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2021-08-31-accounts

The Methodist Church in Great Britain Consolidated Report and Financial Statements for the year ended 31 August 2021

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Table of Contents

Welcome from the Revd Dr Jonathan Hustler 2
The Methodist Church in Great Britain Trustees’ Report 3-43
Strategic objectives, aims and purposes of The Methodist Church in Great Britain 3
Public benefit requirement 3
Structure 3
Governance and oversight 4
Overview of the work of The Methodist Church In Great Britain 8
Key activities 9
1 Building communities 10
2 Children, youth and families 12
3 Evangelism and growth 14
4 Global relations 15
5 Learning network 19
6 Methodist Council and governance 20
7 Ministries 21
8 Property 23
Grant programmes 26
Plans for the future 26
Remuneration of key management personnel 27
Fundraising activities 27
Financial review 28
Managed reserves 30
Investments 33
Principal risks and uncertainties 34
Going concern 38
The environment 38
Related parties 39
Statement of Trustees’ responsibilities 40
Independent Auditor’s report to the Trustees of The Methodist Church in Great 41
Britain
Consolidated Financial Statements 44-98
Statement of financial activities 45
Statement of financial activities – The Connexional Funds 46
Balance sheets 47
Cash flow statements 48
Notes to the Consolidated Financial Statements 49
Trustees and committee memberships 99
Reference and administrative details 101

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Welcome from the Revd Dr Jonathan R Hustler

Brothers and Sisters

This year, as we emerge from unfamiliar ways of living and working, we recognise what has been achieved through a difficult time. This annual report shows us the many and varied ways in which the Methodist Church has faced the challenges of the times to seek a way forward as a response to ‘Our Calling’ to respond to the Gospel and to enable worship, learning and caring, service and evangelism in the Connexion and across the world.

The 2021 Conference in Birmingham affirmed that ‘Our Calling’ is the primary strategic driver for our work so all that we do is seen within that. Our “Strategy for Justice, Dignity and Solidarity”, adopted by the Conference, reminds us that part of our proclamation of “God for All” is to engage with and challenge unjust discrimination, to celebrate diversity, and to practice hospitality. Similarly, our “Walking with Micah” project seeks to equip the Church effectively to challenge injustice in the nations and communities we are called to serve. This Report highlights the work being done by a number of connexional bodies and committees to ensure that our resources are used within that unity of purpose, as we fulfil our calling to be an inclusive, evangelistic, growing, justice-seeking church.

The report also highlights both the challenges and the opportunities facing the Methodist Church in Great Britain today. Much seems uncertain at the moment but the report draws our attention to the resources at our disposal. “Our Calling” speaks not only of the responsibility that we have but also of God who in love has entrusted us with both the responsibility and the resources to discharge it. This report celebrates the faithful ways in which those resources have been used and the potential that we have to continue to serve God’s mission in God’s world.

The Revd Dr Jonathan R Hustler

Secretary of the Methodist Conference

January 2022

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The Methodist Church in Great Britain Trustees’ Report

Strategic Objectives, Aims and Purposes of The Methodist

Church in Great Britain

The activities covered in these financial statements fall within the work of The Methodist Church in Great Britain (‘The Methodist Church’ or ‘The Church’). The aim of The Methodist Church in Great Britain is to fulfil its calling, which is to respond to the gospel of God's love in Christ and to live out its discipleship in worship and mission.

Public Benefit Requirement

The trustees of The Methodist Church have due regard to the public benefit guidance published by the Charity Commission in compliance with its duties under section 17 of the Charities Act 2011.

This guidance sets out two key principles:

  1. The organisation must have an identifiable benefit.

  2. The benefit must be to the public or a section of the public.

The Church exists, inter alia , to:

  1. increase awareness of God’s presence and to celebrate God’s love;

  2. help people learn and grow as Christians, through mutual support and care; and

  3. be a good neighbour to people in need and challenge injustice.

The trustees consider that for these reasons the charity meets these public benefit requirements.

Structure

The entities included in this report are not a record of all the financial activities of The Methodist Church in Great Britain (MCiGB), as they do not include local church, circuit and district financial statements. The names of the entities included in this report, are listed on the group structure diagram in ‘Note 1’ of the financial statements on page 50 and include:

Cliff College (a separately registered charity)
Cliff College Outreach Limited (a separately registered company)
Cliff (Methodist) Developments Limited (a separately registered company)
All We Can (a separately registered charity)
Southlands Methodist Trust (a separately registered charity)
Methodist International Centre Limited
(a separately registered company)

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These financial statements are the consolidated financial statements for the Methodist Council (the Council) and entities under its control. During 2020/21 the Council undertook a review of the entities under its control. This review confirmed that the above named organisations have at least 50% of their trustees appointed by the Council, thus demonstrating a level of control. The review also highlighted that the Westminster College Oxford Trust (WCOT) did not have 50% or more of their trustees appointed by the Council. Consequently, the Council took the decision that WCOT and its subsidiary should no longer form part of the consolidated accounts of the MCiGB.

The Methodist Church registered as a charity on 20 October 2009 (1132208 – ‘The Methodist Church in Great Britain’) when it became necessary for excepted charities with a gross annual income over £100,000 to register.

The members of the Methodist Conference are the trustees and their names are publicly available on the Charity Commission website. The Methodist Council is appointed annually by the Conference to undertake ongoing work on behalf of the Conference (which only meets once a year). Among other functions, the Council is responsible for the adoption annually of a unified statement of connexional finances, clearly distinguishing between restricted and unrestricted funds, and conforming to the law and accounting regulations to give an overall view of those monies and other assets for which the Council is responsible. The Council is further responsible for presenting the unified statement of connexional finances to the Conference. The names of the members of the Methodist Council are appended at the end of these financial statements.

Governance and Oversight

The Constitutional Practice and Discipline of The Methodist Church (2021 edition) Volumes 1 and 2 contain the governing documents of The Methodist Church. The authority under which the Conference acts is legally given by The Methodist Church Act 1976. The Deed of Union provides for the Conference to be the governing body of the Methodist Church. The next ‘tier’ of authority is given by the Model Trusts in the second Schedule of the Act and the Deed of Union. These derive their authority from the Act. Thirdly, there are the Standing Orders and guidelines adopted by the Conference, which are far more detailed and more easily changed, provided that they are within the limits prescribed by the Act, the Model Trusts and the Deed.

Much of the day-to-day work for which the Methodist Council is responsible is delegated to the Connexional Secretary and other members of the senior leadership group of the Connexional Team for matters relating to the objectives of the Connexional Team, and to local trustees in the case of the self-accounting entities. These local trustees are accountable to the Methodist Council.

The basic governance structure as far as these consolidated financial statements are concerned is presented in the diagram below.

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----- Start of picture text -----
The Methodist Church in Great Britain
The Methodist Conference (Trustee)
Methodist Council
Audit & Risk Connexional
Ministries
Assurance Strategy and Resources Committee Allowances
Committee
Committee Committee
Property
Finance Sub- Safeguarding
Development
Committee Committee
Commiittee
----- End of picture text -----

During the year, the Connexional Grants Committee ceased to meet with the SRC overseeing the distribution of the residual functions.

The Methodist Conference

This is the ultimate decision-making body of The Methodist Church. It sets policy for the Church, exercises discipline and ensures effective management and administration of the Church’s affairs. The Conference meets annually in Representative and Presbyteral Sessions (and there is, in addition, a Conference Diaconal Committee). The Conference is a representative body of 306 members comprising ministers and laypersons from the 30 districts of The Methodist Church as well as other sections of the Church.

The Methodist Council

The Methodist Council meets three times a year and consists of 54 members most of whom hold office for four years. Its terms of reference are to:

It has agreed the following objectives for the coming year in order to support the delivery of the Church’s strategic objective ‘to respond to the gospel of God's love in Christ and to live out its discipleship in worship and mission’:

  1. Proclaiming the Gospel through worship / The ministry of the people of God in the life of the world

  2. A Church for all people / The Inclusive Church

  3. God’s Church in God’s world Striving for justice and peace

  4. Evangelism / God For All

  5. Resources for the Church: the use of God’s gifts (including Oversight and Leadership)

  6. Responding to the Gospel in partnership

In addition to the above, it is responsible for ( inter alia ):

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The following committees have an oversight/governance role and report to the Methodist Council:

The Strategy and Resources Committee

The Conference appoints annually the Strategy and Resources Committee (SRC), a subcommittee of the Methodist Council. The SRC advises the Council in relation to all matters that are within the SRC’s terms of reference, having regard to advice of non-voting members. The Committee, which met four times in 2020/2021, has specific responsibility for detailed review and subsequent reporting to the Council on the following aspects of its work:

The Audit and Risk Assurance Committee

This is a committee of the Conference appointed on the nomination of the Methodist Council. To safeguard its independence, members of the Methodist Council or the Connexional Team are barred from serving. This committee nevertheless has powers to require the Connexional Treasurers and any appropriate staff members of the Connexional Team to attend its meetings.

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Meeting three times in the year and reporting annually to the Methodist Council, the Audit and Risk Assurance Committee has responsibility for:

Oversight Committees

To assist the Methodist Council in discharging its duties there are a number of other committees, the key ones being:

The Connexional Allowances Committee, which is responsible for recommending

allowances for ministers and awarding grants from the following funds:

During 2020/2021 the Methodist Council agreed to close the Connexional Travel Fund (a designated fund of the charity), transferring the residual balance in to the Methodist Church Fund (MCF), and establishing a recurrent MCF budget to fund ‘Island Travel’.

The Property Development Committee , which works to develop and maintain a connexional property strategy. Its responsibilities include:

The Ministries Committee which reports to the Methodist Council to enable the Church to develop and maintain a strategic vision for the use of ordained, accredited, commissioned and informal ministries and offices, and is accountable for developing

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and supporting programmes and processes for candidacy, training, oversight and related matters.

The Safeguarding Committee , which has wide-ranging responsibilities for promoting safeguarding practice and safe recruitment across the Connexion. It advises the Methodist Council on all related issues.

Other Oversight Bodies

These include:

A comprehensive list of the subsidiaries whose financial statements are included in The Methodist Church Consolidated Financial Statements is provided on page 66. For each of them, a local governance committee or group of managing trustees is appointed by the Council to oversee the entity, within the terms of responsibility delegated to them by the Council. Ultimate control in all these cases resides with the Methodist Council. As highlighted on page 5, the Westminster College Oxford Trust is not under this delegation from the Council and is therefore being ‘deconsolidated’ from the 2020/21 accounts. Through a governance scrutiny process overseen by the SRC, the Council aims to monitor standards of governance in all the entities that are accountable to the Council and the Conference.

The Methodist Council appoints members to the various trustee bodies, on the recommendations of existing members and based on a reasoned statement provided for each nominee. It follows a selection process that involves a skills audit and advertisement for trustees with the appropriate skills and expertise. Appointments are normally for a six-year period but each trustee body will have its own governing document that will set out the terms of appointment and re-appointment. The Council reviews and re-confirms the appointment of all the trustees to each of these bodies on an annual basis regardless of the term of office for each individual.

All new members of the Council undergo induction to familiarise themselves with the aims and work of the charity, and to ensure they understand fully their responsibilities as trustees and the organisational expectations in terms of their commitment. As part of the induction programme, trustees are provided with constitutional, governance, financial and organisational documentation. Trustees receive regular updates and are made aware of relevant events and training opportunities.

Overview of the Work of The Methodist Church in Great

Britain

The calling of The Methodist Church is to respond to the gospel of God's love in Christ and to live out its discipleship in worship and mission. Most of the work of the Church occurs within or is associated with local churches throughout the country. Church activity encompasses:

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Without the support of volunteers across the connexion the Church would simply be unable to live out its calling to respond to the Gospel of God’s love in Christ. Specifically in relation to the activities covered in this report, we are immensely grateful for the 657 volunteers (note 12 in the accounts) who serve on a whole range of Connexional committees, working groups, and other bodies that support the life of the Church.

This report cannot capture in detail the breadth and depth of the Church’s work. In the section below is a list of a range of activities from around the Connexion as examples of that work.

Key Activities

Introduction

The activities of the Church during 2020/21 were very significantly impacted by the Covid-19 pandemic. At a practical level, the Connexional Team were unable to work from Methodist Church House for much of the year, with only a partial reopening of the building ahead of September 2021. Wherever possible, the main activities of the team were moved online allowing the various committees of the Church to continue to exercise their trustee responsibilities and further the purposes of the Methodist Church. The pandemic also created new work for the team to engage with, including offering practical advice to managing trustees throughout the Connexion on topics ranging from property to worship, and everything in between. As online meetings do not involve travel expenses there were significant financial savings during the year. These savings helped offset the trading losses incurred by the Methodist International Centre Ltd as The Wesley hotel was unable to trade effectively for much of the year.

The experience of the Connexional Team was mirrored by the experience of the church throughout the Connexion, with church buildings closed for significant parts of the year. New and creative ways of being church emerged over this period and leaders of worship developed their skills at online worship. The church also had to contend with a hybrid Conference in June 2021 as it was not possible for all 306 members of the Conference to meet physically.

The Methodist Conference

The government and discipline of the Methodist Church, along with the management and administration of its affairs, are vested in the Methodist Conference that meets annually. The Conference receives reports covering all aspects of the Church’s life and witness. At its hybrid meeting hosted from Birmingham but also online, in June 2021:

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Organisation of the work

Since 2019/2020 The Methodist Church in Great Britain, in response to its calling and in pursuit of the strategic objectives shown at the start of this report, now organises its work in the following eight key areas:

  1. Building Communities

  2. Children, Youth and Families

  3. Evangelism and Growth

  4. Global Relations

  5. Learning Network

  6. The Methodist Council and Governance

  7. Ministries

  8. Property

Each of these is reviewed below.

1. Building Communities

To build communities, the Methodist Church is committed to working with ecumenical partners from a wide variety of Christian traditions. Unity and mission are inseparable and we continue to encourage flexible ways of working together wherever possible. The Conference has reason to be grateful to all those who represent the Methodist Church on a wide variety of committees, commissions and working groups thus enabling connexional, district, circuit and local initiatives.

One of the features that will remain with us, even though we are coming out of lock down at the beginning of this Connexional year, is the ability to meet remotely. National ecumenical officers will continue to participate in regular virtual meetings hosted by Churches Together in England (CTE), but with participation of Wales and Scotland and CTBI, where information is shared and we are able to pray together. On these occasions the CTE and CTBI programmes and resources are shared.

In the context of challenging and changing international relationships, our ecumenical relationships in Europe and through the World Council of Churches are opportunities for wider engagement and enrichment. The Methodist Church in Britain continues to work with our concordat partners, the United Methodist Church (UMC), identifying areas of work where we are stronger together, such as our response to climate change. Together with the World Methodist Council and Global partners the Methodist Church in Britain has created an international team to

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influence COP26. There are opportunities in this initiative for young people and others to engage and contribute.

With a renewed sense of purpose and determination the ecumenical officers continue to work with MAPUM – Methodist-Anglican Panel for Unity in Mission and with the nascent Life in Covenant Group, this latter replaces the previous Joint Covenant Advocacy and Monitoring Group, to seek to implement the commitments made at the signing of the Anglican-Methodist Covenant, in 2003. This involves collective learning to live with differences and contradictory convictions in our church and also at an inter-denominational level. One of the current issues is the registration for a building to be used for equal-marriage ceremonies. The legal advice currently being offered to LEPs by the Conference Officer for legal and Constitutional Practice is that: “Any denomination who is party to a sharing agreement under the Shared Building Act 1969 has the power to veto a registration of the building for same-sex marriage.” We are seeking ways, if at all possible, to minimize the impact of this statutory regulation.

Fellowship Groups are an expression of the global community present in and under the Methodist Church in Britain. The Assistant Ecumenical Officer continues to work with the Fellowship Groups and diverse languages congregations. They are present throughout the Connexion and are an integral part of the life of the Methodist Church in Britain. With the end of the quinquennium grants for some of the Chaplaincies to the Fellowships, a strategic review is necessary to see how the Fellowship Groups that have received support for their ministry for many years move forward to a different model of operating without losing their connectivity. This work shall be channelled now via the Mission Committee. Another aspect of this ministry is the arrival of people coming from Hong Kong in significant numbers. That has opened an opportunity for new mission initiatives. Work that started in the Northeast Region has grown connexionally and involves many from our churches offering to welcome and support the new arrivals. New groups have been formed, for example in Southwest London a class/congregation of HK people has gathered and numbers are at around 150/200 people. We seek to put in place coordinating structures for this work of welcoming HK people and offering them a sense of belonging in our churches and communities.

The Assistant Ecumenical Officer oversees our Inter-Faith work. A twinning programme for churches and mosques to meet virtually during the Inter-faith week in November last year will be happening this year again. The desk continues to represent Methodism at Inter-religious events and committees, not least the Inter-Faith Network UK that relates in particular to the Government, trying to influence public policies. Inter-religious work also happens through CTBI, its inter-religious activities and theological reflection group.

The Joint Public Issues Team (JPIT) has continued to play a role in building communities. It helps church members campaign on a range of peace and justice issues, shaped by the Six Hopes for Society, supported by the Methodist Church and others.

Arising from consultation with local churches, JPIT developed the ‘Reset The Debt’ campaign, raising awareness of the impact of Covid-19 on increasing household debt for the poorest families in communities. They worked with partners from across society to raise this issue in Parliament, the media and with church members, calling for debt write-off for those weighed down by borrowing and arrears due to Covid-19.

JPIT have also resourced members to campaign on justice issues for our global community. This has included campaigning against the cut to the international aid budget, calling for ambitious action at the United Nations COP26 climate meeting in November 2021 and raising concern about the forced labour of Uyghur Muslims in Xinxiang, China.

Continuing work around peacebuilding, JPIT coordinated ecumenical recognition of the Treaty on the Prohibition of Nuclear Weapons, including a statement from senior church leaders. They have continued to campaign on the rights of asylum seekers, migrants and refugees, particularly in

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response to the government’s Nationality and Borders Bill, joining with others as part of the ‘Together With Refugees’ campaign. They also encouraged churches to support EU nationals who needed to apply for the EU settlement scheme after Brexit.

They have continued to resource preachers and worship leaders to explore issues of justice and peace, including through the launch of the weekly ‘Politics in the Pulpit’ podcast and daily ‘Stay & Pray’ prayers of thanks and intercession.

Branding might seem an overly commercial concern for the Methodist Church, but it is fundamentally about all our communications and publications being presented in a consistent way. It conveys our goals and values and builds up our identity as a community. During 2020/2021, we developed a ‘brand book’ to make all our online and print publishing more coherent and recognisable as coming from the Methodist Church, with clear visual direction and a defined, inclusive tone of voice.

For all publications, we have moved to thinking ‘digital first’; a shift undoubtedly accelerated by our churches, circuits and districts responding to Our Calling during the pandemic. This means that we consider sharing information, and resourcing the work of the Methodist Church, by providing digital content first: that may be as social media posts, podcasts and webpages. But also includes PDF publications for downloading, and we are exploring producing e-books, using the Methodist Prayer Handbook 2021/2022: A Place for All as a pilot project.

