SPRING FINANCIAL CONSULTATION 2019
AGENDA • Setting the context – Current financial position • Update on Common Vision plans and the Development Fund • Discussion and Questions • Coffee • 2020 Budget assumptions • Update on 2020 Parish Share and Review • Questions and Discussion • Prayers and close
Setting the context
2018 ESTIMATED OUT-TURN 2018 2017 Actual Budget Actual £000 £000 £000 Parochial Ministry 14,420 14,229 14,232 Administration & Finance 409 520 484 Mission in the Diocese 2,946 3,097 2,712 National Church Responsibilities 1,095 1,095 1,055 Parish Share (Net) 18,986 19,046 18,750 Surplus 116 105 268
Ho How w ar are w e we fun e funding ding the the Di Dioc ocesa esan n Com Common mon V Vision? ision? • Use of Total Return Accounting in respect of Glebe investments to release some of the capital gains that we have made on our stocks and shares while maintaining the ‘real’ value of our investments • Grant(s) from Church Commissioners
Growth of Gr wth of G Gle lebe be T Tota otal l 140 por portf tfoli olio 120 100 80 £M 60 40 20 0 Inception 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Year-ended 31 December Real Value of portfolio (£M) Valuation of portfolio at year end (£M)
Total Return Accounting • Permitted for Dioceses since May 2016 • Allows a portion of the increase in endowment from original levels to be distributed in the present day while continuing to maintain the endowment in real terms for future generations
The Diocese’s approach • Application only to Newton managed portfolio of Stocks and Shares (currently c.£90 million) • Base year of 2000 and endowment maintained in real terms by using RPI • Newton will be able to diversify from high income yielding stocks such as oil companies • Annual withdrawal from Unapplied Total Return pot limited annually to 7% of opening value of Newton managed portfolio, a percentage which has been achieved (above inflation) by Newton since they took over the portfolio. • Legal advice approves this approach
The Diocese’s approach • Limited to three years initially • Will keep withdrawal rate under review. • Should yield around £7.5 million over first three years. • This will be split between Development Fund and Strategic Initiatives
Questions What questions would your group want to ask about the Common Vision process?
2020 Diocesan budget and Parish Share
Parameters Clergy stipends and salary increases 2%(2%) Curates in training 52 (50) Clergy vacancies 30 (28) (2019 numbers are included in brackets)
Total vacancies 44.0 42.0 40.0 38.0 36.0 34.0 32.0 30.0 28.0 26.0 24.0 22.0 20.0 18.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 2017 2016
Non-Ministry related areas Buildings repair costs inflation 2% (2%) Central controllable costs 0% (0%) Share under-collection rate 2.25% (2.4%) Share increase 1.8% (1.75%)
Can we operate a share scheme which is fair for all?
Principles Principles of of the Oxf the Oxfor ord d diocesan diocesan parish parish shar share e sc scheme heme: 1. Must be fair and not be seen to be unfair 2. Should reflect the ability to pay 3. Should not immediately penalize growth 4. Should be allocated at deanery level except where diocesan engagement is necessary
Principles Principles of of the Oxf the Oxfor ord d diocesan diocesan parish share scheme (cont’d.) 5. Should be based on generous and gracious giving plus mutual support 6. Should be easily communicated We apply a formula-based system rather than an offer-based system
Outcome Outcome of of the the Shar Share R e Review view Gr Group oup • No c No chan hange ge to to principle of principle of alloca allocation a tion at t Deaner Deanery le y level el • Tempor emporar ary y incr increas ease of e of rur ural al allo allowanc ance e by £2 by £200k 00k to co to cover cer er certain tain rur ural al deaneries deaneries whic hich ar h are e not cur not currentl ently y able ble to contribu to contribute te an an amoun amount consiste t consistent with nt with cler lergy numbe y numbers but will s but will nee need d mor more e cler lergy to meet oppor y to meet opportunities of tunities of the the Oxf Oxfor ord to Cambridge d to Cambridge cor corridor ridor
Out Outco come of me of the the Share Review Group (cont’d) • Fur Further r ther review of view of inconsistencies inconsistencies in the alloca in the allocation of tion of rur ural al allo allowanc ances es will will be do be done ne for the or the 2021 2021 alloca allocation tion • Other Other chan hanges ges con consider sidered ed and and modelled modelled but the but the outc outcome ome would ould be una be unattr ttractiv active in t e in ter erms ms of of reco ecover erability bility
How do we compare? • We asked for £499 per member in 2018, compared with £602 for the highest diocese and an average of £466 for all English Dioceses • The average unrestricted income per member for parishes across the Diocese in 2017 was £1,200 • Church of England national guidance is that church members should contribute 5% of their net income in voluntary giving.
Costs per Minister - 2019 2019 budget 2018 budget Costs per minister Costs per minister £ £ Stipends, NI and Pension 39,196 38,345 contributions Housing costs 11,826 11,231 Ordinand and Curate training costs 12,813 12,711 Parochial Ministry support 4,670 3,994 Diocesan Mission Strategy 5,989 6,950 Compliance and Governance 2,574 2,698 National Church costs 3,556 3,363 Fees and other income (4,245) (4,480) Total weighted cost per minister 76,379 74,812 Glebe income support per minister (12,646) (12,121)
Questions and comments?
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