THE Church Commissioners have pledged to increase financial support for the Church of England by nearly one third over the next three years, thanks to a strong return on investments in 2021.
The annual report, published on Wednesday, shows that the Commissioners achieved a net return of 13.3 per cent on their investments in 2021, compared with 10.4 per cent in 2020 (News, 18 June 2021). During 2021, the value of their investment assets rose from £9.2 billion at the start of the year to £10.1 billion at the end. This was in spite of “another year of upheaval and uncertainty, as hopes and disappointments ebbed and flowed with the pandemic”, the chief executive and secretary, Gareth Mostyn, writes in the report.
The report says that the level of distributions for the Church’s ministry will rise from £930 million in the current triennium, which ends this year, to £1.2 billion in the next triennium (2023 to 2025): an increase of 30 per cent. The Commissioners hope to be able to maintain this level of funding over the following two triennia, which would amount to £3.6 billion over nine years.
This increase was recommended by the Church Commissioners’ Assets Committee, having received advice from the Commissioners’ actuarial advisers. The Commissioners and Archbishops’ Council have now agreed the allocation of the funds available, as recommended by the Triennium Funding Working Group, which was convened for six months from last October, and which comprises representatives of the Commissioners, the Archbishops’ Council, and the House of Bishops.
Of the £1.2 billion, £426 million will be “core funding” (up from £353 million in the current triennium). This “includes elements of expenditure that are considered of fundamental importance to support the mission and ministry of the Church”, the annual report says. It gives examples of “funding for communities with fewer resources, and statutory funding responsibilities of the Church Commissioners, such as cathedral funding”.
Meanwhile, £226 million will be “strategic” funding (previously labelled “additional” funding), up from £156 million in the current triennium. This funding is for “targeted programmes” such as “supporting growth in the number of clergy” and “interventions to address racial justice” (the latter will receive £20 million).
“Time-limited expenditure” will receive £140 million (up from £45 million), which the report defines as “transformational initiatives which are planned for a short- to medium-term time frame”. An example it gives is helping the C of E to move towards a 2030 target for net zero carbon emissions (News, 14 February 2020): £30 million is being provided to initiate a net-zero programme.
The remaining £417 million will be used to fulfil the Commissioners’ obligation to historic clergy pensions (£383 million in the current triennium).
The Archbishops of Canterbury and York spoke at a press conference on Wednesday about the funding plans for the next triennium, alongside the First Church Estates Commissioner, Alan Smith.
Archbishop Welby said that the £1.2 billion “will go to the frontline: to dioceses and parishes and chaplaincies who are seeking to live out the life of being Christian disciples across this country of England. . . This is a bold investment in the service of God to proclaim Jesus Christ, to serve every single person in England. It is a historic moment.”
Asked whether the Commissioners had considered using its capital gain to help parishes to clear deficits caused by Covid, Mr Smith said: “We don’t believe that kind of doing a blanket covering [of] all deficits in an uninformed way will really solve the challenges.” Instead, he said, funds should be directed to “those parishes that are struggling most” and are “most vulnerable at the current point in time”.
Archbishop Cottrell spoke of the importance of the Lowest Income Communities Fund ((LInC), which is to receive £99 million in the next triennium (to be shared with “transition” funding). LInC money went to “the poorest parishes in the country”, he said.
He continued: “But the best way to secure a future for every parish, in the medium term, is to enable the Church to grow. . . Once the Church begins to grow, then it’s better able to support its ministry.”
The Archbishops responded to criticism from some quarters of the Strategic Development Fund. A review by Sir Robert Chote, published in March, found evidence that the programme had served as a “lightning rod” for a lack of trust within the Church of England, including a perceived bias towards the resource-church model and the Charismatic Evangelical tradition (News, 11 March).
Archbishop Cottrell said that the Archbishops had “listened to what people have said”, and that SDF funding would be distributed “differently this time” i.e. in the next triennium.
“This way of doing it is aligned around agreed priorities, and it’s much more going to be shaped by the aspirations of the dioceses. There is already much greater ownership of this across the Church, and therefore across the bishops. The way the money is distributed at the centre has been slimmed down and simplified.”
