King Charles greets eager Britons (Image: GettyImages)
The King has been hit by the cost-of-living crisis but has drawn on reserves to increase his taxpayer-funded spending by five per cent to £107.5 million in the past year.
Faced with no increase in his £86.3 million Sovereign Grant from the Government for three years, the 74-year monarch has dug deep into savings but has been forced to shelve major projects because of the cost of inflation and rising utility bills.
A £369 million refurbishment of Buckingham Palace has been slowed because 10 per cent inflation and higher energy and other bills left no room for cash to be diverted to the major 10-year project.
The palace gas and electricity bill almost doubled from £1.4 million to £2.7 million in the year to March 31, 2023. In an effort to cut emissions, for environmental reasons as well as cost, the heating has been turned down at Buckingham Palace and other royal homes.
Guests, staff and the Royal Family were living with temperatures set at 19C during the winter and a few degrees lower when rooms were empty but it has been turned down, along with the heating in the Buckingham Palace swimming pool, to reflect King Charles’s concerns.
READ MORE: Royal Special: The Secrets of the Royal Residences
Aides insist the palace reservicing, which is due to conclude in 2027 will still be finished on time, allowing King Charles and Queen Camilla to move into the North Wing of Buckingham Palace in four years’ time, despite the slowdown this year. But other significant maintenance work has had to be delayed until the economic outlook improves. Spending on property maintenance has been cut by 10 per cent.
Four years after the Duke and Duchess of Gloucester downsized and moved out of their 21-room apartment next door to Prince William and Kate’s little used and similarly sized home at Kensington Palace, their former home – Apartment 1 – still remains empty and unfit for habitation.
Workmen removed dangerous asbestos but a complete refurbishment of the property has been postponed because of a lack of money. It joins a growing list of empty properties on the royal estate, including Prince Harry and Meghan’s former home, Frogmore Cottage at Windsor.
The King has also had to help his staff deal with the cost-of-living crisis. Two payments were made in the autumn and spring to help them pay energy bills.
After a pay and recruitment freeze during the Covid-19 pandemic, staff received a five to six per cent pay rise and the number of taxpayer-funded employees has increased from 491 to 517, together leading to a 14.3 per cent rise in payroll costs to £27.1 million.
The figures were disclosed in the Sovereign Grant Report, which also revealed that the palace spent £700,000 of taxpayers’ money on the Queen’s Platinum Jubilee and £1.6 million on her funeral in addition to the £28million and £162 million incurred by the UK Government.
Sir Michael Stevens, the Keeper of the Privy Purse and the King’s most senior financial adviser, said: “This has been an exceptional year for the Royal Household in many different ways. Covering as it does the period from April 1, 2022, to March 31 2023, it relates to a year of grief, change and celebration, the like of which our nation has not witnessed for seven decades.”
With the change of reign, Prince William has inherited the Duchy of Cornwall property empire, which increased its profits from £23million to £24million in the year to March 31.
He and his father split the profits between the first six months when Charles was still in charge of the Duchy and the last six months when William was in charge.
That left Charles with £11.275million and William with £12.773million. William, who also received an undisclosed sum of money from his father in the first half of the year, took £5.9million to support himself his family, and his staff costs for the second half of the year and left the remaining £6.873 million in the Duchy as working capital to get through the transition in ownerships.
Britons throng in front of Buckingham Palace (Image: GettyImages)
Kensington Palace has said the Prince will follow his father’s practice of declaring how much tax he pays on his income in future but faced accusations of a lack of transparency after declining to give the figure for this transitional year.
Graham Smith, chief executive of Republic, said: “William has some explaining to do because a change of monarch and heir is no excuse to row back on what little transparency there is.”
Palace officials said travel costs had fallen from £4.5million to £3.9million, mainly because the Government had requested fewer royal tours. But there were still some big trips.
The King and Queen’s visit to Rwanda for the Commonwealth summit cost £187,000 and their first state visit to Germany ran up a £146,000 bill. William and Kate spent £48,000 going to Boston in the United States.
In spite of the Royal Family’s efforts to campaign on environmental issues, The King and his relatives used gas-guzzling helicopters regularly, including to fly between their different royal residences.
The royal train, used only four times in a year, has been given a reprieve while the King considers its future use but aides suggested it might eventually be decommissioned.
But in spite of all the controversy, Sir Michael insisted the unchanged cost of the Sovereign Grant represented good value for money.
“For ease of comparison, that equates to the equivalent of 77p per person in the UK on core funding of the Sovereign Grant – being 33p cheaper than a first-class stamp that bears the profile of our new King,” he said. “Once the cost of reservicing is taken into account that figure rises by a further 52p.
The Sovereign Grant currently uses 25 per cent of the profits of the Crown Estate as a benchmark to determine the amount of tax money the monarch receives.
A review of the funding formula by Sir Michael, Rishi Sunak, Chancellor Jeremy Hunt and the Treasury is expected to recommend a lower percentage later in the summer.
The Crown Estate’s profits have increased by £130 million to £442.6 million because of a boom in offshore wind farms and the King has said he should not benefit from that increase.
Analysis by Phil Dampier
The King will secretly be pleased that the massive repair works at Buckingham Palace have been slowed down by high inflation and utility costs.
Although Palace courtiers insist the renovations will still finish on time in 2027, that seems increasingly unlikely.
And Charles will not be unduly worried as he much prefers living with The Queen at nearby Clarence House, his London home since 2003.
Building chaos gives him the perfect excuse to stay in his cosy 19th-century, John Nash-designed accommodation for longer. The late Queen Elizabeth also wanted to stay there when her father, George VI, died in 1952. But Prime Minister Winston Churchill advised her to move to Buckingham Palace as he felt it more fitting for the monarch.
With the Sovereign Grant remaining at £86.3million, and reserve funds being dipped into, it’s hard to accuse the royals of undue extravagance.
But Charles does face a major problem, which could bring criticism. He simply has too many royal residences.
As well as inheriting the use of Buckingham Palace, Windsor Castle, Balmoral and Sandringham from his mother, he already had Clarence House, Highgrove, Birkhall, Dumfries House in Scotland and assorted properties in Romania.
So the “Game of Homes” needs to be resolved soon.
Queen Camilla also owns her own home Ray Mill House in Wiltshire. And the King has so far failed to persuade Prince Andrew to move from Royal Lodge in Windsor to Prince Harry’s former home Frogmore Cottage.
But as families struggle to pay their bills, the excess of royal residences is not a good look for a so-called “slimmed down monarchy” – especially as the new Prince of Wales has targeted homelessness as one of his biggest causes.
Some, like Windsor Castle, may have to be turned into museums, although available for big state occasions and banquets.
Only die-hard Republicans will complain about spending money on the late Queen’s Platinum Jubilee and her funeral. And pay-offs to members of the royal household and staff were inevitable after her death.
The Sunday Times Rich List recently calculated the King’s personal fortune at £600million, which is much bigger than his mother’s, and the royals have done well out of the financial structure in the last decade.
But it will be interesting to see if a Treasury review of the funding formula recommends a little royal belt-tightening along with the rest of us.