Nonetheless, some publications are still required or preferred in print, including the Conferencemandated resources, such as the annual Conference Agendas and Membership Tickets. The Christmas evangelistic campaign God is with Us , based on engaging videos and complementary social media posts, also had posters to bring it to the attention of congregations and postcards for them to share its message in their communities. This was supplemented with a phenomenally successful free seasonal CD. We distributed nearly 19,000 copies to bring Christmas worship during lockdown into individual homes, care settings and even to outdoor markets.

As churches adapted to life online, our sales of worship and hymn books for ‘in-person’ services fell very significantly. But sales of other printed resources remained remarkably buoyant, and production of publications required regularly to run churches has continued; for example, to support safeguarding training, to help ordained and lay people taking on new roles in their circuits, or to encourage and support generous financial giving. Additional publications in 2020/2021 included: Reflect and Respond , a study guide created by the Methodist Survivors’ Advisory Group; resources for all ages to engage with ‘A Methodist Way of Life’, and materials to support church leaders to take action on the ‘God for All’ evangelism strategy.

2. Children, Youth and Families

3Generate 2020 was postponed until 2021 due to Covid restrictions on gathering. However, a full residential event at the NEC took place at the end of October 2021 as planned with the opportunity for people to attend as day visitors or as residents.

We have a full programme that has been designed and planned by volunteer groups that have included Young people in the process. This year’s theme is ‘Tune In’ To God challenging children and Young people to Pray, listen and discern with peers and adults what God is calling them to do. Making a Covenant with God to take action on that calling. And sharing this with their local Methodist Community.

3Generate aims to create an inclusive and diverse space and has extensive support in place for children and young people to engage with the event and for the prophetic voice of children and young people to emerge and be heard. The event enables children and Young people to be courageous, share about their understanding of God and Faith and listen to God and each other.

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Through the 3Generate process, children and young people are equipped and encouraged to become participants in decision making and action in their local Methodist Communities. They are encouraged and challenged to Listen and look for God to be involved in decision making and advocacy, for action, change and growth and have an impact in their local Methodist communities.

This is supported by resolution 29/4 from Methodist Conference 2021; reaffirms the importance of hearing the voices of children and young people in discerning future direction and directs the Council and connexional committees, when revising strategic policies, to ensure that there is consultation with under-12s, under-18s and under-23s as well as with other groups.”

And Resolution 29/3 The Conference laments the stresses and traumas experienced by many under-23s living through the COVID-19 pandemic and therefore directs circuit staff teams to review how pastoral care might be more intentionally and actively offered to children and young people.”

3Generate calls the Whole Church to listen to, and be in relationship and dialogue with and amongst, children and young people, so that change and growth can happen together as a community. In October 2021 we had a dynamic and immersive program with Worship, Bible Study, Prayer weaved through and expressed in a variety of ways. Each Child and Young person speaking out and being in discussion. We are piloting this year a new 4-7 year old’s 3Generate day event that has an intergenerational model of participation.

Agents of Change

In 2021/22 we will facilitate five pilot Agent of Change roadshows events, working with regional partners across the country. These events will be aimed at children and young people, aged 8 to 16, and their workers. Each roadshow will explore a different aspect of being an Agent of Change and will support the aims and core principles of the Agents of Change programme, which are to:

Young Adults Leadership Year Program Gathering, Equipping and Developing Methodist Young Adult Leaders. The focus of the year is on the Characteristics of Christian Leadership.

Last year the Leadership Year ran online sessions for the participants, this year we will be running the Leadership Year with 3 residential weekends. There will be approximately 16 young adults aged 18-30s from across the connexion who will participate, growing to 30 young adults in 2022/23.

The focus is on understanding and forming characteristics of Leadership rather than on a skills based approach. The residential weekends contain a creative and engaging mixture of training, activities, reflection, worship, peer group support and mentoring. It is a chance to meet other young adults across Methodism and forge supportive relationships as they grow and learn together. The focus for the residential weekends are:

Weekend 1: Understanding leadership –connecting your discipleship and leadership.

Weekend 2: Exploring where and how you are leading other people.

Weekend 3: Developing your leadership.

We received positive feedback from last year’s cohort, in which they described the programme as “empowering”, “insightful”, “transformative”. One commented that the Leadership Year had “given me new ideas on how I can be a faithful leader and equipped me to work better with others, especially those who are different to me”.

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Methodist Way of Life – Intergenerational Engagement

Working with Learning Network and Methodist Way of Life working group We designed and produced a set of picture and conversation cards for use with all ages together to explore the Methodist Way of Life. And material for three acts of Intergenerational worship unpacking Methodist Way of Life.

Growing Ministry with Children and Young People

365 creating Space for children and young people to participate in decision making, dialogue, prayer, evangelism and Mission and action with the whole Church. When 3Generate 2020 was unable to go ahead we launched 3Generate 365, It started with a year of gathering virtually children and young people to pray every Friday at 5.17pm with our Youth Representatives. We held a virtual event with interactive sessions for Children and Young people facilitated by the Youth President and the 3Generate Reps to Tune In to God and each other sharing their experiences, Young people from across Methodism World Church Partners joining us virtually in Prayer, voting for Youth President and 3Generate Reps via the 3Generate App.

Resourcing Churches 365 events; We developed a toolbox of resources for churches to engage with Children and Youth Ministry. These included downloadable resources and a series of Zoom Gatherings and Webinars. As a part of this we gathered Children and Youth workers virtually on a regular basis over the Covid Lockdown to explore how to Create Spaces with children and Young people. These were learning communities with input and coaching. Ideas exchanges for Youth Workers, Running Intergenerational Ministry virtually. We ran webinars on Involving Children and Young people in Mission planning in the Church, Thriving after lockdown in partnership with the Girls Brigade, Improving Self Esteem, Soul Care and Leadership. With Ministries Love This Calling Campaign we facilitated a webinar on exploring calling and discernment in vocation Children and Youth Ministry. Enabling the Prophetic voice of children and young people, Praying and responding to God for All ages and abilities.

We will be gathering virtually and physically in Regions over the next year for churches who want to Create New Spaces for Children and Young People (New People New Places) to grow Ministry. These spaces will be learning, listening and coaching communities. We will also be facilitating coaching communities and gatherings for those already involved in Children, Youth and Family Ministry to listen, support and coach.

The CYF Team have two licensed Youth Mental Health First Aid Instructors (MHFA), who have delivered seven courses (either in person or online) since they qualified in early 2019. Across these courses they have trained just over 100 people in Youth MHFA – including local church workers and volunteers, key 3Generate volunteers, 3Gen Youth Reps and Ministers. We have established a pattern of delivering at least three of these courses a year. In addition to this we have also hosted webinars on Trauma awareness for leaders and Mental Health and wellbeing and activism with children and young people. We created a short video resource for children on managing anxiety during times of change (such as returning to school after lockdown), delivered training on mental health and emotional wellbeing in partnership with two different Learning Network regions and delivered training to the Methodist Fijian Fellowship on emotional wellbeing.

We spoke at the North East regional safeguarding conference on supporting confidence and resilience in children and young people.

3. Evangelism and Growth

The first full year of God for All: The Connexional Evangelism and Growth (E&G) Strategy has seen every district, circuits and churches in every district, and thousands of individual leaders participating in some way. The key programmes, pathways, and resources called for in God for All

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are now all launched in earnest with feedback loops built into each area for the purposes of ongoing reflection, measurement, and strategic refinement.

The invitation to the whole Church to engage the strategy in a way that resonates with their contexts has been communicated broadly through the publication of Take Your Next Steps in Evangelism and Growth , a free digital and/or paper guidebook to God for All’s opportunities; a 2021 Conference video update and follow-up article in the Connexion magazine; updated webpages; numerous Synod presentations and workshop; the expansion of active, creative social media streams; and the offer of local Zoom conversations in every circuit.

Additional highlights of the year include:

4. Global relations

The Methodist Church in Great Britain (MCB) has over 100 partner churches and organisations in over 65 countries across the globe, and the continuing development of our relationships is overseen by the Global Relationships Committee (GRC). Its strategy is a part of the response to Our Calling and sits within the Mission Team of the Connexional Team, operating within the recommendations of the Hope in God’s Future and Inclusive Church reports. It can be summarised as enabling churches, circuits and districts to be distinctive and highly effective participants in mission, by means of:

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This is expressed by maintaining and strengthening traditional and more recent partnerships through:

As well as supporting Mission Partners who commit to serve for a minimum of three years, the Global Relationships (GR) team also run a number of other programmes for people to serve the World Church. These include opportunities for persons from Britain and Ireland to experience the World Church through volunteering to serve a Partner for 3–12 months under the ‘Encounter Worldwide’ programme; volunteering for a shorter period during sabbaticals and through the Specialist Skills Programme; or participating in a group visit through ‘Encounter Together’. The GR team also enables MCB to receive young adults from other countries to serve in faith-based community and advocacy placements for two years through the Global Mission Fellows (GMF) programme of the United Methodist Church, of which MCB is an affiliate. GR is also working with the Council of Evangelical Methodist Churches of Latin America (CIEMAL) on a pilot programme bringing evangelists to support the work of circuits and districts in Britain and in the Methodist Church Ireland.

Due to the effects of the Covid-19 pandemic, all short-term programmes are suspended; however, planning, advertising and the receipt of provisional applications are now in progress for 2022.

The World Mission Fund is supporting five out of the six COP26 Workers, who are young adults employed to engage Methodists globally in climate awareness and action in preparation for the COP26 summit in Glasgow. The WMF finances the four workers representing our global Partners and one of the two MCB Workers.

Through the Church CAN programme, Global Relationships and All We Can work together with Partner Churches, enabling the strengthening of their capacity and effectiveness as agents of change in their local context.

Following the decision of the Global Relationships committee that the World Mission Fund (WMF) should reach its reserve level by August 2024, there has been a restructuring of the grantmaking system from the WMF. Only Essential Assistance (to help avert organisational crisis) and Solidarity (small grants given to support Partners in unforeseen events, such as disease, conflict or natural disaster, which were formerly called General Grants) Grants will be given this year as we work with Partners to see how we can make best use of the funds over reserve level to enable some capacity-building which will support Partners for a future when our financial position will be very different.

We have also invited all our Partner Churches and Organisations to conversations, facilitated by a Partner, CREAS (Centro Regional Ecumenico de Asesoria y Servicio), to discern how we can best support one another in mission in our various contexts.

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The Strategy for Global Relationships defines the following priorities for grants from the World Mission Fund:

Work has been funded by General (expressions of solidarity) grants, as well as Annual grants, Scholarship and Leadership Training, and Nationals in Mission grants. In 2020/21, the original budget of £250,000 to be given in General grants, was raised to enable £400,000. This was due to the ongoing impact upon some Partners of the pandemic.

Here are a few examples of grants made in 2020/21:

Nicaragua (£10,550)

An annual grant from the WMF has been crucial in supporting the National Evangelical Methodist Church in Nicaragua during the COVID-19 pandemic. The church has been able to distribute essential food packages to 23 communities linked to their local churches.

Peru (£11,620)

Indigenous communities in the Peruvian Amazon have been severely affected by COVID-19, spread by visitors to the surrounding area and internal migrants who have returned from the cities after becoming unemployed during the lockdowns. A General Grant from the World Mission Fund has enabled the Methodist Church in Peru to work with 43 indigenous communities to open nine community pharmacies, offering low cost medicine and basic health consultation services.

Italy (£10,000)

World Mission Fund support has been used to support the Methodist Church in Italy (OPCEMI) / Federation of Protestant Churches in Italy project, Mediterranean Hope, in their work with refugees in Lampedusa. This grant is to support the work of the team in helping refugees with sustenance, team transportation and proactively responding to tell the story of migration that combats the often negative news stories.

Kenya (£6,240)

Jennifer Muthoki Mutua is a National in Mission serving The Methodist Church in Kenya and World Student Christian Fellowship (WSCF) – Africa. During the pandemic the Student Christian Movement of Kenya, which has been dormant for the last five years, has been revived, and there has also been growth in the Student Christian Movement of Tanzania and Uganda.

Zambia (£7,035)

United Church of Zambia Health Institutions have been supporting communities throughout the pandemic. The World Mission Fund was used for the purchase of medical and oxygen supplies to be used at UCZ health centres.

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India (£17,500)

HMI facilitates interfaith dialogue and peace building, transforming conflict situations, promoting inter-faith and inter-ethnic harmony, and offering educational programmes for children and adults. As well as receiving an Annual Grant to support this work, HMI has received an additional General Grant and monies from the joint MCB/All We Can Covid-19 response appeal to support their work distributing PPE and emergency food supplies, as well as awareness-raising around health, wellbeing and vaccination access during the pandemic.

Transforming lives through the work of All We Can.

All We Can, the relief and development charity of the Methodist Church in Britain, helped transform the lives of more than half a million* people between 1 September 2020 and 31 August 2021. By working in partnership with our global neighbours most impacted by disasters, poverty and injustice, All We Can seeks to enable flourishing and resilient communities, and unleash potential.

In the 2020/21 financial year, All We Can partnered with 21 local partners in 6 countries. All We Can works together with talented local organisations who are rooted in their local communities – helping them not only respond to the needs they are facing, but also supporting them with capacity development, training and resourcing. All We Can works in partnership with these local organisations for many years, often over a decade, leaving a legacy of thriving and robust organisations. In the past financial year, local partners in both Ethiopia and Cameroon have graduated from All We Can’s support – equipped with the skills they need to thrive and continue to work sustainably with their communities.

Additionally, through collaboration with Global Relationships, All We Can has worked with 4 Methodist church partners to deliver its Church CAN initiative. This work recognises that Churches have unique strengths that enable them to make an important contribution to seeing ‘everyone’s potential fulfilled’. Church CAN focuses on supporting Churches to implement their institutional strengthening priorities following a facilitated process of capacity self-assessment and strategic planning.

The ongoing impact of Covid-19 has played a huge part in shaping the work of All We Can and its local partners. Throughout the year, All We Can has worked to help partners adapt their programmes to respond to the critical needs of those they serve. It has also engaged with global calls for vaccine equity through WHO’s #VaccinEquity campaign, and as a member of the Crack the Crises Coalition – a union of charities representing more than 12 million people, calling for world leaders to take action on Covid-19, injustice, and climate change. All We Can is also a member of both BOND – the international development network – and the European Commission on Mission, a coalition of Methodist Mission boards and agencies.

Through the joint Emergency Coronavirus Appeal, All We Can and the Methodist Church in Britain have continued to support vulnerable communities across the world tackle Covid-19. In April, when India was at the height of its devastating second wave of the virus, the appeal pivoted to respond directly to this need, working with church and local partners across India to deliver vital support.

All We Can has also responded in other times of urgent humanitarian need. In March 2021, following a devastating fire in Kutupalong camp in Cox’s Bazar, All We Can worked with its humanitarian partner in the region to help rebuild shelters and provide fire safety training for the community. Similarly, in August 2021, All We Can and the Methodist Church in Britain launched the Haiti Earthquake Emergency Appeal in response to the earthquake and following tropical depression which struck the country. By co-ordinating contributions from the global Methodist family, as well as with the generous donations of supporters in the UK, the appeal is helping to provide emergency food, hygiene equipment and temporary shelter materials to the most

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vulnerable families, with plans in place to help farming families regain livelihoods once immediate needs have been met.

The origins of All We Can lie in the Methodist people’s generosity towards refugees in World War Two – and so the charity also remains steadfastly committed to supporting refugee communities. Notably it continues to support the aforementioned work of humanitarian aid partners working in the camps of Cox’s Bazar, Bangladesh alongside Rohingya refugees, as well as with Syrian refugees in Za’atari refugee camp in Jordan.

*Final impact figures are contained in the All We Can’s 20/21 Trustees Report and Accounts and the Annual Review.

5. Learning network

The last year has continued to see the successful development of online engagement for all aspects of learning and development as the learning network team have continued to respond to the ongoing COVID-19 pandemic. The team have been able to offer continued ongoing support to local church leaders, lay and ordained, as we have navigated the pandemic during the year. This year we have developed a closer working across the regions so as to enable more effective use of our resources, skills and experience.

Levels of engagement with the online opportunities has continued to be positive and whilst it is recognised that there have been some limitations to what is possible through online engagement there have also been many advantages. The ability to ‘zoom’ in from anywhere across the connexion, without the need for travel time and costs of travel, or indeed leaving your home, has perhaps been one of the biggest advantages both for those facilitating events as well as those attending, with some people being able to attend events perhaps for the first time. This has enabled those engaging from some of the more remote parts of the connexion to feel more closely linked in and supported through what is being offered. All of this also brings with it additional environmental benefits. Alongside these benefits it is recognised that online engagement has not been possible for all and has therefore meant that some people have been unable to engage with all that has been offered over this period. It is anticipated that online delivery and engagement will continue for a significant proportion of the work of the team and therefore consideration will be given to ensure that the opportunities are as accessible as possible, perhaps with some face-face events where this is essential. Work is underway for delivering a number of areas of work across the Learning Network drawing together individuals from various regions to develop, prepare and deliver connexion-wide learning and development events. These include a number of our shared areas of work with the Evangelism and Growth team, Children, Youth and Families team and Ministries team. This approach will enable further effective use of skills and experience over the coming year.

Learning Network staff have worked closely with our colleagues in the Safeguarding team and wider connexion to develop online delivery options for Creating Safer Space Foundation Module and Advanced Module. This has been achieved successfully with significant work put in from both connexional staff and district safeguarding officers. The delivery of these modules in online format will continue alongside some local face-face delivery as required over the coming year. Work continues on developing our online learning platform ‘Theology X’, including safeguarding training, and it is anticipated that additional modules will become available over the coming year.

Staff within the Learning Network continue to work closely with the Ministries team as they support the ongoing delivery and facilitation of Supervision training. This has been successfully delivered in online format during the year. Work on developing continued professional development for Supervisors will continue during the coming year.

The Reconciliation and Mediation Team pilot project, in the Eastern region, London region and North West and Mann region, is now established and we have worked closely with Place for Hope

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in establishing the project this year. A cohort of 20 individuals have successfully completed their initial training and accreditation as practitioners in supporting the project within the three learning network regions. The Place for Hope team worked well together with the Director of Learning and Development to deliver the initial objectives for the project. The Positive Working Together manager adapted the Faith in Change and Conflict course to the online environment and delivered it to a high standard. The Client Care and Communications Manager worked collaboratively to develop and review fit for purpose infrastructure required for the project. They also developed their skillset to create new media outputs for the successful e-launch of the project during The Methodist Conference on Thursday 1 July 2021. All three Learning & Development Coordinators in the pilot regions are exploring, with the Project Manager, the opportunity for regional events and how best to proactively promote the service during 2021/22.

