• The programme to prevent fire and flood risks at Buckingham Palace has demonstrated clear objectives and a strong focus on keeping within budget
  • Risks have been well-managed so far and some remain, such as backloading of work and limited unallocated contingency to deal with further unexpected issues
  • The Treasury (HMT) and the Infrastructure and Projects Authority (IPA) should capture and share lessons learned, to inform future heritage projects

A 10-year programme to update Buckingham Palace costing £369 million has been well managed to date and demonstrates good practice in numerous areas, according to a new National Audit Office (NAO) report.

The Buckingham Palace Reservicing programme1, which began in 2017, is funded through an uplift to the Sovereign Grant. The programme’s principal aim has been to reduce the real risk of fire and flood by updating essential services, alongside improving public access and environmental sustainability.

The Palace is the official residence of The Sovereign and a working building with more than 700 staff. The Palace hosted around 50,000 guests in 2023-24, who attended a range of events and functions from small lunches to large receptions, as well as garden parties and investitures. Around 500,000 people visit the Palace during its annual summer opening.

Updates to the Palace’s essential services, including replacing 3.5 kilometres of electric cabling, heating systems, lifts and lavatories, are due to finish in 2027. The Household estimates that 82% of operational improvements, which include an accessible entrance ramp, are now complete.

The Royal Household2 developed a clear business case to secure funding3, and chose a governance model reflecting the risks of carrying out improvements at the internationally-renowned Grade 1 listed building while it was still operational.

The programme is run by the Master of the Household, who has been in post since 2015 as the business case was developed. He leads an in-house programme management office, alongside an operations team. His clear, delegated authority – and responsibility for all catering, hospitality, and housekeeping as well as the programme – helps the Household make timely decisions about the trade-offs needed to keep the Palace running during the works, as well as from the perspective of being the operator of the completed Palace.

The overall programme remains within budget. Some individual projects have increased in cost and have taken longer to complete than expected4. For example, the East Wing was completed over two years later than planned, and at March 2024 was 78% over its estimated cost. Other projects have come in under budget, such as the Picture Gallery and roof being 25% under its forecast cost.

Some of the reasons for cost increases and delays were outside the Household’s control, for example COVID-19, variable inflation, and supply chain difficulties. Other challenges, such as the discovery of more asbestos and structural damage than expected – common in heritage programmes – could have been foreseen.

The Household regularly reviewed and revised its plans where appropriate, for example bringing work forward during the pandemic. As cost estimates and complexity increased, it decided not to proceed with a planned visitor centre, as it could achieve the intended engagement by other means, including allowing pupils to experience lessons in the State Rooms.

The programme’s timeline and delivery strategy were reset three times. This was made possible by the Household’s phased approach, which allowed it to better manage risks and uncertainty and apply lessons learned as the programme progressed. Resets have also revised the works schedule and sequencing to manage funding. The programme has benefitted from a culture of collaboration and continuous improvement, including the implementation of recommendations arising from external scrutiny.

There are risks for the Household to manage as project approaches its final stages. More than a quarter (£100m) of the programme’s budget will be received in the last two years, including for works to the North, South and West Wings. Concurrent works increase supply chain and management capacity risks. Furthermore, key staff may leave as the project comes to an end. There is limited unallocated contingency left in the budget to deal with unknown risks without reducing what is delivered.

The NAO recommends that the Household reviews management capacity and capability to ensure it has the right people in place to the end of the programme. The Household should conduct a full evaluation between five and ten years after the programme ends to assess the value delivered, including the benefits for wider society and how the project can inform similar investments across the Royal Estate.

“Updating decades-old plumbing, heating and electrics, as well as adding new lifts and lavatories in one of the UK’s most famous buildings is a significant undertaking, which has been well handled to date.

“Sound planning and project management has enabled the programme to remain within budget to date and respond well to challenges such as the pandemic.

“The Household worked hard to engage stakeholders and the Palace has remained operational throughout. There are plenty of important lessons here for heritage projects and those taking place in a live environment.

“While risks remain as the programme draws to a close, if these continue to be managed effectively the result should represent good value for money.”

Gareth Davies, the head of the NAO

Read the full report

Progress on the Buckingham Palace Reservicing programme

Notes for editors

  1. The Buckingham Palace Reservicing programme is funded through an uplift to the Sovereign Grant. The Sovereign Grant Act came into force in April 2012 and sets out the approach to calculating the value of the grant paid by HM Treasury to the Royal Household to support the official duties of the Sovereign and to maintain the Occupied Royal Palaces. HM Treasury is the Royal Household’s sponsoring department and is therefore responsible to Parliament for the Grant. The Grant is included in HM Treasury’s budget. As such, HM Treasury is responsible for paying the Grant to the Household and ensuring that the Household complies with all necessary requirements. We reported on the Sovereign Grant in our 2023 report Royal Household spending and accountability – NAO report.
  2. The Royal Household supports the King and members of the Royal Family in their official duties.
  3. In July 2023, following an expected increase in the net revenue profit of the Crown Estate from offshore wind option fees, and considering the expected costs of the Household until 2026-27, the Trustees reduced the Grant percentage from 25% to 12%. This change does not affect the programme’s total budget, but it does impact the timing of funding, including an expected increase in the annual funding for the final two programme years.
  4. The Household has considered how to fund the Buckingham Palace Reservicing programme if something happens that means it cannot complete works within budget. In this case, it will fund any difference from the core Sovereign Grant.

Latest press releases