The rise in the sovereign grant comes as the Royal Household published its annual report and accounts for the Sovereign Grant Report 2016-17, as well as accounts for the Crown Estate and Duchy of Cornwall.

The £2.8m rise in the Sovereigh Grant is calculated based on revenues from the Crown Estate and would be equivalent to an 8% increase in funding. The final figure will be set in Budget this autumn.

During the last financial year, the Sovereign Grant amounted to £42.8m (including reserves), up from £39.8m the previous year, while total expenditure amounted to £56.8m, with payroll costs and property maintenance increasing, the latter a result of the increasingly ancient buildings and infrastructure. This Royal Household generated additional income of £14.9m from sources including property rental and facilities management charges.

Over the 12-month period, non-grant income was up by 7% year on year, while income from Royal household resources accounted for 26% of total expenditure.

Total Crown Estate’ profits reached a record £328.8m. The Prince of Wales earned £20.7m from the Duchy of Cornwall, according to Clarence House’s annual accounts released today, with the Prince’s Duchy organic food range valued at over £200m. He paid £4.75m in tax in 2016-17.

Keeper of the Privy Purse, Sir Alan Reid said: ‘In 2016-17 the Sovereign Grant equated to a cost of 65p per person in the United Kingdom – the price of a first-class stamp. When you consider that against what The Queen does and represents for this country, I believe it represents excellent value for money.’

Going forward, the major expenditure and risk is centred around delays or increased costs in completing the projects set out in the 10-year property maintenance plan, including the reservicing of Buckingham Palace.

Property costs

Income supplementing the Sovereign Grant amounted to £14.9m (2015-16: £13.9m). Property rental income increased by £200,000. Facilities management charges increased by £0.2 million. Recharges and other income increased by £0.6m.

The latest condition assessment survey of the Occupied Royal Palaces Estate found that 45% of the Estate was below target condition at 31 December 2015. Changes in the condition of the Estate will continue to be monitored through the regular condition assessment surveys and the next update will be completed within the 2017-18 financial year.

During 2016-17, significant work was undertaken to update the 10-year plan and outline the major projects across the Occupied Royal Palaces Estate.

Expenditure on property maintenance (including capital expenditure) was £19.7m in 2016-17, an increase of £1.7m (9%) compared with the previous year. In addition, £900,000 was transferred to the Sovereign Grant Reserve in 2016-17 to meet the cost of major projects in the 10-year plan including the renewal of Windsor Castle water mains.

With an ageing real estate portfolio, maintenance work on Buckingham Palace included £1.3m for state dining room ceiling repairs and £300,000 on the ballroom landing pantry and upper vault refurbishment. At Windsor Castle, replacement of the orangery doors on the East Terrace cost £1.2m while various utility projects for water infrastructure and air handling amounted to £600,000.

The roof repairs at Buckingham Palace raised concerns about the wider structural safety of the occupied Royal Household and structural engineers and ceiling specialists were called in to inspect all ceilings and recommend a bill of works at a cost of £1m. Work is due for completion by March 2018.

Travel

Over 3,000 official engagements were undertaken across the UK and overseas by members of the Royal Family during the year to 31 March 2017 totalling £2.69m for journeys over £15,000 in value. The principal overseas visits, with the highest costs, including support staff and pre-visit recces included: £154,000 for the Prince of Wales and Duchess of Cornwall’s visit to Italy, Romania and Austria, and £93,000 for their visit to Bahrain, UAE and Oman; the Duke and Duchess of Cambridge’s visit to India and Bhutan came in at £98,000, and there was a £73,000 bill for the Prince of Wales’ visit to Israel for the funeral of Shimon Peres (£73,000). A visit to Botswana and Mozambique by the Duke of York came in at £56,000.

Entertainment

The banqueting team – known as the Master's Department - delivered 97 receptions, 43 lunches, 7 garden parties, and 56 dinners at Buckingham Palace, Windsor Castle, St James's Palace and the Palace of Holyroodhouse, welcoming over 120,000 guests to these residences over the course of the year.

Oversight and governance

The four-person audit committee is chaired by Sir David Tweedie and the accounts are audited by the National Audit Office. As required under professional standards, an independent external assessment of the internal audit function was carried out in October 2015. The report concluded that Audit Services 'has a high profile, with an established, sound methodology and practices’.

The Royal Household’s management of the Sovereign Grant is facilitated through bi-monthly meetings with the Treasury.

Staffing

During the year, the average number of staff paid from the Sovereign Grant was 436 (2015-16: 431). The increase is numbers is mainly due to new roles in property maintenance. The total costs of Royal Household employees was £20.3m (2015-16: £19.5m), an increase of 1.7% in real terms.

Crown Estate

The Crown Estate is an independent commercial business, created by an Act of Parliament, with a diverse portfolio of UK buildings, shoreline, seabed, forestry, agriculture and common land. The business generates revenue for the government and over the last 10 years has contributed £2.6bn to the Consolidated Fund.

The Sovereign Grant and Sovereign Grant Reserve Annual Report and Accounts 2016-17 is available here

Statement of income and capital accounts in relation to Paragraph 9(1) of The Crown Estate Transfer Scheme 2017 is available here

The Royal Finances webpage is here