King Charles is due to receive an increase in the “Sovereign Grant” of hundreds of millions due to a windfall profit. This is the amount given to fulfill his public duties and is financed from the profits made by the “Crown Estate”. In a quirk of British law, the Crown owns the seabed off the coast and there have recently been three big leases sold for windfarm use. Instead of taking the 25% of the windfarm windfall profits, he has said this should be used “for the public good”. How this will be achieved will be decided by the Government.
How the public duties of the Crown are financed has changed
On 1 April 2012 the arrangements for the funding of The Queen’s Official Duties changed. The new system of funding, referred to as the ‘Sovereign Grant’, replaces the Civil List and the three Grants-in-Aid (for Royal Travel, Communications and Information, and the Maintenance of the Royal Palaces) with a single, consolidated annual grant.
The Sovereign Grant is designed to be a more permanent arrangement than the old Civil List system, which was reign-specific. Funding for the Sovereign Grant comes from a percentage of the profits of the Crown Estate revenue (initially set at 15%). The grant will be reviewed every five years by the Royal Trustees (the Prime Minister, the Chancellor of the Exchequer and the Keeper of the Privy Purse), and annual financial accounts will continue to be prepared and published by the Keeper of the Privy Purse.
The new system provides for the Royal Household to be subject to the same audit scrutiny as other government expenditure, via the National Audit Office and the Public Accounts Committee
Queen Elizabeth had negotiated a temporary increase from 15% to 25% to pay for the repairs needed in Buckingham Palace. The latest accounts (.pdf) show the “core grant” for public duties in 21-22 was £51.8 million with an additional £34.5 million for Buck House.
These profits are now expected to be significantly boosted by deals to develop six new offshore wind farms, collectively worth £1bn per year for at least three years in fees from firms buying the rights to build wind farms on Crown Estate offshore sites.
This would have produced a very significant increase in the amount going into the Sovereign Grant, which could have proved embarrassing against a backdrop of financial pressures on the public.
Buckingham Palace says in light of the "offshore energy windfall", the King wants to reduce the slice of profits used to calculate the grant.
The King has already expressed a wish to slim down the staffing needed for his duties. The number of “working Royals” has already been reduced although there may be some “churn”. Anne, the Princess Royal is one of the hardest working with more engagements than there are days in a year. (These include travelling round the country meeting the public or opening hospitals etc). A lot is connected with charities they support, including by drawing attention to their work by visiting. The main picture is of Charles formally “opening” a “Men’s Shed” in Aberdeenshire, Scotland. (The name is a bit misleading as it is more of a community centre for the local charities and the mental welfare aspect, the “men’s shed” movement, is the nominal landlord.) Part of the purpose of these engagements is to give the often volunteer workers a boost — an upmarket “thank you for your service”.
GRA staff said the "really special" meeting would keep morale high at the charity for years to come.
Laura McNeil, fundraising and retail support at GRA, said: "It was nice to be recognised among only nine groups as an important part of tackling poverty in Aberdeenshire.
"That was really exciting.
"To have a special time like that with King Charles, where he is recognising the work we are doing is really special for us.
Such visits are part of the duties of any Head of State. Both the King and US President lay wreaths on Memorial days. Similarly they formally receive other HoS at either the White House or Buckingham Palace with an elegant diner. For elected HoS visits to, say, a bridge building project, has a political end of increasing votes for either him or his party. As a Constitutional Monarch, Charles cannot express political opinions however he can signal his concerns about the nation through his charitable interests.
While outside the UK he is best known for his environmental interests, he has long had a concern over disadvantaged young people. He established his Prince’s Trust with his severance pay from the Navy when he left for full time royal duties. Since then+ it has helped over a million young people progress their ambitions. As Prince of Wales, Charles was free to make speeches expressing concern over the lack of training opportunities, etc which the Trust help fill. Now as King, that would be considered a political statement, i.e. encouraging a change in government policy. He can however visit charities and organisations and praise their work in speeches.
So the declining of the £250 million a year windfall is an expression of concern over the financial worries of the people in the current near-recession. Charles has already expressed concern for those in fuel poverty by donating the money included in condolence cards for his mother to charities helping. He has also given from his own trust monies to buy hundreds of fridges and freezers so food banks can store donations needing them. Direct lobbying for action would be part of the King’s weekly “Audience” with the Prime Minister or possibly within meetings of the Privy Council.
When Charles reads the “King’s Speech” at the State Opening of Parliament, it is the government’s legislative agenda and written by the Cabinet Office. It’s this separation of the functions of Head of State and Head of Government that differentiates the US and French Presidential systems. Most others have a ceremonial President and an equivalent of a Prime Minister as Head of Government. In Ireland there is the Taoiseach and in Germany the Chancellor.
Without the means to openly lobby for, say, increases in welfare benefits; he can express his concerns about fuel and food poverty through highlighting the work of charities dealing with the problem. Charles was already looking to reduce the Sovereign Grant and this windfall is another way he wants the government to use it “for the public good”.