A message from the Chair of the Board of Finance, Nigel Pope
2021 was a mixed year for the Diocese financially. We budgeted an operating deficit for the Common Fund for the year of £1.8m and managed to contain the deficit to £1.6m. 2022 is also expected to be a challenging year with an operating deficit of £1.5m budgeted.
This is clearly not a sustainable position long-term, and we need to significantly reduce this deficit over the coming years.
Our most significant source of income is Parish Offers, which in 2021 provided £7.9m (77%) of the operating income for the Common Fund. This represented a reduction of 9.1% compared to 2019 which was better than the Church of England average of a reduction of 9.5%.
In order to move towards reducing our operating deficit, we need to find ways to increase our income overall – with Parish Offers being critical to that - as well as ensuring that our expenditure is well managed and directed.
Within this challenging overall position, I must express deep gratitude to many parishes for their sacrificial approach to Parish Offers. We have seen many using their reserves in order to meet their parish contribution which is very much appreciated.
A number of parishes have found themselves in very difficult financial circumstances and we have been pleased to be able to make 19 grants of £5k totalling £95k during 2021.
We are delighted that Liz Mullins has joined the Diocese as our Generous Giving Adviser in 2021 and a significant part of her role is to help parishes with
encouraging financial stewardship and generosity.
Notwithstanding the operating deficit referred to above, overall, the Diocese had net income in 2021 of £4.1m after benefiting from gains on property sales of £1.8m and increases in value in the Diocese’s investment assets (Glebe property and market investments) of £3.8m.
As a Diocese, we have been entrusted with assets to use to grow the Kingdom of God and we are working hard to ensure good returns on these assets. To assist in this goal, we appointed Mercers as investment advisers in 2020, and in 2021 we appointed Stephen Hoad as our Property Director. The total return from our investment assets in 2021 was £4.6m, a 16% return, which was a strong performance.
We have also been working during 2021 with our investment and finance committees and with Bishop’s Council, to change to Total Return accounting for our Stipends Capital Account, which is our main endowment fund. This will enable us to access further funds for investment to grow the Kingdom of God here in Rochester.
I feel privileged to be able to serve God working with the Diocese at this challenging time financially and am very grateful to all the Diocesan Staff team for all their hard work, expertise and dedication