Following the release of the Report by the National Audit Office (‘NAO’) (‘the Report’) on royal residences, it has emerged that King Charles pays the rent on properties occupied by his nieces, Princess Beatrice and Princess Eugenie. The properties are provided through The Royal Household, thus it is presumed that Charles pays the rent to The Household (although this is not made explicitly clear in the Report). This arrangement has been criticised on the grounds that the princesses do not carry out official royal duties. This blog analyses constitutional aspects of this arrangement, arguing that there are three grounds on which this might be thought to be an improper use of funds.
According to the Report, the King pays the rents of his nieces using funds from the Privy Purse. The first point of constitutional contention is with the Report’s own definition of ‘Privy Purse’. In the Glossary it is defined, without equivocation, to mean
‘the private finances and estates of the Sovereign. It funds official expenditure incurred by other members of the Royal Family who perform official duties that is not met by the Sovereign Grant, at the discretion of the Sovereign.’
Yet, if Privy Purse money does indeed fund ‘official expenditure’ incurred only by royals ‘who perform official duties’, then the King paying the rents of the princesses must surely be an improper use of such money: by definition neither Beatrice nor Eugenie could possibly incur official expenditure since, as non-working members of the royal family, they do not perform official duties. Perhaps a better definition would have added that the Privy Purse can also fund non-official expenditure. As a House of Commons Briefing Paper from December 2025 states,
‘The Privy Purse is an historical term used to describe the Monarch’s private income. It meets both official expenditure incurred by the King and other members of the Royal Family (that [sic] not covered by the Sovereign Grant) and private expenditure’ (emphasis added).
This implies that non-official expenditure may be covered by the Privy Purse. Supporting this view, Professor Vernon Bogdanor has similarly stated that the Privy Purse meets
‘the Sovereign’s expenditure resulting from his or her responsibilities as head of state as is not covered by the [Sovereign Grant], together with the expenditure of other members of the royal family, and various items of private expenditure’ (emphasis added) (Professor Vernon Bogdanor, Monarchy and the Constitution (1996, OUP)).
Given the importance of the Report – the first into royal residences in over 20 years, which comes at a time of heightened scrutiny for the royal family – the ambiguity created by its own definition is unhelpful.
However, even if the Privy Purse can be said to fund non-official expenditure, the arrangement may still be thought to be an improper use of funds based on another aspect of the definition: the classification of the Privy Purse as ‘private’ income. The Privy Purse consists largely of income from the Duchy of Lancaster; as the Report states, the Duchy’s ‘main purpose is to provide an independent source of income for the Privy Purse’. Yet, the Duchy’s constitutional and legal status has long been contested. While a charter established by Henry IV in 1399 stated that the Duchy was the private property of the Sovereign, in 1305 – just 40 years after the Duchy’s creation in 1265 – Parliament had passed a law entitled ‘An Act for incorporating and also for confiscating the Duchy of Lancaster to the Crown of England for ever’, which vested the Duchy in the public Crown rather than the private House of Lancaster.
Evidence that the Duchy has remained in the possession of the Crown ever since can be seen, inter alia, in the description of the Duchy as a ‘Crown Body’ in the current Royal Tax Memorandum agreed between the Government and the Royal Family in 2023, the post of Chancellor of the Duchy of Lancaster, who remains to this day a government minister responsible for administering the estates and rents of the Duchy, and the numerous Public Acts of Parliament governing the Duchy (see, for example, the Duchy of Lancaster Act 1998, which contrasts with changes made to the constitutions of other, so-called ‘private’ estates via private Acts of Parliament, such as the Earl of Devon’s Estate Act 1884).
Moreover, it is notable that, despite having been incorporated by Royal Charter (and thus seemingly taking the form of a company) the Duchy of Lancaster does not pay Corporation Tax and must submit its accounts annually to Parliament rather than Companies House. In 2005, the Public Accounts Committee reviewed the Duchy of Lancaster. As one MP who sat on that Committee has put it, the PAC’s Report ‘established quite clearly that… this is not the private property of the monarch or her family but a trust established by the nation in order to fund the various members of the royal family.’ In these circumstances, many would take issue with the idea of money from the nation’s ‘trust fund’ being used to pay the rents of two princesses who do not work for the royal family, have jobs outside of the royal family from which they earn private income, own additional properties in the Cotswolds and Portugal respectively, and are married to wealthy individuals.