A cohort of 11 people made up from Learning Network staff and volunteers are currently being trained as trainers in the delivery of Mental Health First Aid. Upon successful completion of the training it is anticipated that this training will begin to be offered across the connexion during 2021/22, working closely with our Wellbeing Adviser.

6. The Methodist Council and Governance

The Methodist Council is charged with responsibility to keep in constant review the life of the Methodist Church, to study its work and witness throughout the Connexion, to indicate what changes are necessary or what steps could be taken to make the work of the Church more effective, to give spiritual leadership to the Church and to report annually to the Conference, bringing to the notice of the Conference matters to which it believes the Conference ought to give urgent attention.

The following are just a few of the actions that the Council carried out during 2020/2021 in accordance with its governance responsibilities.

Work relating to Covid-19 is ongoing. Guidance continued to be produced to aid district chairs, circuit superintendents and others during the pandemic, as well as the work of DBS blemish checks and safeguarding risk assessments.

The President and Vice President of the Methodist Conference 2020/2021 managed to reimagine their role at a time when the ministry of visitation has not been possible. There have been many highlights of digital engagements including Facebook Lives as well as numerous visits that were held online.

During the year, the Independent Inquiry into Child Sexual Abuse released a report of the investigation into Child Protection in Religious Organisations and Settings.

The report made two recommendations: the first on policy, procedures and training and the second around legislation for unregistered institutions providing full-time education. The first recommendation largely reflected the Church’s existing policy and procedures and stressed the

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need for regular updates. As part of the ongoing cycle of learning and review the child protection policy will be reviewed along with the procedures and training to see what changes might be needed in light of the report. Government advice is awaited on the second recommendation.

The report mentioned a general lack of support for victims of abuse among religious organisations. The support to victims and survivors will continue to be reviewed and improved and the Church apologised where this has not happened as it should have done. The Church has learnt much of how the response can be improved from the Survivors’ Advisory Group and is grateful to them for sharing their experiences and working with us to make our systems and support better for all. The Church welcomed the report’s conclusion that child protection work should be ‘victim focussed’ and we will continue to work with and be led by the SAG to achieve this.

The Panel recognised positive child protection practice in the Church including the safer recruitment and internal auditing processes.

7. Ministries

The vocations project has ended, however with the retention of the officer on team we will continue to promote vocational exploration as part of ministry development, The underrepresentation of BAME people in church offices and particularly British born black ministerial candidates is a key focus for a number of officers in the team.

Faith and Worship the old local preachers’ course has now been replaced by Worship: Leading and Preaching . Despite lockdown we have seen a continued increase in the number of preachers on trial being registered onto the course. A service of celebration and recognition for all that Faith and Worship offered to the church will take place at Methodist Central Hall, Westminster in October 2021.

For a second year, the Ministerial Candidates Selection Committee had to take place on line. At the start of the process for the 2020-2021 connexional year we had 31 applicants. CSC met 29.

22 presbyteral and 2 diaconal candidates were accepted. Taking into account deferrals from other years and one from this, 25 students started training in Sept 2021. 14 Ministers of Other churches and Conferences started appointments in Sept 2021.

Support for ministers acting as chaplains and those engaged with lay ministries has been offered by a new officer leading to the redevelopment of many of our webpages. The officer will lead on drafting competencies for Local Lay Pastors.

The Superintendents’ induction programme was reimagined to allow online delivery. This has had the advantage of building a community of practice and will be the foundation of the induction in years to follow. Half of the annual superintendents’ conference happened in person (as lockdown restrictions had been eased by June) 97 supers attended in a COVID safe environment, Feedback made it clear that those who were able to attend had appreciated the content and the ability to confer with colleagues.

A new supervision policy was adopted by the 2021 Conference. 572 people have received initial training as Supervisors of whom 476 were approved to supervise under the policy. About 43 people are in the process of training and 47 have withdrawn or were recommended not to proceed. As all supervision moved online in 2020, so too has our training, with the training course and assessment being adjusted appropriately. Training this year will focus on continuing development in supervision particularly for those early adopters in supervision.

23 people attended the ‘First Moves in Ministry’ retreat and 16 attended an online version of ReCharge (the mid-ministry retreat) for those in years eight to twelve of ministry originally 35 people were due to attend the physical event. 40 ministers attended the pre-retirement courses.

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The team continue to be responsible for creation and signposting of provisions for worshipping at home during the pandemic.

38 awards for higher education studies have been made. (20 new or renewed awards for two years beginning 2021, 18 going into the second year of an award). Work continues at building link with our network centres: The Queen’s Foundation and Cliff College. A tutor in evangelism and leadership has been appointed to the Ministries team who will split her time at the Queen’s foundation and within the ministries team. A new Memorandum of Understanding has been agreed with Wesley House, Cambridge.

The Queen’s Foundation

Queen’s leads the Church’s responsibility for initial ministerial training (IMT), with three basic pathways available: full-time, part-time (The Queen’s Connexional Course), and circuit-based learning (CBLP). In the year 2020/21, the Foundation worked with 59 student presbyters and deacons and 44 probationer ministers, along with 19 ministers continuing to work towards degrees after ordination. They represent around 40% of Queen’s learning and formational community, alongside Anglicans, Pentecostal Christians and other independent students, particularly from black-led churches. Queen’s offers a probation studies pathway for those entering circuit ministry, which is aligned with Connexional guidelines and allows for continued reflection and study, on either an accredited or not-for-credit basis, with continuity from IMT.

Queen’s continues to offer postgraduate degrees and awards through its validating university partners in Durham and Birmingham (Newman University). The research department offers doctoral awards, through continuing partnership with the Free University of Amsterdam, whose theology department is ranked as one of the world’s best. Queen’s continues also to cherish its connections to and work with the global Church, both in offering student ministers experiences of Christian life and ministry in other parts of the world, and in receiving postgraduate students from overseas to join the college community for a period. The Centre for Black Theology was launched in 2019, and is a vital and urgent initiative in the Foundation’s life, offering courses at undergraduate and postgraduate levels to students across Britain.

Professor Clive Marsh began his work as Principal in September 2020. Although he started his appointment at a very challenging time, in terms of the pandemic and its effects, as well as facing a large turnover of staff, the Foundation under his leadership has continued to offer its teaching online, and to support students through its excellent tutorial system. The staff team has re-grouped and all are looking forward to moving into a new academic year. The Foundation’s finances are healthier than many other TEIs, and the foundations are in place for continued growth and development in the months ahead.

Cliff College

Cliff College is Methodism’s ‘own’ college, and works under the authority of the Council, delegated via the Cliff Committee. It cherishes its historic commitments to evangelism, and its more recent and growing work in digital and global theological education. Cliff College works in partnership with several teams and clusters across the Connexion to deliver a range of projects and programmes which contribute to current priorities. These include innovative short courses, shared work with the Evangelism and Growth team, the Cliff Festival and postgraduate degrees which are especially valuable in continuing ministerial development. They also deliver projects in evangelism and digital engagement; global theological education; and online learning and new pedagogies for the worldwide Church’s emerging needs.

The Cliff Committee has welcomed a business plan which seeks to build on the work of Vision 21 and move the work of the college forward to meet future needs. The particular difficulties of the Covid-19 pandemic have found Cliff well placed to respond with creativity and flexibility, especially when there was a need quickly to move courses online. The annual Cliff Festival had to

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be held online for the second year running, and was a great success nevertheless, offering the customary weekend of worship, study and fellowship. During the year, a new Learning Strategy was introduced which shapes the College’s work and guides the development of new courses and pedagogies. In addition, the Connexion is working closely with Cliff in the development of a new Virtual Learning Environment, as part of TheologyX, Cliff’s online learning tool. This will enable the increased use of digital training resources for the needs of the Church. As the Church implements the Conference’s decisions around new patterns of ministry, the College will be key to rolling out a new programme of training for Local Lay-Pastors, and in resourcing Connexional priorities. A new shared mission plan was agreed in 2021, which now undergirds the ways in which Cliff and the Connexion work together.

Southlands Methodist Trust

The Southlands Methodist Trust (SMT) is an educational charity, focused on encouraging the Methodist ethos of Southlands College (the Methodist-founded College of the University of Roehampton) and the development of the College’s contributions to the research and learning of the wider Church and society.

The SMT’s main research and educational activities continue to focus on the Susanna Wesley Foundation (www. susannawesleyfoundation.org.uk). Alongside this, grants from the Trust also supported research and research-related activities across a range of subject areas deemed to be of importance and interest to the Church and society. During the year, there has been increasing collaboration between the SWF and the Connexion in some key areas of current interest and priority, including: processes of change in the Church; clergy well-being; equality, diversity and inclusion; Methodist-Catholic social action; fostering learning communities; and deepening theological reflection on chaplaincy.

The SMT co-sponsors an ecumenical project to develop a Methodist-Roman Catholic student community housed on campus. It also supports chaplaincy activities and student-led ventures to encourage commitment to social action, such as the Southlands Venture. Information about its projects can be found at www.southlandsmethodisttrust.org.uk.

The SMT retains ownership of the college’s historic records and continues to upgrade the archive to make it more accessible to the public as a resource for studying teacher training and the Methodist Church’s involvement in education. This will be especially prominent as Southlands prepares to celebrate its 150[th] anniversary in 2022, and to mark its significant contribution to the teaching profession and to educational progress.

The SMT acts as a resource and a catalyst for the Methodist Church’s contemporary engagement with education at every stage and level, working with the Connexional Team, and the various Methodist schools-related bodies (MAST, MIST, Wesley Trust, MSC) to offer insight, advice and support. As part of this contribution, it provides funding for the staffing of MAST. The Trust nurtures and cherishes its relationships with the global Church and its connections to worldwide Methodist educational ministries. The Head of College is currently a director of the International Association of Methodist Schools, Colleges and Universities, a trustee of MAST, and a member of the Methodist Schools Committee.

8. Property

The Property Support team has strengthened connections during this year with managing trustees and connexional colleagues alike, increasing awareness of the wide-ranging support offered by the team. Support during the pandemic to all those with property responsibilities in the Connexion was a daily priority for the team - ensuring guidance was always up to date and relevant. A dedicated coronavirus property page was established and became a key source of information for any who needed it, alongside direct guidance for specific queries. Despite the

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pandemic, the team has also continued to offer support on property development projects, other forms of pro-active guidance and work on future strategic developments, partnerships and funding.

Support to Managing Trustees and Ministers in regard to church development projects has been a focus for the Director of Property Support. Over the year, it was evident that a broader need for property support was developing across churches, circuits, districts and Connexion alike. By end of the year, property development support could be broken down proportionately in to the following broad themes:

Alongside this, proactive general guidance to managing trustees has continued through undertaking a mixture of reviews, updating and compiling new information. The focus for this was to make property guidance accessible and aligned with other connexional information. This began through simplification of the property website pages which led to a decision to create Property Development Pathways - a centralised and comprehensive resource on the property webpage for those undertaking a property project. When completed in the latter part of 2021, they will present a core project pathway guide with decision ‘gateways’ and detailed guidance reference points, alongside other considerations for partnership and site redevelopment, heritage buildings & conservation, zero-carbon initiatives and equality, diversity and inclusion. It also signposts to guidance from the Mission team and TMCP to ensure consistency and compatibility. Similarly, having taken over the responsibility for Replacement Projects this year, amendments were made to SO 973, including the drafting of new criteria, to bring decisionmaking in line with the new Strategic Guidance for the Use of Property in Mission. These were approved by Methodist Council, and the Conference in June. Other reviews, led to updates to the Superintendents’ Handbook with greater guidance on property; and also support to connexional colleagues in developing further net zero carbon strategies and approaches.

Two significant pieces of proposed Government legislation emerged this year – the Protect Duty Consultation[1] and Contested Heritage[2] . Working with colleagues, the team have been able to provide input into detailed responses to these proposals, forming an ongoing project into 2022. The online newsletter, Property Matters , continued to be a key channel of communication. This was particularly important during the pandemic in promoting guidance updates. The electronic format and monthly emails ensured that information was conveyed efficiently and effectively, and readership improved slightly from the previous quarterly publication: November 2019 (last paper copy) 4,179 readers to August 2021 4,454 readers, with a 60 – 65% average opening rate.

Alongside ongoing support needs, the team have produced forward looking strategic pieces of work. This included a District Property Secretary (DPS) mapping report to analyse current DPS

1 Protect Duty - GOV.UK (www.gov.uk) - the Protect Duty in essence consults on future legislation which will place a duty of care on Managing Trustees for those using their build from the effects of a terrorist action. It is a legislative response to the findings of the public enquiry into the Manchester Arena bombing.

2 Letter from Culture Secretary on HM Government position on contested heritage - GOV.UK (www.gov.uk) - contested heritage, as outlined in the Secretary of State’s letter, focusses on the ability to control the removal through the Planning Laws of statues, plaques, memorials, monuments etc. deemed as contested due to their historic origins or heritage.

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roles across Districts, and inform new approaches and support in the future. The report gathered ‘ground level’ data for each District to develop SWOT analysis, role specification and recommendations. The findings have helped the team in the support of more formal, paid district property officer roles achieved in at least three Districts this year. An extension to this has been the team providing direct support to two districts through property training events, and also to ministers in training at the Queen’s Foundation in Birmingham.

Working with others has been a key objective of the property team this year. A number of connexional teams, TMCP, PDC members and DPS’s came together during the year to present five regional online Property Roadshows between May and July. These proved very successful and the feedback given will be used to inform future training and support on property and related issues. The events attracted 364 attendees with 128 providing feedback. This was a significant improvement on the face-to-face Property Roadshows held in 2019/20 which attracted around 100 attendees. As well as working in more co-ordinated ways with colleagues in TMCP and LCP, the team have developed other relationships, providing Managing Trustees with partnership options when considering mission and property opportunities. A number of these consolidated existing Methodist partnerships including Action for Children and the Boys & Girls Brigade, along with ecumenical partners such as Housing Justice/Faith in Affordable Housing and the Archbishop of Canterbury’s Commission for Housing. The team have been able to offer their input and expertise into other working groups within and outside Methodism, principally focussing on affordable housing, including contributions to the Housing and Homelessness Working Group and Housing & Homelessness Forum (through Citizens UK).

The team continues to support churches through the Feasibility Fund grants administered by the Property Development Committee. This has now expanded to include overseeing the project funding run-off from the Connexional Grants Committee Property Grants, and overseeing support to managing trustees applying for Landfill Trust grants. In addition, this year, through the government’s £2 billion Culture Recovery Fund the property team, led by the Connexional Conservation officer, and supported by TMCP, assisted four managing trustee bodies of Grade I or II* church buildings in submitting funding applications. Unfortunately, due to oversubscription, Historic England agreed to fund only one of the projects, awarding them £420,000 in funding for repairs, to be completed by June 2022. Within connexional resources, the Feasibility Fund, by the end of this year had distributed £34,536 to those who applied; this provided funding to churches at the early stages of exploring future uses of their property for mission (60% of the total costs up to max. £10,000). This enabled:

Due largely to the consequences of the pandemic, the business case for the redevelopment of Oxford Place, Leeds into a hotel became no longer viable. Having taken the difficult decision to end the project, the discussions with the Yorkshire West District resulted in the property being returned to local managing trusteeship.

The 2021 Methodist Conference confirmed the decision to sell Methodist Church House. A project was established under the Methodist Council to take forward this decision and also to progress the options for a replacement to Methodist Church House.

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Grants

The Council agreed that there should be a redesign of the connexional grant-giving processes, in particular those grants which are made from the Mission in Britain Fund, the Fund for Property, and the World Mission Fund.

The Mission in Britain Fund is now to be used for funding New Places for New People projects and Methodist Action on Poverty and Justice. The Epworth Fund is being invested in the Evangelism and Growth strategy. The Fund for Property is being transferred to the oversight of the Property Development Committee. The World Mission Fund is to be overseen by a task group of the Global Relationships Committee.

The changes outlined above will enable streamlined and efficient processes in respect of the three funds which have previously been under the oversight of the Connexional Grants Committee. In the light of these changes, the Council recommended to the Conference that the Connexional Grants Committee be disbanded. Grants already underway in the old system will be honoured and the monitoring of their impact and gathering of learning from them undertaken by the relevant part of the Connexional team and reported to the Strategy and Resources Committee.

World Mission Fund grants £1.9m (2020-21)

These are grants given to Partner Churches and organisations overseas to support mission and ministry in their communities. The grants cover four main streams:

There was an upward trend in the number and value of applications requested in 2020-21. 160 applications were received for a total value of £4.6m, 105 applications qualified for £1.88m worth of annual grants, NMA and SALT grants.

In addition to the above, thirty-one General grants totalling £371k were awarded in 2020-21 to partner churches, with seventeen (£191k) of the grants awarded specifically for Covid-19 related work.

Plans for the future

Throughout the coming year The Methodist Council plans to continue pursuing the objectives of the Methodist Church, in particular those objectives collectively referred to as: ‘Reaffirming Our Calling’. The main strands of this work with some examples include:

  1. Proclaiming the gospel through worship/ The ministry of the whole people of God in the life of the world.

  2. Reflecting on the impact and effectiveness of online worship and learning over the last year to develop future strategies for supporting these areas.

  3. A Church for all people / The Inclusive Church.

Implementing the action plans of the Justice, Diversity and Solidarity Strategy to ensure the Church as a whole becomes a more welcoming, diverse, and tolerant organisation.

  1. God’s Church in God’s world / Striving for justice and peace. Consideration of the Church’s net zero carbon emission targets, ongoing engagement in reflection on our ethics in relation to investments.

  2. Evangelism / God for all.

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Working with Districts in the year ahead to increase our engagement in sharing the gospel in new ways, striving to work with those in the most marginalised communities in our world.

  1. Resources for the Church: the use of God’s gifts (including oversight and leadership). Working with others throughout the Church to respond to the financial impact of the pandemic.

  2. Detailed work to enable the Church to make decisions about its future decision making structure which offers the best patterns of oversight and management for the organisation.

  3. Responding to the gospel in partnership. Continued reform of the processes of grant giving both at home and abroad to ensure participation and positive engagement from our partners.

Remuneration of Key Management Personnel

The Methodist Council oversees the operation of the Church on a day-to-day basis. It acts as the employing body for staff and the appointing body for ministers serving within the Connexional Team. It delegates the monitoring of the Connexional Team to its Strategy and Resources Committee (SRC). The senior management group of the Connexional Team comprises the key management personnel of the Church in charge of directing and controlling, running and operating the Team on a day-to-day basis.

Two senior leadership posts, the Secretary of the Conference and the Assistant Secretary of the Conference, have to be held by ordained ministers. They each receive the standard stipend plus a fixed percentage allowance. The levels of both are set annually by the Methodist Conference. The pay of the senior employed staff is set by a job-grading panel by reference to the Hays Pay and Grading Scale. In view of the nature of the Church’s work, the salaries are benchmarked against pay levels in other charities of a similar size run on a voluntary basis. The salaries for senior staff posts are determined as part of the same salary scale as is used for all staff posts.

