Queen given payment holiday as Crown Estate profits stagnate during pandemic

The Queen has been given a payment holiday after the money she pays annually to the Treasury was deferred for the first time due to the coronavirus pandemic.

The 94-year-old monarch gives the Government all net revenue from the Crown Estate – derived from a collection of land and holdings including London's Regent Street and more than half the UK's foreshore – in return for an annual income, the Sovereign Grant.

But estate managers have this year had to agree a "staged" payment process, so far transferring just £87 million of the £345 million owed to the Government for the last financial year.

It comes as royal finances face hard times, with Historic Royal Palaces, the charity that runs landmarks including the Tower of London and Hampton Court, announcing major job cuts this week after losing an estimated £100 million of income.

Voluntary redundancies have also been sought from the Royal Collection Trust, which has lost £64 million in income as a result of the pandemic.

An internal memo, seen by The Telegraph in July, said that only when the Crown Estate’s annual report was published could the impact on the royal household be properly assessed.

The report, published on Friday, made for grim reading as chief executive Dan Labbad revealed that profits had all but stagnated, rising just 0.4 per cent to £345 million, compared with 4.3 per cent last year.

Mr Labbad noted that, as well as the impact of coronavirus, the estate also faced challenges from the increase in home working, which will affect rental growth on its vast portfolio of prime office space.

"Towards the very end of the period, the Covid-19 pandemic brought with it high levels of uncertainty, a significant slowdown in investment activity, and the likelihood of far-reaching and transformational implications for the office sector," he said.

"We anticipate that companies will place a greater focus on business continuity planning, leading to further investment in technology and digital connectivity, increasing the ability to work from home and reducing the need for traditional office space.

"Whilst it is far too early to accurately forecast our performance for the 2020/21 financial year, we do expect our net revenue profit and property valuations to be significantly down."

The value of the Crown Estate's investment property portfolio has already decreased, with the biggest impact falling on its regional portfolio.