1. FINANCIAL BRIEFINGS
2018
Welcome

2. 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

3. 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

5. 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

6. 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

7. 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.

8. 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.

9. 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

10. 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

11. 2019 Budget Assumptions

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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.

18. Questions ?