Trustees are required to disclose all relevant interests and register them with the Conference Office. In accordance with the Church’s policy, trustees must withdraw from decisions where a conflict of interest arises.

Details of the expenses reimbursed and related party transactions relating to the Council and the SRC are in Notes 25–27 to the financial statements.

Fundraising Activities

T he Methodist Church raises funds through investment management, trading activity, property transactions and voluntary donations. It receives a proportion of funds raised locally on the sale of property owned by circuits.

It does not employ external fundraisers or undertake direct fundraising campaigns, such as direct mail or telephone canvassing of donations. Whilst essentially a passive fundraiser, it is registered with the Fundraising Regulator and indirectly raises funds from individuals by the following means:

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During the year legacy income fell significantly largely due a significant one off legacy received in 2019/20. Giving to the mission funds fell due to less opportunity for local fund raising as a consequence of the pandemic.

The Methodist Church has safeguarding procedures that protect vulnerable people and this extends to the indirect fundraising carried out on its behalf by local churches. The Church has not been made aware of any complaints from its fundraising activities.

Financial Review

The activities covered in these consolidated financial statements are those under the oversight of the Methodist Council. The Methodist Church in Great Britain is the registered charity and the Charity Commission has agreed that these financial statements can properly serve as the financial statements of the charity.

The net income for the year was a surplus of £23.6m (2020: £5.8m deficit), including net investment gains of £22.7m (2020: £5.8m losses). This investment gain largely reflected the improvement in the value of investments held by the Church in units invested by the Central Board of Finance of the Methodist Church. These increases reflected the significant improvement in market conditions that more than offset the losses incurred in the previous year.

Other recognised gains for the year were £13.2m (2020: £14.1m loss). A £12.3m gain (2020: £9.1m loss) arose from the actuarial revaluation of the Pension and Assurance Scheme for Lay Employees of The Methodist Church. A detailed disclosure on the Scheme’s financial position is provided in Note 28 (page 93). A £0.9m gain resulted from the revaluation of the Church’s charitable property.

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Income

The total income for the year was £40.3m (2020: £44.4m) a decrease of 9% compared to the previous year. This was mainly due to the following:

  1. Reduced legacy income following the significant (£1.9m) legacy received in 2019/2020.

  2. Lower levels of donations due to the impact of the Covid-19 pandemic.

  3. Major reductions in trading income across both MICL (reduced hotel occupancy) and Cliff College (course and event cancellations)

  4. A reduction in investment income was experienced due to the significant impact that the pandemic had on the financial markets with consequent reductions in dividends being paid in year.

  5. The deconsolidation of the Westminster College Oxford Trust (£0.5m) - see page 4.

These reductions were partially offset by a material increase in capital levies to £10.3m (2019/2020 £6.9m) as a result of additional sales of Methodist property.

----- Start of picture text -----
Methodist Church in Great Britain - Total Income £40.3m
3%
3%
5%
12% 35%
Charitable activities
Capital levies
Donations and legacies
Investments
Other trading activities
Grants
17%
Miscellaneous income
25%
----- End of picture text -----

Expenditure

Total expenditure decreased to £39.4m (2020: £44.4m). Of this, £35.4m was spent on direct charitable activities (2020: £37.2m). The reduction in expenditure was partly due to a reduction in charitable spending by All We Can and the deconsolidation of Westminster College Oxford Trust (£0.7m). Expenditure also reduced because of the ongoing impact of the Covid pandemic reducing trading, events and physical meetings. Spending from restricted funds plus transfers was £2.6m greater than income. This largely reflects the policy to use excess reserves in a

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planned manner over three years. A detailed analysis of expenditure by activity is included in Notes 7-8 (pages 64-65).

----- Start of picture text -----
Methodist Church in Great Britain - Total Expenditure £39.4m
3% [2%] [2%]
Ministries
4%
24%
5%
Global Relations
6% Evangelism & Growth
Methodist Council &
7% Governance
Learning Network
Income Generating Centres
21%
11%
Building Communities
15%
----- End of picture text -----

The total impact of deconsolidating the accounts of the Westminster College Oxford Trust is a reduction in assets of £10.8m.

Managed Reserves

The total value of funds held at 31 August 2021 was £290m (2020: £264m). There are restricted reserves of £149m (2020: £152m), unrestricted reserves of £118m (2020: £92m), and endowment reserves of £23m (2020: £19m).

The Methodist Church in Great Britain does not have a blanket reserves policy to cover its operations. Rather, the policies are set locally by the relevant trustee bodies and take into account the unique risk factors faced by each entity. The unrestricted funds reported in these financial statements are under the trusteeship of the Methodist Council, therefore the reserves policy outlined below is that of the Methodist Council. As a consequence of the Covid-19 pandemic the reserves policies were reviewed and reserve levels amended. There are five main unrestricted funds:

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General funds

At 31 August 2021, the balance of the unrestricted general funds was £53m (2020: £54m). Of this £40.7m (2020: £46m) is invested in fixed assets, used in the day-to-day running of the Council’s activities and that of its subsidiary undertakings, which is therefore not available for use as a reserve. This consists of £16.3m of tangible fixed assets and £24.4m of investment properties. The trustees approved a reserves balance of £7.5 million. This would ensure that there is sufficient cash or near cash at hand at all times to enable operations to continue smoothly and without the disruption that might otherwise arise when receipts and payments occur irregularly or are delayed or accelerated. At 31 August 2021 the free reserves balance was £12.3m (2020: £8m).

Designated funds

Designated funds are part of the unrestricted funds. The trustees have earmarked them for a particular project or use, without restricting or committing the funds legally. The trustees may cancel the designation if they later decide that the activity should not proceed or they decide not to continue with the project for which the funds were designated.

At 31 August 2021, the designated funds totalled £66 million (2020: £52 million) of which the main fund balances were as follows:


The Connexional Priority Fund

Epworth Fund

The Pension Reserve Fund

Others
Total:		 £11 million
£8 million
£46 million
£1 million
£66 million

The Connexional Priority Fund (CPF), as a large designated fund, reflects the connexional nature of The Methodist Church. Its income is derived from levies on property sales. It serves to redistribute money around the Connexion as a proportion of money released in one area becomes available for new mission and ministry elsewhere. In 2021 the Methodist Council approved a reserves policy for this fund, setting the long-term uncommitted reserves level of the CPF at £1.5 million.

The Epworth Fund was set up with the proceeds from the sale of Epworth House, City Road, London in 1987. The Church wanted the fund to be used in the long term for innovative projects, expenditure for which could not always be justified using other resources and they designated an amount of £5 million for this purpose. In 2021 the Methodist Council amended the reserves policy to £1m to allow the capital balance of the fund to be used for missional purposes.

The Pension Reserve Fund exists to help mitigate the financial risks associated with the Methodist Ministers’ Pension Scheme (MMPS) and the Pensions and Assurance Scheme for Lay Employees of the Methodist Church (PASLEMC). More information can be found in the Financial Risks section below.

At 31 August 2021 the reserves position on the designated funds is above the policy by £16.5 million. The CPF’s reserves are above the policy by £9.8 million and the Epworth Fund is above policy by £6.7 million. Excess balances have been allocated by the Methodist Conference to the delivery of Our Calling and the God For All Strategy over the coming four years. The balance held in the smaller designated funds is detailed in Note 19c (page 80) in the notes to the financial statements.

Financial risks

The Council’s general reserves enable it to make long-term commitments to projects, and to protect its work against adverse financial events. A formal review of the reserve levels takes place every three years. In the intervening years the Strategy and Resources Committee (SRC) considers the impact of the financial risks associated with the income and expenditure streams

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and balance sheet items and assesses the appropriateness of the reserve range. This allows time for fundamental restructuring, in the event of a major downturn, and to protect the current programme of work from unexpected demands. The goal is to plan for the effective deployment of the available financial resources to achieve the strategic objectives of The Methodist Church (see page 3).

The Council is faced with the following financial risks:

The MCF assessment is the main source of unrestricted income for the Council. It is a major contributor to the funding of a number of key activities including the administration of the Connexional Funds, the Learning Network and major aspects of the governance processes such as the Methodist Council and the Conference.

The assessment is a charge upon circuit receipts. The impact of the Covid-19 pandemic has left a number of circuits expressing doubts about their ability to meet the assessment. These concerns build upon the recent trends of decline in membership of local churches. In response, the Methodist Conference reversed its decision for a 1% increase in the 2021/22 Assessment and implemented a 1% cut. It also indicated an intention to cut the Assessment by a further 2% (2022/23) and 3% (2023/24). Planning these reductions over three years affords the Council sufficient time to adjust its expenditure budgets accordingly.

Other sources of income available to the Council are donations, legacies and investment income. Legacy income, when received, is significant but prone to fluctuation. Unrestricted donations tend to be very variable and have been impacted by the closure of church buildings for much of the year.

The impact of a sustained fall in the investments and other assets held by the Council could be felt in two ways: first, a deficit in the statement of financial activities occurring over a number of years; second, difficulties in realising assets with the potential for consequent cash flow, and operational problems.

A key financial risk faced by the Church is the level of the deficit within the defined benefit pension schemes. In order to mitigate this risk, the Pension Reserve Fund was established by the 2009 Conference as a fund outside the schemes, which could be used to meet future funding deficits. This fund has the benefit of providing comfort to the Pension Fund trustees of the financial support of the Church for the schemes and enables them to follow an investment policy more likely to generate higher returns than a more conservative policy would realise. The Fund has made annual contributions of £1 million up to 2018 (with no payment required in 2019 or 2020) to the Methodist Ministers’ Pension Scheme (MMPS) in order to help eliminate the deficit. An additional contribution of £1.1m was made to the Pensions and Assurance Scheme for Lay Employees of the Methodist Church (PASLEMC) scheme in both 2019/2020 and 2020/2021 to reduce the deficit balance on that scheme.

The Methodist Council closed the PASLEMC to new entrants with effect from 31 May 2019. Existing members benefit from the scheme arrangements up until this date but are no longer able to make further member contributions, and members therefore do not build up any further

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benefits in the Scheme. The pension that members have already built up is retained in the Scheme and paid upon retirement (note 28 to the accounts provides more detail).

In addition, the Methodist Council has agreed a Framework Agreement with the trustee of both PASLEMC and MMPS. This covers the requirement for a long term funding objective, a remedy mechanism should funding deviate from the long term goal, and a contingent asset that provides the trustees security over Connexional properties should the Council or Conference ever default on payments due.

The accumulating level of reserves expected to be held in the Pension Reserve Fund forms part of the ‘employer covenant’ with the pension trustee boards and is therefore currently considered appropriate. This fund is defined by SO 974(iA) and decisions regarding its use can only be taken by the Conference.

Investments

As at 31 August 2021, the Church held fixed asset investments with a fair value of £194 million (2020: £189 million). The Finance Sub-Committee regularly review the investment portfolio and performs an annual review of the investment policy. The Church’s investment objective is to seek an optimal return from income and capital combined. The Finance Sub-Committee is satisfied with the overall performance of the investment portfolio against agreed benchmarks.

Funds not immediately required are invested in marketable securities through The Methodist Church’s in-house investment manager, the Central Finance Board (CFB) of The Methodist Church, whose mission is to:

To ensure that the CFB is working to the highest ethical standards, the trustees established the Joint Advisory Committee for the Ethics of Investment (JACEI), which is made up of five people nominated by the CFB and five by the Methodist Council. The committee monitors the activities of the CFB to ensure that it complies with the ethical stance of the Church.

With regard to investment management the Finance Sub-Committee and representatives from the Connexional Team decide, after taking advice from the CFB, the most appropriate investment strategy for each fund under the management of the Connexional Team.

In addition to marketable securities, some funds hold freehold property as investments. These tend either to have been given to the fund, or are redundant properties that are either rented out or are awaiting disposal. The value of these properties is small in relation to the overall amounts held in marketable securities £39m vs £194m (2020: £53m vs £189m). The reduction in investment properties is largely due to the deconsolidation of the Westminster College Oxford Trust and the transfer of trusteeship for Oxford Place, Leeds to the Yorkshire West District.

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Performance and holdings

Gains on investments in year were £22.7m (2020: £5.8m loss on investments). This performance was directly linked to the global market recovery following the Covid-19 pandemic. The total returns as at 31 August 2021 for CFB managed funds are summarised as follows:

1 year to
31.08.21		 3 years to
31.08.21(p.a.)		 11.07.16 to
31.08.21(p.a.)
Managed LT Methodist Council Fund 22.4% 8.0% 9.6%
Managed MT Methodist Council Fund 12.5% 5.7% 6.3%
1year 3years(pa) 10years(pa)
CFB UK EquityFund 29.7% 5.7% 8.7%
FTSE All Share 26.9% 3.7% 7.7%
Ethical benchmark 21.1% 3.1% 7.7%
CFB Overseas Fund 28.9% 13.4% 14.2%
FTSE All World ex UK 25.6% 13.1% 14.2%
CFB Short Fixed Interest Fund -1.1% 1.6% 2.1%
Benchmark -1.2% 1.6% 2.1%
CFB Corporate Bond Fund 0.4% 3.8% 5.0%
Benchmark 3.1% 5.6% 6.4%
CFB Deposit Fund 0.1% 0.5% 0.7%
1 week Libid -0.1% 0.3% 0.3%
Propertybenchmarks
1 year to
30.06.21		 3 years to
30.06.21(p.a.)		 11.07.16 to
31.06.21(p.a.)
Managed LT Methodist Council Fund 18.9% 7.6% 9.1%
Benchmark 16.5% 7.1% 8.6%
Ethical Benchmark 16.0% 7.3% 8.7%
Managed MT Methodist Council Fund 10.3% 5.4% 6.1%
Benchmark 7.9% 5.1% 5.6%
Ethical benchmark 7.6% 5.2% 5.6%
1year 3years(pa) 10years(pa)
CFB PropertyFund 8.9% 3.9% 8.1%
FTSE All Share 21.5% 2.0% 6.4%

Principal Risks and Uncertainties

The Methodist Church in Great Britain has a risk management policy, which has been set by the Methodist Council for use both by the trustees and by the Connexional Team on behalf of the trustees. The risk management policy is designed to identify and analyse key strategic and operational risks facing The Methodist Church and, where they are at unacceptable levels, to take steps to mitigate the risks.

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We define key strategic and operational risks as those that, without effective or appropriate mitigation, are highly likely to occur and would have a negative impact on the Church’s ability to fulfil its purpose of advancing the Christian faith in accordance with its doctrinal standards. These risks are reported to the trustees through a risk management process, which allows them both to challenge any assumptions the management team has made about risks and to understand the context in which decisions are taken. This helps to ensure that the most serious risks are being managed effectively.

The trustees recognise that it is neither possible nor appropriate to seek to eliminate risk entirely. We recognise that risk-taking is inherent within the task of communicating the gospel; John Wesley himself took risks in establishing the Methodist communities. Our task, therefore, is to embrace risks that aim to advance the Church’s purposes while ensuring that we avoid or minimise those risks that might have a negative impact. Effective risk management processes will help to increase the likelihood of the Church fulfilling its mission.

The most significant risks faced by the Church and the mitigations are as follows:

Risk Current mitigations
Lack of coherent strategy and an inability to
identify priorities contributing to decline,
ultimately resulting in The Methodist Church
ceasing to exist.		 Methodist Council, Connexional Leaders' Forum,
and Strategy and Resources Committee engaging
regularly with strategic overview of the future
direction of the Church.
Ineffective recruitment and training of those who
fulfill ministerial/lay roles resulting in
shortage/surplus of ministers or decline in
membership due to poor standard/allocation of
ministers/lay workers.		 Ongoing review and improvement of candidating
and training processes, ongoing learning and
development for ministers. Stationing processes.
Continuing to encourage, equip, and support lay
ministry in the Methodist Church in Britain.
Safeguarding failures leading to harm to
individuals or the organisation.		 Ongoing review programme of Safeguarding Policy,
Procedures & Guidance to reflect current
legislation andgoodpractice.
Ineffective stewardship of resources resulting in
reduced liquidity/cash flow or deficit; or failure
to use funds towards changing priorities.		 Transparent and meaningful accounts presented
to all the relevant bodies. Various committees
undertaking important functions with regard to
investment, audit, and setting of reserves;
Connexional Finance Strategy adopted by the
Council in October 2018 and revised strategic
property guidance in 2021. New budget allocation
process adopted in 2020.
Local churches and circuits deciding to leave the
connexional framework resulting in reduction or
break-up of the Methodist Connexion.		 Deed of Union and Standing Orders state
importance of connexionalism and supporting one
another; provisions for consulting Districts and
Circuits before any anticipated changes. Decisions
arising from the God in Love Unites Us report to
the 2021 Conference, including allowing same-sex
marriages to take place on Methodist premises
have increased the risk of this occurring.
Ineffective governance and organisational
structure meaning the Conference fails to
function properly as the Church’s governing body
and the Conference trustees cannot fulfil their
legal responsibilities.		 In practice the Council and other delegated bodies
(SRC; Audit and Risk Assurance) are carrying out
some significant trustee oversight activities.
Improvements have been made to existing policies
(risk management) and new policies have been
implemented(anti-fraud).
Connexional property projects are not
completed, or are completed to a poor standard,
and are significantly over budget.		 In depth project management and cost monitoring
being carried out with weekly reporting. Property
Development Committee and SRC being updates
at everymeeting.

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New connexional investment properties fail to
deliver expected levels of income due to the
effects of the pandemic.		 New project is currently scheduled to open for
business from September 2022, which should
allow time for gradual recovery of the economy.
Existing connexional investment properties fail
to recover as viable businesses post the
pandemic.		 The business models remain under close review by
the relevant Boards/committees. They continue to
monitor trends as the country emerges from the
pandemic and will adapt as required to
generate/increase trade.

Risk management

In relation to the principal risks identified, these are managed on an on-going basis by the relevant member of the Senior Management Group (SMG) of the Connexional Team. Mitigating actions and risk scores are reviewed monthly at a meeting of the SMG. The risks are reviewed at the Audit & Risk Assurance Committee and at the Methodist Council. The trustees consider that the following framework provides the Church with adequate measures to minimise the impact of identified risks.

Risk appetite

Risk appetite is the amount of risk the Church is willing to accept in relation to key drivers of the organisation. Our risk management philosophy is to minimise risk but it enables us to accept additional risk, providing the impact has been evaluated, mitigation measures have been put in place and a regular robust monitoring process is established. This approach to reviewing risk enables the Methodist Council to adopt appropriate behaviours, decisions and controls according to the priorities in the Connexional Team’s strategy plan.

Prior to any risk being accepted, we consider the likelihood of the risk occurring and the impact on the Church if the risk did occur. Any risk that seriously threatens the ability of The Methodist Church in Great Britain, now or in the future, to further its purpose of advancing the Christian faith will not be acceptable. If such a risk cannot be extinguished, then all steps will be taken to minimise the likelihood of the risk occurring.

