THE COST OF THE MONARCHY

Compares most favourably with costs of Heads of State elsewhere.

There are many misunderstandings about the cost of the monarchy, many of them perpetuated by republicans and journalists who deliberately give inaccurate information. For example, as to how many members of the royal family are receiving income from the Civil List. The following sets out to explain the facts and to equip members to challenge any inaccuracies which they see or hear in the media.

The official website of the British Monarchy - www.royal.gov.uk - contains extensive information about the royal finances.

Here we reproduce some of it, with links to the rest.

How is the work of The Queen funded? How much does the Royal Family cost the tax payer each year? Does The Queen pay tax - and if not, why not?

The Monarchy has sometimes been described as an expensive institution, with Royal finances shrouded in confusion and secrecy. In reality, the Royal Household is committed to ensuring that public money is spent as wisely and efficiently as possible, and to making Royal Finances as transparent and comprehensible as possible.

Each year the Royal Household publishes a summary of Head of State expenditure, together with a full report on Royal public finances. These reports can be downloaded from the royal website.

This section provides an outline of how the work of the Monarchy is funded. It includes information on Head of State expenditure, together with information about other aspects of 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 £41.5 million in 2008-09. In the year 2008-09 The Queen cost the taxpayer just 69 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 the financial year to 31 March 2009 the revenue surplus from the Crown Estate paid to the Treasury amounted to £211 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 two-page Annual Summary and full Royal Public Finances report can be downloaded as Acrobat pdf files on the official Royal website - www.royal.gov.uk

A summary of Head of State expenditure met from public funds in the year to 31 March 2008 reads as follows:

There are four sources of funding for The Queen, or officials of the Royal Household acting on Her Majesty's behalf, in both a public and private capacity.

These are: the Civil List, the Grants-in-Aid for upkeep of Royal Palaces and for Royal travel, the Privy Purse and The Queen's personal wealth and income.

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.

The Prince of Wales's life and work are funded predominantly by the Duchy of Cornwall. Fuller details of this are on the royal website. 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. Apart from an increase of £45,000 on the occasion of the Earl of Wessex’s marriage, amounts remain as follows, provided by The Queen:

The Duke of York (£249,000 per annum)
The Earl of Wessex (£141,000 per annum)
The Princess Royal (£228,000 per annum)
The Duke and Duchess of Gloucester (£175,000 per annum)
The Duke and Duchess of Kent (£236,000 per annum)
Princess Alexandra (£225,000 per annum).

The Queen pays tax. In 1992, The Queen 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.

Of the four sources of funding - the Civil List, Grant-in-aid, the Privy Purse and private income - the first two, which cover official expenditure, are not taxed. The Privy Purse is fully taxable subject to a deduction for official expenditure. The Queen pays tax on her personal income and capital gains. The Civil List is the sum provided by Parliament to meet the official expenses of the Queen as Head of State. About 70 per cent of Civil List expenditure goes to pay the salaries of staff working directly for the Queen. Their duties include dealing with state papers and organising the Queen's public engagements, meetings, receptions and official entertainment including royal garden parties. In other words the whole range of activities expected of the head of state, whether president or monarch.

The £132.9 million profit of the Crown Estate for the year ending March 31st, 2000 was paid to the Exchequer for the benefit of taxpayers. This sum far exceeds the total cost of the monarchy. The Queen's Civil List has been fixed at £9.7 million per annum until 2011. Full details of royal household expenditure are published. A summary of these follows. The annual cost of the monarchy is approximately £37 million.

Prince Philip is the only member of the royal family to receive an annuity from the Civil List of £359,000. The annuities of other members of the Royal Family who carry out engagements are provided by the Queen from the Privy Purse. The Revenue for this is obtained from the Duchy of Lancaster, an independent possession of the Sovereign since 1399. It is not included in the National Asset Register of government holdings published by the Treasury. The Prince of Wales derives his income on which he pays tax. The occupied royal palaces- principally Buckingham Palace, St. James's Palace, Clarence House, parts of Kensington Palace and Windsor Castle - are funded by grant-in-aid. Obviously they would be maintained by the state whether Britain were a monarchy or not. The unoccupied palaces such as the Tower of London and Hampton Court Palace are maintained from visitor admissions.

Royal transport, required to enable the royal family to carry out almost 3,000 engagements year is also funded by grant-in-aid. Of course official travel would have to be paid for if Britain were a republic.

