Crown Estate boost Queen’s income with record profits
Record profits at Crown Estate boost Queen’s income
The Queen is set to enjoy a sharp rise in income after the flourishing prime property market in London and wind farm developments off Britain’s coast drove The Crown Estate to record profits.
By Graham Ruddick
6:00AM BST 21 Jun 2012
The Crown Estate, which owns property on behalf of the Queen, said profits rose to £240m from £231m in the year to March 31.
This means the Queen will be eligible for a payment of £36.1m next April to fund her official duties, a 16pc increase on the £31m paid by taxpayers to finance the Monarchy this year, despite the Government enforcing sharp public spending cuts elsewhere.
The increase follows changes made by the Coalition to how the taxpayer funds the Monarchy.
George Osborne, the Chancellor, has scrapped the Civil List, which financed the official duties of the Queen, and replaced it with a Sovereign Grant that is equal to 15pc of the Crown Estate’s annual profits.
This marks a historic alteration to the previous arrangement. The Crown Estate’s profits have been paid to the Treasury and taxpayers since 1760, after George III handed the Crown’s property to the state in return for an annual fee to support his duties.
A Treasury spokesman said the Sovereign Grant is intended to provide the Royal Household with “long-term sustainable finances” and “is not a representation of how much they should spend”.
Under the Sovereign Grant Act 2011, unused funds will be held in a Reserve Fund and could be returned to the Treasury.
“In the past year, the Crown Estate has performed well in difficult circumstances,” the spokesman said. “This is good news for taxpayers, as profits go to the Exchequer and make a valuable contribution to the public finances.
“The Sovereign Grant, which is designed to put Royal Finances on a long-term sustainable footing, is linked to Crown Estate profits.
“However, it is up to the Royal Household to spend the Grant prudently and ensure that their financial position is sustainable. This includes keeping the reserve adequately funded to cope with unexpected costs and dips in revenue.”
It is understood that additional funds from the Sovereign Grant could be used for a backlog of repairs on the Royal palaces.
A Buckingham Palace spokesman said: “The Royal Household is absolutely committed to ensuring value for money for the taxpayer, having already reduced expenditure by a fifth over five years.
“The Sovereign Grant is a simpler, more transparent way of funding the Monarchy and is, of course, now open to scrutiny by the National Audit Office.”
The Crown Estate’s profits have risen to record levels thanks to an increase in rents from retailers for its urban properties and an increase in income from the seabed it owns around the UK because of rents from new wind farm developments and construction companies paying for material such as sand.
The Crown Estate owns a portfolio of historic assets such as Regent Street, Windsor Great Park, farmland and most of Britain’s coastline, as well as properties bought over the past few years such as Westgate shopping centre in Oxford.
The value of its properties is now £7.6bn, after a 7.4.pc rise in the past 12 months, despite Britain entering a double-dip recession. Including cash in the bank, the organisation is worth £8bn.
Alison Nimmo, chief executive, said: “It has been another tremendous year for The Crown Estate.
“Our super prime portfolio and active asset management have been the cornerstones of this strong financial performance and resilience during recent market volatility.”