British parliament is taking the royal family to task for spending beyond its means, recommending that the Queen keep a stiff upper lip and rein in that fortune, before it's all gone.
In a report published on this week, the Public Accounts Committee said the royal family had exceeded its 2012-2013 budget of $51.38 million by nearly $4 million dollars, reaching into their no-longer-so-deep reserve fund and leaving it at a "historically low level" of £1 million. (About $1.7 million.) This is not good, according to the committee, which questioned the Queen's treasurer and "Keeper of the Privy Purse" Sir Alan Reid on the royal finances.
The committee started out with some classic British reticence, asking Reid:
First, how did you allow yourself to get into the position where your expenditure exceeded your income in the new settlement? Secondly, is it not a bit risky to leave yourselves with just £1 million in reserves?
Reid responded that the Sovereign Grant Act of 2011, which marked the largest overhaul in the royal family budget since the 18th century, made it difficult for the royal family to adjust to a lower spending budget. The committee hit back, losing the polite overtures:
I understand your disappointment in year one but, given the state of the public ﬁnances, every service funded through the public purse faced cuts. What I do not understand, given the unwelcome message you got from the Chancellor in year one, is why that did not lead to your drawing back on your expenditure so that you lived within your income.
And delivering a lesson in civics, taking issue with the royal family's refusal to cut back on staff and, in fact, increased spending on personnel:
Throughout the world of things funded by the public purse, people have had to do more for less. On the whole, in the public sector, that means fewer people delivering more efﬁciently. That does not appear to have happened.
The report details a landmark review of the royal family's finances, introducing a level of transparency to the Queen's budget previously unseen. Royal budgets have been scrutinized before — especially those of the Spanish royal family — but usually not in Britain, where the royal family is seen as an engine of economic growth. The birth of the royal baby last year spurred a boom in the U.K. economy, as retailers capitalized on baby obsession to move royal merchandise. And according to the Guardian, the budgetary hearing and resulting report may be more an exercise in catharsis than a reflection of unusually profligate spending:
However low (or high) that £1 million figure may sound, it actually does not reflect the full scale of assets held by the royal household. In fact, their total reserves stand at £14.2m - £11.8m of which comes from property, plant and equipment. However, those reserves have also been slowly falling over the past three years.
Still, the report points out some interesting ways in which the Queen chose to spend monarchical funds. The Guardian reports that the royal inventory of wine and spirits was significantly depleted over 2012-2013, suggesting that someone has been on a very expensive bender (or, more likely, that the alcohol was sold or given away as gifts). The royal helicopter budget also reportedly went up, supposedly because it "has replaced the amount of fixed-wing aircraft we are now using."
USA Today outlines where the Queen gets her money:
According to Forbes magazine, Queen Elizabeth, has an estimated personal net worth of $500 million that comes from property including Balmoral Castle in the Scottish Highlands, stud farms; extensive art and fine jewelry and a stamp collection amassed by her grandfather. Apart from her own holdings, Queen Elizabeth has exclusive access to properties she does not own, such as Buckingham Palace. She also receives an annual government stipend of $12.9 million, says Forbes.
The committee recommended that the royal family spend more money fixing up Buckingham Palace to jumpstart recently low tourism revenue. One committee member quipped;
It looks to me, from the NAO Report, that you managed to survive and manage the ﬁnances by letting the buildings deteriorate.
And another added,
I remember walking under it and it being explained to us that the
stone — I think it is from Caen in Normandy — was dropping on people, although I don’t think anyone was actually hit.
Reid asserted that "clearly the buildings are not actually falling down," but we're with the committee on this one. The royal family can look forward to a slight budgetary increase in 2014-2015, when they will be allowed to spend $63 million. The roughly $6 million hike seems pretty low, considering that the family ended up using an additional $4 million last year.