Historic Royal Palaces, the charity that runs the Tower of London, has defended the amount raised by its ceramic poppy display at the castle in 2014 after it faced criticism for the fact that less than half of the £23m raised went to the charities that took part.
The Blood Swept Lands and Seas of Red installation, which was created by the ceramic artist Paul Cummins to commemorate the centenary of the beginning of the First World War, sold 888,246 ceramic poppies at £25 each, with the proceeds divided equally between six armed forces charities.
Accounts for the company created by HRP and Cummins to manage the project show that the Blood Swept Lands and Seas of Red memorial raised £23m in total but only £9.5m of this went to the six beneficiary charities: the Royal British Legion, Help for Heroes, Combat Stress, the Soldiers, Sailors, Airmen and Families Association, Cobseo and Coming Home.
The accounts show that nearly £15m was spent on costs, including £7.2m to a company owned by Cummins for producing the ceramic flowers.
The Sunday Times newspaper also reported yesterday that a financier made a profit of more than £1m on the venture after lending about £1m to Cummins when his company experienced cash-flow difficulties.
Today’s Daily Mirror newspaper quoted a former British officer, Colonel Richard Kemp, who said: "Thousands of people who paid for poppies would have expected the lion’s share of what they paid to go to charity.
"Something has gone wrong somewhere. It was not made clear that financiers would be making a profit from this."
But a spokeswoman for HRP said the charity was delighted with the amount the charities had received and said they were in line with expectations.
Newspaper reports claimed that the project was expected to raise £15m for the charities involved, but the spokeswoman pointed to a document filed with Companies House in August 2014 that estimated the net profits for the charities would reach only up to £9.8m.
She acknowledged that there were "substantial commercial costs" that had to be covered because of the ambitious nature of the project.
A spokeswoman for the Royal British Legion said the £1.6m share the charity received – a sixth of the total charitable proceeds – was not less than anticipated. She said the charity had not had a target for the project and "if anything, it exceeded our expectations".
Of the £9.5m divided between the charities, £1.1m was a donation from the government, equating to the amount paid in VAT on the sale of the poppies. It was funded using fines collected from banks that manipulated the Libor rate.
A spokeswoman for Cummins said he had made a "modest loss" on the project.