Spruced-up palaces prove visitors will pay: Improvements at Historic Royal Palaces bring pounds 4.6m surplus. Oliver Gillie reports

ONE DAY the Tower of London will again be surrounded by a moat full of water and people will once more be able to walk all the way around the battlements - this is the dream of David Beeton, chief executive of Historic Royal Palaces, the government agency that runs the Tower.

'The moat was filled in by the Duke of Wellington in the 1840s because it was so polluted and there were outbreaks of cholera among the troops stationed at the Tower,' said Mr Beeton. 'All we have to do is dig out the in-fill and let the Thames flow in.'

This project is not yet on the schedule of works because the agency, which also runs Hampton Court in south-west London and Kensington Palace in west London, has other priorities. But it is part of a vision that is making the royal palaces more exciting for visitors.

Historic Royal Palaces issued its annual report yesterday, recording a commercial surplus of pounds 4.6m for the year. The surplus is 8 per cent up on last year after spending pounds 10m on the new Jewel House at the Tower. The next big cost is moving the Royal Armoury's modern collection from the White Tower to new premises in Leeds.

'The White Tower was always the centre of the Royal Armoury but it is immensely congested. People visiting the Tower do not particularly want to see a North Sea whaling gun. We are moving the modern arms out so that the old arms can be properly displayed,' Mr Beeton said.

Historic Royal Palaces has also begun to refurbish Kensington Palace, which will close next year for 18 months. The rooms will then be rearranged to depict the life of the Royal Family in the 18th and 19th centuries. They are due to open again in spring 1997.

At Hampton Court, the apartments used by the family of George III (1738-1820) will also be rearranged to show how they used to be then. They are now arranged in a formal manner like the grand ceremonial rooms, whereas they were used in a much more intimate family way.

Since Historic Royal Palaces was created four years ago it has spent a lot of money on improving the quality of visits to the palaces. The price of entry has gone up by about 50 per cent, but numbers of visitors have still increased by 10 per cent.

'When we took over we reckoned we needed pounds 24m to improve the experience for visitors,' said Mr Beeton.

'We have raised the money not just from admission charges but by improving catering and by putting on functions such as the Hampton Court flower show, which is now the biggest in the world - bigger than the Chelsea flower show.

'There is no problem with increasing admission charges if you give better value. The staff at Hampton Court used to be dressed in prison warders' uniforms. We now dress them in tailcoats and silk top hats and have trained them to be more helpful to visitors.'

(Photograph omitted)