Andrew Mountbatten-Windsor subletting income from three cottages at Royal Lodge was taken into account when the lease was judged to offer best value, Dan Labbad told the Public Accounts Committee. The Crown Estate chief executive said the property deal was assessed on the basis of the premium, refurbishment needs and other elements. The hearing added parliamentary scrutiny to a lease that left Andrew Mountbatten-Windsor paying a £1 million premium and one peppercorn of rent if demanded per year.
Royal Lodge in 2003
Labbad said the governance process at Royal Lodge in 2003 looked at the premium, the refurbishment requirements and other factors before the lease terms were set. He said the subleasing of the cottages formed part of the independent valuation that informed the value-for-money test. His account places the cottage income inside the original deal structure, not as an afterthought.
He also told the Public Accounts Committee that the £7.5 million refurbishment cost mattered because it was money the Crown Estate could use elsewhere. In his words: “In the case of Royal Lodge, the £7.5 million in refurbishment costs, we were able to then take that money that we would otherwise have to spend, and invest in other things.” He added: “Those potential income streams were taken into account in determining what best value was at the time.”
Public Accounts Committee hearing
A National Audit Office investigation last month revealed that Andrew Mountbatten-Windsor received an undisclosed private income from subletting three cottages on his Royal Lodge estate for over two decades. Labbad said subletting was reasonably common in the property industry for long leaseholds, and he repeated that the cottages were part of the valuation process that satisfied the value-for-money requirement.
He said: “The governance process that led to the arrangements at Royal Lodge in 2003 was such that a whole range of things were looked at – the premium, the refurbishment needs that would have otherwise been a Crown Estate cost, and a whole host of other elements…” He then said: “Within that, subleasing of the cottages was part of the independent valuation that informed both the consideration and the value for money requirements being satisfied.”
Labbad told MPs he did not know how much Andrew Mountbatten-Windsor made from the subletting, and said that amount was a matter for the former duke as tenant. Andrew Mountbatten-Windsor was compelled to vacate his home after the payments came to light and has since moved to Marsh Farm on the Sandringham estate in Norfolk. What remains central now is the scale of the private income itself, because the Crown Estate has defended the lease terms while the earnings from the cottages stay undisclosed.
