Church Commissioners: Where did the money go?

by
14 July 2010

THE annual reports of the Arch­bishops’ Council and the Church Commissioners came to the Synod on Sunday evening. A presentation on the Council’s annual report took the form of a brief introduction from the Archbishop of York, Dr Sentamu, followed by a question-and-answer session.

Introducing the Church Com­mis­sioners’ report, before answering ques­tions, the First Church Estates Com­missioner, Andreas Whittam Smith, said that, before 2007, invest­ors could speak of “looking across the valley” from the previous­ly high values of equities, across the dip caused by their loss of value, towards the upward slope on the other side. Their conviction that there would be an improvement encouraged them back into the stock market.

Now, however, there was so much fog and mist that it was difficult to see what to do. The Commissioners were considering moving away from “equities or properties and nothing much else”, and wanted “more things” — for instance, by investing in forestry in the United States.

He was also considering investing in high-yield brands in the US, and in the emerging markets, especially in debts and currencies. He was also prepared to invest more in hedge funds. He said that there were hedge funds whose investment strategies he would approve of, and others that he would not approve of.

The Commissioners’ investments had, by 30 June this year, been per­forming “even-stevens”. This had been achieved because commercial- pro­perty assets had recovered, resi­dential assets were doing quite well, and agricultural assets were doing well. Uncertainty about the market trans­lated not only into diversifica­tion, but also into the Commission­ers’ distribution policy to dioceses.

The “smoothing mechanism” by which the Commissioners had held back money during good times in order to sustain their distributions during down times would be “even stricter than it already is”. More money would be held back until near the end of the next triennium.

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He intended to ask the dioceses how they would use and how, after three years, they had used the £46.8 million “Darlow” funds that the Com­missioners distributed for par­ish ministry and mission. “With­out that knowledge, we are less likely to distribute the funds correctly in the future.”

He also wanted to use some of the Commissioners’ resources to re­search how well Fresh Expressions had gone after five years. It was in­teresting that cathedrals had done better than other parts of the Church. He also wanted research into work with children and young people.

In answer to a question, Mr Whittam Smith said that the Ethical Investment Advisory Group was in touch with BP, but he didn’t want “to make a song and a dance when the company is struggling for its life”. The Commissioners would wait until BP returned to “something like normal”.

Alan Cooper (Manchester), in his last contribution to the Synod after being a member for 40 years and a Commissioner for 16 years, said that the Church owed a great deal of grati­tude to the Com­mis­sioners. Man­chester had some of the most de­pressed areas in Europe, and with­out their money the Church could not maintain its stipendiary ministry in some depressed wards.

Canon Giles Goddard (South­wark) said that his parish was living through the slow death of the Octavia Hill communities, which was the direct result of the Commis­sioners’ selling these estates.

Mr Whittam Smith said that he had not received any complaints from the residents.

When John Freeman (Chester) asked what more information the Commissioners wanted about the use of their funds by the dioceses, Mr Whittam Smith said that £30 million was going out, “and we don’t know what is happening to it. We could not answer the question if the Charity Commissioners asked us what is happening to the funds.”

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