THE present method of distributing central church funds to the
dioceses should be scrapped, says a new report, one of the set
released this week as part of the Archbishops' programme of renewal
Resourcing the Future, produced by a task group chaired
by John Spence, finance chair of the Archbishops' Council, says
that the present formulae for allocating grants from the Church
Commissioners - about £50 million a year, or four per cent of the
Church's annual income - is "not fit for purpose" since,
paradoxically, it rewards decline and penalises growth.
Instead, says the report, from 2017 dioceses should be ranked
according to average income, and the money redistributed
accordingly. Half of central funds would go to projects that showed
"significant growth potential", half to mission in the poorest
areas. Dioceses will be encouraged to bid for money for particular
In future, if the Archbishops' Council has concerns that a
diocese is failing to achieve its stated goals, or if it cannot
show that money is being directed to the poorest communities, all
or part of its funding could be withheld.
The report is bullish about the future: in its opening
paragraphs, it states: "The question is not 'How do we limit
expenditure to address our steadily diminishing resources?' That is
the management of decline. The issue is 'What investment must we
make to achieve the ambition of growth?'"
Part of the answer is an assumption that, eventually, growing
parishes and dioceses will be able to fund their own mission.
Already, 95 per cent of the Church's income comes from direct
giving. Poorer communities, however, struggle to cover their costs,
and have difficulty in attracting and funding clergy. This is where
central funding should be redirected, says the report.
In the mean time, however, the report talks about preparing a
case for transitional funding to be provided by the Church
Commissioners. Spread over ten years, this will provide a cushion
for those dioceses whose funding is cut under the new system.
At present, central funds are provided to the dioceses under
what is known as the Darlow formula. This calculates the needs of
parishes based on financial need and attendance. Thus, if
attendance in parishes in a diocese decline, the allocation of
central funding goes up.
Looking at one sample (anonymous) diocese, the report concludes:
"Across the whole diocese, more subsidy is being put into parishes
that are less deprived but declining, than those that are more
deprived but growing. . .
"One cannot know exactly where the Darlow funding is being
spent, as there is very little accountability over its expenditure
or impact. But it is clear that it is not being explicitly targeted
on mission work in poorer communities; nor is it proactively
supporting growth. It helps lock dioceses into a position of
Since 2002, £420 million has been allocated through the Darlow
formula. Alongside this, an additional £75 million has been
disbursed through mission development funding, some through a
formula, the rest in response to bids for specific initiatives.
Resourcing the Future concludes that the formula-based
funding should cease, since it "blunts its edge in terms of the
funding being used to invest in new growth opportunities". In
future, all mission development funds should be bid for, "linked to
dioceses' plans for mission and growth, and in a way in which
encourages evaluation of outcomes, sustainability and shared
The report looks at the Sheffield formula, which attempts to
balance the numbers of stipendiary clergy between dioceses. This,
too, is "unfit for purpose".
"The Sheffield formula also focuses solely on stipendiary
clergy, ignoring different forms of ministry. It takes too much
account of historic structures rather than current demographic
factors. As a result, the Darlow formula (which seeks to distribute
ministry support to help poorer dioceses afford their Sheffield
allocation) does not target funds on the poorest communities."
It concludes: "The proposals to align the national funding more
closely with dioceses' plans, with the bias to the poorest
communities, should help contribute to greater equity of
ministerial provision across the country."
In a blog to accompany publication of the report, Mr Spence
summed up the object of the week's activity: "We are here to help
every parish, deanery, and diocese achieve its goals. The totality
of the reports published this week represent a coordinated response
to a proven and vital need."
In future, all of the funding distributed to dioceses should
be investment for mission and growth. Half of the sum available
should be earmarked for the support and development of mission in
the poorest communities. Half should be for the pro-active
investment in new growth opportunities.
The funding to support and develop mission in deprived
communities should be distributed to dioceses through a process
involving objective measures of need and through conversations with
dioceses. This will ensure targeting on the poorest and effective
cohesion with diocesan plans.
The funding for pro-active investment in growth should be
available for all dioceses to apply for, on a matched funding
basis, with a bias in the distribution to the poorest.
