Will Queen have to rein in costs to cover ‘pay cut’?

ALREADY having to deal with Prince Harry’s hurtful claims, and investigate Meghan’s alleged bullying, the Queen faces a new headache.

I hear that talks have begun with Government officials about a new financial settlement for the Royal Family, with courtiers admitting Her Majesty expects to be given a substantial ‘pay cut’.

Her current five-year Sovereign Grant agreement ends in 2022 and the new one is unlikely to be so generous.

‘The last settlement was exceptional and we cannot expect that to be repeated,’ one courtier tells me. ‘Her Majesty is very much aware of the hardships people have been through during the pandemic and is happy to play her part in cutting costs.’

The Royal Family currently receives 25 per cent of the Crown Estate’s profits. They previously received 15 per cent but it was increased to pay for a huge programme of refurbishments at Buckingham Palace.

The Queen, who turns 95 next month, conducted 296 official engagements in 2019, when she was given £82.4 million in taxpayer funding. The Palace claims this is equivalent to £1.23 for every person in the UK.

The Sovereign Grant replaced the Civil List as the funding mechanism for the royals in 2012 and funds the family’s public duties, including travel, operating costs of the Queen’s household and the upkeep of palaces.

The Palace admitted last September that it faced a £35 million funding shortfall due to Covid-19 — but said it would not ask for extra public money.

Senior royal aides said the household would have to tighten its belt, which could lead to job losses.

With Harry and Meghan having left the country, and Prince Andrew not undertaking public duties, it shouldn’t be too hard to make big savings.

Buckingham Palace declines to comment, but a royal source tells me: ‘The five-year review into Sovereign Grant funding is due to start in the coming financial year and it would be premature to speculate on the outcome.’