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Rescue talks under way as even richest dioceses struggle

01 May 2020

But it is not yet revealed how many have asked for financial help nationally


A view of Oxford, one of the largest and best endowed dioceses

A view of Oxford, one of the largest and best endowed dioceses

NO DETAIL has yet been made public concerning the number of dioceses that have applied for the financial rescue package announced by the Church Commissioners and Archbishops’ Council on 27 March (News, 3 April).

The £75 million of short-term liquidity funding was intended to stabilise the situation in struggling dioceses and cathedrals while the National Church Institutions (NCI) gained evidence of how hard-hit each had been. The package also provided for a three-month delay in the dioceses’ monthly payments to the Commissioners to cover clergy stipends, the balance to be paid over the next year.

A statement from Mark Arena, the Archbishops’ Council’s Head of Financial Communications, on Tuesday of last week, said that the internal response to the rescue package had been positive, and that there was currently a “high level of engagement with many dioceses”.

A letter from the chief finance and operations officer, Gareth Mostyn, and the Archbishops’ Council’s general secretary, William Nye, to bishops, diocesan secretaries, cathedral administrators, and Church House staff on Tuesday of this week said that they were “acutely aware of the financial uncertainty created by the current crisis and the anxiety and stress it is causing. We know you are anxious to understand what further financial support may be available and want to assure you that this is the focus of much work across the NCIs.”

Tools to enable online giving and potential applicability of the Government’s financial-support measures had been among the various requests for support and advice, the letter said. “We are conscious of the urgency,” it said, but it went on to say that it was too early to provide further details.

No diocese appears to be immune from taking a financial hit as a consequence of the present crisis. Oxford diocese, one of the largest and best endowed, briefed parishes this week on the financial aspects of the current situation, expecting a shortfall in income this year and given a substantial reduction in investment income over the past three months.

The diocese has 800 churches in 626 parishes. Donations from parishes and benefices as parish share amounted to £19.2 million in 2019. Significant endowment funds in glebe assets generated a further £4.1 million, giving a total income of £24.6 million, against expenditure of £25.3 million.

A joint letter from the Bishop of Oxford, Dr Steven Croft, the chairman of the diocesan board of finance, John Tattersall, and the Diocesan Secretary, Mark Humphriss, described the financial situation as “serious”. “We are anticipating a shortfall in income this year, and we need to work together to address it,” the letter said.

“We hope and pray that the shortfall will be modest. A substantial shortfall would mean that decisions would have to be made by Bishop’s Council on cost-cutting measures such as lengthening clergy vacancies (though we have never done this before), and, if large, reducing posts or increasing parish share in future years ahead of inflation.”

Up to ten members of the 130-strong staff team were being furloughed. The senior team had all volunteered to take a ten-per-cent pay cut for three months, and many others had taken up the option of applying a salary sacrifice — an action that, the Bishop said, had “delighted and humbled”. Oxford had gone ahead with the clergy cost of living increase this month, but some clergy had asked voluntarily to forgo a percentage of their stipend for a period, and this was being arranged confidentially.

This was the time, the letter emphasised, “for all of us to delve into reserves. Reserves are there for significant unexpected occurrences and that is exactly what the present situation is”. Oxford’s central reserves were at just 3.2 months’ expenditure and would certainly be drawn on this year, “just as we would expect most parishes to need to do”. Two-thirds of parishes in the diocese had unrestricted reserves of more than six months’ expenditure, which would be available to assist with both parish share and with other financial commitments.

At a virtual meeting last week, all 29 deanery treasurers said that they would be working to maintain parish share, which primarily funds clergy stipends. There was recognition that, while the effect on some parishes would be manageable, others had low reserves and depended heavily on fund-raising events that had been due to happen during the lockdown period, and on Sunday collections and letting income.

It was hoped that wedding income would be deferred rather than lost, but as a short-term measure, and that no fees would be payable for funerals at crematoria, given the substantial reduction in the number of mourners and the required brevity of such services.

Giving in the collection plate, rental income, fund-raising income, such as summer fetes, and investment income were all recognised as particularly vulnerable areas. The letter contains advice for parishes on how to promote giving at this time of crisis.

The diocesan director of communications, Steven Buckley, said on Monday: “The crisis is hitting us hard, but we don’t expect to have to approach the Commissioners for emergency funding. Clergy, laity, and office staff are all busier than we’ve ever been, and, financial concerns aside, new ways of working and being church are being formed in the crucible of this crisis.”

Reports from other dioceses have confirmed that diocesan and cathedral staff have been furloughed. Peterborough is among those paying furloughed staff 100 per cent of their salaries and seeking the Government’s 80-per-cent funding.

Some parishes were worrying about funding, but others had paid the whole year in advance to help with cashflow, the Bishop of Peterborough, the Rt Revd Donald Allister, said last week. “Longer term, we look forward to, and will need, retrospective help from the NCIs, as this crisis will severely deplete our limited reserves.”

Manchester diocese is among those to have taken up the emergency funding, with early receipt of the full Lower Income Communities Funding normally paid over a year.

The diocese expects, during the coming months, to use some of the other short-term funding facilities offered by the national Church. Some staff have been furloughed and the diocese will be accessing the Job Retention Scheme to help cover those costs. Transitional funding will also be needed.

“Many parishes in our diocese are already financially vulnerable and the Covid-19 crisis will undoubtedly exacerbate these challenges,” the Bishop of Manchester, Dr David Walker, said. “It’s not a question of making concession to parishes with this — it is a matter of fact that many of them simply will not have the funds to pay parish share, given that they have already been operating with very low levels of reserves.

“The longer lockdown goes on, the more acute the financial pressures on parishes, and, therefore, the diocese, will be.”

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