A SEVEN-PER-CENT increase in the National Minimum Stipend (NMS), set to come into effect in April, has been welcomed by the trade union Unite.
The increase, agreed by the Archbishops’ Council, acting as the Central Stipends Authority (CSA), will see the minimum stipend jump from £26,134 to £28,670.
Last July, the CSA announced a five-per-cent increase for 2024. The greater uplift to seven per cent has been made possible because dioceses, which will have to fund the stipends, need pay less into the Church of England pensions scheme. In December, the Pensions Board announced a drop in the contribution rate by three percentage points from April this year: to 25 per cent of the previous year’s National Minimum Stipend.
The Archbishops’ Council has also agreed a seven-per-cent increase in the National Stipend Benchmark to £30,638. This is the sum that the Council recommends that dioceses pay.
This week, Unite’s general secretary, Sharon Graham, paid tribute to members of the Church of England Clergy & Employee Advocates (CEECA) — part of the union’s wider faith workers’ branch. Last year, CEECA was invited for the first time to submit proposals to the Church of England’s Remuneration and Conditions of Service Committee (RACSC), which advises the Archbishops’ Council on increases in stipends.
It called for an increase of 9.5 per cent, citing “significantly higher food costs, combined with current high energy prices that show no sign of abating”, and warning of “chronic financial anxiety and hardship among clergy and their families” (News, 9 June 2023).
Ms Graham said: “The dedication and commitment of Unite’s CEECA activists on behalf of their members has moved the Church into providing this much-needed increase to the stipend. However, financial hardship and a lack of support in ministry remain a real concern for CEECA members. Unite’s fight to improve financial well-being and working conditions for Church of England clergy will continue.”
The Team Vicar of Horsham, the Revd Sam Maginnis, who is the national chair of CEECA (Comment, 16 June 2023), said that the increase would “go some way to ensure that clergy receive relief from the financial hardships and the stress many are dealing with, and can effectively serve their local communities.”
A review in 2021 noted that the CSA had not been uprating the stipend by the Retail Price Index, despite an agreement by the General Synod, in the wake of the 2001 remuneration report Generosity and Sacrifice, that such a policy should be followed (News, 23 November 2001; 18 February 2022). In 2012, it was calculated that the benchmark was lower in real terms against RPI than it was before Generosity and Sacrifice.
The 2021 review recommended that the NMS should be linked instead to the Consumer Prices Index including owner-occupiers’ housing costs — the Government’s preferred measure of inflation.
In a letter sent to diocesan secretaries last month, Kevin Norris, secretary of the RACSC, reported that the Archbishops’ Council had noted that, in order to “fully catch up with inflation”, the 2023 NMS would need to be increase by 11.3 per cent, “which it recognised would be unaffordable for dioceses”.
But, he wrote: “RACSC and the Council are concerned about the impact on clergy wellbeing and morale of stipends having fallen behind inflation and consider that the reduction in the pensions contribution rate provides an opportunity for some catch up. We noted that one effect of the NMS not keeping up with inflation in recent years was to reduce the value in real terms of the starting pension upon retirement. A seven per cent per cent increase in the NMS would go some way towards ensuring that starting pensions keep pace with the cost of living.”
His letter expressed a hope that the move would “encourage you to look again at the level of your Diocesan Basic Stipend for 2024/25, although we remain aware of the acute financial pressures that many dioceses face”.
Most of the dioceses who contributed to the 2021 review argued that a higher level of stipend would not be affordable. Many “expressed concern about the high level of the current contribution rate to clergy pensions (for pensions post 1998): almost 40 per cent of the National Minimum Stipend including deficit-recovery contributions.”
The rate of contribution has since been reduced, in response to statutory valuations of the pensions scheme — to 36 per cent in 2022 and to 28 per cent from 2023, after the deficit, present from the inception of the scheme in 1998, was cleared (News, 18 February 2022).
“The improvement in the scheme’s funding position has resulted from strong investment returns and changes in financial market conditions, principally the rise in interest rates,” the CEO of the Pensions Board, John Ball, said this week. “Once the scheme had moved to a fully-funded position, deficit payments, which prior to April 2022 accounted for around a sixth of the contribution rate, were no longer required.”
The ONS reports that annual growth in regular earnings was 7.3 per cent in August to October 2023 — 1.3 per cent in real terms adjusted for inflation.
THE latest increase in the stipend comes against the background of a long-running debate about the adequacy and affordability of clergy remuneration. The 2021 review, which concluded that the stipend was “adequate for most clergy and is generally an appropriate level of remuneration”, was the first for 20 years. That earlier review, Generosity and Sacrifice, recommended a pay rise of 18 per cent to £20,000, with the new figure based on a primary school headteacher’s salary. It followed a survey of all 10,000 clergy — to which two-thirds responded — which found that just 13 per cent believed the level of stipend (roughly £17,000) was adequate.
It was a recommendation that went unmet: the 2021 review observed that some of the aspirations of its predecessor “proved unaffordable or perhaps unrealistic . . . there is a need to avoid overpromising”.
The present salary range for primary-school heads (outside London) is £53,380 to £131,056, out of which they must pay for housing costs.
Among the underpinning principles of the 2021 review were that “the strong emphasis on vocation means that secular notions of reward do not apply in the same way, as clergy are not primarily motivated by financial considerations”, but that terms and conditions should “enable clergy to flourish in their ministry without undue financial anxiety or hardship”.
A survey completed by 3700 clergy found that 62 per cent reported “living comfortably” or “doing all right”, but 13 per cent were finding it quite or very difficult to manage and 25 per cent were “just getting by”. Those finding it difficult were more likely to be those that had two or more children and no additional household income, clergy with disabilities, and UKME clergy.
Rather than a stipend rise across the board, the review recommended that “additional targeted support should be provided for those clergy in a diocese who are experiencing particular financial hardship, along with greater availability of financial education, signposting, and empowerment”.
The cost of living increased sharply across the UK in the years following the review. The annual rate of inflation reached 11.1 per cent in October 2022, a 41-year high, before easing. Between December 2021 and December 2023 food prices rose by 26.2 per cent.
The latest Central Stipends Authority report noted: “High levels of inflation and the cost of living crisis pose a challenge for the CSA in meeting the aspiration set out in the review of maintaining the real value of the package over time, especially as the stipends are largely funded by the generous giving of parishes and laity who are facing the challenges posed by current economic conditions.”
Read more on this story in this week’s Letters here