THE Church of Scotland has emphasised that its finances are healthy, after the latest annual reports showed that it was running a £4.7 million deficit.
Documents prepared for the Kirk’s General Assembly, to be held this month in Edinburgh, show that the overall budget deficit in 2016 was £4.7 million, up from £3.5 million in 2015.
Most of this shortfall came from the budget for the Church’s social-care programmes, branded as CrossReach, which had a deficit of £3 million.
In addition, the Kirk’s six pension funds have a deficit of £3.8 million. A spokesman, however, said that the Trustees had assessed the pension position as “strong” overall, and agreements had been made for new funds that would reduce the deficit to zero soon.
The spokesman conceded that the overall budget deficit meant that some parts of the Church of Scotland’s ministries were spending more than their income and were being forced to dip into the reserves to cover costs.
“Some of this is short-term expenditure for longer-term gain and robust plans are in place to ensure the deficits will be reduced for 2018 and beyond,” he said.
A report for the General Assembly on CrossReach, which runs care homes and social programmes, warned that while the Church of Scotland had a proud history of social action it must return to a sustainable financial footing if it was to continue into the future.
“The overall and only option for long term sustainability is that we achieve a break even budget,” the report states. “However, despite the very real efforts of the council, management, and staff the unpredictable and precarious nature of our funding presents unexpected and unplanned challenges on an almost monthly basis, rendering the best laid plans challenging or impossible to meet.”
CrossReach is attempting to sell three care homes that are proving to be a heavy financial burden, the report says. The bulk of the pension schemes’ deficit can also be traced back to CrossReach, as its dedicated pension fund is £13.5 million in the red.
The spokesman said that the Church was confident that it was taking the steps required to push its pensions schemes back into the black.
He noted that the total income of the Kirk had increased, from £110 million last year to £114 million in 2017.