Chevening isn’t “taxpayer-funded” in the usual sense

By | September 28, 2021

The Deputy Prime Minister is complaining about having to share his 115-room taxpayer-funded mansion

The right honourable lady should check her facts, because Chevening is funded by a charity—not a penny of taxpayers’ money.

At Prime Minister’s Questions on Wednesday 22 September, Labour’s deputy leader, Angela Rayner, said that the ministerial residence Chevening House is funded by the taxpayer.

The Justice Secretary and Deputy Prime Minister, Dominic Raab, replied that Chevening is funded by a charity.

Overall, the question of whether the public pays for Chevening is extremely complicated.

It is not funded by public money in the way that many might understand—ie, its running expenses are not paid by the Government. But it is exempt from paying some taxes and appears to have received some public money in the past. The “public trust” that runs it operates like a charity in a number of ways, but appears not to be registered with the Charity Commission and was instead established by its own act of Parliament.

What is Chevening?

Chevening is a ministerial residence in Kent that is usually occupied by the foreign secretary. Mr Raab left this post earlier this month, but some media reports suggest that he may continue to use it.

The house and its estate, with an endowment, were left to the nation by the Earl Stanhope after his death in 1967, to be used by someone nominated by the Prime Minister. It is also used by the government and some other organisations for functions and events.

How is Chevening funded?

Like other stately homes used by cabinet ministers, Chevening is not directly owned by the government, but by a trust, which manages it and pays for its upkeep. The Chevening Estate Act of 1959 established this trust and reduced its obligation to pay tax.

On at least one occasion in 2010/11, it does appear that a small amount of public money was spent on Chevening. A House of Commons Library briefing from 2016 said: “Some ‘residual costs’ for running Chevening may also be met by the public purse. For instance, for the financial year 2010-11 these residual costs totalled £3,695, excluding security costs.”

However, in an answer to a written question in 2019, the government’s Assistant Whip, Heather Wheeler MP, said: “​Chevening House is not funded by the Government and is the responsibility of its trustees.”

When we contacted Labour about this question, it made a different argument, saying that besides receiving public money in the past, Chevening “is also taxpayer-subsidised because it is not subject to any taxes”.

Ms Rayner later made the same argument in a series of tweets

Whether this counts as “taxpayer funding” may depend on how you look at things.

If the Chevening trust were paying tax, it is true that the government could have this money to spend elsewhere.

However, Chevening’s tax exemptions were originally introduced because, without them, the government at the time claimed that the estate “would not be self-supporting”.

We have contacted the trust to ask if this is still true.

If so, the trust might not be able to provide the government with a ministerial residence if it were paying tax. As a result, the UK (or at least the UK government) might either have to do without this service, or spend public money on it.

How does the estate earn money?

According to the Chevening House website, the trust is allowed to generate “a modest income” by renting it out as a conference venue to government departments.

Again, we have asked the trust about this, but at the time of writing, we do not know exactly how much of its income it generates in this way, nor whether this income is crucial in supporting it.

In any event, it does seem that while the Chevening trust may not be taxpayer-funded in the conventional sense, some of its income has come from public money in this way. Again though, if the government were not renting Chevening for some of its departmental conferences, it might rent another venue instead.

Is Chevening a charity?

Dominic Raab very clearly claimed in Prime Minister’s Questions that Chevening is funded by a charity—but we’ve struggled to find out more details on this.

When we asked the Cabinet Office, it referred us to the provisions set out in the Chevening Estate Act, but did not directly confirm that the Chevening Estate Trust is a charitable trust. We’ve asked the same question of the trust itself, but have yet to hear back.

The Chevening Estate Trust appears not to be registered with the Charity Commission. This is generally a requirement for a charity with an annual income of more than £5,000, although there are some exceptions.

We asked a solicitor, Gary Rycroft, for his view. He told us: “In England and Wales, a charity is an organisation that is established for charitable purposes only and subject to the High Court’s charity law jurisdiction. Whilst the Chevening Estate Trust may be said to have some ‘charitable purpose’ (in my view it has a very narrow purpose but many registered charities are narrow in purpose) it is a creature of its own statute namely the Chevening Estate Act and so firmly sits outside the jurisdiction of the Charity Commission and the charity law.

“That said, the Chevening Estate Act bestows on the Chevening Estate Trust many of the characteristics of a charity, in particular a very benign tax status.”

Mr Rycroft also pointed out that the Chevening Estate Trust was originally created as a “public trust” rather than a “charitable trust”, although the distinction between the two terms is not always clear.

Source