Risk strategy and responsibilities

The Council’s role in the oversight of risk is to set out the ethos for risk management and to promote a culture of risk management within the activities of The Methodist Church in Great Britain on behalf of the trustees. This includes:

The Council annually reviews the Connexional Team’s approach to risk management; approving changes or improvements to key elements of its processes and procedures; forming an opinion on whether or not the Team has complied with expected risk management practice. The following safeguards are in place:

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Monitoring and review of the policy

The risk management policy is reviewed by the Senior Management Group of the Connexional Team, meeting annually as the Risk Management Group, which makes reports to the Audit Committee and makes recommendations to the Strategy and Resources Committee and/or to the Council.

For the year under review, the Council is satisfied that the major risks to which the Church is exposed have been assessed and is satisfied that systems are in place to manage and mitigate exposure to them.

Risk management is part of the wider system of internal control. This system encompasses a number of elements that together facilitate an effective and efficient operation, enabling the Church to respond to a variety of operational, legal, financial and commercial risks.

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Going concern

The trustees continue to prepare the financial statements on the basis that The Methodist Church in Great Britain is a going concern. Evidently, the Church has adequate financial resources and is able to manage business risks. The planning processes, including financial projections, take into consideration the prevailing economic climate and its potential impact on the various sources of income and planned expenditure. The trustees have looked at least 12 months ahead and are satisfied that the Church has adequate resources to continue in operational existence for the near future and there are no material uncertainties that call into doubt the Church’s ability to continue in operation. This review has taken into account the particular impact of the Covid-19 pandemic. In-year financial performance was favourable to plan due to reductions in expenditure as the lockdown lasted longer than expected. Conversely, income increased particularly due to additional property levy income. Overall balances increased through the significant increases in investment valuations. Looking forward, the budget for 2021/22 has been set on the basis of no gift aided profits being received from MIC Ltd. However, over the medium term it is anticipated that the hotel will return to trading profits. The risk of reductions in District Assessment income over the next 2-3 years is mitigated by the reserves held by churches, circuits and districts in the Central Finance Board Deposit Accounts and commercial bank accounts.

The Environment

The Methodist Church takes its responsibility towards the environment seriously (as detailed in Hope in God’s Future ). Having originally set an ambitious target of 80% reduction of carbon emissions by 2050, in recognition of the urgency of the climate emergency, the Conference agreed an aspirational target to become a net zero Church by 2030.

Our environmental goals The Church’s goals are:

In light of the significant impact our properties have on carbon emissions, the Conference proposed that steps are taken to ‘green’ our processes with regard to property including:

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Related Parties

The various parts of the legal framework within which The Methodist Church is governed allow for the setting up of separate bodies all reporting into the Conference to handle specific aspects of the Church’s work and/or discharge a specific power of the Church. The related parties are:

  1. The Trustees for Methodist Church Purposes (TMCP). These are the custodian trustees of all property held on the Model Trust of The Methodist Church Act 1976, except for properties in the Channel Islands and the Isle of Man, which are held by the Trustees for Jersey Methodist Church Purposes, the Trustees for Guernsey Methodist Church Purposes and the Trustees for Manx Methodist Church Purposes.

  2. The Central Finance Board of The Methodist Church (CFB). This was set up by an Act of Parliament in 1960 to enable Methodist organisations to pool their assets and manage them efficiently. The CFB has its own fund management department enabling it to provide professional investment management for the Connexional Team as well as other organisations within Methodism.

  3. The Methodist Ministers’ Housing Society. This was set up under the Community and Co-operative Benefit Societies Act 2014. It provides housing and associated amenities for retired Methodist presbyters, deacons and their partners. The Methodist Council makes regular grants from the Fund for the Support of Presbyters and Deacons (FSPD) in support of its work under Standing Order 364.

  4. The Queen’s Foundation for Ecumenical and Theological Education. This institution offers training pathways for student ministers to prepare for ordained ministry in The Methodist Church.

  5. Other Methodist bodies with which the Connexional Team have regular dealings include the Methodist Ministers’ and Lay Employees’ Pension Trusts and the Methodist Independent Schools Trust.

Details of transactions with these related parties and any outstanding balances at the year-end are provided under Note 27 (page 91) of the financial statements.

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Statement of Trustees’ Responsibilities

The law applicable to charities in England and Wales requires the trustees to prepare financial statements for each financial year, which give a true and fair view of the state of affairs of the charity and the group and of the income and expenditure of the charity and group for that period. In preparing these financial statements, the trustees are required to:

The trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Charities Act 2011, the Charity (Accounts and Reports) Regulations 2008 and the provisions of the trust deed. They are also responsible for safeguarding the assets of the charity and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The trustees are responsible for the maintenance and integrity of the charity and financial information included on the charity's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Auditor

A resolution proposing the reappointment of RSM UK Audit LLP as auditor to the charity will be put to the Methodist Council.

RSM UK Audit LLP has indicated its willingness to continue in office.

Mrs E Jill Baker Chair of the Council

January 2022

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Independent Auditor’s Report to the trustees of The Methodist Church in Great Britain

Opinion

We have audited the financial statements of The Methodist Church in Great Britain (the ‘parent charity’) and its subsidiaries (the ‘group’) for the year ended 31 August 2021 which comprise the Consolidated Statement of Financial Activities, the Connexional Statement of Financial Activities, the Consolidated and Connexional Balance Sheets, the Consolidated and Connexional Cash Flow Statements and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We have been appointed as auditors under section 151 of the Charities Act 2011 and report in accordance with regulations made under section 154 of that Act.

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group’s or parent charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the Annual Report other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If,

41

based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Charities Act 2011 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the Statement of Trustees’ responsibilities set out on page 40, the trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the group’s and parent charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the group or parent charity or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which the audit was considered capable of detecting irregularities, including fraud Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of noncompliance with other laws and regulations that may have a material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.

In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud through designing and implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified during the audit.

However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud. In identifying

42

and assessing risks of material misstatement in respect of irregularities, including fraud, the group audit engagement team:

As a result of these procedures we consider the most significant laws and regulations that have a direct impact on the financial statements are FRS 102, Charities SORP (FRS 102), Charities Act 2011 and the parent charity’s governing document. We performed audit procedures to detect non-compliances which may have a material impact on the financial statements which included reviewing the financial statements including the Trustees’ Report and remaining alert to new or unusual transactions which may not be in accordance with the governing documents.

The most significant laws and regulations that have an indirect impact on the financial statements are those in relation to General Data Protection regulations in the UK and safeguarding. We performed audit procedures to inquire of management and those charged with governance whether the group is in compliance with these law and regulations and inspected correspondence with regulatory authorities.

The group audit engagement team identified the risk of management override of controls as the area where the financial statements were most susceptible to material misstatement due to fraud. Audit procedures performed included but were not limited to testing manual journal entries and other adjustments, evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business and challenging judgments and estimates.

A further description of our responsibilities for the audit of the financial statements is provided on the Financial Reporting Council’s website at http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the charity’s trustees as a body, in accordance with the Charities Act 2011. Our audit work has been undertaken so that we might state to the charity’s trustees those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity and the charity’s trustees as a body, for our audit work, for this report, or for the opinions we have formed.

RSM UK Audit LLP Statutory Auditor, Chartered Accountants St Philips Point Temple Row, Birmingham West Midlands, B2 5AF

Date: 7 February 2022

RSM UK Audit LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006.

43

Consolidated statement of financial activities for the year ended 31 August 2021

44

The Methodist Church in Great Britain

Consolidated statement of financial activities

For the year ended 31 August 2021

Notes Unrestricted
Restricted
Endowment
2021 Total
Unrestricted
Restricted
Endowment
2020 Total
£000
£000
£000
£000
£000
£000
£000
£000
Income and endowments from:
Donations and legacies
3a
Charitable activities
3e
Investments
4a
Other trading activities
5a
Other
Capital levies
6a
Grants
6b
Miscellaneous income
3c		 1,079
5,620
-
6,699
3,564
5,994
-
9,558
13,680
306
-
13,986
13,555
342
-
13,897
1,312
3,539
-
4,851
1,350
4,060
-
5,410
851
1,235
-
2,086
4,835
1,217
-
6,052
10,272
-
-
10,272
6,917
-
-
6,917
416
954
-
1,370
469
729
-
1,198
426
590
-
1,016
647
685
-
1,332
Total income 28,036
12,244
-
40,280
31,337
13,027
-
44,364
Expenditure on:
Raising funds
Charitable activities
Building communities
7a
Children & Youth
7a
Evangelism & Growth
7a
Global relations
7a
Learning Network
7a
Methodist Council & Governance
7a
Ministry
7a
Property
7a
Others - Pensions
7a
Net loss on the disposal of tangible fixed assets
7a		 2,988
966
17
3,971
6,159
1,001
17
7,177
1,023
817
-
1,840
1,251
818
-
2,069
1,266
7
-
1,273
1,690
7
-
1,697
5,561
394
10
5,965
4,662
1,444
-
6,106
972
7,188
-
8,160
1,341
8,719
-
10,060
2,654
13
-
2,667
2,803
19
-
2,822
4,221
18
-
4,239
3,378
4,335
-
7,713
5,152
4,260
-
9,412
875
149
-
1,024
801
140
-
941
4,698
29
-
4,727
799
-
-
799
691
-
-
691
148
(59)
-
89
106
161
-
267
Total expenditure
20a, 21a		 25,585
13,744
27
39,356
27,654
16,682
17
44,353
Net gains/(losses) on investments
14a		 9,924
9,646
3,125
22,695
(3,070)
(1,850)
(849)
(5,769)
Net income 12,375
8,146
3,098
23,619
613
(5,505)
(866)
(5,758)
Transfers between funds
22		 946
(1,203)
257
-
954
(1,187)
233
-
Net income after transfers 13,321
6,943
3,355
23,619
1,567
(6,692)
(633)
(5,758)
Other recognised gains and losses:
Remeasurement of net defined benefit pension scheme liabil
28
Gains(losses)on revaluation of charitableproperties		 12,213
80
-
12,293
(9,092)
(29)
-
(9,121)
-
946
-
946
-
(5,000)
-
(5,000)
Net movement in funds 25,534
7,969
3,355
36,858
(7,525)
(11,721)
(633)
(19,879)
Total funds at 1 September
Elimination of Westminster College from consolidation
9		 45
45
92,442
152,119
19,480
264,041
99,967
163,840
20,113
283,920
-
(10,757)
-
(10,757)
- -
-
-
Total funds at 31 August 117,976
149,331
22,835
290,142
92,442
152,119
19,480
264,041
45

The Methodist Church in Great Britain

Statement of financial activities - The Connexional Funds

For the year ended 31 August 2021

Notes Unrestricted
Restricted
Endowment
2021 Total
Unrestricted
Restricted
Endowment
2020 Total
£000
£000
£000
-
£000
£000
£000
£000
Income and endowments from:
Donations and legacies
3b
Charitable activities
3f
Investments
4b
Other trading activities
5b
Other
Capital levies
6a
Grants
6c
Miscellaneous income
3d		 1,079
2,267
-
3,346
3,564
2,893
-
6,457
13,680
306
-
13,986
13,555
402
-
13,957
1,312
2,975
-
4,287
1,499
2,950
-
4,449
304
942
-
1,246
319
913
-
1,232
10,272
-
-
10,272
6,917
-
-
6,917
-
266
-
266
-
183
-
183
455
18
-
473
713
42
-
755
Total income 27,102
6,774
-
33,876
26,567
7,383
-
33,950
Expenditure on:
Raising funds
Charitable activities
Building communities
7b
Children & Youth
7b
Evangelism & Growth
7b
Global relations
7b
Learning Network
7b
Methodist Council & Governance
7b
Ministry
7b
Property
7b
Others - Pensions
7b
Net loss on the disposal of tangible fixed assets
7b		 1,175
966
17
2,158
1,360
1,001
17
2,378
1,023
817
-
1,840
1,251
818
-
2,069
1,264
9
-
1,273
1,690
7
-
1,697
5,561
395
10
5,966
4,661
1,443
-
6,104
972
4,476
-
5,448
1,341
5,784
-
7,125
2,654
13
-
2,667
2,803
20
-
2,823
4,220
19
-
4,239
3,941
738
-
4,679
5,858
1,252
-
7,110
875
149
-
1,024
800
141
-
941
4,697
28
-
4,725
799
-
-
799
691
-
-
691
148
(59)
-
89
106
161
-
267
Total expenditure
20b, 21b		 24,474
8,029
27
32,530
23,416
10,149
17
33,582
Net gains/(losses) on investments
14b		 9,924
9,175
3,125
22,224
(3,010)
(2,258)
(849)
(6,117)
Net income 12,552
7,920
3,098
23,570
141
(5,024)
(866)
(5,749)
Transfers between funds
22		 946
(1,203)
257
-
954
(1,187)
233
-
Net income after transfers 13,498
6,717
3,355
23,570
1,095
(6,211)
(633)
(5,749)
Other recognised gains and losses:
Remeasurement of net defined benefit pension scheme liabil
28
Gains on revaluation of charitableproperties		 12,213
80
-
12,293
(9,092)
(29)
-
(9,121)
-
-
-
-
-
(5,000)
-
(5,000)
Net movement in funds 25,711
6,797
3,355
35,863
(7,997)
(11,240)
(633)
(19,870)
Total funds at 1 September 46
90,110
123,261
19,480
232,851
98,107
134,501
20,113
252,721
Total funds at 31 August 45
115,821
130,058
22,835
268,714
90,110
123,261
19,480
232,851

46

The Methodist Church in Great Britain Balance Sheets a$ at 31 August 20ZI The MethDdi5tChur(hin6ieatBritbin Theconnexional Fund5 Note5 Fixeda*5ets 13c Tangible fixed assets Investments iaa&b 95,947 193,575 94,231 87,365 181.991 85.3 L4a&b 1613 Cutrenta55ets Stock5 17 41 Debtors 15 a.￿2 Short-tenndepo&its Shat bank iDhand 13.326 14,038 4.559 11.539 117 4.970 4.175 Trtal ¢urrentassets 21.5 19.Q96 19N76 Ciedtht5 114.3721 117.1581 113.4251 Net(jJ[rent￿lets 5,671 T47ts1 asg0tslÈssturrentl￿hII5tlÉ 275,091 25U14 CIEditot5 16b 13.9691 18.99)) 13.30LI Neta55etsexdud1￿pe￿5M￿1￿bilrtv 29￿0 279J26 271.7 248.6 Deflned bonefltpenslonsthornollablllty 11,0761 Its,7851 I￿,7&51 Neta55EtsintludinspE￿5lu￿ liability 714 Z3U51 Thefundsofthe(hai unYesiri¢ied funds Genoralfunds Sl,214 54,139 52,514 51 Designated lund5 DefiThed benefit pensionsthemeliability 66.(82 64.984 5L096 113.8Y)I 2.412 113.8901 19 ILI,9Ffi Re￿rICted1und5 2.119 130.058 123.261 Endpwmentfvnd5 21835 19A 22.835 19.4BO T￿￿11￿￿& 264￿1 268,714 Total unrestillted fund&lncluderevgluatlon re￿[V￿Of E7.2m12O2Q'. £7.&nl forbothTho Methodlstchurth In GreatBrltalnandthoConnexlonal Funds. TDtal restricted fund5inrluJerevaluation reSe￿e pf £Xlrn12020.-f54.3ml forThE MEthudi5t Church in GreatBritainand ￿2.2￿(2010.. ￿2.3m) forThE Connexional Funds. (Note 24 Pagego Thenoiesonpages49t099foiman Integral ￿rt￿￿these?rc0UMts. Approved4nd èuthori5edfori55uebythe Board ofTru5tee50n26"January20224nd Signed ontheirbehalf by.. The RevorendTlmothy5wlndell 47

The Methodist Church in Great Britain

Cash flow statements For the year ended 31 August 2021

----- Start of picture text -----
The Methodist Church in Great Britain The Connexional Funds
2021 2020 2021 2020
Statement of cash flows Note £000 £000 £000 £000
Cash flows from operating activities
Net cash generated used in operating activities (3,672) (4,477) (2,813) (2,893)
Cash flows from investing activities
Dividends, interest and rents from investments 4,851 5,410 4,287 4,449
Proceeds from the sale of property, plant and equipment 1,893 710 1,893 710
Purchase of property, plant and equipment 13a, 13b (3,104) (2,915) (3,069) (2,769)
Purchase of intangible assets 13c (6) (17) (6) (17)
Proceeds from the sale of investments 14a 382 1,100 100 100
Purchase of investments 14a, 14b (348) (1,593) (227) (620)
Net cash provided by investing activities 3,668 2,695 2,978 1,853
Cash flows from financing activities
Repayment of loans 472 (522) - (502)
Net cash from/(used in) financing activities 472 (522) - (502)
Change in cash and cash equivalents in the reporting period 468 (2,304) 165 (1,542)
Cash and cash equivalents at the beginning of the reporting period 18,597 20,901 15,553 17,095
Non-consolidated entity - Westminister College, Oxford (769) - - -
Cash and cash equivalents at the end of the reporting period 18,296 18,597 15,718 15,553
2021 2020 2021 2020
Reconciliation of net income to net cash flow from operating activities £000 £000 £000 £000
23,619 (5,762) 23,570 (5,749)
Adjustments for:
Depreciation and amortisation charges 382 514 62 86
Loss on the sale of fixed assets 89 267 89 267
Property transferred back to District 2,250 (454) 2,250 (454)
CFB investment units transferred to District 418 - 418 -
Net (gains)/ losses on investments (22,695) 5,769 (22,224) 6,117
Investment income (4,851) (5,410) (4,287) (4,449)
Decrease in stocks 6 10 5 9
Decrease/(increase) in debtors 209 1,439 140 1,940
(Decrease)/increase in creditors (2,681) (1,160) (2,420) (966)
Pension costs/difference between pension costs charged and paid (418) 310 (416) 306
Net cash generated used in operating activities (3,672) (4,477) (2,813) (2,893)
2021 2020 2,021 2020
Analysis of cash and cash equivalents £000 £000 £000 £000
Cash in hand and at bank 4,970 4,559 4,179 2,808
Short-term deposits (less than 3 months) 13,326 14,038 11,539 12,745
Total cash and cash equivalents 18,296 18,597 15,718 15,553
Analysis of changes in net debt
The Methodist Church in Great Britain 01-Sep Cash flows Non-cash 31-Aug
2020 changes 2021
Cash and cash equivalents £000 £000 £000 £000
Short-term deposits 14,038 57 (769) 13,326
Cash at bank and in hand 4,559 411 - 4,970
18,597 468 (769) 18,296
Borrowings
Debt due within one year (28) 28 (28) (28)
Debt due after one year (196) (500) 28 (668)
(224) (472) - (696)
Total 18,373 (4) (769) 17,600
The Connexional Funds 01-Sep Cash flows Non-cash 31-Aug
2020 changes 2021
Cash and cash equivalents £000 £000 £000 £000
Short-term deposits 12,745 (1,206) - 11,539
Cash at bank and in hand 2,808 1,371 - 4,179
15,553 165 - 15,718
Borrowings
Debt due within one year - - - -
- - - -
Total 15,553 165 - 15,718
----- End of picture text -----

48

1. Accounting policies

a) Scope and basis of the preparation of the financial statements

The Methodist Church in Great Britain is a public benefit entity for the purposes of FRS 102, and therefore the financial statements have been prepared in accordance with the Statement of Recommended Practice: Accounting and Reporting by Charities preparing their financial statements in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (‘the SORP’).

