THE Church of England faces serious financial difficulty because of the economic crisis, a financial analyst said on Friday, as churchgoers were being asked to dig deeper into their pockets.
But forward planning by the Church Commissioners meant that cash support for mission and ministry should continue until the end of next year, and possibly longer, said Andrew Britton, chairman of the Finance Committee of the Archbishops’ Council, in a briefing paper prepared for next month’s General Synod.
Mr Britton said that, as the economy moved into recession and asset prices fell, “The current crisis will have a serious and lasting effect, in the parishes, the dioceses, and the national institutions.” One result of the crisis was that there would be less chance of keeping up cash flow by selling off property at acceptable prices or at all.
The parishes and dioceses had more than £1 billion invested in the CCLA Church of England deposit fund. Every one-per-cent drop in interest rates meant that there was £10 million less to spend across the Church. Some dioceses said that they were already finding it harder to collect parish shares from churches.
The Church Commissioners had been using “smoothing” arrangements that were designed to even out the effect of fat years and lean years of investment returns. These arrangements mean that they might be able to sustain cash support for the Church until 2013, but “All predictions need to carry a health warning,” Mr Britton said.
He also warned that the Pensions Board might ask for an interim increase in pensions contributions from dioceses at the start of next year.
The briefing paper showed that parish income in 2006 totalled £826 million. Although 70 per cent of this came from voluntary giving, the rate at which parishioners gave — 3.2 per cent of their income — fell short of the target of five per cent, set 30 years ago, when giving stood at only one per cent.
In 2006, the Church spent £1.1 billion, mainly on clergy stipends and working costs (£317 million), "other mission and ministry costs" (£272 million), church buildings (£200 million), and paying clergy pensions (£113 million).