Shake-up in central funding for dioceses mooted

23 January 2015

BRENT CLARK

THE present method of distributing central church funds to the dioceses should be scrapped, a new report says. It is one of the set released last week as part of the Archbishops' programme of renewal and reform.

The report Resourcing the Future, produced by a task group chaired by John Spence, the 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, the report says, from 2017, dioceses should be ranked according to average income, and the money redistributed appropri-ately. Half of central funds would go to projects that showed "significant growth potential", and half to mission in the poorest areas. Dioceses will be encouraged to bid for money for particular projects.

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, the report says.

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.

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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 attend-ance. Thus, if attendance in parishes in a diocese declines, the allocation of central funding goes up.

Looking at one (anonymous) sample 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 subsidised decline."

Since 2002, £420 million has been allocated through the Darlow formula. Besides 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 Futureconcludes 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 which encourages evaluation of outcomes, sustainability and shared learning".

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 public-ation 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."

Key recommendations:

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 that can improve the mission of the whole Church.

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