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Abolition of diocesan apportionment proposed in Church of England finance shake-up

27 January 2025

Package is expected to enable increase in clergy stipends to catch up with inflation

Geoff Crawford/Church Times

The update is by the chair of the Finance Committee, Carl Hughes, seen here addressing the General Synod in London a year ago

The update is by the chair of the Finance Committee, Carl Hughes, seen here addressing the General Synod in London a year ago

A SHAKE-UP of funding flows between the Archbishops’ Council and dioceses, set out in a paper to come before the General Synod, includes £200 million of “time-limited additional support” for dioceses and the abolition of diocesan apportionment.

The package is expected to enable dioceses to increase clergy stipends to catch up with inflation since 2011.

The update from the diocesan-finances review follows the first report, presented to the General Synod last year, which painted a stark picture of the Church’s financial and mission health. Thirty-five dioceses are expected to report deficits in 2023, and attendance down between 25 and 40 per cent since 2015 (News, 21 June 2024). Twenty-three dioceses hold less than three months’ cash reserves.

The review warned that dioceses had an “increased dependency” on the national church institutions, while complex financial flows were a “mystery to many”, contributing to “resentment and confusion”.

The update, written by Carl Hughes, who chairs the Finance Committee of the Archbishops’ Council, sets out a series of recommendations to be considered as part of the triennium spending plans for 2026-28.

It is proposed that a total of £200 million be provided to dioceses over the course of nine years to “provide breathing space”. This would taper down over the period “as they pursue longer term strategies for growth and sustainability”. The aim is to “help to prevent short-term non-optimal decisions”.

The money will be distributed in two strands: “immediate relief”, determined by formula; and an increase in the Diocesan Investment Programme, the grant programme to which dioceses must submit bids that align with the national Vision and Strategy (News, 28 March 2023). It is hoped that the additional funding will “address short term financial pressures and fund existing ministry costs whilst waiting for missional interventions to translate into improved financial health”.

The update also proposes that Lowest Income Communities Funding (currently distributed to 28 dioceses and totalling £91 million over three years) should be increased by one third.

The most deprived communities, the report says, have 60 per cent lower attendance and 40 per cent lower ministry per capita compared with the least deprived. The most recent available data indicate that 67 per cent of the funding is allocated to parishes in the 25 per cent most deprived areas. A new reporting framework is proposed to “demonstrate transparency, accountability and more intentional use”.

A significant change proposed is the abolition of apportionment: the contribution currently made by the dioceses to the Archbishops’ Council under five separate “votes” (training for ministry; the Council’s operating budget; grants to bodies including the Anglican Communion; mission-agency pension contributions; and clergy retirement housing).

Last year, the total was set at £32.2 million. It makes up half of the total cost of the five items. The Church Commissioners are funding 42 per cent.

The amount that individual dioceses are asked to pay is determined by a formula that includes local income levels and diocesan and parish investment income. For 2025, the total ranges from £280,000 from the diocese of Portsmouth to £2.2 million from the diocese of London.

The review recommends that votes two to five be met by the Church Commissioners. On vote one, it recommends that a single Ministry Training Fund be established for ordination training costs, including all fees, living allowances, and expenses. This would be largely funded by dioceses (whose contributions would reflect diocesan wealth as well as clergy numbers) and administered nationally by the Ministry Development Team.

The package is expected to help dioceses to fund another key recommendation: an increase in the national minimum stipend (NMS). This follows a vote in the Synod last year to ask the Archbishops’ Council, the Pensions Board, and the Commissioners to work together with dioceses to “explore ways in which the level of clergy pensions and stipends might be improved in a sustainable manner”.

A private member’s motion from the Revd Dr Ian Paul had called for the restoration of the clergy pension to its pre-2011 benefit level (News, 16 February 2024). Introducing the motion, he had said that the NMS had fallen by ten per cent between 2009 and 2019 against the Retail Price Index, while the Commissioners’ assets had grown “significantly” to £10 billion.

The review recommends that stipends should be increased to catch up with inflation since 2011, and that in future stipends should increase automatically in line with inflation, with a cap, and subject to an annual review by the Archbishops’ Council. It also proposes that a national standard incumbent stipend (NSIS) be introduced, “removing the differential stipend levels paid across dioceses in order to reduce the ‘postcode lottery’ faced by clergy across the country, supporting national deployment of clergy”.

From April 2026, the NSIS would be £34,000, and the NMS would be £32,000. The NMS for April 2025 was set at £30,110, after above-inflation increases that followed two years in which increases were below inflation.

Most of the dioceses that contributed to a 2021 review of clergy remuneration argued that a higher level of stipend would not be affordable. The update of the diocesan finances review suggests that the package of reforms, including abolition of apportionment, should ease this.

The increase in the stipend would also raise the starting pension, which, the review says, should be based on the NMS of the current rather than the previous year. This would, it says, “mitigate the effect of changes to accrual rates since 2011”. It does not, however, reverse other changes, including a reduction in the pension from two-thirds of the NMS to a half.

It recommends that the Church standardise stipend levels and policies across dioceses, including maternity and paternity packages (News, 8 May 2024).

Last year, concerns were raised about the sufficiency of scrutiny of the Archbishops’ Council’s budget (News, 12 July 2024). The review calls for “a more robust and transparent framework for synodical consideration of national budgets and spending plans”.

There is also a call for further work to pilot schemes “aiming to address structural overheads which impact our cost base, and opportunities to reduce duplication and complexity”.

Mr Hughes says that, in weighing up the package, the Triennium Funding Working Group will “need to consider affordability and balance priorities alongside other funding requests”.

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