Self funded monarchy reforms
Written by Professor David Flint AM   
Monday, 11 July 2011

Our monarchy is truly an extraordinary bargain. Travel and similar costs incurred during Royal visits and homecomings are more than balanced by the fact that we Australians, (or Canadians, New Zealanders, Jamaicans and the citizens of other Realms) pay nothing at all – salaries, allowances, superannuation or golden handshakes - to The Queen of Australia or to any member of the Royal Family.

They give their services for nothing.

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...self –funding...


 

The situation in Britain is that the Monarchy is completely self funded.  The taxpayer pays nothing to fund the Monarchy. Rather the monarch endows the Government with surplus income from the Crown Estate.

 

 Since 1760, successive monarchs have agreed at the beginning of their reigns to hand over the revenues from their Crown Estate to Parliament in return for a Civil List. Frozen for a decade, this is now supplemented by grants-in-aid which provide specific funding for royal palaces, communications and transport for official business.

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In 2009/10 all payments to the Crown came to about £30 million. But the British government received £211 million from the Crown Estate. So the government made a very substantial profit from The Queen’s Crown Estate – about £181 million.

 

 Previous British governments have failed to fulfil their side of the understanding about the revenue from the Crown Estate. They have not returned sufficient funds to the Sovereign to perform her role and function and to maintain the fabric of those buildings which form part of the national heritage.




...Sovereign Grant Bill...




We seem to be entering into a new phase in this financial relationship.  An understanding has been reached between the Palace and the Government for significant reform.. In late June, the Chancellor of the Exchequer, Rt Hon George Osborne MP, presented the Sovereign Grant Bill to the House of Commons.

 This was preceded by a message from The Queen which invited Parliament to consider the provisions of the Bill. And as the Chancellor said, the simple fact is that the current Civil List arrangements are no longer sustainable. He said that they are “inflexible, they are less than transparent and, critically, they rely on a reserve of public funds that has steadily been run down and is about to become depleted.”


Under the new arrangements, the Civil List will be superseded by a Sovereign Grant presently fixed at 15% of the revenues of the Crown Estate, with a floor to protect against unusual variations in the revenues. Unsurprisingly the suggestion made here that the revenues go to the Crown with The Queen deciding how much should go to the Government was not adopted.





    

....flexibility, independence, transparency...




 


( Continued  below) 

This is intended to produce the flexibility and independence from political interference  that is required. The Palace will determine how the money is to be spent, with a cap on any reserve equivalent to 50% of the annual Sovereign Grant.

The Sovereign Grant accounts will be laid before this House, and audited by the National Audit Office. The Public Accounts Committee will be able to conduct hearings on the Royal Finances – with the Royal Household itself providing evidence at such hearings.

The amount payable will be reviewed every seven years by the three Royal trustees - the Prime Minister, the Chancellor of the Exchequer and the Keeper of the Privy Purse. Any proposal for change will be put to Parliament which can be adopted on a motion.

The new arrangements will be permanent and new legislation will not be required at the beginning of each reign. Instead an Order in Council will be sufficient.

The Sovereign Grant for 2013-14 should be £34 million in 2013-14, broadly in line with the latest data on grant and reserve spending for 2009-10 of £34 million.

The current estimate is that the 15% formula means that by 2014-15, the last year of this Parliament, the Sovereign Grant will be £35million. That is broadly in line with what the Palace has spent in recent years.

The result will be that income will fall by about 9% over the present Parliament, in line with other savings required by government departments.  This is rather harsh given that the Palace has been far more successful in reducing its outlays than any Government department – the saving over 20 years was an extraordinary 50%.



..The Queen’s contribution...





The Chancellor placed on record his and the Government’s recognition of The Queen's immense contribution to public life. In her 86th year, she has undertaken 440 public engagements .The Royal Family also conducts official business on behalf of the Government, leading 2,700 engagm ents and 150 official overseas visits last year.

Over 41,000 people were invited to events at one of the Palaces. The Monarchy, he said, is also a powerful magnet for international tourism, worth according to one recent estimate some £500 million to Britain. There is little doubt, he added, that the Monarchy is a source of great national pride and constitutional strength, and is widely admired around the world.

 He concluded by saying the Government’s aim is to ensure the Sovereign can carry out her official duties effectively and with dignity while ensuring accountability to Parliament and value for money to the taxpayer. The arrangements are certainly superior to the previous ones, if unduly harsh in the early years.


Thomas J. Muscatello-DeLacroix Mills, the Secretary General, of The British Monarchist League issued an excellent comment on the new arrangements on 29 June. Read this here