1. Funding our Mission and Ministry in 2017
Parish Offer and
Funding our Mission and Ministry in 2017
We recognise that historically we have fallen short in our communications with parishes.
This presentation is part of our strategy to reconnect and re-engage with parishes to ensure they are better informed about how we together support and fund Mission and Ministry across the diocese as we seek to build the Kingdom of God in this place.

2. What is the Parish Pledged Offer ?
It is based on the following principles:
Freewill Offering
Mutual commitment
Shared responsibility for mission and ministry across the Diocese
It recognises that all giving is a freewill response to the generosity of God, related to both opportunity and need
The Diocese used to operate a formula-based system called Parish Share. This covered things like ministry and shared costs and excluded the stipend and associated cost for the parochial clergy which parishes paid separately. Inevitably some people felt that it was more like taxation.
In common with a growing number of dioceses, we have recently moved towards seeking annual pledged offers from parishes. Guidance is given about how much parishes need to give to cover things like the costs of ministry and support costs.
The Parish Pledged Offer is not based on a formula but on principles of relationship, trust, mutual commitment and freewill offering, coupled with the responsibility for ministry in one’s own place. It recognises that all giving is a freewill response to the generosity of God, related to both opportunity and need.
But we recognise that not all parishes will be able to “pay their way”. There are great differences in each parish’s ability to do so and through the Parish Pledged Offer we are committing ourselves to mutual support.

3. What is the Diocesan Budget?
Costs relating to:
ordained ministry (including housing) and training for ministry, other than local expenses
church building procedures
safeguarding and other matters required by law
lay training
mission development, including support for work with children and young people across the diocese
the national church
The Diocesan Budget sits alongside the budgets of our PCCs and chaplaincies to give the total financial resources for mission, ministry and community engagement across our diocesan family.
The pattern within the Church of England is that many costs are met at parish level, but others formally rest within the Diocesan Board of Finance (DBF). The Diocesan budget gives us the financial means to pay for everything which comes under the umbrella of our shared responsibility.
Most significantly, the DBF holds responsibility for all costs relating to ordained ministry and training for ministry. This includes housing, which is a significant cost and excludes local expenses. The DBF also carries other financial obligations regarding church building procedures, safeguarding and other statutory matters required by law.
There are those things which we chose to do at diocesan level, notably lay training and mission development, including support work with children and young people across the diocese.

4. What is the Diocesan Budget ? cont.
Income relating to:
Parish Pledged Offers
Grants and Donations
Professional Fees
Dividends and Interest
Rental Income
Other Income
On the income side , the Diocese of Rochester has some income from historic reserves, trusts and other assets though, despite being founded in 604, we have never been one of the financially well-endowed dioceses.
This means that in order to meet its obligations, the DBF is very reliant upon contributions from parishes.
We are always grateful for the contributions that are made.

5. What the Diocesan Budget doesn’t include.
It does not include:
the cost of the Bishop of Rochester and his office
the stipend of the Suffragan Bishop
the clergy pension provision prior to 1998, all of which are funded separately by the Church Commissioners.
the Diocesan Board of Education’s schools work
the cost of running Rochester Cathedral.
Many will be surprised to learn that the cost of these specific items is not met by the Diocese.
The Diocesan Board of Education is currently resourced through DBE Trust Funds (although in many dioceses the DBE schools work is funded by or supported by DBF contributions).
In noting the above it is also important to acknowledge the unpaid contribution that the Diocese receives from 1000s of volunteers, retired priests etc.

6. Animation film is here
The following animation has been commissioned by Bishop’s Council with financial support from the Church Commissioners.
It seeks to set out the key income and expenditure areas of the diocesan budget, to emphasise the shared nature of mission, faith and finances.
The film has been designed to compliment this series of archdeaconry meetings and is available online (via the diocesan Website) for use in churches and other meetings.

7. Who sets the Diocesan Budget?
DBF Finance Committee – the draft budget is put together in the light of the Parish Pledged Offers made and other forecast income
Bishop’s Council – considers and approves a budget for recommendation to Diocesan Synod
Diocesan Synod – approves Budget and Authorises a level of Expenditure
All three bodies have members elected by parishes.

