Royal Finances
Head of State expenditure is the official expenditure relating to The Queen's duties as Head of State and Head of the Commonwealth. Head of State expenditure has reduced significantly over the past decade, from £87.3 million in 1991-92 (expressed in current pounds) to £38.2 million in 2009-10. In the year 2009-10 The Queen cost the taxpayer just 62 pence per person. Head of State expenditure is met from public funds in exchange for the surrender by The Queen of the revenue from the Crown Estate. In 2008-09 the Treasury’s gross receipts in respect of the Crown Estate were £230 million. Head of State expenditure excludes the costs of Police and Army security and of Armed Services ceremonial, as figures are not available. Every year the Royal Household publishes an Annual Summary of Head of State expenditure, together a full report on Royal public finances.
The Civil List
This is the amount of money provided by Parliament to meet the official expenses of The Queen’s Household, so that The Queen can carry out her role as Head of State and Head of the Commonwealth. The Queen and The Duke of Edinburgh are the only members of the Royal Family to receive an annual parliamentary allowance. In 1760, George III reached an agreement with the Government over the Crown Estate. The Crown Lands would be managed on behalf of the Government and the surplus revenue would go to the Treasury. In return, the King would receive a fixed annual payment, which we call today the Civil List. In 2006-2007 the revenue surplus received by the Treasury from the Crown Estates was £200 million. Since 2001, The Queen receives a set amount of £7.9 million per annum. About 70 per cent of the Civil List expenditure goes on staff salaries. It also goes towards meeting the costs of official functions such as garden parties, receptions and official entertainment during State Visits. The Queen entertains almost 50,000 people each year. The Royal Household strives to be open and transparent, and details of expenditure are published in an Annual Summary and Annual Report. The civil list does not directly fund the duties of other members of the Royal Family such as Prince Charles, whose income comes largely from the Duchy of Cornwall, though they do receive grants-in-aid funding for official duties, such as transport costs.
Sovereign Support Grant
This single payment (Grant) to Buckingham Palace will replace the Civil List in 2013/14 as the source of income which allows the Head of State to carry out the ceremonial duties of the nation. This grant will consist solely of funds derived by the Crown Estate. This news of the largest change in royal finances in 250 years, will be a welcome change by the Palace, as the crown will have more flexibility in determining how to allocate expenditure, so that more can be spent on building maintenance than travel according to priorities each year, instead of earmarked funding. Precise details of the fund have yet to be worked out but it is likely to be based on a proportion of crown estate revenues each year.
Since the 1760s the crown has surrendered the receipts from its estates — £230m in 2008-9 — to the Government in return for the civil list grant, currently set at £7.9m since 1990 and topped up from reserves to £14.2m last year. Osborne in 2010 announced that the civil list, which was due for renegotiation this year, would remain frozen for a further year and that royal expenditure must be reduced by 14% by 2012-13. The only scheduled increase will be an extra £1-2m to fund the Queen's diamond jubilee in 2012. This change in how the crown is funded means that the household will have to cut back on building maintenance for the time being, as it has been a long-standing royal grievance that the Government has not fully funded palace repairs for many years. The cuts also mean that the crown will have to cut back on garden parties, receptions and other official entertaining. In an effort to reduce costs, the Queen cancelled 2010’s staff Christmas party. Annual royal accounts published last June reflected that the head of state's expenditure had already been reduced by 17% since 2001.
As past governments have continued to penalise the crown by not allocating needed increases in the civil list, this new funding scheme could benefit the crown financially. Though cost of living, goods, and services have increased over the past two decades, there has been no increase in funds allocated to the crown to make up for this difference until now. The Treasury has cut Royal household spending by 14% for the fiscal year 2012/13 as the result of an ‘exhausted’ civil list reserve, in which it has responded by creating the Sovereign Support Grant linked to The Crown Estate revenue as well as an additional £1m Royal financial facility. Buckingham Palaces could be set to gain an estimated at 15 per cent of the Crown Estate’s $6.6bn offshore wind development portfolio. While The Crown Estate has often times generated £210.7m in surplus income, all of its revenues have to date been paid to the Treasury as directed by a deal reached in 1760 by King George III and Parliament, whereas some of these funds will now be redirected to the Royal household as a ‘support grant’ which will replace the civil list source of funding.
With the Crown Estate’s profits expected to continue to grow by £100m each year on average over the coming years, analysts estimate that the Queen will reap at least an additional £37.5m from Crown Estate earnings each year through the ‘grant’. Though there is no set outline of how this grant is to be set up, or the amounts capped on both the top and bottom, we have yet to see exactly how this new scheme will be introduced and carried out as to its predecessor the Civil List. Buckingham Palace and the HM Treasury will continue to discuss details as to this scheme which will be finalized and implemented by 2013.
Since the 1760s the crown has surrendered the receipts from its estates — £230m in 2008-9 — to the Government in return for the civil list grant, currently set at £7.9m since 1990 and topped up from reserves to £14.2m last year. Osborne in 2010 announced that the civil list, which was due for renegotiation this year, would remain frozen for a further year and that royal expenditure must be reduced by 14% by 2012-13. The only scheduled increase will be an extra £1-2m to fund the Queen's diamond jubilee in 2012. This change in how the crown is funded means that the household will have to cut back on building maintenance for the time being, as it has been a long-standing royal grievance that the Government has not fully funded palace repairs for many years. The cuts also mean that the crown will have to cut back on garden parties, receptions and other official entertaining. In an effort to reduce costs, the Queen cancelled 2010’s staff Christmas party. Annual royal accounts published last June reflected that the head of state's expenditure had already been reduced by 17% since 2001.
