Queen Elizabeth's Finances Were Hit by COVID-19, But Her Income From the British Public Will Not Fall
Each year the royal household opens its accounting books to show how it has spent public money, and this year is no exception. Although, as with everything else in the middle of a global pandemic, the unveiling of the Sovereign Grant report in 2020 looks quite different from years past.
For a start, when The Queen’s Treasurer (also known as the Keeper of the Privy Purse) detailed the royal household’s expenditure to reporters yesterday, he was doing so three months later than usual because the pandemic had delayed the accounting. And, rather than focusing only on information from the financial year that the latest report is concerned with (April 2019 to March 2020), the narrative has shifted to what happens now, as we have been thrust into these unprecedented times.
“While the report highlights another busy year, it fails to give an accurate picture of the financial challenges we now face over the next few years brought about by Covid-19,” Treasurer Sir Michael Stevens said. Going on to explain that the household is facing a lower than anticipated income over the next few years at least, he then made clear, “We have no intention of asking for extra funding and will look to manage the impact through our own efforts and efficiencies.”
In a straightforward way, this can be viewed as an admirable stance—an example of a “we’re all in it together” attitude that it is vital for the royal family to embody in these challenging times. But, in reality, it would be a bit of a stretch to suggest that the monarchy deserves plaudits for this declaration alone.
First, a bit of background: The Sovereign Grant is the lump sum that the Queen receives from the UK’s Treasury every year, and it covers the official expenditure of the monarchy—everything from hosting garden parties and investitures to paying for staff, royal travel, and the upkeep of royal palaces.
Since 2012, the amount the Queen receives from the Treasury has been calculated at 15% of the profits of the Crown Estate two years previously. The Crown Estate was historically managed by the monarch, and although it was never the monarchy’s personal property, its profits were always used for public expenditure. But today, it is run by a separate body and pays all its profits to the Treasury.
In 2017, the Queen’s grant was increased for a 10 year period to the equivalent of 25% of the Crown Estate profits, with the additional money allocated to pay for the refurbishment of Buckingham Palace. For example, in the financial year ending March 2020, she received a total grant of £82.4 million (or roughly $105 million)—£49.4 million to meet official royal expenditure and £33 million for the maintenance works.
Every year since 2012, the Crown Estate profits have gone up and therefore so too has the Sovereign Grant. But with the impact of the coronavirus pandemic that is about to change. And yet, (wait for it) the Sovereign Grant legislation specifies that the lump sum the Queen receives can’t go down from a previous year. In short, while the UK's Treasury will get less when the Crown Estate profits go down, the monarchy won’t.
What the Queen will not get is the annual increase that she has been accustomed to, and that it appears has been accounted for when it comes to funding the £369 million repair bill for Buckingham Palace. “So 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.” said Sir Michael Stevens.
The Queen’s finances will also be hit in other ways. On top of the Sovereign Grant, she also receives money from the Royal Collection Trust, which manages the public openings of the palace, as well as money from some other sources such as functions and property rental. The shortfall in this respect is, according to Sir Michael, expected to be an average of around £5 million per year.
In response, royal household teams are being instructed to work out how they can be more efficient; a recruitment freeze has been put in place unless a new post is business critical; and pay freezes have been implemented since April. They are not, however, making people redundant or furloughing staff.
In addition, while figures are not available for this year yet, it is hard to see how the royal family will manage to rack up an official travel bill equivalent to the £5.3 million they spent in the last financial year. Similarly, it makes sense that the absence of most of the estimated 50,000 people per year who visit Buckingham Palace as guests for events such as State Banquets and receptions, will reduce at least some costs.
And, despite the anticipated shortfall, the work is still carrying on—both by royal family members and on the maintenance of the palace. A senior source said they were going to have to “think about how we are going to bridge that shortfall over the next seven years of the project,” but major building work is now underway replacing essential services in the East Wing.
At a time when many people have seen their income drastically reduce or even disappear, it would be a very bad look if the still well-funded monarchy was asking for additional public funds. The fact that they are not is more logical than laudable. But if there is an area where they do deserve acclaim, it is perhaps through some of the other statistics provided in the report.
Last year, at the age of 93, the Queen carried out 296 official engagements and continues to be as visible as possible in our new normal. As Sir Michael Stevens said: “Although Covid-19 has temporarily changed the format of engagements and events, it has not changed the sense of continuity, reassurance and recognition they provide. Her Majesty’s programme, supported by Her family, will continue to develop meaningful ways to lead the nation through this time.”
You Might Also Like
