda are not a substitute for personal contact
and there is little consultation between the Personnel Service and senior staff when it
comes to new recruitment. Bobo MacDonald and ‘Bennie’ Bennett, who would have told
Elizabeth what the feeling was, are both dead. No one else would dare interfere. And