Simply - if Beatrice and Eugenie aren't going to do the work currently done by the Gloucesters and Kents and even their own uncle and aunt then those duties won't be done by royals.
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Sometimes I do wonder why the minor Royals do Royal duties at all. Most of the stuff is pretty boring anyway, then there is the time-consuming travel when the event is not in London. As for Royal PR: They are never recogniced for their work in the national papers anyway, must be glad to be mentioned in the Popplebury Examiner's local part... Okay, if a Royal gets bitten by a dog (or even better, as Camilla said, when a Royal bites a dog) then it might make the Daily Mail or the Telegraph but apart from extraordinary circumstances most Royal engagements are only mentioned in the Court Circular. While Pippa Middleton only needs a well-formed derriere to be in the news daily. That must suck.
Plus the parliament wants to pay less and less for the Royals, even though they grabbed the Crown Estate in exchange of the Civil List and now keep the surplus of the Crown Estate while not paying most Royals anymore. Ok, that is about to change but I'm sure once the financial situation of the RF has been cleared with them getting back part of the income of the Crown Estate instead of the Civil list we'll see an actual change when it comes to Royal duties.
But I doubt Charles thinks of it as a "downgrading" or "reducing" of the RF. Im sure he does not think of taking away Royal titles but he surely thinks about allowing most Royals to retire into their private lifes. Think Lady Ella Windsor: life as a journalist with a Royal background is much more fun than being on the Royal circuit opening hospital units in the deepest countryside. And I doubt Britain will change: the Windsors and the Mountbatten-Windsors will always be considered Royal and on top of society, HRH or not.
So why should they hang on to Royal duties when the "firm" does not reap the fruits of their work in form of public recognition while they could live their own life as they want on still being high society?