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Queen Elizabeth takes a spending hit

As the axe fell on government spending Wednesday even Queen Elizabeth felt the pain.

Outlining some of the biggest government budget cuts in a generation, Chancellor George Osborne said the queen had agreed to do her bit.

She had "graciously" given the nod to a freeze in the palace's cash allowance, known as the Civil List and funded by the taxpayer, for a year.

The bulk of the grant goes toward paying staff, with the rest spent on items like stationery, laundry and garden parties.

"Going forward, she has also agreed that total Royal Household spending will fall by 14 percent in 2012-2013 while grants to the household will be frozen in cash terms," Osborne told parliament.

Buckingham Palace estimates the annual cost of the royals to the taxpayer is about 38 million pounds, but that doesn't include significant security costs.

After that date a new funding scheme will give the palace a portion of the cash generated from the multi-billion pound Crown Estate property portfolio, royal in name only and owned by the government.

"The Household obviously has some challenging times ahead, like many areas of government," a palace spokesman said.

But he said the queen welcomed the new funding mechanism, known as the Sovereign Support Grant, "as a modern, transparent and simpler way of funding the Head of State."

The monarch, under pressure to reduce costs had already agreed to the 7.9 million pound ($12.42 million) cost of the Civil List being frozen for 20 years from 1990. That arrangement expired this year.

In October, Buckingham Palace announced it had scrapped its planned Christmas party after it was deemed inappropriate to celebrate as millions of ordinary Britons feel the pinch from tough economic times.

British media reported that the Christmas shindig, planned for December 13, would have cost 50,000 pounds and was to have been enjoyed by 1,200 guests.

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