July 20th 2023.
The Treasury has announced a drastic reduction to the Sovereign Grant, the King’s allowance to fund his official duties. The Grant will now be just 12% of the Crown Estate’s net profits, totaling £86.3 million - a decrease of £24 million for the coming year, and a total of £130 million lower in both 2025 and 2026 than if the rate was kept at 25%. This money will now be used for public services instead.
The cut in the Grant is the result of a review by Royal Trustees, which includes Prime Minister Rishi Sunak, Chancellor Jeremy Hunt, and Keeper of the Privy Purse Sir Michael Stevens. The review was made public on Thursday.
The Crown Estate’s profits from offshore wind deals were boosted last year, making a total of £442.6 million - £130 million more than the previous year. As a result, the late Queen Elizabeth II’s death and the increasing cost of living caused officials to dip £20.7 million into their reserves. Additionally, the Platinum Jubilee celebrations cost a further £700,000.
Despite the costs, the amount spent on the royals remained static at £86.3 million. Sir Michael Stevens commented on the ‘exceptional year’ in which the nation has not witnessed for seven decades. He added that payroll costs rose significantly, with lower-paid staff given a pay rise of about 5-6%. Additionally, housekeeping and hospitality expenses increased from £1.3 million to £2.4 million, and utility bills rose from £3.2 million to £4.5 million.
The palace also generated £9.8 million in income, primarily from rental agreements and the annual summer opening to the public. Overall, these changes have had a significant impact on the royal budget, and how the Sovereign Grant will be used in the upcoming years.
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