The annual report of royal finances show a rise in spending to £107.5 million for 2022/23 compared with £102.4 million for the year before. Chris Ship has the latest on how the Royal family trying to cut back on spending
The royals had to scale back on property maintenance and cut heating costs in order to offset the huge rise in inflation last year.
The merging of households following Queen Elizabeth’s death also impacted the palace’s target to recruit more staff from diverse backgrounds.
The annual report of royal finances show a rise in spending to £107.5 million for 2022/23 compared with £102.4 million for the year before.
It was, said the Keeper of the Privy Purse Sir Michael Stevens, who is in charge of royal finances, “a year of grief, change and celebration, the like of which our nation has not witnessed for seven decades”.
It led to a 5% increase in spending even though its publicly funded budget was “effectively” cut in real terms by 10% because of the soaring rate of inflation.
Utility bills across the royal estate went up by 100%, following the steep rise in gas and electricity prices after the Russian invasion of Ukraine.
The late Queen’s Platinum Jubilee, which was held last June when she was becoming increasingly frail, cost the palace £700,000 and her funeral in September added £1.6 million to the spending totals.
The government has previously announced the funeral costs the taxpayer £162 million but the Palace took responsibility for paying for the reception for the Heads of State attending the funeral, the State Funeral service at Westminster Abbey and the Committal Service at St George’s Chapel in Windsor where Queen Elizabeth was laid to rest.
The additional costs from the last financial year meant the palace overshot the money it gets from the Sovereign Grant and it had to dip in to its reserves to find an extra £21 million.
The Sovereign Grant is calculated as a percentage of the profits of the Crown Estate.
Every year, 15% of the profits is syphoned off to pay the core funding of the Royal Family and a further 10% is taken to fund the programme of redevelopment works at Buckingham Palace – for a limited 10-year period.
That gives the royals £51.8 million for the core grant and £34.5 million for the palace rebuilding.
But money which supplements the Sovereign Grant – such as ticket sales – has been hit by a sharp drop in visitor numbers since Covid.
They are 50% lower than pre-pandemic levels.
In response the palace has cut more than £2 million from its property maintenance programme on other palaces.
And the King has ordered the heating to be turned down across the royal estate which has saved 19% on gas and heating emissions.
But Buckingham Palace has had to admit its target for a more diverse household has been impacted by the change of reigns.
"We are determined to accelerate progress in this area,” said Sir Michael as he revealed the proportion of staff from minority backgrounds has stalled at 9.7% - the same as it was last year.
“We are not where we would like to be and we are committed to making progress in this area,” said a palace official, pointing to the merging of two households which had “complicated matters”.
Clarence House – the office of the former Prince of Wales and Duchess of Cornwall – was closed and merged with Buckingham Palace when Charles and Camilla became King and Queen.
Buckingham Palace has set itself a new diversity target of 14% by 2025.
A royal source insisted the King and Queen have always “embraced the diversity of our nation” and said it was “important that our workforce reflects the communities we serve”.
The Sovereign Grant itself will remain frozen at £86.3 million for next year but a future income stream from new offshore windfarms could provide a significant boost in the years ahead.
Sir Michael Stevens admits the Crown Estate “will see its revenues increase substantially in the coming decade” but the King has ordered that any additional money should be diverted into Treasury coffers rather than his own, “for the wider public good”.
Royal sources said the extra profits from the windfarms will mean the King will take a smaller proportion of profits for the Core Sovereign Grant (currently 15%) and the exact amount of the “downwards adjustment” will be announced later this year.
Listen to ITV News podcast the Royal Rota