In a significant move, the British government announced on Thursday its decision to reduce the proportion of funds allocated to the royal family from the Crown Estate starting next year. The decision came after King Charles expressed his desire to utilize the surplus windfarm profits for the “wider public good.”
The royals receive an annual “Sovereign Grant,” which covers their household expenses and official travel costs. This grant is funded based on the surplus revenue generated by the Crown Estate, a property portfolio belonging to the monarchy but independently-run with its profits going to the Treasury.
Traditionally, the Sovereign Grant is calculated as 15% of Crown Estate profits. However, due to extensive refurbishment work at Buckingham Palace, last year, the rate was temporarily increased to 25%.
Now, with new deals for offshore wind farms struck in January, the Crown Estate profits are expected to skyrocket by an estimated 900 million pounds annually. King Charles has advocated for this surplus money to be used for the greater benefit of the public.
As a result, the Treasury has decided to reduce the Sovereign Grant to 12% of Crown Estates' profits for the next year. While the grant will remain at 86.3 million pounds, this adjustment means it will be 24 million pounds less than it would have been under the previous rate.
Looking ahead, the Sovereign Grant for the years 2025 and 2026 will see a reduction of 130 million pounds compared to what it would have been if the rate had stayed at 25%. The Treasury clarified that this significant sum “will instead be used to fund vital public services, for the benefit of the nation.”
Explaining the rationale behind the decision, finance minister Jeremy Hunt stated, “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.”
This move marks a notable shift in funding allocation, aiming to channel windfall profits towards supporting crucial public services, aligning with the King's vision for the “wider public good.”