He continued: “One size cannot fit all. We know from everything we see in the world around us that things flourish when there is diversity. . . That means for every bit of the Church to flourish, not just urban and rural, not just Evangelical, but Catholic and so-called middle of the road. . . And the funding priorities now are absolutely aligned to that. So, if you are a multi-parish, rural benefice, with a big dream of doing work with young people in your benefice, you can now work with your diocese to prepare a bid to receive some funding to help you do that.”
The Archbishops and Mr Smith were also keen to emphasise that they were aware of the financial struggles being experienced by some clerics and lay workers. A £3-million hardship fund, announced on Monday, had been created “very quickly”, Mr Smith said, after the Archbishops raised the need with him and the chairman of the Archbishops’ Council’s finance committee, John Spence. “We realise that there’s a real need on the ground in current challenging circumstances, [and] to actually get that out there was key,” Mr Smith said.
Archbishop Cottrell said that he did not know whether £3 million would be enough to meet the needs of clerics who are struggling financially, “but it will certainly help them a great deal”.
Archbishop Welby said that he and Archbishop Cottrell had both been parish priests and were aware of “the difficulties of making ends meet on a stipend. . . That is something that weighs very heavily on our minds. It’s not just the parish priests, of course, it’s chaplains in many areas. This is a very widespread issue, and it’s one that we’re very, very focused on at the moment. . . This is something we’re all discussing and trying to work out how to deal with it best.”
WHILE the Commissioners’ annual report shows strong overall performance, it acknowledges that 2021 was “difficult” for its active managers, who “struggled to keep pace with the sharply rising market”. The Commissioners’ public equity portfolio achieved returns of 13.3 per cent, short of a benchmark of 20.1 per cent. The report says, however: “Our track record over longer time frames remains ahead of the respective indices over 5, 10, 20 and 30 years.”
Private equity and venture-capital portfolios made “exceptionally strong gains” during 2021 of 26.6 per cent and 54.8 per cent respectively. The total return for the rural portfolio, meanwhile, was 10.3 per cent; for “strategic land” 13.8 per cent; and for timberland 34.6 per cent.
In light of a report published last year by the Archbishops’ Commission on Housing, Church and Community (News, 26 February 2021), the Commissioners “have explored investment opportunities where their capital could address the housing crisis and help the communities that are most affected”, the annual report says. This included the investment last year of £20 million into the Schroders-Civitas Social Supported Housing Fund, which provides specialist accommodation for adults who have learning difficulties.
The Commissioners worked during 2021 to help the C of E move towards a 2030 target for net-zero emissions, the report says. Since the General Synod voted to adopt the target for church buildings (News, 14 February 2020), the Commissioners have sought to understand the level of current emissions, using the Energy Footprint Tool.
Among the findings has been that “more than 80 per cent of the average church’s energy use goes on heating”. The tool also shows that one in 14 parish churches now reports net-zero emissions, it says.
The Strategic Investment Board (SIB), which distributes grants on behalf of the Archbishops’ Council, awarded £15.3 million of Strategic Development Funding (SDF) in 2021, the report says. The money went to seven “major change projects” in seven dioceses: Blackburn, Chichester, Coventry, Exeter, Leeds, Southwell & Nottingham, and Winchester. A total of 84 projects have received SDF funding, of which 68 have been funded since January 2017, when the programme was expanded significantly.
Since 2020, SDF funding has been targeted at promoting growth in the largest urban areas, and on one or both of younger generations and deprived communities. In June last year, however, the SIB amended the SDF criteria “to explicitly include targeting SDF on United Kingdom Minority Ethnic/Global Majority Heritage (UKME/ GMH) communities”, as recommended by the report of the Archbishops’ Anti-racism Taskforce, From Lament to Action (News, 23 April 2021).
The new criteria will apply to projects awarded SDF from 2022, the report says. “The SIB will consider programmes not targeted at the largest urban areas if they are focused on areas of particular deprivation, UKME/GMH communities or younger generations, and have reach and impact in keeping with the other priorities for SDF.”
The Church Commissioners’ annual report is available to download here.