UK Government to Cut Sovereign Grant Funding for Monarchy After Palace Repairs

Public funding for the British monarchy will drop for the first time since the Sovereign Grant began in 2012. The current record level of £137.9 million for 2026-27 stems from a two-year increase to cover Buckingham Palace repairs.

Treasury-led meetings are under way to determine the reduction. Treasury ministers have signaled a lower grant after the repairs finish. The Sovereign Grant Bill, announced in this week's King's Speech, confirms the change.

The grant, launched at £31 million, has nearly tripled in real terms over 14 years. It consolidated previous funding streams for staff, buildings and official travel. The level is set by the prime minister, chancellor and Keeper of the Privy Purse James Chalmers.

Financial Secretary to the Treasury Lord Livermore told the House of Lords in March that legislation would reset the grant lower from 2027-28. The National Audit Office has called the palace project well managed and set to deliver value for money.

A Public Accounts Committee inquiry into the Crown Estate starts later this summer. The independent property firm must provide public value. MPs will examine leases for royal properties, prompted by Prince Andrew's past stay at Royal Lodge in Windsor.

Prince Andrew, or Andrew Mountbatten-Windsor, vacated Royal Lodge and later returned a lease on nearby East Lodge. His scandals, including Epstein ties and trade envoy expenses, have fueled scrutiny. He denies wrongdoing or personal gain from the envoy role.

Author Andrew Lownie said Andrew's downfall raises questions for the family. "It's opened a can of worms for the rest of the Royal Family about their own finances and… I hope there's more scrutiny, as they need to be more open."

A YouGov poll last month showed 64 percent support for the monarchy but only 53 percent saw value for money. A former civil servant told the BBC of Andrew's spending: "I couldn't believe it… it was like it wasn't real money, they weren't spending any of their own money."

Constitutional expert Craig Prescott of Royal Holloway, University of London, called finances a weak spot. "The Royal Family look like they have fantastic wealth and so the perception is of taxpayers' money going to people who are very, very wealthy in the first place - and that's never a good look. However, if you want to have a monarchy that carries out public functions, then the state should pay for that, fundamentally."

The grant is a percentage of Crown Estate profits, paid by the Treasury. Former Chancellor George Osborne called it a proxy for the economy. Critics question tying it to property profits over inflation.

The "golden ratchet" allows increases but not decreases. New legislation permits a one-off 2027-28 cut, with that level as the future baseline. Palace officials stress existing transparency via Parliament and National Audit Office oversight.

Calls for openness grow. Lib Dem leader Sir Ed Davey said: "We must build a culture of transparency and accountability." Labour MP Rachael Maskell added: "Unaccountable power must not hide, privilege must not be protected, money must be accounted for."

Professor Anna Whitelock of City St George's, University of London, noted past public reverence has given way to questions on accountability and money. The King and Prince of Wales pay income tax voluntarily. Duchy incomes exceed £20 million each yearly as private funds.

The Duchy of Cornwall now calls itself a social impact organization. A spokesperson said: "The Duchy of Cornwall is changing. Our new strategy puts social and environmental impact at the heart of everything we do... This is the direction of travel for the Duchy: long-term investment, real partnership with communities, and a clear focus on positive impact."

Professor Pauline Maclaran of Royal Holloway said finances must align with public service to maintain trust.