FINANCIAL BRIEFINGS 2018 Welcome

How can we fund the Diocesan Common Vision? 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

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 CONCERNS WHICH WE HAVE CONSIDERED The value of the original gifts of land which formed the original glebe funds will be eroded in a manner contrary to the wishes of the original donors 2. Such withdrawals will not preserve equity between generations 3. The adoption of Total Return Accounting will lead to riskier investment decisions by our investment advisers 4. The potential size of the ‘Unapplied Total Return’ fund will lead to an unmanageable rush of demands for investment from parishes 5. The tight disciplines that we have established over our budgets will be lost 6. Mitigation of parish share from glebe investment income would be reduced (in real terms) in the future. 7. We may be acting illegally

Bishop’s Council’s response 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 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

Bishop’s Council approval Limited to three years initially Will keep withdrawal rate under review. Should yield around first £7.5 million over three years.

Principles of the Oxford diocesan parish share scheme: 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 5. Should be based on generous and gracious giving plus mutual support 6. Should be easily communicated.

The outlook for 2019 Stipends and salary increase of 2% pa Given income constraints in parishes, parish share increase limited to 1.75% (though share capping ceiling of 4.0% and floor of -1% remain) Generous giving campaign and Parish Giving Scheme making progress – so we have assumed undercollection rate of 2.40% (2018: 2.50%) Significant increase in contribution to National Church costs (3.9%) and Central Fund for training (14.9%) Pressure for more increases from the National Church

The outlook for 2019 (continued) The opportunities for mission in the Diocese are increasing and will require resources in new areas and new roles Common Vision will continue to put pressure on staff resources and new congregations may take some years before they are able to contribute their fair share to the Diocese

2019 Budget Assumptions

2019 Budget Overview Budget 2019 £’000 Budget 2018 Parochial Ministry 19,787 19,244 Administration & Finance 501 521 Mission in the Diocese 3,055 3,097 National Church – Mission to the Nation 1,139 1,095 Glebe and Fees income (net) (5,153) (5,061) Parish Share (19,396) (19,000) Budget / Forecast Surplus 67 104 Common Vision Funding/ Expenditure 2,558 2,391

Costs per Minister - 2019 2019 Costs per minister £ Stipends, NI and Pension contributions 39,196 38,345 Housing costs 11,790 11,231 Ordinand and Curate training costs 12,600 12,711 Parochial Ministry support 4,765 3,994 Diocesan Mission Strategy 6,184 6,950 Compliance and Governance 2,547 2,698 National Church costs 3,549 3,363 Fees and other income (4,257) (4,480) Total weighted cost per minister 76,374 74,812 Glebe income support per minister 12,599 (12,121) Parochial Ministry support – increase in safeguarding from 1 staff member to a team including training and specialist support

Ordinand and Curate training costs 2019 Costs per minister £ Curates stipends 5,728 Curates housing costs 308 Pre-ordination costs 1,268 Ordination grants 312 Diocesan training costs 2,065 National Church Training for Ministry 2,919 Total weighted cost per minister 12,600 Curates stipends reduction due to lower number of posts in the budget, 50 in 2019 v 52 in 2018, due to curates leaving soon after end of year 3 Diocesan training costs - increased staff costs from new post, Deputy Director of Mission (Ministerial Formation), appears in later versions of 2018 budget, the above figures are based on the March 2017 draft budget for the share allocation unit costs

Mission in the Diocese 2019 Costs per minister £ Department of Mission 3,142 Board of Education 823 Communications Deptartment 845 Grants and other costs 1,374 Total 6,184 Board of Education – end of Free Schools grant, time limited Communications

Administration and Finance 2019 Costs per minister £ Services to parishes DT(O)L, MPC & DAC 1,067 Finance Compliance and Secretariat 858 Legal and Chancellor 622 Total 2,547

Summary Balance Sheet as at 31 December 2017 General £M Tangible Fixed Asset Property Fund £M Restricted Endowment Total Fixed assets 0.3 74.0 - 230.4 304.7 Investments 0.9 0.6 125.0 126.5 Current assets 11.5 0.1 2.5 11.7 25.8 Liabilities (1.3) (2.3) (9.4) (13.0) Total assets 11.4 71.8 3.1 357.7 444.0 Total assets (2016) 6.2 74.3 2.3 352.2 435.0 More info: 98% of funds are invested in approx 455 houses for clergy (valued at £301M) and glebe investments (valued at £121m) and a debtor for sale of glebe land (£12M) where the use of the capital is restricted and the income is used to pay stipends. Total assets increased by £9M during the year due to favourable market conditions increasing glebe investment and agricultural land values.

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