Yet, even if it can legitimately be claimed both that the Privy Purse covers non-official expenditure and that money from the Duchy of Lancaster – and, thus, Privy Purse – is indeed private, Charles paying the rents of his nieces’ would still appear to be improper use of funds on a third constitutional ground. This is because the Privy Purse is not the only source of private income for the King, who also enjoys personal income derived from his personal ‘investment portfolio’. The monarch may spend private funds in one of two ways: his capacity as Sovereign or his capacity as a private individual, in keeping with the idea of the King’s ‘two bodies’. According to Professor Bogdanor, while ‘the Sovereign’s private expenditure as Sovereign is financed from the Privy Purse… the Sovereign’s private expenditure as a private individual is financed from his or her own personal income’ (emphasis added) (Bogdanor, above). In relation to Charles’ decision to pay the rents of his nieces, the Report makes clear that he does so as their uncle in what is a private family arrangement when it states that ‘His Majesty The King… funds properties as a private individual and separately from his role as Sovereign’ (emphasis added). As Charles thus seemingly pays the rents in his capacity as a private individual rather than as Sovereign, arguably he should use funds from his personal income and not the Privy Purse.
These may all seem like technical niceties. However, history shows that the financing of the monarchy has always had constitutional implications. It has long been recognised that the Sovereign needs funds to carry out his constitutional role. As the House of Commons Briefing Paper states,
‘the theory of the medieval English constitution was that the King, having been entrusted with the defence of the realm and the administration of justice, must have sufficient funds for those purposes.’
Originally, funds for these kingly duties came from the monarch’s private purse (or ‘Privy Purse’). This highlights the link between the Privy Purse and official royal expenditure which can still be seen today in, for example, the fact that the Privy Purse supposedly remains ‘primarily’ a fund for official expenditure, such as paying pensions for past and present employees (i.e. those working for the royal family) (Bodganor, above). This further suggests that an arrangement which sees the Privy Purse pay the expenses of two individuals who do not work for the royal family is inappropriate. Initially, the monarch also enjoyed complete autonomy over royal finances. However, control over royal finances became crucial in the battles between parliament and the King in the seventeenth century as there was concern that the Sovereign might seek to leverage government revenues to exert improper influence and build an independent power base. Thus, during the reign of Charles I the parliamentary opponents of the King insisted that the finances of the monarchy be placed under parliamentary control, leading to the 1689 settlement which saw parliament vote to allow an annual sum of £600,000 to William and Mary to finance the civil government. This settlement prefaced the passing of the first Civil List Act in 1697, the constitutional effect of which was to provide parliament with the ability to limit royal financial discretion (Bogdanor, above).
Is it time, once again, for Parliament to take a greater interest in royal finances in order to avoid the sorts of issues raised in the NAO Report? Arguably, total parliamentary control of royal finances would be undesirable as it could threaten the independence of the monarchy. But the precise balance between these competing principles – parliamentary control and monarchical independence — is a legitimate matter for debate and discussion which has been sparked by the NAO Report. For example, arguably there should be greater scrutiny to ensure that Charles does not use money from the Privy Purse for private expenditure when acting in his capacity as a private individual.
Questions should also be asked about just how much non-official expenditure the Privy Purse pays for. The Royal Family has itself claimed that the Privy Purse is still ‘largely used’ for official expenditure and it has previously been claimed that non-official expenditure accounts for just a ‘minor part’ of the Privy Purse (Donald Pearce-Crump, ‘Royal Taxation’ (1994) British Tax Review 635), but figures would be helpful here. Arguably, there are also substantive questions about what sort of non-official expenditure the Privy Purse pays for. For example, if the King is indeed going to spend Privy Purse income on non-official expenditure, many may legitimately question why he does not choose to spend it on other (arguably more deserving) non-official purposes, such as paying to clean up the UK’s ‘worst illegal waste dump’ on land which the Duchy of Lancaster (from where Privy Purse money is itself derived) owns in Wigan.
The late Queen herself famously stated that ‘no institution… should expect to be free from the scrutiny of those who give it their loyalty and support.’ Bagehot may have claimed that ‘we must not let in daylight on the magic’ of monarchy, (Walter Bagehot, The English Constitution (London: Henry S. King and Company 1867)), but when it comes to royal finances the NAO report has exposed chinks on which greater light should be shone.
The author would like to thank Dr Paul Scott and Dr Leah Trueblood for their helpful comments on an earlier draft of this post.
(Suggested citation: F. Jackson, ‘Princesses, the Privy Purse, and Parliament: Constitutional Issues Raised by the Royal Residences Report’, U.K. Const. L. Blog (22nd June 2026) (available at https://ukconstitutionallaw.org/))