Leeds looks at redundancies to reduce a £3 million hole in its finances

31 July 2018

DIOCESE OF LEEDS

The Bishop of Leeds, the Rt Revd Nick Baines, addresses 900 people at the diocese’s first lay conference, “Together in Faith”, held at the Harrogate Convention Centre last month

The Bishop of Leeds, the Rt Revd Nick Baines, addresses 900 people at the diocese’s first lay conference, “Together in Faith”, held ...

FOUR years after its creation, the diocese of Leeds has announced a series of cuts, including 14 redundancies, in order to address an annual deficit of £3 million.

A shortfall in parish share of £1.8 million is identified in its annual report as the most pressing challenge. On a working-age poverty measure, 21 per cent of its parishes are in the ten per cent most deprived, nationally.

A letter from the diocesan secretary, Debbie Child, dated 17 July, referred to a “serious financial situation” necessitating immediate action. It confirmed that diocesan staff had been informed of plans to close the church-workers defined-benefit pension schemes at the end of the year; to “harmonise” pay scales from four to one; and to review salaries. Fourteen employees would be made redundant.

A statement from the diocese, issued on Monday, said: “The financial challenges that predated the creation of the diocese now need to be addressed in the light of a comprehensive and detailed appraisal of our income/expenditure. . . A strong future demands strong action now.”

On Tuesday, the Bishop of Leeds, the Rt Revd Nick Baines, denied that the diocese was “in crisis”.

This week’s announcement prompted the Bishop of Burnley, the Rt Revd Philip North, to reiterate his call for wealthier dioceses to extend greater support to poorer ones (Comment, 1 June).

“A northern diocese ‘in crisis’ because of a debt of less than one per cent of the funds held by some southern dioceses,” he wrote on Twitter, on Tuesday, “This ‘crisis’ is no more than a symptom of a much deeper financial and spiritual institutional sickness. The solution is in Acts 2.”

But Bishop Baines replied: “It is not a crisis. It is reality and we are attending to it — have been for some time. Not everything can be pinned on the South.”

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Last year, the diocese received £1,664,426 from the Church Commissioners in low-income communities funding — second only to Manchester (News, 21 October, 2016). Across eight measures of poverty monitored by the Church Urban Fund, it has a higher proportion of deprived parishes than average.

The National Church also allocated the diocese £1.9 million last year to aid its search for a stable financial footing, and £3.1 million in strategic development funding towards a £5.3 million plan to establish five church plants in Leeds (News, 15 December, 2017).

The 2017 annual report highlights as the diocese’s key challenges a shortfall of parish share and “beginning to reduce expenditure as we work towards a balanced budget”. Parish share, budgeted to provide two-thirds of the diocese’s income, was short by £1.8 million, despite increasing by two per cent, to 88 per cent of the requested budget. Costs have been partially offset by vacancies in clergy staff posts.

A £1.6 million charge for lay pensions is also highlighted. The diocese has been asked to increase payments to clergy and staff pension schemes in order to contribute towards covering pension fund deficits.

The diocese of Leeds was created at Easter 2014 by merging the dioceses of Bradford, Wakefield, and Ripon in line with proposals put forward by the Dioceses Commission (News, 17 April 2014). The Commission’s report, published in 2010, found that the financial position of all three dioceses was “challenging”.

Bradford was found to be covering its costs by selling houses and reducing the number of stipendiary clergy, with a deficit predicted for each of the next five years.

In Wakefield, a six-figure annual deficit in the years 2010-2014 was forecast. Surpluses had been achieved by cutting diocesan staff posts and keeping benefices vacant.

Although the Commission emphasised that its report was “mission-led and not finance-driven”, it predicted that financial savings could be made through the merger, which entailed a reduction in the number of diocesan bishops and the creation of a single diocesan office.

In 2012, it forecast a net annual saving of up to £800,000, with aggregate office running costs reduced by one-third.

A ten per cent reduction in diocesan staffing costs over five years would be achieved “through natural wastage”.

The Commission wrote: “With a combined budget of over £23 million (based on 2013 budgets), the new diocese will have an income and reserves that can provide a much greater level of financial security and stability than hitherto.”

It warned, however, that, “in a context where none of the Yorkshire dioceses is financially strong, no structural change that we could propose could of itself solve the financial problems”.

Ms Child’s letter refers to plans to bring a “medium term sustainability plan” to the diocesan synod in October. She added: “We are offering members of staff all the support we can but I ask that you keep them in your prayers through this difficult time.”

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