Sovereign Grant changed after Crown Estate sees profits surge

The Sovereign Grant has been changed after the Crown Estate saw a surge in profits due to offshore wind projects.

The fund, used to finance the monarchy’s official duties, will be 12% of the Crown Estate’s net profits next year – down from 25%, the Treasury has said.

Cutting the rate to 12% is expected to reduce the Sovereign Grant by £24m next year – and £130m lower in 2025 to 2026 – when compared with the rate staying at 25%.

This means the total Sovereign Grant will remain flat at £86.3m.

Part of it is expected to go towards the reservicing of Buckingham Palace, works aimed at preventing a serious risk of fire, floods and damage to the building.

Read more:

Queen denied annual allowance for official duties


Heating at Buckingham Palace turned down to cut emissions and save money

King Charles III and Queen Camilla are pictured in the Throne Room at Buckingham Palace, London

Image: King Charles III and Queen Camilla during the Coronation

The reduction follows a review by Royal Trustees – which include Prime Minister Rishi Sunak, Chancellor Jeremy Hunt and Keeper of the Privy Purse Sir Michael Stevens.

It also comes at a time when the rest of the public is feeling the pressure of rising energy bills and soaring living costs.

Mr Hunt said: “The new Sovereign Grant rate reflects the unexpected significant increase in The Crown Estate’s net profits from offshore wind developments, while providing enough funding for official business as well as essential property maintenance, including completing the 10-year reservicing of Buckingham Palace.”

The King had asked in January for the wind farm profits to be used for the wider public good instead.

What is the Sovereign Grant?

The Sovereign Grant is a single grant supporting the monarch’s official business as head of state and covers central staff costs and running expenses of the royal household – including official receptions and parties.

It also funds maintenance of royal palaces in England and travel costs for engagements and visits.

In exchange, the King gives revenue from the Crown Estate to the government.

Analysis: A multimillion-pound boost for the Treasury

Firstly, it’s important to note that the amount of taxpayer money the King receives isn’t about to fall.

That’s staying static at £86.3m a year.

What’s happening here is all about the Crown Estate and wind farms.

The Crown Estate is the vast portfolio of land and assets that belongs to the reigning monarch. That portfolio includes most of the seabed around the UK.

Although it all belongs to the King, the net profits go straight to the Treasury, which then gives a percentage back to the monarch to pay for his official duties.

That percentage was set at 25%, which includes an extra 10% to pay for the renovation of Buckingham Palace.

The reason that percentage is dropping to 12% is because of swelling income from offshore wind farm projects, which are significantly increasing Crown Estate profits.

Back in January, the King asked his treasurer – also known as the Keeper of the Privy Purse – to tell the Treasury he wanted profits from wind energy to be used for “the wider public good”.

Put simply, the King’s income from the Crown Estate stays the same, but the Treasury gets a multimillion-pound boost.

You might also like...