Crown Estate profits fall as returns to Treasury more than halve

Profits generated by the Crown Estate have slumped over the past year, causing the amount of money given to the Treasury to fall by more than half.

Newly released figures show the Crown Estate's revenue account profit, which is similar to its net profit, dropped to £487m from £1.1bn a year earlier.

The Crown Estate is an independent property business whose profits go to the Treasury to be used for public spending.

Reduced income from offshore wind projects was the primary reason behind the slump. Companies pay the Crown Estate option fees to reserve a part of the seabed for turbines, but construction for many of the projects has now begun.

Excluding the fading impact of wind farm option fees, the Crown Estate reported growth in its marine operation, with profits climbing to £175m.

It said the growth was boosted by favourable wind conditions, new offshore capacity and expansion across different activities in the sector.

The Crown Estate owns half the beaches and immediate shoreline, and the entire seabed, around England, Wales and Northern Ireland.

Meanwhile, operating profits for the estate also dipped to £1.2bn in the year to March compared with £1.4bn last year.

Despite the slump in returns to the Treasury, the latest annual figures show the Crown Estate's net asset value grew to £16.7bn compared with £15bn a year earlier.

Profits from its real estate and development operation increased to £258m from £242m.

The Crown Estate owns billions of pounds worth of real estate properties in London and is one of the country's biggest rural landowners.

A percentage of the profits of the Crown Estate is provided to the Sovereign Grant - the annual public funding for the official duties of the monarchy – such as travel, staff and maintaining buildings.

The money for the Sovereign Grant comes from the Treasury, not from the Crown Estate, but the profit levels of the Crown Estate are used as a benchmark.

This has been the measure since the Sovereign Grant was introduced in 2012, despite suggestions that this is confusing and it might be more straightforward to link adjustments to the Sovereign Grant to a marker such as inflation.

The Crown Estate had announced plans to invest up to £5bn over the next decade across renewable energy, housing, science and innovation.

Its CEO Dan Labbad said the latest numbers demonstrate "the strength of our underlying business and the importance of taking a long-term approach to managing national assets".