Britain's Queen May Run Out of Money by 2012

Maintaining a monarchy is costly, as Britain found out when a newly published account revealed that Queen Elizabeth II will be out of pocket by 2012 unless the government boosts funds for the Royal household for the first time in 20 years.

The total cost of keeping the monarchy increased by £1.5 million ($2.5 million) to £41.5 million pounds ($69.23 million) during the last financial year, according to royal accounts published on the UK monarchy's official web site. The Queen had to tap the reserve fund by £6 million to supplement the cost of running the Royal household, the accounts showed.

The Queen's Civil List pays for things like staff salaries and has been frozen at an annual £7.9 million by the government nearly 10 years ago. It is due to be open for renegotiation in 2010.

Once £35 million, the reserve fund has now declined to £14 million and Buckingham Palace estimates it will have disappeared by the end of 2011. A senior household official told to the daily newspaper The Telegraph that on current spending, the Queen will be unable to balance the books in two years time.

"The Queen is naturally very thrifty," the official told the newspaper.

But accounts show travel expenses for the Royal family rose to £6.5 million in the last financial year, while salaries amounted to £9.9 million, administration £1.5 million, housekeeping and furnishings £700,000, £1.1 million was spent on catering and hospitality and £600,000 on garden parties.

AP Queen Elizabeth II

The report also disclosed that the backlog of repairs on the royal estate will increase to £40 million from £32 million within the next decade unless the government raises the £15 million maintenance budget by 2011 when the new Civil List will come into effect.

Key projects, including the $13 million renewal of lead and slate roofs at Buckingham Palace and Windsor Castle, a £4.5 million refurbishment of state rooms at both properties, including replacements to the palaces' heating, water and electricity services, now face a 10-year wait, Reuters reported.

Royal officials are negotiating with the government to increase support to £19 million a year to avoid the backlog, a senior Buckingham Palace source told the news agency.

But as the recession persists in Britain and tax payers continue to show their displeasure at where their taxes are going, an imminent refurbishment is unlikely. Earlier this month, a parliamentary committee suggested the Queen open Buckingham Palace more often to tourists to help raise money for repairs, but the Queen refused the proposal.

© 2012 CNBC.com