8. 2016 – Budget Income & Expenditure
Training (including Curates)
£1,840,800
Other Deployed Clergy Costs
£7,034,200
Deployed Clergy Housing
£1,138,300
Other Diocesan Expenditure
£2,130,400
Total Expenditure
£12,143,700
Income
Contributions from Parishes (Parish Pledged Offers)
£9,430,000
Income from Investments (including Glebe rentals)
£1,019,700
Other Income/Transfers to Budget
£1,136,500
Total Income
£11,586,200
Net Deficit
£557,500
This slide shows a summary of the Budget approved by Diocesan Synod in October 2015.
As will be seen Synod approved a Budget with an anticipated net deficit of £557,500

9. 2016 – Actual Income & Expenditure (May 2016 position – before corrective action)
May 2016 Actual YTD
Expenditure
Training (including Curates)
£747,400
Other Deployed Clergy Costs
£2,931,500
Deployed Clergy Housing
£519,500
Other Diocesan Expenditure
£914,000
Total Expenditure
£5.112,400
Income
Contributions from Parishes (Parish Pledged Offers)
£3,768,000
Income from Investments (including Glebe rentals)
£381,100
Other Income/Transfers to Budget
£410,100
Total Income
£4,559,200
Net Deficit to end of May 2016
£553,200
Estimated Net Deficit assuming trend continued
£1,327,200
However it was clear by May 2016 that without any action being taken and with the trend continuing the DBF could be facing a deficit of over £1 million.
Challenges being faced – 20 more ordained clergy than we could afford as a diocese; parishes not willing/able to respond to the challenge of increasing their 2015 Parish Pledged Offer by 2.5%

10. Short Term Steps – Already Taken
Moratorium on all spending unless contractually committed
No lay vacancies to be filled without a critical review
No pay increase for lay staff on 1 July 2016
The clergy stipend to be frozen until it falls in line with regional benchmarks
Bishop’s Council agreed that action was required both in the short and longer term.
Bishop and DBF Chair wrote to parishes explaining the situation on 7 July 2016.

11. 2016 – Projections to end of Year
Revised forecast following corrective action
Projection 2016
Expenditure
Training (including Curates)
£1,922,300
Other Deployed Clergy Costs
£7,005,000
Deployed Clergy Housing
£861,100
Other Diocesan Expenditure
£2,115,100
Total Estimated Expenditure
£11,903,500
Income
Contributions from Parishes (Parish Pledged Offers)
£9,280,800
Income from Investments (including Glebe rentals)
£1,212,000
Other Income/Transfers to Budget
£937,600
Total Estimated Income
£11,430,400
Estimated Net Deficit 31 December 2016
£473,100
The steps we have taken have enabled us to take control of the situation and on current forecasts we expect to end 2016 with a deficit of £437K approx.

12. Reserves Policy
…The Trustees agreed to adopt a policy which is to hold a balance of readily realisable assets in the general fund equivalent to 3 months unrestricted expenditure for 2016 as based on the previous year. At 31 December 2015 the amount required totalled £2.8M, but actual free reserves totalled £368,000.
The Trustees are aware of the deficit against the policy and have set aside funds in a specific designated fund to increase reserves until such time as the level of free reserves increase.
In line with the changes in accounting practice and reflecting our move from Parish Share to Parish Pledged Offer, Bishop’s Council decided to increase it reserves policy from 3 months stipend payment to 3 months unrestricted expenditure .
This has meant an increase in Reserves from £850K to £2.3m.

13. Long Term Steps Clergy Deployment
Parsonages Strategic Plan, Parsonage Repairs and renting out vacant properties
Focus on financial stewardship
Consideration of the termination of the lay staff final salary pension scheme
Sharing services with other dioceses and review of administration support
Plan to break even by end of 2018 at latest
Mention was made earlier of the Long Terms steps that we need to take.
In taking steps to reduce the number of parish clergy by 20 over the next few years it is important that we do not have an ad hoc approach. We need to see the reduction within the context of the wider deployment of clergy across the diocese.
Bishop’s Council is currently working up a methodology which takes account of both hard and soft data.
Bishop’s Council will also be reviewing our approach to stewardship and how this can be taken forward in a cost effective way. This is likely to include the development of resource material and training both for clergy and laity; support and encouragement for stewardship campaigns and planned giving schemes.

