Watch: Royal Collection seeking job cuts as £30m loss predicted
The trust that manages the opening of the Queen’s palaces has said it needs to borrow more money after taking a hit on its finances during the pandemic.
The Royal Collection Trust (RCT) manages royal art and jewels as well as the summer opening of Buckingham Palace and the regular openings of Windsor Castle, and the Palace of Holyroodhouse, with much of its income coming from tourists.
However, the palaces have had to remain mostly closed since March 2020 when the coronavirus pandemic put Britain into lockdown, severely affecting the trust’s income.
The RCT already confirmed it had taken out a £22m loan in the summer, and asked staff to consider voluntary redundancy, but it has proven to not be enough.
A spokesman said: “Owing to the temporary closure of our sites, Royal Collection Trust’s financial position remains very challenging, and further bank borrowing will be necessary, subject to approval by the Trustees.
“Currently there are no plans for further redundancies.”
Prince Charles is chair of the trustees, so he will have to approve the request to borrow more money.
It’s been reported the RCT would look to borrow from Coutts, the Queen’s bankers.
Other trustees include Sir Michael Stevens, keeper of the Privy Purse, who manages the Queen’s finances, and Earl Peel, the Lord Chamberlain, who is head of her staff in Buckingham Palace.
Royal finance expert David McClure told Yahoo UK it was “no wonder” the RCT is having to go “cap in hand” to the banks.
He said: “All of the royal finances are vulnerable to a shock like this COVID crisis, but this is more vulnerable than the Sovereign Grant.
“They are so reliant on tourists, and foreign tourists – people forget the majority of people who come to the palaces are coming from America, Japan, China, and with quarantine because of COVID they have not been able to come since Easter.”
He also pointed out there may be some time before a full recovery is made, with it potentially taking several years before travel returns to pre-pandemic levels.
McClure said the RCT also relies on selling items in its shops for a percentage of its income, which is damaged by the lack of tourists.
The RCT was established in 1987 and operates as a “halfway house”, McClure said, with a charitable arm that does not have to pay tax as well as a trading body.
The trust looks after the royal collection on behalf of the Queen and the nation and ensures that as much of it as possible can be seen through gallery openings and events.
It is part of the Royal Household but does not get any public funding. However, there remains some lack of clarity over which parts of the collection are the Queen’s private possessions and what belongs to the crown.
The full value of the collection isn’t known either.
The RCT does have some money in reserve. Its annual report for 2019-20, when the trust was not profoundly impacted by the pandemic, shows a total income of £71.5m and a surplus of £3.5m. Its reserves were £8.4m at the time.
McClure added: “There’s no reason why it had to be set up like a halfway house, it could have been set up like a department of royal trusts, and work in the ministry of arts and the money could have gone to the taxpayer.
“They do have savings but you would think their business model might be in need of recalibrating due to the shock of COVID.”
It’s not yet clear when the palaces could reopen to tourists, but even with British tourists allowed back, there will be some impact from social distancing and the lack of foreign visitors.
The Queen has cancelled her annual summer garden parties for the second year in a row, but as these don’t generate income the decision is linked to the organisation of the events, not any income.
Watch: A look at all the Queen’s homes