The financial statements have been prepared to give a “true and fair” view and have departed from the Charities (Accounts and Reports) Regulations 2008 only to the extent required to provide a “true and fair” view. This departure has involved following “Accounting and Reporting by Charities preparing their financial statements in the UK and Republic of Ireland (FRS 102)” second edition effective from 1 January 2019, rather than “Accounting and Reporting by Charities: Statement of Recommended Practice effective from 1 April 2005” which has since been withdrawn. The preparation of the financial statements in accordance with FRS102 requires the trustees to make judgements, estimates and assumptions that affect the application of policies and reported amounts in the financial statements. The areas involving higher degree of judgement, or areas where assumptions or estimates were significant to the financial statements are disclosed in Note 2 on page 57.

b) Preparation of the financial statements on a going concern basis

These financial statements have been prepared on the basis that The Methodist Church in Great Britain is a going concern. A comprehensive review of the Church’s financial performance and general reserves position is covered in the financial statements and Trustees’ Report. Evidently, the Church has adequate financial resources and is able to manage business risks. The planning processes, including financial projections, take into consideration the prevailing economic climate and its potential impact on the various sources of income and planned expenditure. The trustees have looked at least 12 months ahead and are satisfied that the Church has adequate resources to continue in operational existence for the near future and there are no material uncertainties that call into doubt the Church’s ability to continue in operation. This review has taken into account the particular impact of the Covid-19 pandemic. In-year financial performance was favourable to plan due to reductions in expenditure as the lockdown lasted longer than expected. Conversely, income increased particularly due to additional property levy income. Overall balances increased through the significant increases in investment valuations. Looking forward, the budget for 2021/22 has been set on the basis of no gift aided profits being received from MIC Ltd. However, over the medium term it is anticipated that the hotel will return to trading profits. The risk of reductions in District Assessment income over the next 2-3 years is mitigated by the reserves held by churches, circuits and districts in the Central Finance Board Deposit Accounts and commercial bank accounts.

c) Group financial statements

The Statement of Financial Activities (SOFA) and balance sheet consolidate the financial statements of the Church and its subsidiary undertakings as set out in the diagram below.

The consolidation principles applied are based on the SORP, whereby the parent charity consolidates the subsidiaries it controls. Control in this context is the power to govern the financial and operating policies of an entity in order to benefit from its activities. This control is the power to appoint and remove trustees. The Methodist Council, as managing trustee, has the ability to govern the financial and operating policies of the entities. Westminster College Oxford Trust does not have more than 50% of its trustees appointed by the Council (they are appointed by the Methodist Conference) and therefore the Methodist Council does not have sufficient control to govern the financial and operating policies of the entity. Consequently, the Council has approved that the accounts of Westminster College will no longer form part of the consolidated accounts of the Methodist Church in Great Britain. For consolidated companies limited by

49

Accounting policies (continued)

shares, control is by virtue of shareholdings. For consolidated companies limited by guarantee, control is by virtue of sole or majority membership.

The beneficial element of this control is demonstrated by the concurrence of purpose. All the subsidiary entities included in the consolidation contribute to the purposes and aims of the Methodist Church in Great Britain and benefit its beneficiaries.

The results of the subsidiary entities are consolidated on a line-by-line basis in accordance with section 9 of FRS 102. Any inter-entity balances and transactions have been eliminated on consolidation. All the entities have the same reporting date and uniform group accounting policies have been adopted.

50

Accounting policies (continued)

d) The group structure

e) Excluded entities

There are a number of entities which form part of the wider picture of the Methodist Church in Great Britain, some of which are mentioned below. These entities are excluded from consolidation because the Methodist Council has no control over their financial and operating policies.

Methodist churches, circuits and districts Methodist Independent Schools Trust Trustees for Methodist Church Purposes (TMCP) The Central Finance Board (CFB)

51

Accounting policies (continued)

The Methodist Ministers’ Housing Society

Westminster College Oxford Trust Ltd Westminster College Oxford Trust

f) Recognition of income and endowments

All income is accounted for when the Church has entitlement to the funds, the amount can be quantified and receipt of the funds is probable. Where income is received in advance of providing goods and/or services, it is deferred until the Church becomes entitled to that income.

All income is reported gross.

Rental income from operating leases (net of incentives given to the lessees) is recognised on a straight-line basis over the lease term.

No amounts are included in the financial statements for services donated by volunteers.

District Assessment

The assessment is accounted for on a receivable basis. The amount can be measured reliably by the Church as they are published annually in advance in the Minutes of Conference. Standing Order 361 (2) states that the Methodist Church Fund shall be maintained “by an assessment levied by the Conference on each Circuit in the home church through the Districts [...]”. The assessment primarily funds the decisions of the Conference, part of which is the provision of certain services such as the administration of the connexionally held funds and the processing of ministerial stipends.

Donations

Donations are recognised when there is evidence of entitlement, receipt is probable and the amounts can be measured reliably. Where a donor has specified certain terms and conditions, the Church evaluates whether these conditions can be met before claiming entitlement. In any event, donations or gifts with conditions or terms which are outside of the Church’s stated purposes, or which are illegal are rejected by the Church.

Goods donated for on-going use by the Church in carrying out its activities are recognised as tangible fixed assets or as investments with the corresponding gain recognised as income from donations within the SOFA, subject to the capitalisation threshold of £1,000.

Legacies

Entitlement to a legacy is assumed when there is sufficient evidence that a gift has been left to the Church, usually through the notification of a will. Receipt of a legacy is deemed probable when there has been a grant of probate and it has been established that there are sufficient assets in the estate to pay the legacy and there are no conditions attached to the legacy that are outside the control of the Church, or uncertainty around the receipt of this gift. Income from pecuniary legacies is recognised upon notification or receipt if earlier.

Where legacies have been notified to the Church or the Church is aware of the granting of probate, and the criteria for income recognition have not been met, then the legacy is treated as a contingent asset and disclosed if material.

Capital (property) levies

Capital levies are due on the disposition of property by churches, circuits and districts under Standing Order 970 of the Constitutional Practice and Discipline of the Methodist Church. These are accounted for on a receipts basis when the disposal proceeds are deposited with the Church’s custodian, Trustees for Methodist Church Purposes. Capital levies are disclosed net of any refunds due back to the church, circuit or district.

52

Accounting policies (continued)

Grants

Income from grants is recognised when there is evidence of entitlement to the grant, receipt is probable and its amount can be measured reliably. To this end, evidence of entitlement is assumed to exist when the formal offer of funding is communicated in writing to the Church. Where there is a performance condition attached to the grant, entitlement is only recognised when the conditions have been met.

g) Accounting for leases

Rental income from assets leased under operating leases is recognised on a straight-line basis over the term of the lease. Rent-free periods or other incentives given to the lessee are accounted for as a reduction to the rental income and recognised on a straight-line basis over the lease term.

h) Recognition of expenditure

All expenditure is accounted for on an accruals basis when an obligation that can be measured or reliably estimated exists at the reporting date and it is more likely than not that payment will be made in settlement.

There are two main categories of expenditure shown in the statement of financial activities: expenditure on raising funds and charitable activities.

Expenditure on raising funds includes all expenditure incurred to raise income to spend on charitable purposes. Expenditure on charitable activities includes all costs incurred by the Church in undertaking activities that further its charitable aims for the benefit of its beneficiaries. This expenditure is further analysed into direct and support costs. Direct costs are those specifically related to producing the delivery of an activity or service, for example the costs incurred in training ministers; mission partners working overseas or the payment of grants to beneficiaries. Support costs are those which provide indirect support to front-line services – for example financial services, facilities management, development and personnel, governance costs and management information services. Support costs not attributable to a single activity have been allocated on a basis consistent with identified cost drivers for that cost category such as staff head count and floor space.

Grant commitments

Grants awarded are provided for in the SOFA in the year in which they are approved by the trustees and the offer is communicated to the recipient. Grants awarded but not paid are recorded as a liability within the balance sheet. Grants awarded subject to explicit conditions being met by the recipient before payments are made are not accrued until such conditions have been met. Such commitments are disclosed in the financial statements as contingent liabilities.

i) Fund accounting

Unrestricted funds are available for use at the discretion of the trustees in furtherance of the general charitable objectives. Designated funds are a portion of the unrestricted funds that have been set aside for a particular purpose by the trustees. Restricted funds are donated for a particular purpose, the use of which is restricted to that purpose. The purposes of the main restricted and designated funds are set out in the notes to the financial statements. Endowment funds are either permanent or expendable. Permanent funds are normally held indefinitely, while trustees have the power to convert expendable funds into income. The return on endowment investments is made up of income earned.

53

Accounting policies (continued)

The costs of raising and administering the restricted funds are charged against the specific fund. Any investment income or gain is allocated to the appropriate fund in the case of restricted funds and in accordance with the terms of the endowment in the case of endowment funds.

j) Pension costs

Defined benefit pension schemes

The Methodist Council participates in three main pension schemes: the Methodist Ministers’ Pension Scheme (MMPS); the Pensions and Assurance Scheme for Lay Employees of the Methodist Church (PASLEMC); and the Superannuation Scheme for Lay Mission Partners of the Methodist Church (SSMP).

The PASLEMC scheme is a group plan for accounting purposes, with the Methodist Council as the sponsoring employer with legal responsibility for the plan. There is no contractual arrangement or stated policy for charging the net defined benefit cost of the plan as a whole to individual group entities and therefore the Council has recognised the entire net defined benefit cost and the relevant net defined benefit liability in its individual financial statements. Participation in a group pension plan is a related party transaction. The Council’s policy is to recognise the contributions paid to the Scheme by other group employers as a credit in the Statement of Financial Activities.

The pension assets and liabilities in respect of the PASLEMC and SSMP schemes are recorded in line with FRS 102, with scheme valuations undertaken by independent actuaries. FRS 102 measures the value of pension assets and liabilities at the balance sheet date and determines the benefits accrued in the year and the interest on assets and liabilities. Current service costs, together with the net interest cost for the year, are allocated to relevant expenditure headings within the SOFA. The MMPS scheme assets and liabilities are excluded for reasons set out on pages 58-59.

Scheme assets are measured at fair value at the balance sheet date. Scheme liabilities are measured on an actuarial basis at the balance sheet date, using the projected unit credit method, and discounted at a rate equivalent to the current rate of return on a high-quality corporate bond of equivalent term to the scheme liabilities. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other recognised gains and losses in the SOFA. These amounts together with the return on plan assets less amounts included in net interest, and any unrecognised net surplus, are disclosed as re-measurements of the PASLEMC defined benefit liability. The resulting defined benefit asset or liability is presented separately on the face of the balance sheet. Any asset resulting from this calculation is limited to the present value of available refunds or reductions in future contributions to the plan.

The MMPS is a group scheme as all of the participating entities, mainly the circuits and the Council, are under the common control of the Conference. However, the Council has adopted a different accounting policy for this Scheme set out in detail in Note 12 for the reasons set out on pages 58-59. For the MMPS, costs equal to the contributions paid are recognised in the accounts as they fall due. Pension costs are allocated to activities and between funds according to an employee’s normal job function.

Defined contribution pension schemes

Pension costs in respect of defined contribution schemes are charged to the SOFA for the period in which they are payable. Such costs are allocated to activities and between funds according to an employee’s normal job function.

54

Accounting policies (continued)

k) Stocks

Stock consists of purchased goods for resale. Stocks are valued at the lower of cost and net realisable value after making due allowance for obsolete or slow moving items.

l) Foreign currencies

Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to the SOFA.

m) Tangible fixed assets

All tangible fixed assets costing more than £1,000 are capitalised and included initially at cost, including any incidental expenses of acquisition and irrecoverable VAT. Subsequently, charitable (functional) land and buildings are held at valuation. The Church undertakes to perform the valuations every five years to ensure that the carrying amount does not differ materially from the fair value of the asset at the end of the reporting period. Work to existing properties which is capable of extending the useful life or otherwise adding to the value of the property is capitalised. All other expenditure incurred in respect of general repairs to functional assets is charged to the SOFA in the year it is incurred. Assets under construction are stated at cost and transferred to completed properties when ready for use.

n) Depreciation

Tangible fixed assets are depreciated to their estimated residual values over their expected useful lives. The depreciation expense is charged or apportioned to the relevant SOFA heading reflecting the asset’s use on a straight-line basis as follows:

Freehold land nil Freehold buildings nil Computer equipment over 3 years Furniture and fittings over 5 years Motor vehicles over 5 years

o) Impairment

An assessment is made at each reporting date of whether there are indications that a fixed asset may be impaired or that an impairment loss previously recognised has fully or partially reversed. If such indications exist, the Church estimates the recoverable amount of the asset. Shortfalls between the carrying value of fixed assets and their recoverable amounts, being the higher of fair value less costs to sell and value-in-use, are recognised as impairment losses. Impairments of revalued assets are treated as a revaluation loss. All other impairment losses are recognised in the Statement of Financial Activities. Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Reversals of impairment losses are recognised in the Statement of Financial Activities or, for revalued assets, as a revaluation gain. On reversal of an impairment loss, the depreciation or amortisation is adjusted to allocate the asset’s revised carrying amount (less any residual value) over its remaining useful life.

p) Intangible fixed assets and amortisation

Intangible assets are held on the balance sheet at cost less accumulated amortisation and impairment losses.

Computer software, including development costs, is capitalised as an intangible asset and amortised on a straight-line basis over the expected useful life of five years. Impairment reviews are conducted when events and changes in circumstances indicate that an impairment may have occurred. If any asset is found to have a carrying value materially higher than its recoverable amount, it is written down accordingly.

55

Accounting policies (continued)

q) Heritage assets

There are four Methodist Heritage sites in Great Britain which fit into this definition. These are: The Old Rectory, Epworth, Lincolnshire - the childhood home of John and Charles Wesley; The New Room (John Wesley’s Chapel), Bristol - the first ever Methodist building in the world; Wesley’s Chapel & House, and The Museum of Methodism, London - John Wesley’s London base (from which he travelled 250,000 miles to preach, and the place of his death and burial) and Englesea Brook Chapel & Museum of Primitive Methodism, near Crewe - exhibitions and activities focusing on one strand of 19th Century Methodism. These assets have not been consolidated in the financial statements because they belong to entities that are not under the control of the Methodist Council.

r) Investments

Investments are stated at fair value at the balance sheet date and the statement of financial activities shows net investment gains and losses arising from revaluation of the investment portfolio and disposals during the year. Investment properties are initially recognised at cost which includes purchase cost and any directly attributable expenditure. Subsequently, investment properties are measured at fair value. The surplus or deficit on revaluation is recognised in the statement of financial activities for the year. Investment properties are normally revalued triennially by independent professionals who hold recognised and relevant professional qualifications and have recent experience in the location and class of the investment property being valued. In the intervening periods, the trustees carry out the valuations. Investments held in units in the Central Finance Board are stated at the Board’s published valuations. The value of the unlisted investments in William Leech (Investments) Ltd are stated at the underlying value of the net assets based on the company’s audited balance sheet at 31 March 2021, updated by the value of any share acquisitions (at cost) up to 31 August 2021. The assets are held at fair value.

s) Irrecoverable VAT

Irrecoverable VAT has been charged to the expenditure to which it relates within the statement of financial activities.

t) Cash and cash equivalents

Cash and cash equivalents includes cash and cash held on deposit with the Central Finance Board of the Methodist Church and the Trustees’ Investment Fund of the Trustees for Methodist Church Purposes and which has a maturity of less than three months from the date of acquisition and used for working capital purposes. Cash and cash on deposit are cash and cash equivalents for the purposes of the cash flow statements.

u) Financial instruments

The Church has basic financial instruments and financial assets. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value. Trade and other debtors are recognised at the settlement amount due after any trade discount offered. Creditors are recognised where the Church has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors are normally recognised at their settlement amount after allowing for any trade discounts due.

Financial assets comprise investments held by the Church in units invested by the Central Board of Finance of the Methodist Church. The fair value of the investments is based on the closing quoted bid price at the accounting dates. Unrealised gains and losses arising from changes in market value are recognised in the income and expenditure account.

56

Accounting policies (continued)

v) Concessionary loans made

Methodist ministers or probationers appointed for the first time to a station within the control of the Church are eligible to receive financial assistance from the Methodist Church Fund. This assistance may be given by way of grant or interest-free loan or a combination of both according to criteria set by the Methodist Council. The maximum amount for a loan is £10,000 repayable over five years. Additionally, loans may be advanced to other Methodist bodies from trusts under the control of the Methodist Council in line with the trust’s individual objectives. Initial recognition and measurement of the loans is based on the actual value of the loan advanced. In subsequent years, the carrying amount is adjusted to reflect repayments. If a loan that has been made is found to be irrecoverable an adjustment will be made for impairment.

w) Termination benefits and payments

The Council may be committed, by legislation, contractual or other agreements with employees or their representatives or by a constructive obligation based on business practice, custom or a desire to act equitably, to make payments to employees when it terminates their employment.

Termination benefits are those that arise as a result of either the Council’s decision to terminate an employee’s employment before the normal retirement date or an employee’s decision to accept voluntary redundancy during an organisational restructure. These are recognised as an expense and charged to the Statement of Financial Activities when the Council is demonstrably committed to terminating the employment of an employee or group of employees before the normal retirement date; or to providing termination benefits as a result of an offer made in order to encourage voluntary redundancy. Termination benefits that arise as part of a settlement agreement are recognised once the period of consultation between the employee and their representative is completed and terms are agreed upon.

2. Accounting estimates and judgments

In preparing the financial statements, the trustees are required to make estimates and judgments. The areas considered below are considered the most important in understanding the judgments that underlie the financial statements as well as the uncertainties inherent in accounting estimates that could affect the figures reported in the operating results, financial position and cash flows of the next or future accounting periods.

The accounting policies are set out in Note 1 to the financial statements.

Grant commitments

The Church empowers and supports the mission of overseas partners by way of annual support grants over a number of years. In addition to the expenditure recognised in the financial statements, the Church has commitments in respect of these programmes at the year end. The partner churches are obliged to report back to the Connexional Grants Committee on the use of the grants before the next instalment is released. Judgment is exercised as to satisfactory progress being made against the agreed project outcomes.

Cost allocation

Costs that are not attributable to a single activity are reallocated, or apportioned to activities on a basis consistent with identified cost drivers for that activity. Cost drivers utilised include the headcount and floor space and judgment is exercised in applying cost drivers to cost categories.

