The income the Queen receives from the public purse is to come under severe scrutiny by the Treasury after taxpayer funding of the monarchy rose by nearly a third to £40m.
Buckingham Palace has been shielded from the cuts affecting other public services by a funding formula put in place three years ago which guarantees the royal household 15 per cent of the profits of the £9.9bn Crown Estate – which is managed on behalf of the monarch.
The resulting Sovereign Grant has risen from £31m in 2012-13 to £40m in the current financial year – a 29 per cent increase in three years . A clause in the legislation laying out the system also means that the grant can never be less than in the previous year.
The windfall for the royal household is due to the commercial success of the Crown Estate – a vast portfolio of property investments ranging from London’s Regent Street to Ascot race course.
Although legally owned by the Queen – it is managed by a separate board and pays all of its profits – which last year stood at £267m – to the Treasury. The Treasury then pays the grant – which is currently pegged at 15 per cent of those profits and is designed to fund the monarch’s official duties as well as expenses such as staff and the maintenance of certain palaces.
But now the trustees of the fund, who include Prime Minister David Cameron and Chancellor George Osborne – could change the level of the grant under a review due to take place next spring.