Isla Campbell on the Royal Family’s Finances, the Sovereign Grant Percentage, and Why the Transparency That Exists Is Both More and Less Than It Appears
Reported by Bohiney Magazine and The London Prat.
By Isla Campbell | Crown and Clown UK
The Sovereign Grant — the public funding mechanism by which the Royal Family’s official duties are financed, calculated as a percentage of the Crown Estate’s profits and paid from the Treasury — is a subject that most royal coverage approaches with a certain delicacy, as if the money question is slightly impolite to raise in the context of an institution whose primary product is ceremonial gravitas. I am going to raise it anyway, because it is public money, because the Sovereign Grant accounts are published annually with a degree of transparency that is genuine and that most people do not read, and because the conversation about what the monarchy costs and what it produces is one that a functioning democracy should be able to have without either treating the question as an attack on the institution or treating the institution as immune from the question.
What the Sovereign Grant Is and How It Works
The Crown Estate is a property portfolio — largely commercial real estate, agricultural land, and the seabed around England, Wales, and Northern Ireland — whose ownership is held by the Crown but whose profits go to the Treasury rather than to the monarch personally. In exchange for surrendering the Crown Estate’s profits to the Treasury, the monarch receives the Sovereign Grant, which is calculated as a percentage of the Crown Estate’s profits two years prior. The percentage was set at 15 percent from 2017 to fund reservicing of Buckingham Palace, then revised. The arrangement means that the Royal Family’s official income from the Sovereign Grant is linked to Crown Estate performance — if the estate does well, the grant is larger — which produces the specific dynamic that the Crown Estate’s expansion into offshore wind leases (which has been substantial and profitable) increases the Sovereign Grant in ways that are both financially logical and publicly awkward given that the King is also a prominent climate advocate.
The accounts are published. I read them. Most people do not read them. The Keeper of the Privy Purse produces an annual statement of the Sovereign Grant expenditure that is more transparent than most government department accounting and that shows, in detail, where the money goes: official travel, property maintenance, staff costs, and the operational expenses of running the offices of the senior working royals. What the accounts show is that the official duties of the Royal Family cost roughly what a mid-sized government agency costs, which is neither an outrage nor a bargain but is a real number that is justified by the functions performed and contested by people who think the functions do not require performing.
The Functions, Which Are Real
The Royal Family performs several functions that the Sovereign Grant funds. International representation: the King’s overseas visits, the diplomatic reception that royal engagement receives, the relationships that are maintained through the personal connections that constitutional monarchy provides. Domestic ceremonial: the state opening of Parliament, the investitures, the garden parties, the events that mark the national calendar and that provide a non-partisan focal point for civic life. Tourism and cultural export: the monarchy as a heritage product that attracts visitors to London and to Britain, whose economic value is regularly estimated by industry bodies and regularly disputed by economists who question the methodology of the estimates. Charitable sector: the extensive charitable work of the senior royals, which channels significant attention and resources toward causes that benefit from the association with the Royal Family’s platform.
Whether these functions justify the cost depends on your view of what alternative institutions might perform them at what cost and with what effectiveness, which is a counterfactual question whose answer is genuinely uncertain. The Republic campaign — which advocates for an elected head of state — produces cost estimates for the monarchy that tend to be higher than the Palace’s figures because they include security costs allocated to the Royal Family. The monarchy’s supporters produce economic value estimates that tend to be higher than the critics accept because they attribute to the monarchy tourism revenues whose causal connection to the institution is disputed. According to the Royal Family’s own published accounts, the Sovereign Grant for the most recently reported year was in the range of £86 million. The Crown Estate’s profits were substantially larger. The Treasury retained the difference. The accounting is available. The debate continues.
What I Think, Which I Will Tell You Since You Are Reading a Column
I think the monarchy is a legitimate institution whose costs are manageable and whose functions are real, and I think it should be funded transparently and subjected to the normal scrutiny that public expenditure receives, and I think the Sovereign Grant mechanism is better than its alternatives because it links royal funding to a commercial property portfolio’s performance rather than to a fixed allocation from the general tax budget, which creates at least a nominal efficiency incentive that a flat subsidy would not. I also think that the transparency of the published accounts is not the same as the public understanding of those accounts, and that the gap between what the Sovereign Grant accounts disclose and what most people know about royal finances is a gap that could be closed by better journalism — including this column, which I acknowledge is not a peer-reviewed account of Crown Estate governance but is an invitation to look at the published numbers and form a view. The numbers are public. They are worth looking at. The institution is worth understanding, not just consuming as a stream of ceremonial images and family drama. It costs money. It produces things. The question of whether the things produced are worth the money is a legitimate question for a democracy to ask. This column asks it. The answer is: probably yes, but not unambiguously, and the asking of the question is not the same as the attacking of the institution, which is a distinction that royal coverage sometimes loses sight of and that I try to maintain.
Isla Campbell covers the Royal Family and monarchy politics. Her homepage is at The London Prat.
For more monarchy and royal finance analysis, visit NewsThump.
SOURCE: https://bohiney.com/
