Legislation
The Sovereign Grant Act came into force on 1 April 2012, the start of the financial year, [5] and changed the arrangements for the funding of Queen Elizabeth II's official duties. The Act consolidated four funding sources that the monarch received into a single payment, called the Sovereign Grant. The current system is intended to be a more permanent arrangement than the previous one, which was reign-specific. [6]
The Sovereign Grant is paid annually by HM Treasury at a value indexed as a percentage of the revenues from the Crown Estate and other revenues in the financial year two years earlier. [7] It is based on an index percentage that was initially set at 15% [8] and this is reviewed every five years by the Royal Trustees (the Prime Minister, the Chancellor of the Exchequer and the Keeper of the Privy Purse).
Any unspent Sovereign Grant is put into a reserve fund. The level of the Sovereign Grant is protected by law from decreasing as a result of falling Crown Estate revenues. In addition, the legislation requires that the Sovereign Grant shall not rise to such a level that the Reserve Fund becomes more than half the level of annual expenditure. [7] Annual financial accounts are published by the Keeper of the Privy Purse [6] and audited by the National Audit Office, making the Sovereign Grant more accountable than its predecessor. [9] Funding to the Royal Household is treated similarly to funding for other government departments, unlike previous Civil List payments.
Finances
Since its inception, the Sovereign Grant has often risen each year at a rate higher than the rate of inflation. About a third of the grant is used to tackle the backlog in property maintenance at the royal palaces. Following the 2016 review of the percentage of the Crown Estate income used to calculate the grant, it was announced that a temporary increase in the Sovereign Grant would be used to fund a £369 million refurbishment of Buckingham Palace, subject to parliamentary approval. [10] The trustees recommended that the percentage should rise to 25% for the 10 years during which the work would take place, and that the grant should then be returned to 15% when building work is finished in 2027. This was expected to result in a 66% rise in the grant in 2017–18. [11] The increase in the grant to 25% was approved by Parliament in March 2017. [12] A decrease in the Crown Estate's rental income during the COVID-19 pandemic led to the first use of the provision that prevents the value of the Sovereign Grant from falling, with the Treasury committing to make up the shortfall. [13]
After the accession of King Charles III in September 2022, the new king approved a Statutory Order in Council to allow the existing Sovereign Grant provisions to continue throughout his reign. Prior to the Sovereign Grant Act, primary legislation had been required for the continuance of the Civil List. [14] In January 2023 the Keeper of the Privy Purse, on behalf of the King, asked the government to reduce the percentage used to calculate the sovereign grant so that the total does not include the income from new offshore wind power leases, calculated to be worth around £1 billion annually to the Crown Estate. This request was said by the King to be due to his desire that the money could instead be used for the "wider public good". [15] In July 2023, due to the Crown Estate's sale of wind farm leases dramatically increasing the money going to the Treasury, the government announced that the grant would be 12% of the Crown Estate's net profits in the following year, down from 25%, while maintaining the same level of payment in pounds. [16]
In July 2024 it was announced that the annual profits from the Crown Estate had risen again due to the proceeds from offshore wind projects, resulting in an annual increase of £45 million to the Sovereign Grant for 2025–26. The Keeper of the Privy Purse said the increase will be used to complete the renovation of Buckingham Palace, and that once this was accomplished: "a reduction in the absolute amount of the sovereign grant will be sought as part of the royal trustees review in 2026–27, through primary legislation". [17]
| Year | Grant (£m) | % change | sources |
|---|
| 2012–13 | 31.0 | — | |
| 2013–14 | 36.1 | +16.5% | [18] |
| 2014–15 | 37.9 | +5.0% | [9] |
| 2015–16 | 40.0 | +5.5% | [19] |
| 2016–17 | 42.8 | +7.0% | [20] |
| 2017–18 | 76.1 | +77.8% | [21] |
| 2018–19 | 82.2 | +8.0% | [22] |
| 2019–20 | 82.4 | ±0.0% | [23] |
| 2020–21 | 85.9 | +4.2% | [24] |
| 2021–22 | 86.3 | +0.5% | [25] |
| 2022–23 | 86.3 | ±0.0% | [26] |
| 2023–24 | 86.3 | ±0.0% | [27] |
| 2024–25 | 86.3 | ±0.0% | [28] |
| 2025–26 | 132 | ±52.1% | [17] |
The King and the Prince of Wales also receive private income through the Duchy of Lancaster and Duchy of Cornwall. [29]
The Sovereign Grant only accounts for one part of the total cost of running the monarchy. The Sovereign Grant does not cover the costs of police and military security and of armed services ceremonial duties [8] nor does it cover the costs of royal ceremonies or local government costs for royal visits. These are generally paid by government from public tax receipts. [29]
The British royal family comprises King Charles III and his close relations. There is no strict legal or formal definition of who is or is not a member, although the Royal Household has issued different lists outlining who is a part of the royal family. Members often support the monarch in undertaking public engagements, and pursue charitable work and interests. Members of the royal family are regarded as British and world cultural icons.
The monarchy of the United Kingdom, commonly referred to as the British monarchy, is the form of government used by the United Kingdom by which a hereditary monarch reigns as the head of state, with their powers regulated by the British Constitution. The term may also refer to the role of the royal family within the UK's broader political structure. The current monarch is King Charles III, who ascended the throne on 8 September 2022 upon the death of Queen Elizabeth II, his mother.
In the United States, Social Security is the commonly used term for the federal Old-Age, Survivors, and Disability Insurance (OASDI) program and is administered by the Social Security Administration (SSA). The Social Security Act was passed in 1935, and the existing version of the Act, as amended, encompasses several social welfare and social insurance programs.
