The Prince Andrew scandal has highlighted fundamental flaws in the funding of the monarchy

Of the many questions raised by the scandal, one of most pressing is who funded his £12 million ($A24. 4 million) settlement with Virginia Giuffre, who accused him of sexual abuse (a claim vehemently denied by the prince).

The MP for the British seat of York, Rachael Maskell, is calling on the royal family to provide “clarity” about whether public money was used to fund the 2022 settlement.

It was widely reported at the time that the late Queen Elizabeth footed the bill using money from her Duchy of Lancaster estate. But is this money public or private? The answer is both – although it’s complicated.

The Duchy of Lancaster is a private estate that provides a source of income for the monarch. Another estate known as the Duchy of Cornwall provides a similar income for the heir to the throne. The duchies are ancient dukedoms, with the former dating from 1265 and the latter 1399.

The estates are vast. The Duchy of Lancaster owns more than 18,000 hectares comprising castles, entire villages, and a hectare of prime central London real estate.

The Duchy of Cornwall is even more expansive. It owns more than 55,000 hectares of land, including the entire Isles of Scilly, 18 homes in central London valued at £124 million alone ($A252 million), and the Oval cricket ground in London. This alone makes the Duke of Cornwall – currently Prince William – the largest private landowner in the UK. But the duchy additionally owns more than 40,000 hectares of coastal foreshore.

Hugh Town on the Isles of Scilly, part of the Prince of Wales’ extensive British landholdings. Photo: Pixabay

The ways in which the duchies make money has often been a source of controversy. Both enjoy a range of property rights, including rights to sell, purchase and lease land and foreshore and rights to minerals. They generate income through collecting royalties resulting from the exercise of these rights.

But they have repeatedly hit the headlines for the wrong reasons. For example, in 2024 the duchies were accused of “ripping off” British public services such as the National Health Service, state schools, prisons and cash-strapped charities through unfair leasing arrangements.

Another way in which the duchies make money is through bona vacantia. This property right allows them, rather than the British Treasury, to collect the money of people who die intestate in their respective regions of Lancashire and Cornwall.

It again is controversial. For example, the duchies claim all the money of the deceased – a contrast with Australia, where the government may use a bona vacantia estate to provide for dependents, whether kindred or not, of the intestate and anyone else whom the intestate might reasonably have been expected to make provision.

The income generated by the duchies is supposed to fund the public work of the monarch and heir respectively. On its website, the royal family claims that Duchy of Lancaster income is “used to meet official expenditure incurred by His Majesty” in the course of his official public duties. Regarding the Duchy of Cornwall, it similarly states that “the income from the duchy estate [is used] to meet the cost of [the Prince of Wales’] public and charitable work”.

It had long been hard to assess the veracity of these claims, as neither duchy publishes a detailed account of how income is spent. However, a 2013 parliamentary inquiry into the Duchy of Cornwall found that the amount spent on “official duties” is, in fact, at the “discretion” of the Prince of Wales and subject to “his own desires and instincts”.

Investigations have found that the King, as Duke of Cornwall, spent less than half of all duchy income on official duties. Instead, he spent a “large” part of the income paying for more than 100 staff, including secretaries, valets, gardeners, private chefs, stable hands and farm workers. Further funding his “far from frugal lifestyle”, he spent millions on a “fleet of luxury vehicles”.

He also provided his wife, now Queen Camilla, with two secretaries, an adviser, driver, and gardener, and paid for her bodyguards, travel, jewellery, clothes, and stabling for her horses. The King also funded the lifestyles of his children, including paying for the Duke and Duchess of Sussex’s new life in California.

The same is true when it comes to the Duchy of Lancaster – which brings us to Prince Andrew. The late queen used Duchy of Lancaster income for payments to members of her family, including her favourite son: She used duchy money to pay him a naval pension and, it seems, funded his £22 million settlement with Giuffre.

But is this money public or private? Arguably it is both: The duchies are private estates, yes, but the income they generate is supposed to fund public duties. So there is a strong argument that Andrew’s settlement was funded with public money – something that will not go down well with the British taxpayer.

Either way, it is hard to justify the existence of these controversial private sources of income today. The income is meant to fund public duties, yet this is exactly what the Sovereign Grant already does.

Since 1688, the British government has provided public funding for the monarchy. Originally this was via what was known as the Civil List. In 2011 it was replaced by the Sovereign Grant, which pays for the cost of things like travelling to and from official royal engagements and maintaining royal residencies used for formal entertaining and ceremonial events. The grant is made up of 15 per cent of whatever the revenue from the Crown Estate – a vast portfolio of land and property owned by the Crown – is that year.

The Sovereign Grant is much more generous than the Civil List – which was a fixed amount – ever was. The value of the Crown Estate has soared in recent years thanks to windfalls from wind and wave power, both of which feature heavily on Crown Estate land. For example, until 2010 the monarchy received £7.9 million ($A16.1 million) from the Civil List annually, yet will receive a whopping £132 million ($A269 million) from the Sovereign Grant in 2025/26.

This is remarkably higher than any other European monarch receives. While most heads of state – be they constitutional monarchs or presidents – receive government funding to support their official duties, the next highest amount received by a comparable European monarch is £40.1 million ($A81.6 million) for the Dutch king.

Because the amount of public funding provided by the Sovereign Grant has grown so much, there is now no longer any need for the duchies.

In the past when the royals received a lesser amount from the Civil List, duchy income was justified as a means of topping up where public funding fell short.

Today it is superfluous – hence why duchy income is increasingly being spent privately on non-official expenditure. No other comparable European monarch or heir is entitled to the sort of secondary income that the duchies provide. When it is used to fund questionable out-of-court settlements like Andrew’s, it is hard to justify why our royals are.

Francesca Jackson is a PhD candidate, Lancaster Law School, Lancaster University