King Charles and the royal family are set to benefit from a surprise, significant increase in Crown Estate profits. The news was released by the U.K. Treasury on Thursday in the Report of the Royal Trustees on the Sovereign Grant Review 2023.
A brief outlined that the Sovereign Grant will be cut from 25% to 12% for 2024-2025 onwards, “reflecting a significant increase in Crown Estate Profits from offshore wind developments.”
“This money will instead be used to fund vital public services, for the benefit of the nation,” the brief stated.
Despite the percentage cut, the surge in profits generated by the Crown Estate means the royal family will actually receive more money. The increase will come from offshore wind developments over the next few years.
According to The Guardian, public funding for the monarchy will bump up 45% starting in 2025, from about £86 million ($110 million) to nearly £125 million ($160 million) starting in 2025.
The Sovereign Grant is the taxpayer-funded settlement given to the British royal family for official duties and is linked to the Crown Estate, calculated from profits made in the previous two years.
Though the Sovereign Grant will stay the same next year and the royals will receive £86 million ($110,974,896) the sum jumps to £124.8 million ($160,483,440) in 2025 and to £124.8 million ($162,025,920) in 2026, The Guardian noted.
A Buckingham Palace spokesperson noted to The Guardian that the increase was “temporary” for the financial years of 2025 to 2027 amid the ongoing renovation work on the Buckingham Palace, The Crown Estate was established by Parliament in 1961, and its lucrative portfolio includes land, coastline and seabed throughout the U.K.
The Crown Estate is not privately owned by the sovereign and it operates as an independent, commercial business, its FAQ explains.
The current Royal Trustees are Prime Minister Rishi Sunak, Chancellor Jeremy Hunt and Sir Michael Stevens, Keeper of the Privy Purse. The review considered the Royal Household’s current income and expenses, the level of the Sovereign Grant Reserve and the costs of major projects ahead, the brief said.
The royal family’s funding will never falter from previous years due to an unusual mechanism. Thanks to the “golden ratchet clause” in the Sovereign Grant Act of 2011, the royals will never receive less than the previous year.
King Charles acknowledged the cost of living crisis in his first Christmas broadcast as sovereign in December and gave back to the public the following month.
In January, the 74-year-old King redirected $1.2 billion in profits from wind farms to the British government instead of the royal family.
The royals were set to receive a potential boost following an expected surge in profits from six wind farms owned by the Crown Estate around the British coast, and King Charles instead made the money available to the treasury.
Last month, courtiers said that the King had to dip into cash reserves during an expensive royal year. In late June, the Royal Household published its annual statement, covering the financial year from April 2022 to March 2023.
The report showed that $136 million was spent, a 5% rise compared to the year before. The Sovereign Grant covered $108.9 million, while the rest was pulled from reserve funds.
As explained in a statement on the royal family’s official website, “This year’s statement covers a period of significant transition for the Royal Household, reflecting the Platinum Jubilee and State Funeral of Queen Elizabeth II, the Accession of The King, the lead up to Their Majesties’ Coronation, and the coming together of staff from two Households.”
Continued renovations on Buckingham Palace also added to the increased costs.
Queen Elizabeth’s Platinum Jubilee celebrations — including the four days of festivities in June 2022 including Trooping the Colour, the Platinum Party at the Palace concert and the Platinum Jubilee Pageant — marked her historic 70th year on the throne.
The palace spent about $883,000 on the related events, the Sovereign Grant report showed.
The most expensive event of the year was the funeral of Queen Elizabeth in September, costing the Sovereign Grant about $2 million.