Escheat is a common law doctrine that transfers the real property of a person who has died without heirs to the crown or state. It serves to ensure that property is not left in "limbo" without recognized ownership. It originally applied to a number of situations where a legal interest in land was destroyed by operation of law, so that the ownership of the land reverted to the immediately superior feudal lord.
His Majesty's Treasury, occasionally referred to as the Exchequer, or more informally the Treasury, is a ministerial department of the Government of the United Kingdom. It is responsible for developing and executing the government's public finance policy and economic policy. The Treasury maintains the Online System for Central Accounting and Reporting, the replacement for the Combined Online Information System, which itemises departmental spending under thousands of category headings, and from which the Whole of Government Accounts annual financial statements are produced.
The Federal Old-Age and Survivors Insurance Trust Fund and Federal Disability Insurance Trust Fund are trust funds that provide for payment of Social Security benefits administered by the United States Social Security Administration.
The Duchy of Lancaster is a private estate of the British sovereign. The estate has its origins in the lands held by the medieval Dukes of Lancaster, which came under the direct control of the monarch when Henry Bolingbroke, the then duke of Lancaster, ascended the throne in 1399. In 1461 King Edward IV confirmed that the Duchy would be inherited by the monarch, but held separately from the Crown Estate, the other assets which belong to the monarch.
A civil list is a list of individuals to whom money is paid by the government, typically for service to the state or as honorary pensions. It is a term especially associated with the United Kingdom, and its former colonies and dominions. It was originally defined as expenses supporting the British monarchy. Denmark also maintains a similar civil list that supports the Danish monarchy.
In many states with political systems derived from the Westminster system, a consolidated fund or consolidated revenue fund is the main bank account of the government. General taxation is taxation paid into the consolidated fund, and general spending is paid out of the consolidated fund.
The Duchy of Cornwall is one of two royal duchies in England, the other being the Duchy of Lancaster. The eldest son of the reigning British monarch obtains possession of the duchy and the title of Duke of Cornwall at birth or when his parent succeeds to the throne, but may not sell assets for personal benefit and has limited rights and income while a minor.
The Privy Purse is the British sovereign's private income, mostly from the Duchy of Lancaster. This amounted to £20.1 million in net income for the year to 31 March 2018.
Crown land, also known as royal domain, is a territorial area belonging to the monarch, who personifies the Crown. It is the equivalent of an entailed estate and passes with the monarchy, being inseparable from it. Today, in Commonwealth realms, crown land is considered public land and is apart from the monarch's private estate.
The Crown Estate is a collection of lands and holdings in the United Kingdom belonging to the British monarch as a corporation sole, making it "the sovereign's public estate", which is neither government property nor part of the monarch's private estate. The Crown Estate in England, Wales, and Northern Ireland is managed by the Crown Estate Commissioners. In Scotland, the Crown Estate is managed by Crown Estate Scotland, since the Scottish estate was devolved in 2017.
Unowned property includes tangible, physical things that are capable of being reduced to being property owned by a person but are not owned by anyone. Bona vacantia is a legal concept associated with the unowned property, which exists in various jurisdictions, with a consequently varying application, but with origins mostly in English law.
Republic is a British republican pressure group advocating the replacement of the United Kingdom's monarchy with a de jure parliamentary republic. It is a member organisation of the Alliance of European Republican Movements and is currently by far the largest organisation solely campaigning for a republican constitution for Britain. Other organisations include No More Royals, Our Republic, Cymru Republic and Labour for a Republic. Republic states that its mission is: "the replacement of hereditary monarchy with a democratic republican constitution". As of 2023, Carol Lever is the current chair of Republic, and Graham Smith is the chief executive.
Under the French monarchy, the Courts of Accounts were sovereign courts specialising in financial affairs. The Court of Accounts in Paris was the oldest and the forerunner of today's French Court of Audit. They oversaw public spending, handled finances, protected crown estates, audited the accounts of crown officials, and adjudicated any related matters of law.
In the UK and certain other Commonwealth countries, King's Consent is a parliamentary convention under which Crown consent is sought whenever a proposed parliamentary bill will affect the Crown's own prerogatives or interests. Prince's Consent is a similar doctrine, under which consent of the Prince of Wales must be obtained for matters relating to the Duchy of Cornwall. King's or Prince's Consent must be obtained early in the legislative process, generally before parliament may debate or vote on a bill. In modern times, following the tenets of constitutional monarchy, consent is granted or withheld as advised by government.
The finances of the British royal family come from a number of sources. The British government supports the monarch and some of his family financially by means of the Sovereign Grant, which is intended to meet the costs of the sovereign's official expenditures. This includes the costs of the upkeep of the various royal residences, staffing, travel and state visits, public engagements, and official entertainment. Other sources of income include revenues from the Duchies of Lancaster and Cornwall, income from assets of other trusts, income from private investments, and a parliamentary annuity.
Crown Estate Scotland is the self-financing public corporation of the Scottish Government responsible for the management of land and property in Scotland owned by the monarch 'in right of the Crown'. It was separated from the Crown Estate of the United Kingdom under the Scotland Act 2016. It is responsible for a range of rural, coastal, urban and marine assets across Scotland. The monarch remains the legal owner of these assets, but they do not form the private property of the monarch, and cannot be sold by the monarch. The primary purpose of Crown Estate Scotland is to invest in property, natural resources, and places to create lasting value for the people of Scotland. Surplus revenue does not belong to the monarch, but is paid to the Scottish Consolidated Fund which in turn helps finance the Scottish Government.
The Ministry of Finance or Ministry of Treasury (MH) is the department of the Government of Spain responsible for planning and carrying out the government policy on public finance and budget. It applies and manages the regional and local financing systems and the provision of information on the economic-financial activity of the different Public Administrations.
