Prince Harry and Meghan have paid an undisclosed upfront sum for the rent and refurbishment of their UK home Frogmore Cottage, royal accountants have disclosed.
The Duke and Duchess of Sussex, who quit as full-time working royals and relocated to the US, had already announced paying back the £2.4 million spent renovating the Windsor property after they signed a £112m deal with Netflix.
The developments emerged as the palace showed a potential £35 million shortfall due to Covid-19 pandemic.
A senior palace source said: “The Duke and Duchess of Sussex have made a substantial contribution to the Sovereign Grant that covers refurbishment and rental obligations for Frogmore Cottage.
“The reporting method for this contribution has yet to be determined and will have to be agreed by the National Audit Office before appearing in next year’s accounts.”
As the royal accounts were released, details emerged of a £15 million shortfall expected over the next three years that supplements the Sovereign Grant, which funds the Queen due to Covid-19.
It also emerged that £369 million re-servicing programme to update essential electrical cabling, plumbing and heating at Buckingham Palace over a 10-year period is expected to be £20 million short.
Sir Michael Stevens, Keeper of the Privy Purse, stressed the royal household had no intention of asking for extra funding, but would “look to manage the impact through our own efforts and efficiencies”.
A pay freeze for royal staff was implemented in April and there is also a halt on recruitment, with only business-critical posts being filled.
Accounts for the Sovereign Grant have shown the monarchy cost the taxpayer £69.4 million during 2019-20 – an increase of £2.4 million on the previous financial year.
All major expenditure areas have increased, from payroll, up £1.2 million to £24.4 million, to travel, rising by £700,000 to £5.3 million, and housekeeping and hospitality, rising by £300,000 to £2.6 million.
Harry and Meghan’s official visit to southern Africa cost almost £246,000, the report revealed, while a two-day visit by the Prince of Wales to Oman to pay his condolences following the death of Sultan Qaboos bin Said cost £210,345.
For a trip to Pakistan, the Duke and Duchess of Cambridge’s travel costs were £117,116.
The Sovereign Grant increased slightly by £200,000 to £82.4 million during 2019-20 – a core element of £49.4 million which funds the Queen and her household, and an additional £33 million to pay for the on-going re-servicing costs.
Sir Michael outlined the report, which covered the 12 months to March 31, but looked ahead to the problems that Covid-19 will pose to finances.
He added: “So in our forecasts we are now estimating that this reduced growth in the Sovereign Grant means the likely contribution from the Sovereign Grant to the re-servicing programme will be over £20 million short of the agreed £369 million ten-year budget.
“If we look at our core Sovereign Grant and the income that we generate to supplement the Sovereign Grant, both of which support the official duties of the Queen.
“We are expecting a significant reduction in income from the Royal Collection Trust, due to the impact Covid-19 has had on their visitor numbers.
“This forms the bulk of a projected shortfall in income which we estimate will be around £5 million per year for the next three years.”
He added: “In responding to both these financial challenges we have no intention of asking for extra funding and will look to manage the impact through our own efforts and efficiencies.”