How Parliament sets the monarchy’s grant

The Sovereign Grant Act 2026, passed on 2 November 2026, fixes the Sovereign Grant for 2027-28 at £99.9 million, according to the Act. It also changes the Crown Estate percentage used in future calculations from 12% to 20.5% from 1 April 2027, according to the Act.

That is the news. The lesson is the sentence you often hear around it: the Crown Estate pays for the monarchy. That sentence is tidy. It is also not quite how the machine works.

The Crown Estate is a property business owned by the Crown in a public capacity, not by the monarch as private property. Its annual revenue profit is reported to go to the Consolidated Fund, which is the government’s main account. The Crown Estate Annual Report and Accounts 2025/26 is reported to have put its revenue account profit for the year ended 31 March 2026 at an estimated £487 million and said that this amount was payable to the Consolidated Fund.

The Sovereign Grant comes out another way. The Treasury pays it to support the monarch’s official duties. The House of Commons Library briefing on the finances of the monarchy is reported to explain the point cleanly: the Crown Estate figure is used to arrive at a number, not as the source of the payment. So the Crown Estate does not send a royal invoice payment across the road. Its surplus is a measuring stick Parliament has chosen to use.

Before this Act, the ordinary route had several steps. The Royal Trustees, whose membership is described elsewhere as including the Prime Minister, the Chancellor and the Keeper of the Privy Purse, looked at the Crown Estate income account net surplus from the base year, which is the financial year two years before the grant year. A report is said to have put the Crown Estate income account net surplus for 2024-25 at an estimated £1,149 million; 12% of that at an estimated £137.88 million; and the resulting grant at an estimated £137.9 million.

There was also a floor. The old formula is reported to have compared the percentage figure with the previous year’s grant and used the higher amount. That mattered because it meant the grant did not normally fall just because the Crown Estate figure fell. A 2026 review is reported to have said the existing framework would otherwise prevent the 2027-28 grant from decreasing year on year, even where expected costs had reduced.

Now look at what Parliament has done. For 2027-28, it has not left the normal annual calculation to produce the number. It has written the number into the Act: £99.9 million, according to section 1 of the Sovereign Grant Act 2026. It has also said the Royal Trustees do not have to prepare the usual section 5 report determining the grant for 2027-28.

That is the constitutional switch. The official story is not that the Crown Estate has paid a bill. The official legal story is that Parliament has set a public spending amount, using a Crown Estate-linked formula as one input and then overriding the ordinary route for this year.

The surrounding Treasury material is reported to give part of the reason. A 2026 review is reported to have said the Buckingham Palace Reservicing Programme was reaching its final tranche in the 2026-27 grant and that funding for that programme was no longer required from 2027-28. A report is also said to have put the grant for 2026-27 at an estimated £137.9 million and described the Buckingham Palace work as a ten-year, estimated £369 million programme agreed in 2016.

But the design question remains. If the point is to reset the grant after the palace works, why does Parliament need to cancel the ordinary 2027-28 determination report and the review duty after the period ending 31 March 2026? One answer is legal neatness: the old floor would block a fall from £137.9 million to £99.9 million, so primary legislation was needed. Another answer is political control: Parliament has chosen to make the number itself rather than leave the statutory trustees’ route to do it for that year.

That does not make the decision illegitimate. Parliament can change an Act. But it does change the evidence trail you would normally inspect. A Royal Trustees determination report is generally described as stating how the annual number was calculated and being laid before Parliament. For 2027-28, the Act itself says that duty does not apply. The Act also removes the duty to carry out the scheduled percentage review after the review period ending 31 March 2026, although a 2026 Royal Trustees review is reported to have set out expected costs and recommended 20.5%.

So the word doing the hiding is pays. It makes a parliamentary choice sound like an automatic transfer. A more accurate sentence would be: Parliament sets the Sovereign Grant, and the law uses a percentage of the Crown Estate’s income account net surplus as part of the calculation.

The next word to watch is appropriate. The Act builds a new test around the Reserve Fund, which is the pot holding unused grant money. From 1 April 2027, the grant amount is treated as appropriate only if the Royal Trustees think the adjusted Reserve Fund would end the year no lower than 10% and no higher than 50% of audited net relevant resources, according to the Act. That band is now law. The Act does not itself show why 10% and 50% are the right limits.

The Treasury also gains a new lever. If the normal formula cannot keep the Reserve Fund inside that band, the Treasury must set a different amount by regulations. A regulation is a legal instrument made by a minister under powers Parliament has already granted. If the regulation increases the grant, the Commons must approve it first; if it decreases the grant, it can be annulled by the Commons afterwards, according to the Act.

There is one more lever. The Treasury may increase the current-year grant in “exceptional circumstances”, after consulting the Royal Trustees and with prior Commons approval, according to section 6B inserted by the Act. The phrase matters because the Act does not define “exceptional circumstances”. Without a definition, readers have to judge each use from the minister’s explanation and the Commons vote.

Who benefits? The Royal Household is set to receive £99.9 million for 2027-28, according to the Act, and a new 20.5% formula after that. The Treasury gets a power to intervene when the formula and Reserve Fund test do not fit. The Royal Trustees lose some ordinary duties for this transition year but remain central to the system.

Who pays? Public finances pay, according to the broader account of the system, because Crown Estate revenue otherwise goes into the Consolidated Fund for general public use. The public also pays in scrutiny when a usual report is removed, because one document that would have shown the calculation for 2027-28 will not exist in the ordinary statutory form.

What can you inspect? Start with the Sovereign Grant Act 2026 and mark every place where it says a duty does not apply. Then read the reported HM Treasury 2026 Royal Trustees review for the cost case, especially the parts on expected maintenance, digital systems, travel, heating and Crown Estate revenue. Then compare the reported Royal Household Sovereign Grant accounts with the Crown Estate accounts. The question is not whether you like the monarchy. The question is who decides the number, what evidence they published, and what evidence the law no longer requires them to publish.

MonarchyPublic moneyParliament