The Queen's finances are expected to be heavily impacted by the coronavirus pandemic. According to new reports, Her Majesty is expected to lose £20 million in the next few years as palace visitors and events slow down.
But though the loss is a large one, the Royal family finances are still looking healthy - the impact of Covid just means The Firm will not receive the financial increase it has grown accustomed to since 2012.
The Sovereign Grant is the money that the Queen receives from the UK Treasury each year, which is allotted to cover monarchy expenses ranging from events and travel to paying staff and managing palace upkeep.
In 2017, the amount of money the Queen receives each year from the Treasury increased from 15% of the Crown Estate profits from two years previously to 25% so that ongoing renovations for Buckingham Palace would be covered. (For reference, according to Town & Country, the Queen received a grant of around $105 million, or £82.4 million, in the financial year ending in March 2020.)
Ordinarily, the Crown Estate profits increased each year, therefore, the Sovereign Grant money from the UK Treasury increased as well. But due to the pandemic the Crown Estate profits have already seen a reduction - something that is only expected to continue for the next few years, according to the Queen’s Treasurer, Sir Michael Stevens (aka the Keeper of the Privy Purse).
“We have no intention of asking for extra funding and will look to manage the impact through our own efforts and efficiencies,” Stevens said when he detailed the Royal household’s expenditure earlier this week.
And while that sounds nice in theory, here’s where things get a little hazy. The Sovereign Grant legislation states that the sum the Queen receives from the UK Treasury can’t go down from the previous year. So while the UK government will receive less as the Crown Estate profits continue to plummet during the pandemic, the monarchy won’t see that same decrease reflected in its funds.
The only real downside for the Queen is that the yearly Sovereign Grant increase (which likely won’t happen over the next several years) appears to have already been accounted for when it comes to covering the cost of the $469 million (£369 million) renovations for Buckingham Palace.
“In our forecasts, we are now estimating that this reduced growth in the Sovereign Grant means the likely contribution from the Sovereign Grant to the Reservicing Programme will be over £20 million short of the agreed £369 million ten-year budget,” Stevens said, which equates to just over $25 million.
Let the Queen’s hard-luck serve as an important lesson not to overestimate your finances.
