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, 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.
King Charles III and Queen Camilla during the Coronation
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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 ten 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.
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