Queen Elizabeth To Receive £37.9million Pay Rise - Foreign Affairs

Queen is given a 'pay-rise': Her Majesty to receive inflation-busting 22% increase over next two years

Monarch set to be given £37.9million next year, up from £31million this year

The Queen is said to be down to her 'last million'

But spending on Royal Household has fallen in last 20 years, claims report

Queen Elizabeth is set to get an inflation-busting pay rise of 22 per cent for 2014/2015

The Queen is set to receive an inflation-busting 22 per cent ‘pay rise’ over two years, according to new official figures.

The monarch is said to be ‘down to her last £1 million’, leaving her vulnerable to ‘unexpected costs’, a report has said.

She is now expected to be given £37.9 million in 2014-15 to run her Household and conduct official engagements, up from £31 million in 2012-13.

The figures were released yesterday by the National Audit Office which has, for the first time, been allowed to examine all aspects of the Queen’s funding as Head of State.

But while recommending the increase, their report goes on to highlight what it describes as ‘significant reductions’ in the monarchy’s funding over the last 20 years.

It says that grants for royal travel on official engagements both at home and abroad has been slashed by 76 per cent in real terms.

The maintenance for royal palaces, including Buckingham Palace and Windsor Castle, was similarly reduced by an impressive 60 per cent.

That has left, according to the NAO, a huge backlog in property maintenance, with 39 per cent of occupied royal palace being deemed below their ‘target condition’.

In order to cope with the shortfall the Queen’s money men have been dramatically scaling back their spending, reducing net expenditure by 55 per cent in real terms.

According to the figures, that led to real-term expenditure of £32.9 million in 2011-2012, compared to £72.6million in 1991-92.

In order to help meet the shortfall, the Queen has repeatedly eaten into her savings - known as ‘drawing down on reserves’ - over the years and is, apparently, down to her last £1 million in the bank.

The NAO, which scrutinises public spending for Parliament and is independent of government, says this poses serious questions about the palace’s ability to cope in an unexpected crisis if, say, the roof of Buckingham Palace fell down.

‘As part of its long-term planning the Household may need to consider whether the Reserve is adequate to meet unexpected costs,’ it says.

The NAO report will be put before parliament’s powerful Public Accounts Committee on Monday as part of as investigation into royal finances,
Until last year the monarch was funded by a complicated combination of civil list payments and government grants.

Following an extensive review of royal finances by the government, the Queen now receives one single pot of money known as the Sovereign Grant to largely spend as she wishes on everything from funding her office to repairing the palace roof.

The maintenance for royal palaces, including Buckingham Palace and Windsor Castle, has been reduced by 60 per cent over the last 20 years
In each of the last six years, the Queen’s programme has on average seen her conduct more than 300 engagements in addition to 3,000 trips by the rest of the Royal Family , six gardens parties and more than 26 investitures.

The money is taken from the Crown Estate, a wealthy portfolio of agricultural land, buildings and property - ranging from a retail park in Liverpool to London’s Regent Street - which historically belonged to the monarchy but the profits of which have, since the reign of George 111, gone to the Treasury.

This year the Crown Estate announced record revenue of £253 million

As a result of protracted - and sometimes combative - negotiations with Downing Street, the monarch is now, for the first time in two centuries, entitled to keep 15 per cent of its profits with the rest going to the Treasury.

Its entire holdings are now worth an astonishing £8.1 billion and the NAO says that profits are likely to continue to rise, meaning the Queen will enjoy further increases in funding to come.

The palace insists most of its extra cash will be spent on a ‘massive backlog’ of repairs to royal palaces, which the Queen holds in trust on behalf of the nation.

It has long complained of having to put off millions of pounds worth of essential repairs due to those real-term falls in funding.

Buckets are frequently used to catch water leaks in the picture gallery while none of the state rooms, regularly used for entertaining heads of state, have not been decorated in more than sixty years.

The new NAO report also highlights the royal household’s efforts to increase income through money-spinning schemes such as renting out its facilities for commercial events. This has generated a rise of 54 per cent in profits, £11.6 million last year alone.

Other nuggets in the report show that the monarch’s 436 staff cost her £19.5million a year, although anyone earning more than £21,000 has had their pay frozen since 2011 in a bid to cut bills.

Last year the family spent £4.5 million on travel, a real term reduction of 30 per cent in the last decade, as royals were told to stop using private jets and take scheduled flights instead of that £900,000 was spent on rail journeys last year and £1.6 million on helicopters. The royal train, which was used just 15 times last year at an average cost of more than £25,000 is now under review again.

Chris Heaton-Harris, Conservative member of the Public Accounts Committee, who set to quiz the Queen’s chief ‘bean counter’, Keeper of the Privy Purse Sir Alan Reid, on Monday as part of the royal finances investigation said: ‘It is the first time the PAC or parliament has had this level of access to the Royal Household’s accounts.

‘We want to show we take our responsibilities very seriously and be sure the Royal Household is giving good value for money.

‘I think this kind of scrutiny can only be good for the monarchy.’