The King wants to cut the royal slice of Crown Estate profits, which are rising after a £1bn wind farm deal.
Image source, ReutersKing Charles has asked for a surge in profits from a £1bn per year Crown Estate offshore wind farm deal to be used for the “wider public good”, rather than for the Royal Family.
The Sovereign Grant, which pays the running costs of the Royal Household, is currently based on 25% of Crown Estate profits.
Those profits will see a big increase with payments from six new wind farms.
King Charles is proposing to reduce the royal slice of these higher earnings.
It would mean a higher proportion of these increased profits being kept by the Treasury for public spending.
In his Christmas message, King Charles highlighted the pressures of the cost-of-living crisis – and he seems to be taking action to avoid what could have been an awkward surge in income for the Sovereign Grant.
The Crown Estate is an independently-run, commercial business, but its profits are used as a benchmark for the level of funding for the Sovereign Grant, last year worth £86.3m.
These profits are now expected to be significantly boosted by the signing of deals for six offshore wind farms, with £1bn per year for at least three years in fees from firms wanting to develop them on these Crown Estate offshore sites.
This would have produced a very significant increase in the amount going into the Sovereign Grant, which could have proved embarrassing against a backdrop of financial pressures on the public.
Buckingham Palace says in light of the “offshore energy windfall”, the King wants to reduce the slice of profits going into the grant.
At present, the Sovereign Grant is based on 25% of Crown Estate profits – a temporary increase on the usual 15% – with the extra funding used for repairs and renovations for Buckingham Palace.
The grant is used for paying for the costs of working royals, such as travel for official engagements, and for the upkeep of royal palaces.
A review of this percentage of Crown Estate profits going into royal funding is currently under way with the Treasury, with a decision expected in the next few months.
Sir Michael Stevens, the Keeper of the Privy Purse, has written to the prime minister and chancellor to propose an “appropriate reduction”.
Three of the new offshore wind farm locations are off the North Wales, Cumbria and Lancashire coast, and three are in the North Sea off the Yorkshire and Lincolnshire coast. Once developed, the ambition is for them to generate enough electricity for seven million homes.
This will add to the existing 36 operational offshore wind farms on Crown Estate sites off the coasts of England, Wales and Northern Ireland.
Dan Labbad, chief executive of the Crown Estate, hailed the benefits of this “next generation of projects”.
“They demonstrate the far-reaching value that our world-class offshore wind sector can deliver for the nation – homegrown energy for all, jobs and investment for communities, revenue for the taxpayer, clean energy for the benefit of the environment, and a considerate, sustainable approach which respects our rich biodiversity,” he said.