THE Church Commissioners wrote to every diocese last Friday to allay fears over funding levels, after the Church of England suffered an estimated 22 per cent loss.
Andrew Brown, Secretary to the Church Commissioners, confirmed that this loss equated to about £1.2 billion, based on the last valuation of its assets in late 2007, which totalled £5.6 billion. He said that this reduction was not as severe as losses on the FTSE 100 index, which had fallen by an average of 30 per cent.
In a letter to every diocesan board of finance, Mr Brown said that the Church Commissioners would be able to maintain planned levels of support for dioceses until the end of 2010, and might be able to continue until 2011-13.
He said this was possible because the Commissioners had paid out less to dioceses “in good years, in order to keep something in hand to cover leaner years”.
He mentioned that, over the past decade, the total return on the Commissioners’ investment fund — which includes a portfolio of assets of commercial, residential, and rural property investments, as well as stock market investments — had averaged 5.4 per cent per annum. This figure takes into account unaudited figures for 2008.
It also shows the effect of the financial crisis, as the ten-yearly average return, until the end of 2007, had been 9.5 per cent per annum.
The Church’s return still remained significantly better than the profits of 200 similarly sized funds, which had averaged just 3.7 per cent, and meant the Commissioners had been able to distribute about £21 million more each year to the Church over the past decade.
“The impact of the overall financial situation would be much greater”, Mr Brown wrote, had the Commissioners not taken a range of steps before the full extent of the financial crisis was felt by the markets. These included reducing residential property holdings, selling commercial properties, and investing in more overseas stock-markets and property.
Speaking to the Church Times on Monday, Mr Brown remained positive about the situation, despite the continuing uncertainty in the financial markets. “It’s good news that we are able to make available the money in capital markets that we said we would. We are no different from any other investor: we have the same pressures as any other investor.”
But, he said, it was impossible to tell whether current levels of funding could be maintained after 2010. A decision would be taken after the figures were released at the end of this year.
Last month, the Church of England confirmed that it had withdrawn its investment in Caterpillar, the bulldozer company that manufactures machines that were used by the Israeli government to destroy Palestinian settlements (News, 13 February).
Bishop’s call for giving. The Bishop of Bradford, the Rt Revd David James, has called for people to give their way out of the current economic crisis. The Christian response to the recession, he said, began with “the Church and her members living out the values of the Kingdom”, and “rediscovering the mutuality which is the foundation of our building societies and our credit unions”.
People who were still working, or whose pensions had been unaffected by the fall in interest rates, should “give more on behalf of those who have less”, she suggested.