Sovereign Grant Act 2026 sets royal funding at £99.9m for 2027-28

The Sovereign Grant, the public money that pays for the monarch's official duties, will be £99.9 million in 2027-28, down from £137.9 million in 2026-27, after the Sovereign Grant Act 2026 received Royal Assent on Monday 2 November.

The grant is normally worked out by a formula in the Sovereign Grant Act 2011. The Royal Trustees, who are the Prime Minister, the Chancellor of the Exchequer and the Keeper of the Privy Purse, take a set percentage of the Crown Estate's profits and review that percentage at fixed intervals. The 2011 Act did not allow the grant to be set lower than the year before, which is why new legislation was needed to bring it down.

Why it is falling

In 2016 the Trustees of the time raised the percentage to give a temporary boost for a ten-year programme to replace Buckingham Palace's plumbing, electrical cabling and heating, some of which had not been updated since shortly after the Second World War. The final tranche of that money is in the 2026-27 grant.

At the same time, the Crown Estate's profits are expected to fall over the next two years and stay below their 2025-26 level. The Trustees' review, published in June, says this is because large but temporary option fees from offshore wind leasing are ending as those sites move into development. The Crown Estate has also been keeping back more of its revenue to invest in areas such as science, housing and renewable energy.

Main provisions

• The 2027-28 figure: fixed directly in law at £99.9 million.
• The percentage: the share of Crown Estate profits used in the formula goes from 12% to 20.5%, as the Trustees recommended.
• A new Treasury duty: if the formula produces an amount that would leave the grant's Reserve Fund below 10% or above 50% of the resources used that year, and the Trustees cannot adjust it themselves, the Treasury must set a different amount by regulations. An increase needs approval by the House of Commons, while a decrease can be annulled by a Commons vote.
• A new Treasury power: in exceptional circumstances, and after consulting the Trustees, the Treasury can raise the grant for the current year, again only with Commons approval.

The Trustees expect the grant to stay flat at the 2027-28 level for each year of the review period to 2031-32, which they accept means a further fall in real terms each year. The next review is planned for 2031.

The Bill was introduced in the Commons on 1 September and completed all its Commons stages on 14 September. The Lords gave it a second and third reading on 14 October. Most of the Act comes into force on 1 April 2027.