Sovereign Grant Act 2011

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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.[1]

Background[edit]

Main article: Civil List

In 1760 King George III agreed with Parliament that he was no longer to govern in person, and therefore was no longer entitled to income from the Crown Estate, which for 700 years had always been used for the administration of the state. Parliament granted a fixed annual income from the Civil List.[citation needed] The resulting system required the annual State expenditure on the Monarchy to be decided by the Treasury and presented to House of Commons. Prior to abolition, 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.[2] In 2011 the Civil List was raised to £13.7 million.[3]

There were four funding sources:

Legislation[edit]

The Act came into force on 1 April 2012[4] and changed the arrangements for the funding of The Queen’s Official Duties. The Act consolidated all four funding sources 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.[5]

The Sovereign Grant is paid annually by the treasury at a value indexed as a percentage of the Government's revenues from the State owned Crown Estate and other revenues in the financial year two years earlier.[6] It is based on an index percentage which was set at 15%[7] 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.[6] Annual financial accounts are published by the Keeper of the Privy Purse[5] and audited by the National Audit Office, making the Sovereign Grant more accountable than its predecessor.[8] Funding to the Royal Household is treated similarly to funding for other government departments, unlike previous Civil List payments.

Finances[edit]

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.

Year Grant (£m) Annual % Increase
2012-13 31.0 -
2013-14 36.1[9] 16.5%
2014-15 37.9[8] 5.0%
2015-16 40.0[10] 5.5%

Costs of Police and Army security and of Armed Services ceremonial are not included in the Sovereign Grant.[7]

The Sovereign Grant only accounts for a small part of the cost of the monarchy.[citation needed] The rest is made up of revenue from the Duchies of Cornwall and Lancaster and the estimated cost of security.[citation needed]

See also[edit]

Notes[edit]

  1. ^ "Royal funding changes become law". BBC News Online. 18 October 2011. 
  2. ^ Elena Egawhary (23 June 2010). "How the Civil List is spent". BBC News. Retrieved 30 January 2014. 
  3. ^ "Royal Public Finances: Five Years to March 2012" (PDF). www.royal.gov.uk. 7 June 2012. p. 4. Retrieved 6 July 2014. 
  4. ^ "Sovereign Grant Act 2011". UK Statute Law Database. Retrieved 6 July 2014. 
  5. ^ a b "Royal finances". The Official Website of the British Monarchy. Retrieved 29 January 2014. 
  6. ^ a b "Determination of the amount of Sovereign Grant". www.legislation.gov.uk. Retrieved 31 January 2014. 
  7. ^ a b "Sovereign Grant Annual Report 2012-13". The Official Website of the British Monarchy. 27 June 2013. Retrieved 29 January 2014. 
  8. ^ a b "Royal overspend prompts call to open palace doors". BBC News. 28 January 2014. 
  9. ^ "The Sovereign Grant and Sovereign Grant Reserve Annual Report and Accounts 2012-13" (PDF). Her Majesty's Stationery Office. 27 June 2013. p. 2. Retrieved 31 January 2014. 
  10. ^ "Queen's income set to rise to £40m next year". BBC News. 26 June 2014.