Last updated 20th October 2021

Budget presentation to Diocesan Synod, October 2021; Chair of Board of Finance

Budget Presentation to Diocesan Synod, by David Barlow, Chair of the Diocesan Board of Finance.             

16 October 2021

David is pictured above giving his presentation. It should be read in conjunction with the paper presented to Diocesan Synod, available here.

Good Morning. I am conscious that there will be people present who listened to my presentation in July so apologies if I repeat much of what I said that evening, or of course contradict what I said that evening.

I am also aware that there will be people present who will be hearing this for the first time, and so I thought it would be useful to give some context to the budget process.

Any budget, and particularly, in our current circumstances, includes an element of risk; risk of course equals trust and faith. This budget has been prepared in the trust and faith that we are working in partnership with God, working out His plan for our Diocese, and working in partnership with each other.

For the past three years the budget has been produced with the future 3/5 years in mind. The Board agreed in 2019 that the maximum increase in annual budget for the Diocese as a whole will be restricted to 3% and with the impact of the pandemic this has been extended to 2024. You may recall that there was no increase in budgeted costs for the current year.

The intention is that we work towards a balanced parish share budget for 2025, without large increases in the parish share request overall, although clearly the impact on individual parishes is different. We are, of course, receiving a presentation from Carolyn after the break which will give us more detail on Missional and Financial Flourishing and how that fits into our wider Vision 2026. Our budget is an integral part of this process.

In presenting the budget for 2022, in July, it was intended that PCCs would receive their Parish Share requests earlier than previously, giving them more time to plan for the year ahead. Whilst this was not possible, we took the decision to send out draft Parish Share requests to assist parishes in their planning, and hopefully after this morning they will not have to be amended.

As my later short paper on the Budget Scrutiny Committee indicates, the budget was produced by the Bishops Budget team, was subject to independent scrutiny from the Scrutiny Committee, before it was agreed by the Finance Committee and then approved by the Board for submission to you today.

I am also aware that whilst the increase in budget overall was limited to 3% due to the runoff of LICF (Lowest Income Communities' Funding) changes, introduced in 2019, and changes in the Regular Weekly Attendance figures, plus in some cases a fall in DBF fees paid, a number of parishes received share requests well in excess of 3%.

As we cannot amend the share formula for individual parishes can I ask any parish that believes its 2022 share request is unachievable to contact Ruth, Kim or Jenny at Clayton House to arrange a meeting with representatives from the Board to see how we can help you on an individual basis.

These meetings are not like a visit to the headteachers room but friendly and informal and I understand from feedback from parishes who have attended that they find them particularly helpful.

I hope that everyone has had the opportunity to review the figures. The key elements were highlighted in the introduction to the paper and I only want to reiterate a number of key points.

1. The budget deficit, estimated at some £490k will increase by £300k or so if the Parish Share collection rate stays at circa 89%, the average percentage of the past 3 years or so. That said over the past few years the actual outturn for the year has generally been better than estimated due to cost control and investment growth. 2021 is expected to come in within the range budgeted and possibly better dependent upon any growth in our investments this year.
2. The budget is prepared taking into account forecasts over a 3/5-year period and the Board anticipate using some £3.55 million of reserves reducing the unrestricted free reserves by some 30% to the level in our reserves policy. Hence my comment about trust and faith.
3. The Board are working towards a balanced Parish Share Budget in 2025, without recourse to significant increases in share request year on year and have again agreed to limit the overall increase in budget to 3% a year for the next three years.
4. To assist parishes the Board also anticipate that the Share Support Fund, used to help parishes who engage with the Board, will be reduced by 1% a year from 2023 from its current level of 8% to 5% in 2025.
5. Our position has been helped by a robust investment performance over a number of years and we will regularly review all our investments to ensure that we are able to continue supporting parish ministry and if necessary, maintain the successful initiatives enabled by National Church Strategic Funding.
6. There is one addition to my paper presented to the July Synod. Following a discussion at the last Board meeting it was felt helpful to allocate £150,000 from DBF reserves to provide transitional relief to help recovering parishes, when a new incumbent is appointed, to a position of being able to pay their parish share request in full. This is in addition to the Parish Share Relief fund and will be found from DBF reserves with no impact on the Parish Share request.
7. Hopefully you are also aware that the Board has signed up to the national Parish Giving Scheme and I am pleased to say that a good number of PCCs have already joined the scheme. Whilst there will be a formal launch in March next year can I encourage you to discuss this at your PCC meetings; if you need any information please contact Stephanie Rankin for help.

Finally, I would like to thank the Bishops Budget Team, the Budget Scrutiny Team and of course Ruth and our excellent Finance Team for preparing the budget, for their wisdom, insight, diligence and courage. Can I give a very personal thank you to Graeme Pollard, who in my three years as Chair of the Board has been both helpful and encouraging. All the mistakes I have made are my own and there would have been many more without Graeme’s help.

We should all be encouraged by how supportive the National Church is of the initiatives being taken in our Diocese to make Vision 2026 real in the lives of all our churches and communities.

And can I thank you all for your continuing ministry in your own parishes, for your support for the DBF and not least for the continuing payment of parish share which I know has been a particular challenge over the past two years.

PRESENTATION ENDS.

Diocesan Synod then voted in favour of the following …

Motion:

This Synod accepts,

• the 2022 parish share budget with expenditure of £13,200,981 and a projected budget deficit of £493,479 based on a support fund of 8% being sufficient to adjust requested shares.

And is aware

The parish share requested has been adjusted by:

• a maximum 3% for those parishes who were capped in 2020 due to the change in allocation of LICF
• changes in the cost of ministry
• the decrease of 1.8% in total Diocesan regular weekly attendance rolling average used in the share calculation using 2019 RWA figures in place of 2020
• individual parish changes of regular weekly attendance.