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Buckingham Palace staff face job cuts amid speculation Queen will not return to London after summer

An internal memo lays bare the full implications of the coronavirus crisis for palace staff - Chris Ratcliffe/Bloomberg
An internal memo lays bare the full implications of the coronavirus crisis for palace staff - Chris Ratcliffe/Bloomberg
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Buckingham Palace staff are facing the spectre of job cuts amid speculation that the Queen will not come back to London following her summer holiday in Balmoral.

The Telegraph has seen an internal memo that lays bare the full implications of the coronavirus crisis for palace staff.

As well as seeking voluntary redundancies from the Royal Collection Trust (RCT), which has lost £64 million in income as a result of the Covid-19 pandemic, pay is being frozen for all employees while a consultation into the pension scheme is launched.

RCT – which derives its income from visitors to the palace – had been expected to make £77 million this year, but the lockdown has caused its earnings to fall to £13 million.

Warning that the Royal household "may not be fully operational until 2021", the memo, written by the Lord Chamberlain, Lord Peel, states: "Even when lockdown measures are relaxed, social distancing and changing attitudes to travel will mean that visitor numbers are likely to be reduced for several years."

According to one palace source, employees fear that is "the opening salvo to further cuts".

"The word is Buckingham Palace is not being opened up any time soon, which has huge implications for staff," said the insider.

"The Queen is planning to spend the summer in Balmoral as usual, but after that it's thought she will probably return to Windsor Castle. What that means for staff in London is anyone's guess. A lot of people fear they'll lose their jobs."

The Queen and Prince Philip pictured at Windsor Castle, where they have been since March
The Queen and Prince Philip pictured at Windsor Castle, where they have been since March

The Queen, 94, and Prince Philip, 99, have been in self-isolation at Windsor Castle since mid-March and are being tended to by a "bubble" of 22 staff.

The memo spells out the "wider implications for the royal household", pointing out that "the contribution RCT makes to overall finances will be considerably reduced". RCT currently covers around a fifth of the Royal household's total expenditure.

The memo adds that the Sovereign Grant, linked to the level of the Crown Estate's surplus, "is not immune to the impact of Covid-19", saying that only when the Crown Estate announces its results for 2019-20 can the impact be properly assessed.

Funding for the Sovereign Grant, which finances the Queen's official duties, is currently set at 15 per cent of the profits of the Crown Estate revenue, derived from a collection of land and holdings including London's Regent Street and more than half the UK's foreshore.

"Even though the Sovereign Grant cannot reduce in absolute terms, the Royal Household will need to make savings," the memo reads. "Some of these will result from our reduced activity this year. However, it is unlikely that these savings will compensate fully for the anticipated reduction in income."

The memo confirms that the Sovereign Grant budget and three-year plan 2020-23 will be "reforecast" to help the Lord Chamberlain's Committee "understand better the scale of the financial challenge over the coming years". The Lord Chamberlain is the most senior officer of the Royal Household.

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The memo adds: "As part of this consideration of cost management, but also to ensure that we are working to best effect as a modern organisation, initiatives are under way to examine how we can take advantage of what we have learned about digital and remote working.

"We will also need to identify ways we can most effectively share resources across the funding sources."

It concludes: "We understand that many of you are anxious about the future. These decisions have not been easy and are the result of careful consideration and an exploration of all the options. Yet the unfortunate reality is that we are living through unprecedented times, requiring us to respond in unprecedented ways."

The memo promises that staff will be kept updated.

But on Tuesday night, a royal aide downplayed suggestions that the 94-year-old monarch would not be returning to London, saying she would resume duties at Buckingham Palace "when appropriate in accordance with the Government advice".

"Buckingham Palace is the Queen's home during the working week, but the working week has been heavily disrupted," the aide said.