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 Issues | Local Church | Financial Structure

An explanation of the financial structures of the Church of England.

The Church of England is a complex institution and this survey of
its finances is necessarily brief.

The Different Bodies


The heart of the Church of England is its parishes. Parish finances
are the responsibility of the Parochial Church Council, which
receives money in and pays money out. Income arises from giving,
legacies, fees, rent, investments etc. Expenditure includes building
maintenance, ministry resources, non-clergy staff costs and parish
share or quota. For the purposes of this paper Cathedrals are
similar to parishes albeit with some significant differences.


Dioceses are the regional layer of the Church and their finances are
primarily the responsibility of the Diocesan Board of Finance. Income arises from parish share, donations, legacies, investments,
sale of properties etc. Expenditure include the administration of the Diocese, particular boards, diocesan officers, costs relating to stipendiary clergy in the Dioceses together with their housing.

Part of the income of each Diocese derives from glebe land transferred to the Dioceses from the parishes in 1973. Likewise, the assets of a Diocese comprise in large part the Parsonage houses that belong to each Benefice.

Nationally the Church of England is defined both doctrinally and by its establishment. The House of Bishops provide spiritual oversight whilst General Synod exercises government. However, all this is regulated by Parliament, which, at least nominally, represents the people.


The Archbishops' Council is an umbrella for most of the national bodies of the Church attempting to bring together both oversight (it is the Council of the two Archbishops) with governance (it is accountable to and partly elected by the General Synod). The Archbishops' Council therefore embraces most of the national bodies of the Church. Income comes primarily from the Dioceses. Expenditure includes all the costs of the central bodies, including training, as well as the costs of ecumenical and international bodies. The Council also oversees around £20million of Church Commissioners' grants that are allocated to Dioceses primarily for clergy stipends.


The Pensions Board acts as trustees for several funds and administrator for both these and others (covering both clergy and lay employees). The Pensions for all current employees are fully funded by contributions from Dioceses or other bodies. The Central Board of Finance now acts as Trustee for various funds that invest on behalf of others, including parishes and Dioceses. Through its subsidiary company CCLA it also manages funds for other charities and local authorities.

In 1948 the Church Commissioners took over from two bodies concerned to sustain ministry in areas of need. In the years following their role has changed significantly and, for example, they now run the national clergy payroll. Their income comes mainly from historic assets. They spend around £160million (not including the clergy payroll). Now around one tenth of their money is given directly to assist needy parishes. Over 60% of their expenditure goes to the pension provision of all service prior to 1998. Just over 10% of their funds is used to pay for the stipends, housing and costs of Bishops, around 4% for Cathedrals and 6% for general parish support. The Commissioners also make loans to clergy, retired clergy, parishes and Dioceses.

Parish share (or quota)

The largest part of the expenditure of each Diocese is on parochial clergy (stipend, housing, national insurance etc.). To meet this they require income and the main income comes from parish share or quota. Parishes are under no legal obligation to pay this but without it a Diocese cannot meet its commitments. Some Dioceses, particularly the older ones, also gain significant income from investments including the old glebe land and from the sale of clergy houses. Therefore, the level of parish share varies greatly from Diocese to Diocese. The level of grants from the Church Commissioners to each Diocese is adjusted in order to give greater assistance to poorer Dioceses.


Some examples:
A parish administrator. The PCC will usually pay the salary direct and probably contribute to a pension with the Pensions Board.
A stipendiary clergyman. The Clergyman receives his stipend from the Church Commissioners (who act like a payroll bureau for this) who pay it out of the account they hold for the relevant Diocese. Pensions contributions are also paid by this means. Expenses of office will be paid by the parish.

The parsonage house. This belongs to the Benefice but is listed as a Diocesan asset and is maintained and administered by the Diocese. In older parishes the property and possibly other land will have come from the historic patrons or the parishioners.
A retired clergyman. He receives his pension via the Commissioners who channel money from the Pensions Board. Pension commitments for service prior to 1998 are met by income from the Church Commissioners investments (despite the fact that these assets were originally given to benefit poor parishes. Since 1998 Dioceses have gradually picked up the pensions bill, which they meet from parish
share payments and pass on to the Pensions Board. Some retired clergy receive housing loans from, or jointly own property with, the Commissioners.


Remembering history
The present financial structure dates back to the 1970s and was significantly revised in the late 1990s. For centuries prior to this clergy were mostly paid locally from glebe income and parish fees with the predecessors of the Commissioners assisting poorer parishes. This resulted in widespread inequality, which the centralised system rectified.

The 1973 Endowments and Glebe Measure transferred assets from parishes to Diocese. This was to ensure greater equality. Each diocese should show the remaining assets and income from them in their accounts. The income should be used to pay parochial clergy and on average appears to represent around £3,000 per clergyman. Some well-endowed parishes, including small country livings, often handed over assets that would have generated more than enough to continue paying their clergy today.

It is a matter of debate whether the centralised system of payments and pooling has served the Church well over the last 30 years. For centuries prior to this the Church had survived and generally thrived without such a system.

 

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