Liz Truss faces Whitehall row over purchase of £20m New York ‘partyhouse’ for British diplomats 

Foreign Secretary Liz Truss is at the centre of a Whitehall row over the purchase of a £20 million ‘party house’ in New York for British diplomats.

A leaked memo seen by The Mail on Sunday states that Ms Truss is ‘very supportive’ of plans to buy the freehold on a 19th Century townhouse from Guy Wildenstein, an art dealer who is facing trial for a £500 million tax fraud in France.

And a separate leaked document indicates that Ms Truss is pushing back against demands from No 10 for deep cuts in the Civil Service, with up to 91,000 positions under threat. 

The memo states that the Foreign Office does not believe it ‘can deliver the headcount reductions of 900 presently proposed’ and calls for a ‘net increase of 1,000 after using a Voluntary Exit Scheme to replace people whose skills we no longer need’.

Officials have raised concerns that Ms Truss’s department is ‘insufficiently conscious’ of the need to make economies, including on staff, at a time when the rising cost of living for families is becoming a significant political problem for the Government.

The memo on the proposed Manhattan purchase argues that ‘the Sutton Square townhouse would provide a high-quality entertainment space close to the UK mission to the UN [and] comfortable accommodation for VIPs’, but warns that ‘there may be media interest in the purchase given the high value of the property and its intended use as a diplomatic residence’.

Despite the controversy surrounding Mr Wildenstein, the memo says the Foreign Office is ‘confident that there is no legal risk of purchasing the property from this individual and believe that media interest will be manageable… we are aware that the Foreign Secretary is very supportive’.

It adds: ‘The property is also in a highly desirable area of New York and will likely hold or increase in value over the long-term’. 

The property, pictured here, lies in Sutton Square on the eastern side of Manhattan island and is on the market for £20million

Tonight, a source close to Ms Truss denied the memo’s claim that she was ‘very supportive’ of the move.

The 9,600 sq ft Manhattan townhouse, which has views over the East River, would be used mainly by Dame Barbara Janet Woodward, the UK’s Permanent Representative to the United Nations.

Described by the property agents as ‘a grand and iconic residence for the new gilded age’, Dame Barbara, who served as Britain’s Ambassador to China from 2015 to 2020, would enjoy the use of a huge kitchen, sauna-like showers, parquet de Versailles wood floors and a filigreed spiral staircase.

The documents leaked to The Mail on Sunday make the argument that despite already owning three residences in New York, in addition to the embassy and ambassador’s house in Washington, the new property is required to help the UK to pursue ‘soft power’ diplomacy through drinks and canapes.

One of the memos says that ‘while [the Foreign Office] currently has three other residences in New York, (for the Consul General, Deputy CG and Deputy PR) the PR [Permanent Representative] cannot regularly rely on these residences… to improve the PR’s entertaining capabilities [it is] ‘seeking facilities with capacity to host 24+ people seated for dinner and 50+ standing’.

It adds: ‘It is difficult to quantify the marginal benefit of the PR having a prestigious residence close to the UN, or being able to host extra guests at the residence. 

‘Other missions have comparable residences, but it is an open question whether such large premises are really necessary to support the UK’s ‘soft-power’… only a townhouse can meet the PR’s needs. 

The house is set to be purchased for British Diplomats to use, and is currently owned by art mogul Guy Wildenstein who is facing a £500million tax fraud trial in France

‘A townhouse would be owned entirely… and as such there would be no risk of restrictions on use being imposed’.

The row comes after this newspaper revealed in 2020 that Antonia Romeo, who is now the Permanent Secretary at the Ministry of Justice, had been investigated over allegations that she had ‘terrorised’ staff who criticised her extravagant lifestyle and reportedly lavish spending when she was Britain’s Consul General in New York.

A Foreign Office spokesman said: ‘No decisions have been made on purchasing a new residence of the UK’s Permanent Representative to the United Nations in New York.’

A Foreign Office source said: ‘The Foreign Secretary has not been consulted and has made no decisions on this issue. She has therefore not expressed any views.’