With only £1 million left in her account, Queen Elizabeth II is set to get a 22 per cent pay hike from the British government to help her tide through her dwindling finances. She will receive the money over a two-year period.
Reports say she will get £37.9 million to run her household in 2014-15, a 5-per cent rise on this year's funding, up from £31 million in 2012-13.
Till last year, the Queen was funded through a combination of civil list payment and government grants. After a review of royal finances, the Queen will now receive one single pot of money known as the Sovereign Grant.
The National Audit Office (NAO) released its figures on Saturday, for the first time, after being allowed to examine the Queen's funding as head of state.
The NAO report highlights the 'significant reductions' in the royal funding over the last 20 years.
Prominent among these is the grants for royal travel on official engagements both at home and abroad, which has been cut by 76 per cent.
Similarly the maintenance for royal palaces, including Buckingham Palace and Windsor Castle, has been slashed by 60 per cent. The NAO, however agrees, that the reduction in maintenance budget has left 39 per cent of the occupied royal palace to be deemed below their 'target condition,' creating a backlog of property maintenance.
Considering the shortfall, the Queen's money managers have cut spending by 55 per cent, the report says. This has led to led to fall in expenditure to £32.9 million in 2011-2012 from the high of £72.6 million in 1991-92.
It is to meet the shortfall that Queen Elizabeth II has withdrawn from her savings. These withdrawals are known as 'drawing down on reserves' which has left her with only £1 million in the bank.
According to reports, NAO says the status of royal finances poses serious questions about the ability of the palace to cope in an unexpected crisis, say a roof collapse in Buckingham Palace.
"As part of its long-term planning the Household may need to consider whether the Reserve is adequate to meet unexpected costs," the NAO report says.
The NAO report will be put before the Public Accounts Committee on Monday as part of as investigation into royal finances.
To contact the editor, e-mail: