At present, for 2026-27, the Sovereign Grant currently stands at a record £137.9m, in the second of a two-year hike to pay for building work at Buckingham Palace.
Plans for a reduction were indicated by Financial Secretary to the Treasury Lord Livermore. “The government is committed to bringing forward legislation to reset the grant to a lower level from 2027-28 once Buckingham Palace reservicing works are completed,” he told the House of Lords in March.
There are now plans for that legislation to carry this out.
Cutting funding will see the end of a long upward trend, with the Sovereign Grant having almost trebled in real terms, taking into account inflation, in the 14 years since the grant was introduced.
The Sovereign Grant was £31m when it was launched in 2012 as a more efficient way of covering royal costs, such as staff, buildings and official travel.
It brought together public funding for the royals into a single payment, replacing a mix of grants from a range of government departments.
It’s not known yet how much the reduction might be, or when it will be announced, but the approaching funding cut won’t be a surprise to the Royal Household, as it knew that the current high level of funding was only temporary, while palace repairs were completed.
It will nonetheless mean some belt-tightening at an institution that previously kept on receiving increases through some tough years for public spending. Palace officials have always emphasised that funding levels are already transparent and open to scrutiny.