Where Does The Royal Family Get Funding? Queen Elizabeth, Monarchy Too Costly For Taxpayers, Critics Say

From Buckingham Palace’s $450 million upkeep to Kate Middleton’s array of designer gowns and coats, royal family status involves a hefty price tag. With Queen Elizabeth’s taxpayer grant income hiked to the equivalent of nearly $56 million for the next year, it’s unlikely she’ll have trouble footing the bill for medical treatment for the “heavy cold” she’s suffered from over the past two weeks.

But while their clothes, heath status and ceremonial activities receive widespread media attention, the royal family’s growing budget hasn’t spent quite as much time in the spotlight.

New legislation allowed the queen’s taxpayer-provided funding to balloon in 2011, when the Sovereign Grant Act disposed of a two-and-a-half-century rule known as the Civil List, which allowed Parliament to give the monarch a fixed sum in exchange for income from the Crown Estate. Between 2000 and 2010, that fixed payment was capped at the equivalent of just under $10 million, while any needs beyond that cap were to be fulfilled by a budget surplus pool of about $43 million, accrued between 1990 and 2000. By 2010, the monarchy had spent nearly $42 million of it, mostly on executive, administrative, housekeeping, hospitality, catering and ceremonial worker salaries.

Under the Sovereign Grant Act, lawmakers introduced a new payment structure in the form of a single grant given to the queen, the amount of which comes to 15 percent of the Crown Estate’s revenues from the two years before the year in question. (The Crown Estate’s revenues mostly stem from tourism on land under de facto ownership of the monarch.) The law, which went into effect for the 2013-2014 budget year, gave Queen Elizabeth a 20 percent pay raise, to the equivalent of $44 million—what was, at the time, her highest pay since 2008. Since then, it’s only grown, rising to nearly $56 million for the next budget year, from $52 million the prior year.

After rising Crown Estate profits boosted the queen’s pay, the royal family faced criticism for not only such high levels of income in the aftermath of an economic crisis, but for benefitting from the Department for Culture, Media and Sport’s undisclosed expenditure on security and other expenses for the Diamond Jubilee celebration and, more recently, receiving a $456 million home makeover. As author and broadcaster Kenan Malik wrote in a 2014 New York Times op-ed titled “Britain’s Welfare Queen,” the monarch doesn’t pay to reside in her famed London estate.

“The queen does not own Buckingham Palace; the nation does,” Malik wrote. “It follows that, wealthy as she is, the queen sees no reason to pay for the upkeep of the palace, since she lives there by virtue of her public duties.”

The Crown Estates and royal art collection she inherited, he continued, could be sold for the sake of public ownership, but remain her possessions. The estates known as the Duchies of Lancaster and Cornwall, which provide income for the sovereign and her heir, generate millions annually but are not subject to corporate or capital gains taxes. Republic, an anti-monarchy activist group, pegs the cost to taxpayers, including such “lost revenues” as tax free earnings on the estates and renovations for Buckingham Palace, at the equivalent of nearly $409 million annually.

“Royal funding is a scandal. The Sovereign Grant is a disgrace,” Republic Chief Executive Graham Smith said, according to a press release from the group following the June announcement of Queen Elizabeth’s pay raise. “With the country under such immense economic pressure and public spending being squeezed, it is disgraceful that the queen keeps taking more and more of taxpayers’ money.”