Core grant for funding of the monarchy to increase to £100 million a year

Laura Elston, Press Association Court Correspondent

The core funding of the monarchy is to jump to £100 million a year, almost doubling in the space of three years.

Under a new formula for calculating the Sovereign Grant, which pays for the royal family’s official duties and the upkeep of royal palaces, the Royal Household is to receive £99.9 million as a core grant in 2027-28, a jump of £48.1 million compared with the core grant of £51.8 million in 2024-25.

The change was decided upon by Royal Trustees – outgoing Prime Minister Sir Keir Starmer, Chancellor Rachel Reeves, and the King’s Keeper of the Privy Purse and Treasurer James Chalmers.

The boost will be used to pay for a backlog in maintenance at occupied royal palaces, strengthen cyber security at royal residences, and for the installation of energy efficient heating systems, with £11 million set aside to replace boilers nearing the end of their life at Windsor Castle.

Republic, which campaigns for an elected head of state, criticised the announcement, with chief executive Graham Smith branding royal finances “out of control”.

Keeper of the Privy Purse Mr Chalmers insisted the funding was “not a blank cheque” and there were strict value for money requirements.

“Expenditure is governed by the same standards and disciplines as any publicly funded body, with strict value-for-money requirements, detailed planning, multi-year strategies, independent audit, and Treasury oversight,” he said.

A temporary decade-long uplift to the Sovereign Grant was put in place from 2017 to pay for the £369 million overhaul of Buckingham Palace, with an extra reservicing portion grant added to the core grant for 10 years.

The refurbishments are coming to an end in 2027, when the annual overall grant will fall from £137.9 million, which includes both core funding and the Buckingham Palace renovations funds, in 2026-27, to a core funding of £99.9 million in 2027-28.

‘Appropriately supported’

Mr Chalmers said: “This year we are announcing that the Sovereign Grant will be reduced in 2027-28 for the first time since its inception.”

He added: “In line with His Majesty’s clear wishes, it will be reduced to £100 million, a level that the Royal Trustees have determined will ensure the work of our Head of State and the wider Household can be properly and appropriately supported in the nation’s best interests.”

The new figure will be, however, almost double the core grant of £51.8 million in 2024-25, and £27.8 million above the core grant of £72.1 million in 2025-26.

The official funding of around £100 million a year is set to continue for a period of five years, until the next review, because Crown Estate profits, which benefited previously from a major boost, are expected to be “significantly impacted” as Offshore Wind option fees cease, the Royal Household’s report on royal finances revealed.

More than £28.2 million was invested in ongoing property maintenance in 2025-26 to preserve historic buildings other than Buckingham Palace – a rise of around £10 million, the Sovereign Grant accounts showed.

In 2016-17, before the start of the Palace renovations, the Sovereign Grant for official duties and general official residence upkeep was £42.8 million – a figure, which according to the Bank of England inflation calculator, would today be worth £60.4 million.

Crown Estate net profits

The Royal Trustees decided in their review that the Sovereign Grant will be formed of 20.5% of Crown Estate net profits from 2027-28, rather than current rate of 12%, for five years.

Mr Chalmers added: “It is important to emphasise that the Sovereign Grant does not provide personal income to members of the Royal Family.

“It funds the work of the institution – not private lives or private wealth.”

The Sovereign Grant is met from public funds in exchange for the King’s surrender of the revenue from the Crown Estate, two years in arrears.

The Crown Estate’s 2025-26 annual accounts, published on Thursday, showed a net revenue profit of £487 million.

The Treasury said the recalculation of the Sovereign Grant Bill would ensure “a sustainable and proportionate funding framework going forward”.

Mr Smith, of Republic, said: “Royal finances are out of control, and parliament needs to act to slash the annual budget to below £10 million.”

He added: “Despite ongoing concerns about the huge cost of the royals, the grant will remain hugely inflated on its initial level of £31 million in 2012. If that had risen by inflation the grant would stand at £45 million, not £100 million.”