Diocesan Synod 10 July 2013 Bath & Wells Diocesan Board of Finance  Pre-Budget 2014: Looking Forward  Current Year 2013  Proposed Budget 2014 Harry Musselwhite FKC Chairman of the DBF

CURRENT YEAR 2013: APPROVED BUDGET Common Fund increased by 3.7% after 2 years of freezes Budget break-even, 3 years earlier than planned Challenging year with a number of risk areas: – Parish Share collection rate – Parochial clergy vacancies – Timing of additional investing for income return Half-way through 2013, seeking break-even but may end year with a small deficit

PROPOSED BUDGET 2014 Budget Day meeting just a week ago Proposed Common Fund increase of 1.9% Break-even Budget (as 2013) Expenditure increase of 0.6% Approval at next Diocesan Synod in October Expectation that Common Fund increases for 2015 and 2016 will also be kept below 2% Additional risk area 2015 – increased requirement in clergy pension contribution

Key Financials – General Fund £m 2011 Actual 2012 Actual 2013 Budget 2014 Budget Common Fund (net of discounts and non-collection) £8.7m£8.8m£9.2m£9.4m Other Income£1.9m£2.0m£2.2m£2.3m Expenditure£(11.2)m £(11.6)m£(11.7)m FCG Designated Fund Transfer£0.2m Operating (Deficit)£(0.6)m£(0.4)m£Nil Common Fund increases 2013 and 2014 But Other Income streams also increasing Expenditure being contained With Budget break-even 2013 and 2014

Inflation, Common Fund and Expenditure 2011 Actual 2012 Actual 2013 Budget 2014 Budget Retail Price Index (RPI)4.8%3.1% 2%+ Consumer Prices Index (CPI)4.2%2.7% 2%+ Common Fund % increaseNil% 3.7%1.9% DBF Expenditure %inc/-dec-1.6%-0.3%3.3%0.6% Common Fund frozen in 2011/12 when inflation over two years between 7% to 8% increase 3.7% in 2013 ahead of inflation (budget break-even) increase to be kept below 2% in 2014 DBF Expenditure cut in real terms 2011/12 and below inflation 2013/14

Concluding Thoughts Membership; Population; Common Fund and non-collection Continuing membership decline of ~2% each year with the Somerset population increasing year on year Bath & Wells continues to have one of the highest Common Fund collection rates across dioceses However, every 1% not collected amounts to £90k For the past five years (2008 to 2012), provisions for non-collection of Common Fund totalled £668k £600k of this was not budgeted and had to be drawn from reserves Non-payment affects the DBF’s ability to meet all its commitments as emphasised in recent film