UK Royal Household spending exceeded income last year, annual financial statement shows

From CNN’s Max Foster and Lauren Kent

(CNN) — The British Royal Household released its annual financial statement on Thursday, revealing that official spending for the year 2022-2023 exceeded the Sovereign Grant and other royal earned income.

It attributes the high costs to the “exceptional period of transition” in the Royal Household, which saw Queen Elizabeth II’s funeral last year and King Charles III’s coronation in May, as well as an ongoing refurbishment project at Buckingham Palace.

In total, the Royal Household’s net expenditure was reported to be £107.5 million ($136 million), compared to the total Sovereign Grant of £86.3 million ($109.1 million) and the additional income of £9.8 million ($12.4 million).

The Sovereign Grant – an annual lump sum from the government – is essentially an expense account, covering the costs of travel, security, staff and the upkeep of royal palaces. The Royal family’s three main sources of income are the Sovereign Grant, the Duchy of Lancaster and Duchy of Cornwall estates and their personal property and investments.

“Official expenditure was more than the Sovereign Grant and the supplementary income earned, with net expenditure of £107.5 million ($136 million), a 5% increase on the previous year due to significant work relating to the Reservicing of Buckingham Palace and the costs associated with the change of Reign, as well as the impact of the Consumer Price Index rising by 10.1%,” Buckingham Palace said in a statement.

The high official expenditure saw the Sovereign Grant reserve reduce by £20.7 million ($26.2 million) in the last year.

“This year’s statement covers a period of significant transition for the Royal Household, reflecting the Platinum Jubilee and State Funeral of Queen Elizabeth II, the Accession of The King, the lead up to Their Majesties’ Coronation, and the coming together of staff from two Households,” the palace statement said.

“The total Sovereign Grant for 2022-23, amounted to £86.3 million (2021-22: £86.3 million) ($109.1 million), which is made up of a core grant of £51.8 million ($65.5 million) which funds official travel, property maintenance and the operating costs of The Sovereign’s household. The core grant equates to 77p (97 cents) per person in the UK,” the statement added, noting that the total Sovereign Grant remains unchanged since last year.

The United Kingdom’s population is about 67 million people, meaning that the Sovereign Grant is equivalent to £1.29 ($1.63) per person in the country, according to the palace.

The country’s main anti-monarchy group has criticized the royals for continuing to increase spending of public money, as well as criticized the way the Royal Household arrived at the figures.

“The royals have long hidden their true cost, which we have worked out to be at least £345 million (£436.3 million). That’s enough to pay for 13,000 new nurses or teachers,” said Graham Smith, chief executive of campaign group Republic. “Trying to excuse this by dividing the figure by every man, woman and child is nonsense.”

“Our figure of £345 million is far more accurate than the official report, when we factor in costs to local councils, local police forces, the revenue of the two Duchies and security,” Smith added, also calling for more transparency from the monarchy, which his campaign group seeks to abolish.

The Royal Household’s Keeper of the Privy Purse, Sir Michael Stevens, said in the palace statement, “As we look back on those twelve months, we reflect on how the nation came together to celebrate the Platinum Jubilee of Queen Elizabeth II in June, and to mourn Her Late Majesty in September while marking the Accession of The King, as well as the months of preparation leading up to Their Majesties’ Coronation.”

Stevens also said that the last year saw many events return that had been missing during the pandemic years, including palace Garden Parties, Maundy, Garter, and state visits of King Charles.

“Like other organizations, the Royal Household has not been immune to the impacts of the joint challenges of the pandemic and inflationary pressures, which have resulted in a flat Sovereign Grant. The figure for the year remained unchanged at £86.3 million, with a significant proportion funding the Reservicing of Buckingham Palace, which is now in its seventh year. This figure will remain unchanged at £86.3 million for the year 2023-24,” Stevens added.

Smith of the campaign group Republic said, “The questions that need to be asked are whether this spending is ethical, a good use of public money and what else it could be spent on.”

The private wealth and lifestyle of King Charles and Britain’s royal family have been called into question this year, as the UK grapples with a cost-of-living crisis, leaving many people unable to afford their bills and household basics.

Fans of the royals meanwhile argue the monarchy offers value to British taxpayers because it boosts tourism and consumer spending, particularly during big events.

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Previous reporting by CNN’s Ivana Kottasova