The transition to the new funding arrangements should be done
carefully over a ten-year period, but we hope that additional
distributions from the Church Commissioners can be found to
accelerate the build-up of funding available for proactive
investment in growth.
We hope also that additional national funding can be made
available to provide extra investment across the Church for
recruiting and training church leaders. In addition there should be
greater investment in national Church infrastructure, and activity
which can improve the mission of the whole Church.
Can money alone turn around the Church's decline?
No. But decisions about funding need to be part of the solution.
Money enables mission activity to take place. Church growth often
costs money to sustain and develop. Spending less on supporting
activities associated with decline liberates funds for intentional
investment and encourages fresh thinking about how to advance
mission and growth.
Will the funding changes benefit the poorest
Yes. The present formula takes no account of deprivation.
Moreover, the evidence shows that the national funding currently
given to 'poorer dioceses' (in the form of the 'Darlow funding')
does not consistently find its way to the poorest communities in
those dioceses. A significant amount of the funding goes to support
parishes which are not poor but which cannot afford their ministry
costs because they are in decline. Our very broad estimate is that
only a third of the total funding currently allocated to dioceses
goes to the poorest communities. Our proposals will increase this
to 50%. Further, the other 50%, which will be for proactive
investment in growth across the country, also has a bias to the
Will the new measure of need used to distribute funding to
dioceses for the support of mission in the poorest communities
disadvantage rural areas?
No. The measure of need is centred on the average income of the
residents in the diocese, with a small modification to give extra
help to dioceses with significant pockets of low income. The less
income an area has, the less likely its churches will have
sufficient resources to undertake their mission. Assessing average
residents' income will enable an objective comparison of need
across all areas of the country - urban and rural.
Why does the calculation for allocating funding between
dioceses for mission in the poorest communities take no account of
diocesan wealth or investment income?
The funding for mission in poorest communities aims to do
exactly what it says - fund mission in the poorest communities. The
previous formula took into account a number of church-related
factors, with the result that it was never clear whether a diocese
was receiving funding because it ministered to poor communities, or
because of issues relating to its own management. (The more
ineffective a diocese was in managing its resources the more
funding the previous formula would give it.). The new allocation
system will mean that the Church can be sure that funding is
allocated to the most deprived communities. Investment income will
continue to be taken into account in the formula system which
apportions national Church expenditure between dioceses, and the
funding for proactive investment in growth opportunities will take
note of the other funds available to dioceses, to ensure the
funding awarded is demonstrably providing additional value.
Why are there no proposals to direct funding towards areas
where it is hard to sustain mission and ministry for reasons other
than poverty (e.g. areas where there are significant numbers of
It is for dioceses to make detailed decisions about which of
their parishes need financial support. The national funding
represents only a small proportion of most dioceses' total income,
and we believe that the greatest impact national funds can provide
is for mission in the poorest communities.
Should the national funding have greater emphasis on
investment in growth in view of the Church's persistent decline?
Why should national funding support mission in the poorest
communities? Isn't that the responsibility of dioceses?
We believe all the national funding distributed to dioceses is
investment in growth, with some earmarked to support mission in the
poorest communities and some used in other parts of the country
where there are opportunities for growth. This reflects the
Church's 'bias to the poor' and recognises the challenges of
undertaking mission in the poorest communities. Sustainable growth
must include growth in the poorest communities.
There is a welcome emphasis on greater mutual accountability
between dioceses - how exactly will this work?
The detail will be discussed with dioceses themselves but we
envisage a process for distributing the funding for mission in the
poorest communities whereby: a) dioceses are given an indication of
their funding; b) they decide their plans for spending it; c) they
share their ideas with other dioceses as part of a peer review
process to help reach a common understanding of the desired
outcomes of the funding; d) the money is allocated and spent; and
e) subsequently dioceses share learning on their use of their
funding. Money would only be withheld from a diocese if there were
serious concerns about its failure to achieve what it planned to do
or if there was a lack of evidence that the monies were being
directed to the poorest communities.
Is there a risk that the proposals about accountability will
lead to a more 'centralist' approach?