57

Accounting estimates and judgments (continued)

Actuarial assumptions in respect of defined benefit pension schemes

The application of actuarial assumptions relating to defined benefit pension schemes incorporated in the financial statements is in accordance with FRS 102. In applying FRS 102, advice is taken from independent qualified actuaries. In this context, significant judgement is exercised in a number of areas, including future changes in salaries and inflation, mortality rates and the selection of appropriate discount rates. Movements on the defined pension schemes are shown in Note 28.

Defined benefit pension scheme commitments

The Pension and Assurance Scheme for Lay Employees of the Methodist Church (PASLEMC)

The Methodist Council is the principal employer of the Pension and Assurance Scheme for Lay Employees of the Methodist Church, with its employees both past and present accounting for more than 80% of the scheme members. As mentioned in Note 12, there are other employing bodies, four of whom are not consolidated in these financial statements. These are The Central Finance Board of the Methodist Church; Trustees for Methodist Church Purposes (TMCP) and the Methodist Ministers Housing Association (MMHA) and Methodist Central Hall Trustees. There is no contractual agreement or stated policy for charging the defined benefit cost of the plan as a whole to individual group entities and therefore the Council has recognised the entire net defined benefit cost and relevant net defined benefit asset/liability of the Pension and Assurance Scheme for Lay Employees of the Methodist Church in its financial statements. This is because the Council is the sponsoring employer of this Scheme as it has legal responsibility for the plan. The Council closed the scheme to new entrants from 31 May 2019 following consultations taking place with members.

The Methodist Ministers’ Pension Scheme (MMPS)

The MMPS is a defined benefit pension scheme for Methodist Ministers. It should be accounted for as a group plan as all the participating employers, namely the circuits and Council, are under the common control of the Conference. The scheme has not been included in these financial statements for the reasons set out below:

58

Accounting estimates and judgments (continued)

There is no contractual agreement or stated policy for charging the defined benefit cost of the plan as a whole to individual circuits and other participating employers; such decision would be made by the Conference.

Useful economic lives

The annual depreciation charge for tangible fixed assets, particularly buildings is sensitive to change in the estimated useful economic lives and residual value of the assets. As our policy is to revalue the buildings every five years and to undertake full quinquennial inspection in the intervening years, the useful economic lives will be assessed and amended where necessary, to reflect current circumstances. Note 13a shows the relevant tangible fixed assets.

Methodist Church House

The Methodist Council had agreed to discontinue the proposed redevelopment of Methodist Church House in light of significant change of circumstances since the decision had been made to rebuild. Consequently, the Methodist Council has recommended that Methodist Church House be sold, with the proceeds of the sale used for alternative office accommodation for the Connexional Team in London. Under the terms of the required Charity Commission Scheme for the Centenary Hall Trust, the Conference confirmed the decision to sell Methodist Church House.

Revaluation of functional property assets and investment properties

The Church carries its functional property assets and investment properties at fair value, with changes in fair value being recognised in the Statement of Financial Activities. The Church obtains valuations to determine fair value on a cyclical basis; normally being every five years for functional properties and three years for investment properties. The trustees consider that this is sufficiently regular to ensure that their carrying amount does not differ materially from their fair value at the reporting date. Some of the key assumptions used to determine the fair value of the assets are based on the valuer’s knowledge and experience of the market, values of similar properties that could be deemed subjective.

Revaluation gains on functional properties and investment properties are shown in Notes 24 and 14 respectively, and the relevant assets are included in Notes 13 and 14.

59

Accounting estimates and judgments (continued)

Leases

In categorising leases as finance leases or operating leases, management makes judgements as to whether significant risks and rewards of ownership have transferred to the lessee, where the Group is the lessor. This is relevant to the lease between Westminster College Oxford Trust and Oxford Brookes University as shown in Note 16c on page 78. However, this is zero this year due to the deconsolidation of Westminster College Oxford Trust.

60

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

----- Start of picture text -----
3a. Donations and legacies - The Methodist 2021 2020
Unrestricted Restricted Unrestricted Restricted
Church in Great Britain Total Total
£000 £000 £000 £000 £000 £000
Donations 1,070 3,580 4,650 1,566 3,880 5,446
Legacies 9 2,040 2,049 1,998 2,114 4,112
Total 1,079 5,620 6,699 3,564 5,994 9,558
3b. Donations and legacies - The Connexional Unrestricted Restricted 2021 Unrestricted Restricted 2020
Funds Total Total
£000 £000 £000 £000 £000 £000
Donations 1,070 1,807 2,877 1,566 1,955 3,521
Legacies 9 460 469 1,998 938 2,936
Total 1,079 2,267 3,346 3,564 2,893 6,457
3c. Miscellaneous income - The Methodist 2021 2020
Unrestricted Restricted Unrestricted Restricted
Church in Great Britain Total Total
£000 £000 £000 £000 £000 £000
Student fees - 545 545 - 620 620
Seminars and events 17 - 17 168 1 169
Conference income 6 - 6 - - -
Administration & IT services 23 - 23 41 - 41
Bureau & Accountancy services 355 - 355 300 - 300
Others 25 45 70 138 64 202
Total 426 590 1,016 647 685 1,332
3d. Miscellaneous income - The Connexional 2021 2020
Unrestricted Restricted Unrestricted Restricted
Funds Total Total
£000 £000 £000 £000 £000 £000
Seminars and events 17 - 17 168 1 168
Conference income 6 - 6 - - -
Administration & IT services 23 - 23 41 - 41
Bureau & Accountancy services 355 - 355 300 - 300
Others 54 18 72 204 41 245
Total 455 18 473 713 42 755
3e. Charitable activities - The Methodist Church 2021 2020
Unrestricted Restricted Unrestricted Restricted
in Great Britain Total Total
£000 £000 £000 £000 £000 £000
District assessment 13,661 133 13,794 13,534 125 13,659
Rental Income 19 173 192 21 217 238
Total 13,680 306 13,986 13,555 342 13,897
3f. Charitable activities - The Connexional 2021 2020
Unrestricted Restricted Unrestricted Restricted
Funds Total Total
£000 £000 £000 £000 £000 £000
District assessment 13,661 133 13,794 13,534 125 13,659
Rental Income 173 19 192 21 277 298
Total 13,834 152 13,986 13,555 402 13,957
----- End of picture text -----

61

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

4a. Investment income - The Methodist Church
in Great Britain		 Unrestricted
Restricted
2021
Total Unrestricted
Restricted
2020
Total
£000
£000
£000
£000
£000
£000
Central Finance Board
Interest and other investment income
Rental Income
William Leech Charities Fund		 1,176 1,349
2,525
1,219 1,534
2,753
1 7
8
5 102
107
135 895
1,030 126 1,268
1,394
- 1,288
1,288
- 1,156
1,156
Total 1,312
3,539
4,851
1,350
4,060
5,410
4b. Investment income - The Connexional Funds Unrestricted
Restricted
2021
Total Unrestricted
Restricted
2020
Total
£000
£000
£000
£000
£000
£000
Central Finance Board
Interest and other investment income
Rental Income
William Leech Charities Fund		 1,176 1,270
2,446
1,219 1,453
2,672
1
-
1
5 1
6
135 417
552 275 340
615
- 1,288
1,288
- 1,156
1,156
Total 1,312
2,975
4,287
1,499
2,950
4,449
5a Other trading activities - The Methodist
Church in Great Britain		 Unrestricted
Restricted
2021
Total Unrestricted
Restricted
2020
Total
£000
£000
£000
£000
£000
£000
Publishing
Room and conference hire
Advertising and fees		 293
-
293
319
-
319
547 1,235
1,782
4,516 1,217
5,733
11 -11
- --
Total 851
1,235
2,086
4,835
1,217
6,052
5b Other trading activities - The Connexional
Funds		 Unrestricted
Restricted
2021
Total Unrestricted
Restricted
2020
Total
£000
£000
£000
£000
£000
£000
Publishing
Room and conference hire
Advertising and fees		 293
-
293
319
-
319
- 942
942
- 913
913
11 -11
- --
Total 304
942
1,246
319
913
1,232

62

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

6a Capital levies

Standing Order 973 permits capital levies to be refunded for qualifying projects. Some of these levies may be refunded at any time. Therefore, a contingent liability exists in respect of income already recognised in the Connexional Priority Fund.

6b Grant income - The Methodist Church in
Great Britain		 Unrestricted
Restricted
2021
Total Unrestricted
Restricted
2020
Total
£000
£000
£000
£000
£000
£000
Chiesa Valdese - All We Can
The Aldershot Military Trust
Other*		 - 198
198
- 438
438
- 250
250
- 160
160
416 506
922 469 131
600
Total 416 954 1,370 469 729 1,198
6c Grant income - The Connexional Funds Unrestricted
Restricted
2021
Total Unrestricted
Restricted
2020
Total
£000
£000
£000
£000
£000
£000
The Aldershot Military Trust
Other		 -
250 250
-
160
160
- 1616
-
23
23
Total - 266 266
- 183 183

63

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

7a. Expenditure - The Methodist Church in Great Grant Direct Support 2021 Grant Direct Support 2020
Britain Costs Costs Costs Total Costs Costs Costs Total
£000 £000 £000 £000 £000 £000 £000 £000
Raising funds - 3,729 242 3,971 109 6,729 339 7,177
Charitable activities
Building communities 418 1,141 281
 1,840 531 1,178 360
 2,069
Children & Youth 116 853 304
 1,273 94 1,218 385
 1,697
Evangelism & Growth 4,043 1,434 488
 5,965 3,083 2,316 707
 6,106
Global relations 3,429 4,088 643
 8,160 5,326 3,820 914
 10,060
Learning Network 106 2,031 530
 2,667 5 2,150 667
 2,822
Methodist Council & Governance 31 3,402 806
 4,239 3,160 3,927 626
 7,713
Ministry 4,928 4,039 445
 9,412 120 749 155
 1,024
Property 120 705 116
 941 31 3,667 1,028
 4,726
Others - Pensions - 799 -
 799 - 691 -
 691
Net loss on the disposal of tangible fixed assets - 89 -
 89 - 268 -
 268
13,191 18,581 3,613 35,385 12,350 19,984 4,842 37,176
Total 13,191 22,310 3,855 39,356 12,459 26,713 5,181 44,353

The basis of allocation of support costs is described in Note 8. Grant expenditure is further analysed in Note 10.

The Charitable activities breakdown was updated during the year. Below are the 2020 figures for the updated activities if current The Charitable activities breakdown was updated during the year. Below are the 2020 figures for the updated activities if current The Charitable activities breakdown was updated during the year. Below are the 2020 figures for the updated activities if current The Charitable activities breakdown was updated during the year. Below are the 2020 figures for the updated activities if current The Charitable activities breakdown was updated during the year. Below are the 2020 figures for the updated activities if current The Charitable activities breakdown was updated during the year. Below are the 2020 figures for the updated activities if current format is used.
Charitable activities
Methodist Council & Governance 31 3,402 806
 4,239 31 3,667 1,028
 4,726
Ministry 4,928 4,039 445
 9,412 3,160 3,927 626
 7,713
Property 120 705 116
 941 120 749 155
 1,024
Grant Direct Support 2021 Grant Direct Support 2020
7b. Expenditure - The Connexional Funds Costs Costs Costs Total Costs Costs Costs Total
£000 £000 £000 £000 £000 £000 £000 £000
Raising funds - 1,916 242 2,158 - 2,039 339 2,378
Charitable activities
Building communities 418 1,141 281
 1,840 531 1,178 360
 2,069
Children & Youth 116 853 304
 1,273 94 1,218 385
 1,697
Evangelism & Growth 4,043 1,435 488
 5,966 3,083 2,314 707
 6,104
Global relations 2,396 2,409 643
 5,448 3,917 2,294 914
 7,125
Learning Network 106 2,031 530
 2,667 5 2,151 667
 2,823
Methodist Council & Governance 31 3,402 806
 4,239 2,666 1,387 626
 4,679
Ministry 5,295 1,370 445
 7,110 120 749 155
 1,024
Property 120 705 116
 941 31 3,666 1,028
 4,725
Others - Pensions - 799 -
 799 - 691 -
 691
Net loss on the disposal of tangible fixed assets - 89 -
 89 - 267 -
 267
12,525 14,234 3,613 30,372 10,447 15,915 4,842 31,204
Total 12,525 16,150 3,855 32,530 10,447 17,954 5,181 33,582
The basis of allocation of support costs is described in Note 8. Grant expenditure is further analysed in Note 10.
The Charitable activities breakdown was updated during the year. Below are the 2020 figures for the updated activities if current format is used.
Charitable activities
Methodist Council & Governance 31 3,402 806
 4,239 31 3,666 1,028
 4,725
Ministry 5,295 1,370 445
 7,110 2,666 1,387 626
 4,679
Property 120 705 116
 941 120 749 155
 1,024

Note * The expenditure incured in raising funds for the Methodist Church in Great Britain - £4.0m (2020: £7.1m) and for the Connexion - £2.2m (2020: £2.4m) is broken down as follows:

The Methodist Church The Connexional Funds
in Great Britain
2021 2020 2021 2020
Cost of raising voluntary income £0.2m £0.3m £0.2m £0.3m
Cost of investment management £0.2m £0.4m £0.2m £0.3m
Cost of other trading activities £3.6m £6.5m £1.8m £1.8m

64

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

8a. Support costs by activity - The Methodist Church in Great Britain and The Connexional Funds

Building
communities
Children
& Youth
Evangelism
& Growth
Global
relations
Learning
Network
Ministry
Property
Methodist
Council &
Governance
Raising
funds
2021
Total
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
Facilities
Per capit
Development & Personnel
Per capit
Financial Services
Per capit
Information Technology
Per capit		 a 44 49 39 59 89 44 15 128 25492
a 83 92 74 111 166 83 28 239 46922
a 82 83 311 377 130 246 49 230 1311,639
a 72 80 64 96 145 72 24 209 40802
Total 281 304 488 643 530 445 116 806 242 3,855

8b. Support costs by activity - The Methodist Church in Great Britain and The Connexional Funds

Building
communities
Children
& Youth
Evangelism
& Growth
Global
relations
Learning
Network
Ministry
Property
Methodist
Council &
Governance
Raising
funds
2020
Total
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
Facilities
Per capit
Development & Personnel
Per capit
Financial Services
Per capit
Information Technology
Per capit		 a
67
74
59
89
133
67
22
193
37
741
a
94
104
83
125
188
94
31
271
52
1,042
a
133
133
505
612
213
399
80
372
213
2,660
a
66
74
60
88
133
66
22
192
37
738
Total 360 385 707 914 667 626 155 1,028 339 5,181

9. Subsidiaries

The results of the Council's subsidiaries (before consolidation adjustments) are included within the Statement of Financial Activities as follows:

2021 Cliff College
Southlands
Methodist
Trust
All We
Can
Methodist
International
Centre Ltd
Westminster
College
Oxford Trust
Ltd
2021
2021
2021
2021
2021
£000
£000
£000
£000
£000
208 23 3,123
- -
84 450 30
- -
298 - - 963
-
- - - - -
968 - 497
- -
591 - - 2
-
- - - - -
2,149
473
3,650
965
-
- - 535 1,812
-
Income from:
Donations and legacies
Investments
Other trading activities
Other:
Grants
Miscellaneous income
Total income
Expenditure on:
Raisingfunds

9. Subsidiaries

The results of the Council's subsidiaries (before consolidation adjustments) are included within the Statement of Financial Activities as follows:

2022 Cliff College
Methodist
Can International
College
2022
2022
2022
2022
2022
£000
£000
£000
£000
£000
458 - 71 - 755 1
-
496 - 105 - 1,074 - 33
-
534 - 140 - 1,393 - 68
-
572 - 175 - 1,712 - 102
-
610 - 209 - 2,031 - 136
-
648 - 244 - 2,350 - 170
-
686 - 279 - 2,669 - 205
-
4,004
1,223
-
11,981
-
713
-
-
- - 535 1,812
-
Income from:
Donations and legacies
Investments
Other trading activities
Other:
Grants
Miscellaneous income
Total income
Expenditure on:
Raisingfunds

9. Subsidiaries

The results of the Council's subsidiaries (before consolidation adjustments) are included within the Statement of Financial Activities as follows:

65

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

9. Subsidiaries (continued)

9. Subsidiaries (continued)
Methodist Westminster
Southlands International College Oxford
Cliff College Methodist Trust All We Can Centre Ltd Trust Ltd
2020 2020 2020 2020 2020 2020
£000 £000 £000 £000 £000
Income from:
Donations and legacies 477 - 2,625 - -
Investments 78 458
 17 - 560
Other trading activities 303 - - 4,992 -
Other:
Grants 925 - 586 - 8
Miscellaneous income 650 - - 13 -
Total income 2,433 458
 3,228 5,005 568
Expenditure on:
Raisingfunds - - - 4,948 -
Charitable activities
Ministry 2,718 580 - - 728
Global relations - - 3,020 - -
Total expenditure on charitable activities 2,718 580 3,020 - 728
Total expenditure 2,718 580
 3,020 4,948 728
Net gains/(losses) on investments -
(158)		 (43) (60) 606
Net income/(expenditure) (285) (280) 165 (3) 446
Distribution under Gift aid - - - - -
Net movement in funds (285) (280) 165 (3) 446
Net assets
Fixed assets 7,568 23
 16 323 -
Investments 547 10,168
 558 - 15,530
Current assets 653 93
 1,599 1,106 795
Creditors and loans (407) (89) (293) (1,432) (5,568)
Total 8,361 10,196
 1,880 (3) 10,757

Cliff College Cliff College Outreach Limited Cliff (Methodist) Developments Limited Charity Number 529386 Company Number 2331438 Company Number 4934377

The College was founded in 1883 to provide training for mission and evangelism to people from diverse backgrounds. It offers degrees validated by the University of Manchester in the areas of theology and mission as well as providing a wide variety of short courses and training events.

All We Can

Charity Number 291691

All We Can works through partnerships to end the cycle of suffering caused by poverty, inequality and injustice.

Southlands Methodist Trust

Charity Number 1100660

Southlands Methodist Trust supports educational activities, including research, chaplaincy and charitable work undertaken in and through Southlands College that reflect its Methodist foundation and ethos.

Methodist International Centre Limited

Company Number 3866984

A company set up for the Methodist Council to conduct trading in support of its charitable activities. It is an accredited ethical social enterprise hotel which also provides student accommodation.

