Cost of monarchy down by £1.8m

(PA)

The Queen's official expenditure decreased by 5.3% from £33.9 million in 2009/10 to £32.1 million in 2010/11 according to the royal public finances annual report.

The Queen's Civil List spending fell from £14.2 million to £13.7 million, while there was a cut in spending on property services from £15.4 million to £11.9 million.

Royal travel costs rose from £3.9 million in 2009/10 to £6 million in 2010/11 but Buckingham Palace said the sale of the Queen's helicopter in 2009/10 resulted in lease repayments of £1.5 million to royal travel.

Excluding this income, expenditure on royal travel would have been £5.4 million in that year, according to the accounts.

Sir Alan Reid, keeper of the privy purse, said the fall in spending had been achieved through increased income generation, deferral of property maintenance and a pay freeze for staff which will continue this year.

But he warned that it would be "very difficult" for expenditure to reduce "very much further" without having an effect on the royal household's work to support the Queen and the long-term health of the estate.

"The Queen is very keen that the royal household should continue to reduce its expenditure in line with public expenditure reductions," he said.

"The decrease in expenditure is due mainly to increased income generation, the deferral of property maintenance expenditure and the implementation of a pay freeze.

"This pay freeze will continue on to this year."

He added: "Over the past five years, the Queen's official expenditure has reduced by 19% in real terms and while the royal household will continue to identify efficiencies, it will be very difficult for overall expenditure to reduce very much further without impacting on the royal household's activities in support of the Queen and the long-term health of the estate."

Further cuts in funding will mean that the budget for projects in the annual works programme is likely to be reduced from £4 million in 2010/11 to around £3 million in 2012/13, according to the report.

"This will inevitably lead to the deferral of works and will increase the backlog," the report said.

"Furthermore, it is likely that the programme will become more reactive than planned."

The reduction in funding means that "key" projects will not be undertaken, the report said.

These include more extensive renewal of lead and slate roofs at Buckingham Palace and Windsor Castle - it is likely that only one area will be achieved in each financial year at each site rather than three.

Refurbishment of the state rooms at Buckingham Palace and Windsor Castle will not be undertaken, the report said.

Other projects affected include replacement of existing heating and electrical services at Buckingham Palace, with associated asbestos removal, which will now take 15 to 20 years to complete.

Buckingham Palace said the figures for the royal public finances were calculated using the new sovereign grant system which will replace the current funding streams from the civil list and grants-in-aid for royal travel, palace maintenance and communications.

The report listed journeys costing £10,000 or more by air or rail and funded from the royal travel grant-in-aid.

These included £356,253 for the charter flight costs of the state visit of the Queen and the Duke of Edinburgh to the United Arab Emirates and Oman in November.

The Prince of Wales and the Duchess of Cornwall's trip to India as part of an official Foreign Office visit in October cost £298,089 in charter flights.

The Duke of York's charter flight travel in April last year as part of an official UK Trade and Investment (UKTI) and Foreign Office visit to Italy and central Asia cost £121,810.

The total figures released for the Queen's official expenditure in the financial years 2009/10 and 2010/11 do not include the Duke of Edinburgh's parliamentary annuity or expenditure met directly by government departments and the Crown Estate, a Buckingham Palace spokesman said.

Graham Smith, spokesman for the anti-monarchy group Republic, said: "Of course, the costs published today are just the tip of the iceberg - the true cost of the monarchy is likely to be over £200 million each year. The royals know that but continue to mislead the public.

"The new sovereign grant would give the royals a limitless annual budget for them to fritter away on luxury travel.

"There will be more waste and less accountability. It's time for ministers to halt their plans, launch a full inquiry into royal spending and make their decision when we can see exactly what value the royals give us."