New legislation has been brought forward to restructure the funding of the Monarchy, setting the Sovereign Grant at £99.9 million for the 2027-28 financial year.
The Sovereign Grant Bill identifies this new funding level as a “reset” following a period of higher expenditure. The figure marks a significant decrease from the £137.9 million allocated for 2026-27.
This reduction is primarily linked to the conclusion of the 10-year Buckingham Palace Reservicing Programme. The major project, which involved extensive updates to the palace’s plumbing, cabling, and heating systems, required temporary increases in funding that are no longer deemed necessary now that the works are reaching completion.
Amendments to the Sovereign Grant Act
To facilitate the planned reduction in funding, the bill will amend the Sovereign Grant Act 2011. Under the existing 2011 legislation, a “ratchet” mechanism was in place which effectively prevented the grant from decreasing from one year to the next.
The new bill removes this restriction, granting the government the legal flexibility to reduce the grant amount year-on-year when appropriate. Further information on legislative changes and parliamentary briefings is available via the House of Commons Library.
New Calculation Formula
The method used to calculate the grant is also being overhauled. For the five-year period between 2027-28 and 2031-32, the “reference percentage” of Crown Estate profits used to determine the grant will be set at 20.5%.
This is a notable increase from the previous 12% rate. However, the total cash grant is falling because of the way Crown Estate profits are projected. While income from offshore wind farm leases has seen significant peaks, the adjustment to 20.5% is intended to maintain a stable level of funding for official royal duties and the maintenance of occupied Royal Palaces while reflecting the overall change in the Crown Estate’s financial portfolio.