14. Budget 2017
In October 2016 Diocesan Synod authorised a budget of £11.99m
Budget formulated using known income as the starting point
Expenditure budgets being reduced so that we live within our means
A report and update to be made to Diocesan Synod in March 2017
In October 2017 Diocesan Synod authorised a budget of £11.99m
The move to the Parish Pledged Offer has enabled us to forecast with reasonable accuracy the offers we will receive during the year. Something we did not know under the old Parish Share until the end of the year. So for the first time we are able to construct our budget on the basis of known income.
Currently further scrutiny is being given to departmental budgets and our forecast income. We will be providing a detailed report to Diocesan Synod when it meets again on 1 March 2017.

15. 2017 – Indicative Budget Budget 2017 Expenditure
Training (including Curates)
£1,952,000
Other Deployed Clergy Costs
£6,714,400
Deployed Clergy Housing
£700,000
Other Diocesan Expenditure
£2,622,200
Total Expenditure
£11,988,600
Income
Contributions from Parishes (Parish Pledged Offers)
£9,500,000
Income from Investments (including Glebe rentals)
£1,285,000
Other Income/Transfers to Budget
£1,203,600
Total Income
Net Deficit
£ nil

16. 2017 Budget - Income

17. 2017 Budget - Expenditure

18. Our expenditure explained
The estimated average costs of deploying a full-time minister in our Diocese in 2017 are:
* Repairs, improvements, insurance and admin, etc, are paid for by the DBF; other costs such as council tax and water rates are paid for by PCCs
Stipend
£26,060
National Insurance
£2,085
Pension
£9,335
Housing*
£6,690
Training, Grants & Admin
£2,200
Oversight
£1,630
Total
£48,000
We have been asked to provide parishes with an estimated average cost for deploying a full-time minister in our Diocese this works out as £48,000 per annum.
This figure has remained fairly static for the last couple of years –with any increases in cost being balanced out by a reduction in the projected number of clergy.

19. Our expenditure explained cont.
The estimated average cost of other support in our Diocese in 2017 is:
Ordinands in Training
2,840
Mission and Ministry
1,875
Diocesan Advisory Cttee
555
Safeguarding
835
Communications and IT
1,370
Finance/Stewardship
Synodical/Admin support
Strategic Projects
National Church
1,240
1,975
2,700
1,610
Total
£15,000
Then if you add in the provision of support and services to parishes which we estimate as being £15,000 the total cost to parishes would be £63,000. Many other dioceses use a higher figure, often in excess of £70,000.

20. Budget 2017 – 2 Options
If Parish Pledged Offers collectively rise to £9.5M in 2017 (a 2.5% increase), this will enable a break-even position to be achieved;
Whilst a standstill on Parish Pledged Offers (i.e. no overall increase) is estimated to result in a deficit of £250,000 – the fall-back position
The Budget 2017 as presented to Diocesan Synod includes provision for two scenarios.
We believe it is realistic for Parishes to increase the Pledged Offer they made in 2016 by 2.5%.

21. 2.5% increase in Parish Pledged Offers
Increase in Parish Pledged Offer of £250,000
Assuming church attendances of 20,000
Is ONLY £12.50/attendee! Or 25p each week!
(and less with Gift Aid)
This is not insurmountable

22. What can we do? Pray Strive to be more generous Take the initiative
We are all encouraged to give prayerful consideration to the financial contribution we make in support of mission and ministry across our Diocese.
We need to strive to be more generous and realistic about the level of our giving. Through increased generosity we can begin to release energy for growth. Over the next thirty years it is estimated that the population in our Diocese will increase from 1.3 million to 1.8miilion. An increase of just under 40%!
We need to stop comparing ourselves with others.
Take the initiative – when did your parish last think about stewardship and giving – its not just the incumbent’s responsibility?

23. Resources The animation can be viewed at:
This presentation and a series of Frequently Asked Questions and Answers are on the Diocesan Website. We will be updating the Q and As over the coming months.
We are also producing a leaflet for PCCs and Church members which explain the Parish Pledged Offer.
The animation can be viewed or downloaded via the diocesan website.

24. Questions?