Privately the Queen owns Balmoral and Sandringham and some smaller properties. Estimates of the Queen's wealth often mistakenly includes items which are held by the Queen as sovereign. These include the royal palaces and art collections. It is interesting to note that far from being Britain's wealthiest person the Queen is 105th on the Sunday Times 2001 Rich List!

In republics not only do presidents have to be supported financially, as do former presidents and widows, but their official duties have to be paid for and official and historic residences maintained. And there is the added expense of periodic elections. Republics show great reluctance in publishing the cost of the heads of state but the cost of the British monarchy compares extremely favourably.

Year to 31st March 2003

Year to 31st March 2003 2002

Head of State expenditure is met from public funds in exchange for the surrender by The Queen of the revenue from the Crown Estate.
Head of State expenditure for 2002-03, at £36.2 million, is 2.5% higher than in the previous year (a decrease of 0.6% in real terms). The £0.9 million increase is mainly attributable to increased expenditure on the Property Services Grant-in-aid with a large building project (the refurbishment of Clarence House) undertaken during the year, expenditure on The Queen’s Golden Jubilee and increased Information Technology expenditure. This is offset by a reduction in Parliamentary Annuities following the death of Queen Elizabeth The Queen Mother and reduced spending on ceremonial occasions since there were no State Visits during 2002-03.
Head of State expenditure has reduced from £87.3 million (expressed in current pounds) in 1991-92, a reduction of 59%.
Head of State expenditure excludes the costs of Police and Army security and of Armed Services ceremonial, as figures are not available.
Figures are for calendar years 2002 and 2001

The Queen's Civil List

Year to 31st December 2002 2001

The Civil List is the funding provided by Parliament, on a 10 yearly cycle, to meet the central staff costs and running expenses of Her Majesty’s official Household. 70% of the Civil List is spent on salaries and other employment costs. Civil List expenditure increased by 19.7% during 2002 as a result of the Golden Jubilee (£0.4 million mainly temporary staff )x, increased Information Technology expenditure (£0.2 million), inflationary increases and the full year impact of the transfer of expenditure to the Civil List from other funding sources (£0.5 million). This transfer was with effect from 1st April 2001, to utilise the Civil List reserve brought forward at the beginning of this 10 year funding period. Because the Civil List and the other funding sources have different financial year ends, only nine months of this expenditure is charged to the Civil List in 2001 and the full impact seen in 2002.

The expenditure transferred is principally in respect of:

(a) pension contributions for Civil List staff (from the Consolidated Fund);

(b) porters and non-domestic cleaners at Buckingham Palace and Windsor Castle, furnishings and the State Apartments at St. James’s Palace (from the Property Services Grant-in-aid); and

(c) information technology equipment (from the Cabinet Office).

A detailed annual report showing how the Civil List has been spent during 2002 is available from the Deputy Treasurer to The Queen, Buckingham Palace, London SW1A 1AA.

Parliamentary Annuities

Year to 31st March 2003 2002

The Parliamentary Annuity was paid to The Duke of Edinburgh (and also Queen Elizabeth The Queen Mother in 2001-02). The annuity was primarily to meet official expenses incurred in carrying out his public duties. Parliamentary Annuities paid to other Members of the Royal Family are reimbursed by The Queen.

Grants-In-Aid
Year to 31st March 2003 2002

Grants-in-aid are provided to the Royal Household annually by the Department for Culture, Media and Sport for Property Services and Communications and Information, and by the Department for Transport for Travel by Air and Rail.

Property Services
The Grant-in-aid is to meet the cost of property maintenance, and of utilities, telephones and related services, at: Buckingham Palace, St. James’s Palace, Clarence House and Marlborough House Mews, the residential and office areas of Kensington Palace, the Royal Mews and Royal Paddocks at Hampton Court, and Windsor Castle and buildings in the Home and Great Parks at Windsor. These Palaces and buildings are used by The Queen in fulfilling the role and functions of Head of State, and also need to be maintained as important parts of the national heritage. Approximately 1,000 people work in them, with approximately 70,000 guests annually and 1.6 million paying visitors. The most significant project during 2002-03 was the refurbishment of Clarence House which is due for completion in summer 2003.

