Britain's Queen Elizabeth II down to her last million; palaces crumbling

Staff catch rain in buckets to protect art and antiquities, while the Queen's old boilers were contributing to bills of 774,000 pounds a year, the report said.

"The household must get a much firmer grip on how it plans to address its maintenance backlog. It has not even costed the repair works needed to bring the estate back to an acceptable condition. Again, the treasury has an oversight role here," Hodge said.

In April 2012 the Sovereign Grant replaced the old way of funding the Royal family through the Civil List and various government grants.

The Sovereign Grant represents 15 per cent of the net surplus income of the Crown Estate, land holdings that generate money for the treasury.

A Buckingham Palace spokesman said the sovereign grant had made the Queen's funding "more transparent and scrutinised" and was resulting in a "more efficient use of public funds".

He said repairing the palaces was a "significant financial priority" and that the Royal household had almost doubled its income to 11.6 million pounds since 2007. The Queen receives 31 million pounds a year from taxpayers.

In the report, the PAC suggests that the Royals need to both cut their costs and increase their income. It points out that last year the Royal Household's gas consumption rose by 14 per cent and the waste it generated by 9 per cent.

It pointedly asks why Buckingham Palace cannot be open to the public for longer, potentially increasing revenues.