Funding from the British government to support the official duties of the monarchy will be reduced to 12 percent of the Crown Estate’s net profit next year, down from 25 percent.
This drop in the percentage of profits handed over to the monarch, revealed in a review by the royal secretaries published on Thursday, means the royal family budget will be £24m smaller in 2024 than it would have been, and £130m less in each of the following two years.
The Treasury Department said the money saved from the grant cut “will instead be used to fund vital public services, for the benefit of the nation.”
King Charles announced in January that the royal family would redirect profits from the Crown Estate’s lucrative new wind farm deals into the “wider public good”.
Last month, the Financial Times revealed that offshore wind development projects had led to a 42 per cent increase in profits for the property, which owns the sea floor surrounding Britain up to 12 nautical miles.
Crown Properties said it made a profit of £442.6m in the last financial year, an increase of £129.9m on the previous year.
Option fee income from six offshore wind farm licenses, which came into effect at the start of the year, paid for much of the increase and offset an overall decline in the British monarchy’s legacy property portfolio.
British Prime Minister Rishi Sunak, Chancellor Jeremy Hunt and Secret Purse Keeper Sir Michael Stephens – who collectively make up the royal trustees – have taken the decision to recalculate the Sovereign Grant in response to the windfall.
Earnings projections in the Trustees Review show that the grant is expected to increase in 2025 to £124.8m, and to remain at a similar level in 2026, when it is expected to reach £126m.
The review said the trustees felt such a rise would be “appropriate” given “several previous years of steady grant levels” which had “restricted” the maintenance of the royal family’s property portfolio and the renovation of Buckingham Palace.
The grant for next year will remain steady at £86.3m, with part of the money going towards a 10-year project to renovate Buckingham Palace, due for completion in 2027.
The next recalculation of the Sovereign Grant, which reduces it further, is expected to take place after the completion of the renewal.
“For nearly 300 years, kings and queens have ceded the profits of ownership of the Crown to the British people, and in return the government has provided a fraction of that to adequately support the monarch in the discharge of his official duties,” Hunt said.
The new sovereign grant rate “reflects the unexpectedly large increase in Crown Properties’ net profit from offshore wind developments,” the chancellor said.
The property finance system was reformed in 2011 by then Prime Minister David Cameron. The Sovereign Grant, which tied royal finances to the profits of the Crown Estate, replaced fixed annuities approved by the MPs and reviewed each decade.
The Crown Estate is a public corporation that manages The King’s estate portfolio worth billions of pounds. It is administered independently of the king and the government.
