Let’s Catch Up on the Money Talk

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On Tuesday the 2018-2019 summary report of the Sovereign Grant was released, sparking a slew of news stories on how much money the Royal Family brought in and spent, and raising the age-old question of whether their expenditure is worth the monarchy’s cost.

Some key points from the report highlighted on the Royal Family’s website:

  • The total Sovereign Grant for 2018-19, including the dedicated amount for Reservicing, amounted to £82.2m (2017-18 £76.1m), equivalent to £1.24 per person in the UK.
  • The £82.2m Grant is made up of a Core Grant of £49.3m and an additional dedicated amount for Reservicing of £32.9m.
  • Additional income generated from facilities management charges and property rental increased to £17.8m (2017-18 £17.3m), up 3%.
  • The official expenditure in the year met by the Sovereign Grant was £67million, up 41% (2017-18 £47.4m), primarily due to higher levels of spending on property, including £14.1m on Reservicing and £25.1m on maintenance from the Core Grant.
  • £15.2m was transferred to the Sovereign Grant reserve (2017-18 £28.7m) to fund future phases of the Reservicing of Buckingham Palace.

The RF’s finances are confusing for most people (including myself, quite frankly – this is definitely a little outside my wheelhouse), and as such it can be tricky to parse what headlines about the cost of home renovations(!) actually mean. The long and short of it is that money from the Sovereign Grant, which is one pool of money that finances the crown, is public money. It’s given to the crown by the U.K. government and is used to finance royal households (staff payroll), official engagements, and the upkeep of royal residences.

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How that particular figure is set is based on how much money the Crown Estate brings in each year, and for the past three years the Grant equaled roughly one-quarter of the Estate. This particular set up was implemented in 2012 following the passage of 2011’s Sovereign Grant Act, meant to subject the crown’s finances to a higher level of government scrutiny.

The monarchy cost the taxpayer £67 million during 2018-19 – an increase of almost £20 million from the previous year. Much of that uptick is due to the £15 million funding ongoing renovation of Buckingham Palace.

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A lot of the talk around the annual release of this information naturally segues into a broader conversation about the viability of the monarchy itself. Namely, is it a good deal for taxpayers? It should be noted that while the Crown Estate is sometimes described as the monarch’s personal pot of money then turned over for government funding, the Estate is in fact public land.

The monarch also has access to semi-private estates attached to the crown. The duchy of Lancaster is one and is sometimes described as Queen Elizabeth’s “private income,” though it should further be noted that it belongs to whoever sits on the throne, not the woman herself. When the Prince of Wales ascends the throne the duchy of Lancaster will be his, and the estate attached to the PoW, the duchy of Cornwall, will in turn belong to the Duke of Cambridge. We have some visibility into those portfolios, but definitely less, and it’s from this money that other official engagements are funded, as well as (presumably) the private living expenses for various members of the family.

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The two big ticket items from this year’s financial disclosure are related to home renovations and travel. The former is always a bit of a tricky issue, because many of the residences that members of the RF live in technically belong to the public. Many of them are also centuries old and some of the U.K.’s most famous and beloved national icons. They require regular maintenance to keep up for the purposes of, well, quite literally keeping them up, but they also house apartments that serve as family homes.

As we well know, earlier this year, the Duke and Duchess of Sussex moved from Nottingham Cottage, a two-bedroom home that sits on the grounds of Kensington Palace, to Frogmore Cottage, which sits on the grounds of Windsor Castle. The move came as a surprise to many who assumed the couple would eventually take over a larger suite of rooms within KP, much like William and the Duchess of Cambridge did a few years back.

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Before the couple moved in, they implemented a host of updates on the “cottage” that totaled around £2.4 million. Some of that went into security (Harry and Meghan are wildly popular and very real threats go along with that), as well updates that speak to personal space and modernizing a very old building. This has kicked off quite a bit of coverage questioning why a family of three needs to spend that much money on their home, particularly when (allegedly) the Duke and Duchess of Gloucester offered to vacate their own suite of apartments in KP. And as is unfortunately natural for the news cycle at this point, a lot of that criticism is landing on Meghan.