As past governments have continued to penalise the crown by not allocating needed increases in the civil list, this new funding scheme could benefit the crown financially. Though cost of living, goods, and services have increased over the past two decades, there has been no increase in funds allocated to the crown to make up for this difference until now. The Treasury has cut Royal household spending by 14% for the fiscal year 2012/13 as the result of an ‘exhausted’ civil list reserve, in which it has responded by creating the Sovereign Support Grant linked to The Crown Estate revenue as well as an additional £1m Royal financial facility. Buckingham Palaces could be set to gain an estimated at 15 per cent of the Crown Estate’s $6.6bn offshore wind development portfolio. While The Crown Estate has often times generated £210.7m in surplus income, all of its revenues have to date been paid to the Treasury as directed by a deal reached in 1760 by King George III and Parliament, whereas some of these funds will now be redirected to the Royal household as a ‘support grant’ which will replace the civil list source of funding.
With the Crown Estate’s profits expected to continue to grow by £100m each year on average over the coming years, analysts estimate that the Queen will reap at least an additional £37.5m from Crown Estate earnings each year through the ‘grant’. Though there is no set outline of how this grant is to be set up, or the amounts capped on both the top and bottom, we have yet to see exactly how this new scheme will be introduced and carried out as to its predecessor the Civil List. Buckingham Palace and the HM Treasury will continue to discuss details as to this scheme which will be finalized and implemented by 2013.
Grant-In-Aid
Each year the Royal Family carries out almost 3,000 official engagements around the United Kingdom and overseas. The Royal Household receives annual funding to meet the costs of official travel through the Department of Transport. The majority of Royal Travel expenditure pays for The Queen’s helicopter and charter and scheduled fix-wing aircraft. A separate grant is voted by Parliament each year, through the Department of Culture, Media and Sport, to cover the upkeep of the Royal residences. These are: Buckingham Palace, St James’s Palace, Clarence House, Marlborough House Mews, the residential and office areas of Kensington Palace, Windsor Castle and the buildings in the Home and Great Parks at Windsor, and Hampton Court Mews and Paddocks, as well as The Queen’s Gallery. The money is used to meet the cost of maintenance and some utilities.
Privy Purse and Duchy of Lancaster
This is a historical term used to describe income from the Duchy of Lancaster, which is used to meet both official and private expenditure by The Queen. The Duchy of Lancaster is a portfolio of land, property and assets held in trust for the Sovereign in his/her role as Sovereign. It is administered separately from the Crown Estates. Its main purpose is to provide an independent source of income, and is used mainly to pay for official expenditure not met by the Civil List (primarily to meet expenses incurred by other members of the Royal Family).
The Queen's personal wealth and income
The Queen’s personal income, derived from her personal investment portfolio and private estates, is used to meet her private expenses. Though many see Her Majesty as wealthy, the majority of her wealth is not amassed in liquid assets that she can withdraw from a bank, hedge-fund, or other liquid investments. Far from being Britain's wealthiest person, the Queen is ranked 105th on The Sunday Times 2001 Rich List. Simply stated, Her Majesty is limited on cash spending for personal needs. The Queen owns the Balmoral and Sandringham Estates, which were both inherited from her father. Estimates of The Queen’s wealth often mistakenly include items which are held by her as Sovereign on behalf of the nation and are not her private property. These include Royal Palaces, the majority of art treasures from the Royal Collection and the Crown Jewels. The Queen cannot sell these – they must pass to her successor as Sovereign.
The various official sources of funding detailed in this section are used entirely to support The Queen's work as Head of State. This means that the money goes towards a number of resources which enable Her Majesty to carry out her official duties. These include: Royal travel for official engagements in the UK and overseas; the maintenance of Royal residences which are used for formal entertaining and ceremonial events; funding for the work of The Duke of Edinburgh which supports and complements that of The Queen and salaries for employees of the Royal Household who support and administrate the work of Her Majesty as Head of State.
Other than The Queen, The Duke of Edinburgh is the only member of the Royal Family to receive an annual parliamentary allowance to enable him to carry out official public duties. Since 1993, The Queen has repaid the annual parliamentary allowances received by other members of the Royal Family. Most of the allowances received are spent on staff who support their public engagements and correspondence. In 2000, the annual amounts payable to members of the Royal Family (which are set every ten years), were reset at their 1990 levels for the next ten years. The Queen pays tax. In 1992, The Queen and the heir to the throne Prince Charles both volunteered to pay income tax and capital gains tax, and since 1993 her personal income has been taxable as for any other taxpayer. The Queen has always been subject to Value Added Tax and pays local rates on a voluntary basis.
The various official sources of funding detailed in this section are used entirely to support The Queen's work as Head of State. This means that the money goes towards a number of resources which enable Her Majesty to carry out her official duties. These include: Royal travel for official engagements in the UK and overseas; the maintenance of Royal residences which are used for formal entertaining and ceremonial events; funding for the work of The Duke of Edinburgh which supports and complements that of The Queen and salaries for employees of the Royal Household who support and administrate the work of Her Majesty as Head of State.
Other than The Queen, The Duke of Edinburgh is the only member of the Royal Family to receive an annual parliamentary allowance to enable him to carry out official public duties. Since 1993, The Queen has repaid the annual parliamentary allowances received by other members of the Royal Family. Most of the allowances received are spent on staff who support their public engagements and correspondence. In 2000, the annual amounts payable to members of the Royal Family (which are set every ten years), were reset at their 1990 levels for the next ten years. The Queen pays tax. In 1992, The Queen and the heir to the throne Prince Charles both volunteered to pay income tax and capital gains tax, and since 1993 her personal income has been taxable as for any other taxpayer. The Queen has always been subject to Value Added Tax and pays local rates on a voluntary basis.