The aim of our proposals is to support dioceses' plans for
mission and growth. This involves dismantling the current central
planning systems which have influenced national funding decisions.
There is not a 'Church of England' strategy; there are 42 diocesan
strategies. Our proposals will ensure national funding supports
those strategies where there is most need and opportunity. The
evaluation of dioceses' use of funding will be undertaken by peer
review so that dioceses can learn from each other how they are
deploying the Church's resources and so develop stronger mutual
Does the funding earmarked for proactive investment in
growth opportunities also have to be used in the poorest
No. Dioceses should support their greatest growth opportunities
wherever they are. However, we believe there should be some bias to
the poor in the distribution of national funding - and wherever
financial support is provided care is taken to ensure that it
genuinely supplements local resources.
What do you mean by 'proactive investment in new growth
It will be for dioceses to decide. It is not a push towards
'novelty'; tried and tested mission activity will be supported, for
example, where there is opportunity to support it in new settings
(e.g. as a result of population shifts). The focus is on extending
the Church's reach - in whatever form and in whatever setting that
dioceses believe will make a significant difference to the Church's
mission. "New opportunities" needs to be taken in the broadest
sense; they could include major expansion at an existing church
whose ambition is being limited by finance.
Is this the national Church pushing an agenda on dioceses to
conform mission to certain activity?
No. There is no such agenda in the national church. These
changes will help dioceses take control and pursue their own
visions, whatever that may be. Dioceses will be able, in each
funding stream, to receive funds which fit with their own strategic
priorities. This may include support for mission enablers,
administrators, prophets, pastors, evangelists, visionaries,
risk-takers, apologists and pioneers.
Will the focus on evaluation mean that the riskier projects
are cut out? What about those with benefits which are hard to
measure, or mainly have benefits in the long term? Or indeed
initiatives where God may surprise us?
The focus on evaluation will mean that the Church can have
confidence that its mutually shared resources are being stewarded
effectively. High risk and long-term projects can receive funds if
the potential benefit can be shown to be worth the risk. Funding
decisions need to be informed by a clear view of what it is hoped
will be achieved, acknowledging that God can always surprise
Does the Church know enough about the causes of church
growth to ensure that any significant investment in funding is
The evidence base relating to church growth has increased
significantly over recent years as a result of the church growth
research programme (http://www.churchgrowthresearch.org.uk/).
Nobody pretends that there is a simple relationship between cause
and effect but there is a growing amount of information about what
is likely to support growth - or likely to maintain decline.
Funding decisions can and should be informed by this information so
that the Church's money is put to best effect.
Will the prospect of the Church Commissioners making more
money available for distribution risk creating more financial
dependency and reducing giving levels?
Our proposals involve a shift from a formulaic subsidy system to
one which directs funding to where there is genuine need to support
mission in the poorest communities. The peer review process
governing the distribution of funding to dioceses for this purpose
will have the specific aim of promoting dioceses' financial
strength and sustainability. The funding given to dioceses for
proactive investment in growth will be distributed on a matched
funding basis so that there is a commitment at the outset to the
financial sustainability of any new mission work supported.
Do dioceses have the capacity to take forward their
ambitions to increase their number of ministers and make other
necessary changes to advance their mission and growth?
A number of diocesan leadership teams have expressed a desire to
improve their capacity to be strategic about their mission activity
and leadership requirements, given the huge range of day-to-day
issues that face them. We propose that some national funding should
be earmarked to support diocesan teams so they have increased
capacity to develop and deliver their plans for change. There will
need to be discussions with dioceses about what would best help
Is the transition to the new funding arrangement too long in
view of the seriousness of the Church's decline?
An orderly transition is required so that dioceses do not face
sudden large swings in their funding levels which will undermine
their mission and growth plans. Most dioceses will face minor
changes; the ten year period allows an orderly transition for all.
The 'cost' of the transition arrangements, if no extra funding is
available, is that there will be not be as much money available as
we would like in the short-term for proactive investment in new
growth opportunities. We hope therefore that the Church
Commissioners will be able to make some more money available to
help speed up the pace of change.