Rising costs and not enough cash ... just like us, your Majesty

The Queen is struggling with soaring costs after her budget was frozen.

The bill for running the monarchy rose by nearly twice the official rate of inflation last year to £40 million, official accounts show today.

They also reveal a £32 million black hole that threatens the future of Buckingham Palace and other royal buildings.

Courtiers complain they are having to put off essential repairs to the palace and Windsor Castle because, like millions of her subjects, the Queen cannot raise extra funding. The squeeze is being blamed partly on the rising cost of the 2012 Olympics.

Royal aides today made clear their "extreme frustration" at having budgets frozen by the Government for the next three years while the bill for the London Games has rocketed.

Today's accounts show the cost of the monarchy rose by 5.3 per cent last year. It is the first real-terms increase for many years but aides said it was mainly due to additional requests from the Foreign Office for overseas trips by senior royals. "We are not masters of our own destiny on this," said one.

Prince Andrew's travel bill almost doubled to nearly £800,000. The palace said this was because of his increasingly active official role as an ambassador for British business. The overall bill for royal travel rose nearly 11 per cent from £5.6 million to £6.2 million.

Another factor in the rise in the total cost of the monarchy was the deferral of essential building maintenance projects from the previous year.

Courtiers stressed how the Queen personally took an interest in keeping costs down by simple measures such as turning off lights at night. Fuel costs were also reduced by buying wholesale energy in the futures market.

Finance chief Sir Alan Reid said the monarchy now costs each person in Britain the equivalent of 66p a year - up from 62p last year.

Palace officials said this is less than the price of two pints of milk or an iPod download. The accounts reveal that the backlog of essential repairs at Buckingham Palace, Windsor and other

royal buildings will reach £32 million within a decade without a big increase in government funding.

Aides have calculated that an extra £4 million a year, on top of the existing frozen budget of £15 million, will be needed from 2011 for repairs.

Other major jobs such as the rewiring of Buckingham Palace, removal of asbestos and redecoration of state rooms have also been put on hold. Sir Alan said: "This backlog relates to essential maintenance and does not include any allowance or projects such as the redecoration of the State Rooms at Buckingham Palace, most of which were redecorated before the Queen's reign."

The Queen's plea for an extra £1 million a year for the next three years was rejected in February by the Department for Culture, Media and Sport, which also funds the 2012 Games.

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