The issue is related, but not identical, to angst around the Buckingham Palace renovations. There are definitely some people who believe that the Queen should be personally responsible for the upkeep of a “home” that she lives in, however the flip side of that argument is that Buckingham Palace is hardly a home by most people’s standard of the word. It belongs to the public and the vast majority of the building makes up state rooms used for official business and historical tours and office space for palace staff. Since it’s used for government business (state dinners, for one), the RF argues that its upkeep falls on the government.

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Frogmore Cottage is obviously not used in the same way, however Harry and Meghan do need a secure place to live. It then becomes a balancing act between what expenses should come from public money, and what should be handled privately by the family. Matters related to making a home livable and safe generally get roped into public money, while those that speak to personal taste are handled privately. But that’s obviously subjective, hence the current conversation.

Right now, unfortunately, the issue is coming up while Meghan is on maternity leave (and thus less visible than normal) and just as there’s been widespread coverage of the relationship between the Sussexes and Cambridges. In other words, should £2.4 million have been spent for the Sussexes to move away from the Cambridges due to their personal desire to when a less expensive option was available at KP?

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Personally, I think this is much ado about nothing. Frogmore Cottage, even with these updates, pales in grandeur and scale to the homes of the Queen’s three younger children – the Princess Royal, the Duke of York, and the Earl of Wessex. And arguably they do more to bring in revenue, including tourism, than all three combined. The Princess Royal objectively works “harder” (she carries out more engagements year over year), but her work also drives by far less attention, which raises a question of quality v. quantity.

I do think Meghan becoming the focal point for a lot of this criticism is patently unfair, if unsurprising. But I would add that the Cambridges were subjected to exactly these same questions when work was underway on their apartment at KP, a time during which neither William nor Kate were full-time working royals, and Kate also spent a portion of it on maternity leave with Prince George. (The maternity leave issue is relevant, in my opinion, because I think people get restless when they’re not regularly seeing the royal in question.) At the time, Kate (more than William, naturally) was criticized for wanting multiple kitchens installed in KP – one for her and one for the staff – and I seem to recall there being consternation over her changing her mind over paint colors at one point.

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This, too, shall pass. The timing of this coverage unfortunately bolsters a broader negative news narrative cropping up around Meghan, and one which I think warrants a separate post (maybe later today…maybe Saturday, TBD).

The second headline is the travel expenses of Charles and his wife, the Duchess of Cornwall. Since the Queen no longer travels internationally, and as the heir to the throne, the brunt of representing the monarch abroad falls on him, and thus requires a fair bit of money. This year that price tag rose from £1.01 million to £1.33 million. Some trips cost hundreds of thousands of pounds, thanks in part to the mode of travel itself, which is private.

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Sure, reading in a vacuum that Charles went to the Carribbean and Cuba for a whopping  £417,000 sounds extravagant, but those trips aren’t for pleasure, and they’re not even at his direction. The RF travels internationally at the behest of the Foreign Office, and their work, speeches, presence, etc. are at the government’s request to complement policy, strategy, and goals. Their presence is considered a boon in Commonwealth countries to help keep that entity intact, and the RF has been deployed throughout Europe in the past 2.5 years to ease fallout from ongoing Brexit tensions. That’s work, and when heads of state –  or their representatives – travel abroad, it’s expensive.

So, do I think any of these specific costs are outlandish or unreasonable? No. But – and this is a significant “but” – the overall optics are the responsibility of the RF. That’s why popularity, goodwill, and visibility are so crucial to the RF’s longevity, and why familial spats and tension can be so corrosive. At the end of the day, no one wants to fund a soap opera, and no one wants to pay for a host of well-off strangers.

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This is why I think Charles’s rumored desire to “streamline” the monarchy during his reign is for the best. The vast, vast majority of the RF’s star power is housed in a small percentage of today’s working royals, and an even smaller percentage than those who stand on the balcony of Buckingham Palace during Trooping the Colour. I think Charles has his finger on the pulse of the direction the monarchy needs to take financially, and we’re going to see a lot of change when he eventually takes over.

In the meantime, yes, the RF needs airplanes…and kitchens.

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