Royal incomes will be hit hard by coronavirus, Palace staff warned

Staff working for the Queen have been warned of a huge financial hit to the Palace’s revenues because of coronavirus.

The impact is being felt across the Royal Households as palaces are closed to the public and income from tourism dries up.

The Lord Chamberlain, Earl Peel, who is the Head of the Household, has written to staff with his concerns for the financial impact of the pandemic.

The Palace says the Royal Household is “no exception” when it comes to the financial impact which is likely to hit the entire country.

Buckingham Palace has already announced that it will not open its State Rooms to the public this year, as it has done every year since 1993, when the Queen relocates to Balmoral for the summer holiday.

The tour of the 19 State Rooms which are used for ceremonial and state occasions costs £26.50 per visitor.

The Royal Collection Trust that operates the public visits has also has been forced to close Windsor Castle, the Royal Mews, Clarence House, and the Palace of Holyrood House in Edinburgh.

They are all closed until further notice.

The royal budget could lose millions of pounds in revenue. Credit: PA

Last year, 3.2 million visitors to the various palaces and residences raised more than £72 million for the Trust – which manages and maintains the Royal Collection, one of the most important art collections in the world – and does not take any public funding.

A Palace spokesperson said: “The whole country is very likely to be impacted financially by Coronavirus and the Royal Household is no exception.

"However, the time to address this issue will be when the full impact of all the implications of the current situation is clearer."

In a memo to staff, see by the Sun newspaper, Earl Peel wrote: “The crisis has already tested our resilience, adaptability and preparedness in many ways and at all levels across the organisation.

"It has also had a significant impact on the activities of the whole Royal Household.

“Although the UK appears to be over the peak of infections, it remains unclear when measures such as social distancing will come to an end.

“We must therefore assume it could still be many weeks, if not months, before we are able to return to business as usual.

“There are undoubtedly very difficult times ahead and we realise many of you will be concerned.”

Royal sources do not deny the existence of the Lord Chamberlain’s memo, which appeared on the Royal Household’s intranet page, and nor do they take issue with the words that have been reported.

The Sun suggested a cut in revenues of around £18 million, which could result in job losses or pay freezes but the Palace would not be drawn on those claims.

Land around the Savoy Hotel is part of the royal property investments. Credit: PA

It’s not known what impact Covid-19 will have on the Queen’s private income – which is paid to her from the surplus generated by the Duchy of Lancaster, an ancient portfolio of property and land dating back to 1399.

Last year, the Duchy generated a surplus of £21 million from its agricultural and property investments which includes land around the Savoy Hotel on London’s Strand.

The Sovereign Grant – which is the taxpayer’s contribution to the running costs of the official duties of the Royal Family - will only be impacted if the pandemic hits the revenues of the Crown Estate.

But, by law, the Sovereign Grant cannot be lower than the previous year, so this sum of public money will not be affected by the pandemic.

The Sovereign Grant for 2020-21 is £85.9 million and includes the extra levy to pay for the urgent repairs to Buckingham Palace.

The Grant is currently calculated as 25% of the Crown Estates profits – the rest goes to the Treasury for government spending.

A Palace spokesperson added: “At the moment the attention of the Royal Household is on ensuring it follows all the guidelines and supports the national effort in combating Covid-19."

However, the campaign group Republic, which wants the end the Monarchy, said the Queen will continue to receive public funds even though the revenues for the Royal Collection Trust will be hit.

The Chief Executive of Republic, Graham Smith, said “The palace wants to be seen to be suffering with the rest of us.

"What they're actually saying is that their low paid staff will face job losses or pay freezes, but not the royal family."

He added: “The annual grant will remain at least as high as the previous year, because the law says it can't go down.

"That's regardless of what income is brought in from tourists or events."

The Queen’s diary has been cleared as she isolates with the Duke of Edinburgh and a core number of staff at Windsor Castle.

Both the Queen, 94, and the Duke of Edinburgh, 98, are in the coronavirus high risk category because of their age.

A Palace spokesperson said: “The Queen continues to be busy and will follow appropriate advice on engagements.”

It is not known when her public engagements will resume but she continues to hold her weekly audiences with the Prime Minister by telephone and works on her official papers, known as her red boxes.

The Lord Chamberlain’s Office is responsible for organising the Queen’s ceremonial programme and public events such as garden parties, investiture ceremonies and state visits.

All of which are current postponed indefinitely.