Ratepayers in the South Hams are effectively paying the Duchy of Cornwall (DoC) millions of pounds in mooring fees as a result of a deal signed with South Hams District Council (SHDC) more than 15 years ago, this paper can reveal.

Under the 21-year lease agreement for the Salcombe Harbour and Kingsbridge Estuary, the Duchy, as the acting landlord, charges SHDC about £150,000 in mooring fees every year.

It amounts to £3.15m over the life of the lease, which was signed in September 2009 but backdated to 2007. The contract will be up for renewal in March 2028.

The DoC boasts a vast portfolio of land, properties and assets, which are worth more than £1bn and are mostly in the South West of England.

The revelations come after a recent Dispatches documentary on Channel 4 showed that the DoC and the Duchy of Lancaster last year made about £50m from charging rent and leasing land to such cash-strapped public services as the NHS and schools, as well as to charities and the Ministry of Defence.

Although both Duchies operate as commercial ventures and provide income for both the King and Prince William, they are run as private estates and are exempt from paying corporation and capital gains tax. They are also separate from the tax-payer funded Sovereign Grant.

Inheritance tax is not paid either when the Duchies are passed down the royal line of succession.

Under the terms of the harbour and estuary agreement, SHDC has to share legal costs with the Duchy for any proceedings involving the protection of the estuary. There is also a clause that requires the council “to use its best endeavours” to prevent pollution in the harbour.

However, the Duchy also charges South West Water (SWW) for six outfall sewer licences. Although SWW declined to say how much it pays for these, it is likely the cost is passed down to customers via their water bills.

The Salcombe Harbour budget is ring-fenced and not run for profit, but as it has to cover the costs of a 17.5 per cent levy the Duchy charges SHDC, it ultimately impacts on ratepayers.

SHDC leader Julian Brazil said the Duchy was “making quite a killing” on the deal.

“They are ring-fenced accounts. We just see the end figure, so they're making quite a killing,” he said, adding that SHDC should consider re-negotiating any future contract with the DoC.

“The Duchy is a huge industry. In the past people have been far too deferential when it comes to negotiating contracts with the DoC. We need to re-negotiate the percentage of the fee that we pay, because in the end we get absolutely nothing from the Duchy.”

Regarding the DoC’s licences with SWW, he said the water company “inevitably just passes the buck on to customers”.

SHDC deputy leader Dan Thomas agreed that residents were having to pay the DoC “a lot of money”.

As board member of the Dartmoor National Park, he also complained about the rent charged by the Duchy for the visitor centre it owns in Princetown and which is set to close in March next year due to a lack of funding (a one-off £440,000 payment from the government in 2023 helped to stave off closure during this period).

He said: “They charge a lot of rent that has a negative impact on Dartmoor National Park, which is also ultimately paid for by taxpayers. In that regard, I wonder whether the Prince of Wales actually knows what impact Duchy business deals have on the people that they directly affect.”

A DoC spokesperson said: “The Duchy of Cornwall is a private estate with a commercial imperative which we achieve alongside our commitment to restoring the natural environment and generating positive social impact for our communities.

“The Duchy has a wide variety of commercial leases and licences in place. Rents for land and marine assets are set in accordance with property industry best practice. They are agreed in conjunction with our tenants and lessees. They are reviewed regularly in accordance with the terms of the agreements.”

The DoC added that tenants “are able to obtain appropriate external advice before an agreement is reached”.

It said the Dartmoor National Park Authority had leased the building in Princetown since 1991 at a fixed annual rent of £100 (net).

Regarding the future of the visitor centre, the Duchy said: “We will continue our dialogue with the Authority as the future management of the building is explored. We are very mindful of the Authority’s importance within Princetown and the role that this key building provides to the local community.”