Sovereign Grant Act 2011
The Sovereign Grant Act 2011 (c. 15) is the Act of the Parliament of the United Kingdom which introduced the Sovereign Grant, the payment which is paid annually to the Monarch by the Government. It was the biggest reform to the finances of the British Royal Family since the inception of the Civil List in 1760.
In 1760 King George III surrendered the Crown Estate to the Government in exchange for a fixed annual income from the Civil List. The resulting system required the annual value of State expenditure on the Monarchy to be decided by the Treasury and presented to House of Commons. Since the 19th century the Monarchy had sought reform to remove funding decisions from Government and Parliament, preferring funding to return to its pre-1760 source of the Crown Estate. Surpluses in the 1991-2000 Civil List led to the controversial accrual of a £35.3 million reserve by late 2000. Subsequently the Civil List was fixed at £7.9 million annually for the decade 2001-10, the same amount as in 1991, with the reserve being consumed over the decade. In 2011 the Civil List was raised to £13.7 million.
The Act came into force on 1 April 2012 and changed the arrangements for the funding of The Queen’s Official Duties. Previously there had been four previous funding sources:
- The Civil List paid by the Exchequer
- The Grant-in-Aid for Royal Travel paid by the Department for Transport
- The Grant-in-Aid for Communications and Information paid by the Department for Culture, Media and Sport
- The Grant-in-Aid for the Maintenance of the Royal Palaces paid by the Department for Culture, Media and Sport
The Act consolidated all four into a single payment, called the Sovereign Grant. The current system is intended to be a more permanent arrangement than the previous one, which was reign-specific.
The Sovereign Grant is paid annually by the treasury at a value calculated as a percentage of the Government's revenues from the Crown Estate and other hereditary revenues in the financial year two years earlier. The initial percentage was set at 15% and this is reviewed every five years by the Royal Trustees (the Prime Minister, the Chancellor of the Exchequer and the Keeper of the Privy Purse). Any unspent Sovereign Grant is put into a Reserve Fund. The level of the Sovereign Grant is protected by law from decreasing as a result of falling Crown Estate revenues. In addition, the legislation requires that the Sovereign Grant shall not rise to such a level that the Reserve Fund becomes more than half the level of annual expenditure. Annual financial accounts are published by the Keeper of the Privy Purse and audited by the National Audit Office, making the Sovereign Grant more accountable than its predecessor. Funding to the Royal Household is treated similarly to funding for other government departments, unlike previous Civil List payments.
The sovereign grant has been rising each year at a rate higher than the rate of inflation. About a third of the grant is used to tackle the backlog in property maintenance at the Royal Palaces. Costs of Police and Army security and of Armed Services ceremonial are not included in the Sovereign Grant.
|Year||Grant (£m)||Annual % Increase|
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