The Sovereign Grant Bill specifies the amount of the grant for the 2027-28 financial year at £99.9 million, a decrease from the £137.9 million allocated for 2026-27.
New powers to reduce funding
One of the most significant changes in the Bill is the removal of the “ratchet” mechanism, often referred to as the “golden rule.” Under the Sovereign Grant Act 2011, the grant was previously restricted so that it could not be lower than the amount provided in the preceding year.
The new Bill introduces a mechanism that allows the grant to be reduced from one year to the next for the first time. This gives the Treasury greater flexibility to adjust funding based on the monarchy’s actual requirements. According to the House of Commons Library, this allows for a formal reset of the grant.
The Crown Estate link
While the total amount is falling, the formula used to calculate the grant is being adjusted. The Bill sets a new “reference percentage” of 20.5% of the net profits from the Crown Estate.
This percentage is intended to stabilise funding. Profits from the Crown Estate have seen a significant windfall in recent years, largely driven by offshore wind farm developments. By setting the percentage at 20.5%, the government aims to ensure the Royal Household receives an appropriate level of funding as these temporary profit surges level off.
The calculations and recommendations for these changes are overseen by the Royal Trustees. This body consists of the Prime Minister, the Chancellor of the Exchequer, and the Keeper of the Privy Purse. Their latest review of the funding structure is available via GOV.UK.
What the Grant covers
The Sovereign Grant is the annual payment from the government to the Monarch to fund official duties. It is not used for the King’s private income or personal wealth, which are separate.
The funds are strictly allocated to specific areas of royal operation:
- Official royal engagements, communications, and staffing.
- International and domestic travel for official business.
- The maintenance of occupied Royal Palaces, including Buckingham Palace, St James’s Palace, and Windsor Castle.
