The Sovereign Grant regime is a hybrid: it is statutory in its source (the Sovereign Grant Act 2011) but historically constitutional in its rationale, tracing to George III's 1760 surrender of Crown Estate net revenues to Parliament in exchange for a fixed payment. The 2011 Act replaced the Civil List and grants-in-aid with a single annual payment, indexed by a formula in section 6 to a percentage of The Crown Estate's net profits two years prior, subject to a ratchet (the Grant cannot fall below the previous year's level).
The regime operates through three statutory layers. First, sections 1-6 fix the Grant mechanism: HM Treasury pays the Grant each year; the formula auto-indexes it to Crown Estate net revenue. Second, sections 7-8 provide the review and recalibration machinery: the Royal Trustees keep the percentage under review and report periodically, and the Treasury may, by Order, change the percentage to give effect to a Trustees' recommendation. Third, sections 11-12 govern audit and accountability — the Royal Household lays accounts before Parliament, audited by the Comptroller and Auditor General.
The section 16 sunset is the constitutional bridge: the Grant provisions expire six months after the end of a reign unless renewed. The 2022 Privy Council Order under s.16(3) preserved the provisions on King Charles III's accession, but the underlying architecture remains time-limited to the present reign.
The 2024 percentage change is the regime's first stress test. Crown Estate Round 4 offshore wind option fees — approximately £1 billion per annum across six projects for at least three years (NAO July 2023) — would have driven the Grant to politically untenable levels if the 25% percentage had been left undisturbed. The Royal Trustees' 2023 Review recommended a cut to 12%; SI 2024/52 implemented that recommendation by delegated legislation under s.8(2). The 2026 Bill is the alternative primary-legislation route, presumably to entrench the recalibration, restructure the indexation formula, or both.
The regime sits alongside, but is doctrinally distinct from, the Crown Estate's own statutory framework under the Crown Estate Act 1961. The 1961 Act funds the Commissioners' office via Parliamentary supply (schedule 1 paragraph 5) — a separate stream from the Grant — and is itself being reformed by the Crown Estate Act 2025 (borrowing and investment powers). The two regimes interact only through the section 6(1) formula's reliance on Crown Estate net profits.