Government Departments’ expenditure in support of the Golden Jubilee will be set out in “Her Majesty The Queen’s Golden Jubilee: Official Report” to be published by the Department for Culture, Media and Sport.

Communications and Information
The Grant-in-aid is to meet the cost of communication and information services in connection with official royal functions and engagements in England and Scotland. Expenditure is incurred principally in respect of press officer support for royal visits (at 99 locations during 2002-03) and the development and maintenance of the Royal Website (there were 60 million page references in 2002-03).

Royal Travel
The Grant-in-aid is to meet the cost of official royal travel by air and rail. It is an important part of The Queen’s role as Sovereign, supported by the Royal Family, to act as a focal point for national life and to bring people together across all sectors of society. Approximately 2,300 official engagements were undertaken by Members of the Royal Family in 2002-03. These involved a significant amount of travel that needs to be undertaken in a way which meets efficiency, security and presentational requirements.

Detailed annual reports on how the Grants-in-aid have been spent are available from the Deputy Treasurer to The Queen, Buckingham Palace, London SW1A 1AA.

Expenditure Directly by Government Departments and the Crown Estate
Year to 31st March 2003 2002

Administration of honours
This expenditure is to meet the cost of the Central Chancery of the Orders of Knighthood. It is responsible for administering and maintaining the records of the Orders of Chivalry, for organising the investitures at which the honours are presented by The Queen and for the distribution of the insignia.

Equerries and orderlies
Equerries and orderlies are seconded from the Armed Services to assist The Queen and other Members of the Royal Family in undertaking their official duties. Baggage transport is also charged to this heading.

Maintenance of the Palace of Holyroodhouse
The Palace of Holyroodhouse is The Queen’s official residence in Scotland. Members of the Royal Family stay there for several weeks during the year, while undertaking official duties. The Palace is also open to the public with 232,000 paying visitors in 2002-03. The Queen opened the new Queen’s Gallery on 30th November 2002 which attracted 28,000 paying visitors in 2002-03.
• Figures not audited

State Visits to and by The Queen and liaison with the Diplomatic Corps
During 2002-03 The Queen made a Royal Visit to Canada. In 2001-02 there were two outward State/Royal Visits and two inward State Visits. The Marshal of the Diplomatic Corps is responsible for liaison with the Diplomatic Corps in London. An annual reception for the Diplomatic Corps is held at Buckingham Palace or Windsor Castle.

Ceremonial occasions
The costs are to provide stands, barriers, flags, daises and canopies for State Visits and other ceremonial occasions. The decrease in expenditure reflects the fact that there were no inward State Visits in 2002-03 and two in 2001-02.

Maintenance of the Home Park at Windsor Castle
The Crown Estate is responsible for the maintenance of the Home Park at Windsor Castle and for its day-today security. The Home Park provides accommodation and sports grounds for staff. Part of it is farmed with rent payable by the Privy Purse to the Crown Estate.

Costs Funded From Other Sources

Duchy of Lancaster
Income from the Duchy of Lancaster, which is subject to tax in the normal way, funds the Privy Purse. It is The Queen’s private income although largely used by Her Majesty to meet official expenditure, in particular reimbursing Parliamentary Annuities and meeting expenses of other Members of the Royal Family. The Privy Purse also pays for the upkeep of Balmoral, The Queen’s estate in Scotland. Accounts for the Duchy of Lancaster are published and laid before Parliament annually.

Duchy of Cornwall
Income from the Duchy of Cornwall, which is also subject to tax in the normal way, funds the official duties of The Prince of Wales. Accounts for the Duchy of Cornwall are published and laid before Parliament annually.

The Royal Collection
The Royal Collection consists of works of art of all kinds and is held by The Queen as Sovereign in trust for her successors and for the nation. All costs, except for some building occupancy costs, are met by the Royal Collection Trust from visitor admissions to the occupied palaces and from related activities. Five million people saw the Royal Collection in royal palaces during 2002-03. In addition over 1,300 items were loaned to special exhibitions or formed part of the Royal Collection’s own travelling exhibitions. During 2002-03 £872,000 was spent on conserving items from the Collection and £2.1 million on new galleries, in which works of art from the Collection are displayed to the public. The Royal Collection receives no funding from the Government or the National Lottery.

An annual report is published by the Royal Collection Trust. Copies are from the Secretary,The Royal Collection Trust, St. James’s Palace, London SW1A 1BL.

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