GENERAL SYNOD

DRAFT DIOCESAN STIPENDS FUNDS (AMENDMENT) MEASURE

Policy Note

1. This note provides the policy context for the draft Diocesan Stipends Fund

Amendment Measure.

Background

2.

Existing legislation means that dioceses can only use their Diocesan Stipends

Funds (DSFs) for certain specified purposes and only within the diocese.

3.

In June 2021 General Synod was informed (see GS Misc 1296) that the House

of Bishops and the Archbishops’ Council had supported the recommendation of

the Mutuality in Finances Group1to seek permissive legislative change that

removes the geographic restrictions. This would, in effect, enable a Diocesan

Board of Finance (DBF) to grant funds from its DSF income account for use by

other dioceses in the Church of England if it wished to do so.

4.

As noted in GS 2255XX, in November 2021 General Synod overwhelmingly

passed a motion requesting the Archbishops’ Council to develop legislative

proposals to give dioceses more freedom to be generous with their historic

wealth to other dioceses in the Church of England, and in this way enable a more

equitable sharing of this wealth. Last year’s debate was supported by the paper

GS 2234 and the resulting draft legislation is set out in GS 2255.

Purpose of the draft legislation

5.

A brief history of financial endowment in the Church of England and Diocesan

Stipends Funds was set out in GS 2234 and is not repeated here. In the context

of this paper, suffice it to say that the transfer of glebe assets into DSFs in 1978

did not equalise such assets across the dioceses – it did not seek to do so. Since

then the growth of DSFs has varied considerably, not least due to the significant

variation in land values across the country and how these assets have been

managed including the range of returns earned from the wider variety of asset

classes dioceses have invested DSF funds in when land has been sold.

6.

Based on 2020 accounts, the diocese with the largest value of historic assets is

Oxford (£171m) and the diocese with the lowest value of historic assets is

Liverpool (£1.5m), demonstrating the huge range of historic wealth held by

dioceses. However, it is obviously important to take into account the size of the

dioceses in looking at the relative historic wealth, and Appendix 1 shows the

amount of historic wealth in each diocese per capita – to take account of

diocesan population size.

1 The Mutuality in Finances Group was established in September 2020 as part of the Emerging Church of

England programme to explore options for greater generosity between dioceses.. 7.

Although dioceses do not all account for historic wealth in quite the same way

(with the result that comparisons are not entirely straightforward, as there are

differing accounting policies for valuing property assets), it is notable that of the

ten dioceses with the lowest historic wealth per capita, seven are industrial areas,

and seven are in the north of England (and a further one, Birmingham, is in the

Midlands) – reflecting the historic reasons for the disparity.

8. The DSF (Amendment) Measure 2016 allowed dioceses to adopt a total return

approach to their DSF, allowing them to release some gains in asset values to

income. Around a quarter of dioceses have chosen to do so, and this together

with the factors set out above mean that there is significant variation in the

amount of income dioceses are able to derive from their DSF. Although no

diocese has any difficulty in applying DSF in line with current purposes

(because even for those with the greatest DSF income, this is still less than

stipends that must be paid), this disparity does mean that dioceses with larger

DSF balances are less vulnerable to other income shocks such as the impact

on parish finances (and therefore, via parish share contributions, diocesan

finances) during the pandemic.

9.

The draft measure would provide an opportunity for dioceses with a higher level

of DSF balances to be explicitly generous to other dioceses with lower DSF

balances if they wish to do so, having taken account of their own financial

position.

How might this work in practice

10. The draft measure provides for any DBF wishing to grant DSF funds for use

outside its geographic boundaries to give a grant direct to one or more dioceses

or to grant funds to a Church charity for onward distribution. There are existing

examples of both types of gift where a DBF has decided to use some of its

general funds to support mission and ministry in other dioceses.

11. In a few cases a diocese has chosen to support curacy posts in another diocese.

And last year Oxford generously approved £250,000 to be made available for

other dioceses every year for four years (£1m in total). This money will be granted

to the Archbishops' Council, which decided to distribute it to the five dioceses in

receipt of Lowest Income Communities (LInC) grants (which the Council

distributes from funds granted to it by the Church Commissioners) with the lowest

level of DSF capital per capita.

David White

Deputy Director of Finance, National Church Institutions

June 2022

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