Westminster College Oxford Trust Limited

Company Number 3714361

Westminster College Oxford Trust Charity Number 309672

Westminster College Oxford Trust Ltd is the charitable company that acts as the managing trustee of the Westminster campus at Harcourt Hill,

However, during 2020/21 the Council undertook a review of the entities under its control and it was realised that Westminster College Oxford Trust (WCOT) and Westminster College Oxford Trust Ltd (WCOT Ltd) were previously consolidated in error. This review confirmed that consolidated organisations have at least 50% of their trustees appointed by the Council, thus demonstrating a level of control. The review also highlighted that although the WCOT directors are appointed by Conference, WCOT did not have 50% or more of their trustees appointed by the Council. Consequently, the Council took the decision that WCOT should no longer form part of the consolidated accounts of the MCiGB. Therefore, WCOT is eliminated from the consolidation and the balances eliminated (the balances as at the beginning of the current year) are as follows:

66

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

Westminster College balances eliminated from consolidation
Investments £'000
Investment properties 11,750
Central Finance Board Units 3,729
Other investmensts 51
15,530
Current assets
Prepayments and accrued interest 26
Cash at bank and in hand 769
795
Creditors
Accruals (879)
Trade creditors (23)
Grant commitments (1,001)
Deferred income (3,665)
(5,568)
Net assets 10,757

67

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

10a. Grant expenditure: The Methodist Church in Great Britain

----- Start of picture text -----
2021 2020
Activity Individuals Institutions Total Total
Global relations £000 £000 £000 £000
Annual grants - 2,039 2,039 3,046
Nationals in mission appointment - 574 574 843
Scholarship programmes - 714 714 1,340
Ministerial and personnel support grants - 102 102 96
Total - 3,429 3,429 5,325
Other grants £000 £000 £000 £000
Building communities 158 260 418 531
Children & Youth - 116 116 94
Evangelism & Growth - 4,043 4,043 2,698
Learning Network - 106 106 5
Methodist Council & Governance - 31 31 31
Ministry 2,140 2,788 4,928 3,546
Property - 120 120 120
Income Generating Centre - - - 109
Total 2,298 7,464 9,762 7,134
Grand Total 2,298 10,893 13,191 12,459
----- End of picture text -----

10b. Grant expenditure: The Connexional Funds

----- Start of picture text -----
2021 2020
Activity Individuals Institutions Total Total
Global relations £000 £000 £000 £000
Annual grants - 1,006 1,006 1,638
Nationals in mission appointment - 574 574 843
Scholarship programmes - 714 714 1,340
Ministerial and personnel support grants - 102 102 96
Total - 2,396 2,396 3,917
Other grants £000 £000 £000 £000
Building communities 158 319 477 531
Children & Youth - 116 116 94
Evangelism & Growth - 4,043 4,043 3,083
Learning Network - 106 106 5
Methodist Council & Governance - 31 31 31
Ministry 1,003 4,292 5,295 2,666
Property - 120 120 120
Total 1,161 9,027 10,188 6,530
Grand Total 1,161 11,423 12,584 10,447
----- End of picture text -----

The figures in Note 10 are not intended to be the same as those listed for grants on page 17-19. A detailed list of institutional grant recipients can be viewed using the following link:

https://www.methodist.org.uk/media/19808/list-of-grant-recipients-2021.xlsx

68

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

----- Start of picture text -----
The Methodist Church The Connexional
11. Included in the SOFA are the following: in Great Britain Funds
2021 2020 2021 2020
----- End of picture text -----

2021 2020 2021 2020
Audit and consultancy fees £000 £000 £000 £000
Payable to RSM UK Audit LLP 82 80 60 68
Payable to RSM UK Tax & Accounting Ltd for taxation advice 37 20 32 18
Payable to other auditors - for internal audit services 31 16 30 16
Payable to other auditors - for audit of self accounting entities 36 48 - -
Depreciation 351 458 36 40
Amortisation 31 56 26 46
Foreign exchange differences 1 1 1 1
Loan interest payable 6 11 - 4

12. Stipends and salary costs

The Methodist Council appointed or employed on average 378 (2020: 420) people during the year, of which Connexional Funds had 283 (2020: 277) and the costs were:

Stipends and salaries
Redundancy costs (loss of office)
Temporary staff costs
Social security costs
Pension costs - (defined contribution schemes)
Defined benefit pension costs excluding interest
Total		 2021
2020
2021
2020
£000
£000
£000
£000
12,969
13,819
9,819
9,546
253
20
172
20
162
293
68
203
1,197
1,285
911
921
1,331
1,581
1,142
1,335
1,622
1,514
1,605
1,501
17,534
18,512
13,717
13,526
The Connexional
Funds
The Methodist Church
in Great Britain

The Methodist Church in Great Britain

18 employees were paid £60k or more during the year (2020: 17 employees). The total aggregate pension contributions for these employees for the year were £168k (2020: £177k).

The Connexional Funds

13 employees were paid £60k or more during the year (2020: 10 employees). The total aggregate pension contributions for these employees for the year were £145k (2020: £105k).

The Methodist Church The Methodist Church The Methodist Church The Connexional
in Great Britain Funds
2021 2020 2021 2020
Number of Number of
employee employee Number of
Number of
Basic salary plus bonus s s employees employees
£60,001 - £70,000 9 10 6 7
£70,001 - £80,000 6 4 5 2
£80,001 - £90,000 2 - 1 -
£90,001 - £100,000 - 1 - -
£100,001 - £110,000 1 1 1 1
£170,001 - £180,000 - 1 - -

69

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

12. Stipends and salary costs (continued)

The Methodist Church in The Methodist Church in The Connexional Funds
Great Britain
Actual average number of staff by activity 2021 2020 2021 2020
Methodist Council & Governance 58.9 58.4 58.9 58.4
Global Relations 46.3 45.7 26.8 26.2
Evangelism & Growth 20.2 18.2 20.2 18.2
Learning Network 43.9 41.4 43.9 41.4
Children & Youth 19.5 23.5 19.5 23.5
Ministry 64.0 59.5 25.0 19.0
Building Communities 19.0 21.3 19.0 21.3
Administration & Support 50.0 47.0 50.0 47.0
Property 5.0 6.1 5.0 6.1
Fund Raising 50.8 98.4 14.8 15.4
Total 377.6 419.5 283.1 276.5

The average number of volunteers working for the Council during the year was 657 (2020: 1,367).

Volunteers play an important role in the Council. Their contribution is significant in terms of the time they commit to attending meetings, raising funds and delivering services to beneficiaries.

Key management personnel

The key management personnel of the Church comprise the Secretary and Assistant Secretary of the Conference, the Connexional Secretary, the Conference Officer for Legal & Constitutional Practice, the Head of Mission, the Head of Ministries, Director of Finance and Resources and the Director of Human Resources & Development. A number of these posts are undertaken by Trustees (as set out in Note 26) and the remuneration of these individuals is included in the amounts below. Their total remuneration inclusive of benefits and 13.8% employer's national insurance, but excluding pension contributions was £555k (2020: £507k). In addition, pension contributions of £84k were paid into defined contribution pension schemes on behalf of these personnel (2020: £78k).

Pension costs

The Methodist Council operates three main pension schemes:

The PASLEMC Scheme closed to new entrants and the future accrual of pensionable service with effect from 31 May 2019. The Methodist Council now contributes to a defined contribution scheme with Royal London for its Lay employees.

70

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

12. Pension costs (continued)

The Methodist Ministers’ Pension Scheme

The MMPS is treated as a group scheme for accounting purposes as all of the entities participating in the scheme, mainly the circuits and the Council, are under the common control of the Conference. There is no contractual arrangement or stated policy for charging the net defined benefit cost of the plan as a whole to individual circuits and the Council. A detailed explanation of the accounting treatment is provided in Note 2 on pages 43-44 with further information as required by FRS102 included on pages 79-81.

The Methodist Church in Great Britain is the sole statutory employer for purposes of pension law, that is The Church as defined in the Methodist Church Act 1976 and the Deed of Union 1939 of which the Conference is the supreme governing body. There are approximately 1,266 ministers who are active members of MMPS of whom the Council (the ‘reporting entity’) is responsible for the pension contributions of around 54, the majority of ‘employer’ pension contributions coming from the circuits to which they are stationed annually by the Conference, that also pay their stipends and employer national insurance contributions.

For the MMPS, costs equal to the contributions paid by the Council for ministers in posts under the control of the Council are recognised in these accounts as they fall due; likewise, pension contributions for ministers stationed at circuit level are paid by the individual circuit.

FRS 102 requires that if the net defined benefit pension cost is not reflected in the individual financial statements of the participating entities, it should be reflected in the individual financial statements of the group entity which is legally responsible for the plan. However, the Council is not legally responsible for the plan and so the liability has not been included in these financial statements. The agreement with the Trustees of MMPS for the making good of the technical deficit rests with the Conference and not the Council.

The Pension and Assurance Scheme for Lay Employees of the Methodist Church (PASLEMC)

The PASLEMC scheme is treated as a group scheme for accounting purposes, with the Methodist Council as the sponsoring employer with legal responsibility for the plan. There is no contractual arrangement or stated policy for charging the net defined benefit cost of the plan as a whole to individual group entities and therefore the Council has recognised the entire net defined benefit liability in its financial statements.

The PASLEMC scheme is a funded defined benefit arrangement which provides retirement benefits based on final pensionable earnings. The most recent actuarial valuation of the Scheme, carried out as at 1 September 2020, revealed that the Scheme had a deficit on the funding basis. The Methodist Council, the other participating employers and the Trustee of the Scheme put in place a Schedule of Contributions and a Recovery Plan which detailed the contributions that would be made to fund this deficit. It was agreed that contributions from the Methodist Church’s Pension Reserve Fund would be made as follows:

• a lump sum of £2,380,000 per annum will be paid into the Scheme each August, starting August 2021 up to and including August 2026 (the August 2021 amount to be paid in December 2021); and

• between £0 and £529,000 will be paid to the Scheme each December, starting December 2021 up to and including December 2026. The precise amount payable will be determined by the Scheme Actuary each year having regard to Scheme experience.

The PASLEMC Scheme closed to new entrants and the future accrual of pensionable service with effect from 31 May 2019.

71

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

The Superannuation Scheme for Lay Mission Partners (SSMP)

The Superannuation Scheme for Lay Mission Partners of the Methodist Church operated by the Methodist Church is a defined benefit arrangement which provides retirement benefits calculated as fixed pension amounts for each year of service. The Scheme closed to the future accrual of benefits in 2007, when all remaining active members became deferred pensioners. The most recent actuarial valuation of the Scheme, carried out as at 1 January 2017, indicated that the Scheme had a deficit.

There are 34 members in total, 6 of whom are deferred pensioners. The scheme has been accounted for as a defined benefit scheme in accordance with FRS 102. The Scheme is now closed to new entrants.

The scheme provides a pension of £175.19 per year of qualifying service to a single retired mission partner or widow / widower, £233.65 per year of qualifying service to a married mission partner. The rates are increased annually in line with the retail price index. There are also retirement grants of £116.42 (single) / £155.61 (married) per year of qualifying service for those mission partners who withdraw before completing 10 years qualifying service. Mission partners who retire after completing 10 but less than 15 years qualifying service are given the option of receiving a withdrawal grant or a retirement pension at the appropriate retirement age. Mission partners who withdraw or retire after completing 15 years qualifying service receive a retirement grant and a pension at the appropriate retirement age.

The calculations for the FRS 102 disclosures have been carried out by running actuarial calculations as at 31 August 2021 by the Scheme’s actuary and shown in Note 28.

Other pension schemes

The Methodist Council also participates in a number of smaller pension schemes. The members are mission partners currently working overseas. The schemes are: The Pensions Trust and The Retirement Benefit Scheme (Ireland).

The Pensions Trust

There are 17 members in the scheme participating in the Trust's two defined contribution schemes: the Ethical Fund and the Flexible Retirement Plan. The pension charge for the year was £116k (2020: £141k). Further disclosures are deemed unnecessary on the grounds of immateriality.

The Retirement Benefit Scheme (Ireland)

There are currently 2 members in this scheme. The pension charge for the year was £9.4k (2020: £8.7k). Further disclosures are deemed unnecessary on the grounds of immateriality.

72

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

13a. Tangible fixed assets - The Methodist Church in Great Britain

----- Start of picture text -----
Freehold land Furniture and Computer Motor
and buildings fittings equipment vehicles Total
At cost or valuation £000 £000 £000 £000 £000
At 1 September 2020 94,374 1,924 1,734 33 98,065
Additions during the year 3,043 15 46 - 3,104
Revaluations 946 - - - 946
Transfers (to Software) - - (27) - (27)
Disposals (1,982) - - - (1,982)
Total 96,381 1,939 1,753 33 100,106
Depreciation
At 1 September 2020 606 1,579 1,634 15 3,834
Charge for the year 111 148 87 5 351
Transfers - - (26) - (26)
Disposals - - - - -
Total 717 1,727 1,695 20 4,159
Net book value as at 31 August 2021 95,664 212 58 13 95,947
Net book value as at 31 August 2020 93,768 345 100 18 94,231
----- End of picture text -----

13b. Tangible fixed assets - The Connexional Funds

----- Start of picture text -----
Freehold land Furniture and Computer Motor
At cost or valuation and buildings fittings equipment vehicles Total
£000 £000 £000 £000 £000
At 1 September 2020 86,238 955 1,196 - 88,389
Additions during the year 3,043 12 14 - 3,069
Transfers 13c - (32) - - (32)
Disposals (1,982) - - - (1,982)
Total 87,299 935 1,210 - 89,444
Depreciation
At 1 September 2020 - 896 1,178 - 2,074
Charge for the year - 21 15 - 36
Transfers - (32) - - (32)
Disposals - - - - -
Total - 885 1,193 - 2,078
Net book value as at 31 August 2021 87,299 50 17 - 87,366
Net book value as at 31 August 2020 86,238 59 18 - 86,315
----- End of picture text -----

13c. Intangible fixed assets

13c. Intangible fixed assets
Software
At cost		 The
Methodist
Church in
Great Britain
The
Connexional
Funds
£000
£000
At 1 September 2020
Additions during the year
Transfer in/(out)
Total
Amortisation
At 1 September 2020
Transfer in/(out)
Charge for theyear		 383
347
6 6
13
-
402
353
284
264
11
-
31 26
Total
Net book value as at 31 August 2021
Net book value as at 31 August 2020		 326
290
76
63
99
83

Amortisation cost is included in the support cost and apportion in other activities (Note 8)

73

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

13d. Revaluation of charitable land and buildings

Land & buildings have been revalued as set out below on an existing use open market value basis, in accordance with the Guidance Notes of the Royal Institution of Chartered Surveyors. The individual valuers are not connected with the Methodist Church. Valuations are based on fair value of the land and buildings subject to and with the benefit of existing leases where appropriate.

The freehold land and buildings were revalued on 31 August 2019 except for Asbury Overseas House, Birmingham which was revalued in 31 August 2020.

The manses, which are residential and have a well established market were revalued internally by reference to current market prices on 31 August 2019.

Asbury Overseas House, Birmingham (Birmingham Methodist Overseas Guest House) A full professional valuation was carried out by Savills in August 2020. The property was valued at £1,850,000.

The commercial properties were valued by professional independent valuers as follows:

25 Marylebone Road, London - valuation was carried out in August 2016 by Andrew Low, Partner, Knight Frank (Commercial Business), BA, MSc, RICS, valued at £25,802,142.

Kings Cross Complex London WC1 - valuation carried out in August 2017 by Tony Harris LLM FRICS FCIArb of Cluttons, Portman Street, London W1H 6DU; valued at £4,000,000.

105 Lambeth Road SE1- valuation by Tony Harris LLM FRICS FCIArb of Cluttons, Portman Street, London W1H 6DU, in August 2017 for £2,000.

Cliff College, Calver, Hope Valley, Derbyshire S32 3XG - Valuation carried out in August 2021 by M J Hull BSc (Hons) MRICS from SMC Chartered Surveyors, 54 Campo Lane, Sheffield S1 2EG; valued at £6,066,000

Current value of Guy Chester Centre in the accounts is based on the valuation carried out by James Gilmartin Mrics (RICS registered valuer) of Gilmartin Ley. The valuation was done in April 2016. The property was valued for £23,720,000. The Property Development Committee has commissioned a review of the development options for the North Bank Estate and we will get an updated valuation as part of that process. As a consequence, a full professional valuation (in line with our policy of five yearly valuations) has not been undertaken at this time. It is believed that the current valuation in the accounts is satisfactory given that minimal investment in the property over the last five years will have created sufficient depreciation to offset any appreciation in underlying asset values.

All the properties were valued at fair value in accordance with FRS 102.

The carrying value that would have been recognised had the assets been carried under the historical cost model is £28.0m (2020: £27.6m) for the Methodist Church in Great Britain and £20.7m (2020: £20.3m) for Connexional Funds.

74

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

14a. Investments - The Methodist Church in Great Britain

Investment
properties		 Central
Finance
Board Units		 William Leech
Charities Fund		 Other
Investments		 2021 2020
£000 £000 £000 £000 £000 £000
Fair value at 1 September 53,445 123,385 11,234 1,048 189,112 193,934
Additions - 121 227 - 348 1,593
Elimination of Westminster College (Note 9) (11,750) (3,729) -
(51)		 (15,530) -
Transfers (2,250) (418) - (2,668) 454
Disposals -
(382)		 - - (382) (1,100)
Investment gains
Fair value as at 31 August		 -
39,445		 20,969
139,946		 1,726
13,187		 -
997		 22,695
193,575		 (5,769)
189,112

14b. Investments - The Connexional Funds

Investment
properties		 Central
Finance
Board Units		 William Leech
Charities Fund		 Other
Investments		 2021 2020
£000 £000 £000 £000 £000 £000
Fair value at 1 September 33,428 116,746 11,234 900 162,308 167,451
Additions - -
227		 - 227 620
Transfers (2,250) (418) - - (2,668) 454
Disposals -
(100)		 - - (100) (100)
Investment gains
Fair value as at 31 August		 -
31,178
20,498
136,726		 1,726
13,187		 -
900		 22,224
181,991		 (6,117)
162,308

Investment additions and disposals

During the year, the Finance Sub-Committee reviewed the investment portfolio in line with the current investment policy.

William Leech Charities Fund

The Methodist Church holds investments valued at £13.2m (2020: £11.2m) in William Leech (Investments) Ltd which represents 20% of the company's net assets as at 31 August 2021. The holding is based on the company's audited accounts to 31 March 2021, updated with management accounts to 31 August 2021. The Methodist Church has a representative on the board of the company but cannot exert significant influence over it.

75

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

The Methodist Church in
Great Britain		 The Methodist Church in
Great Britain		 The Connexional Funds The Connexional Funds
14c. Analysis of movement of investment properties 2021 2020 2021 2020
£000 £000 £000 £000
Fair value at 1 September 53,446 53,442 33,428 34,114
Additions - - - -
Elimination of Westminster College (11,750) - - -
Transfers (2,250) -
(2,250)
 -
Donated assets -
454		 - 454
Disposals
Fair value at 31 August		 -
39,446
(450)
53,446		 -
31,178		 (1,140)
33,428

Included within investment properties are the following revalued properties:

i) Westminster College Oxford Trust

Westminster College no longer forms part of the consolidated accounts of the Methodist Church in Great Britain. A property at Harcourt Hill Campus, Harcourt Hill, Oxford OX2 9AT valued at £11.8m last year is included in the accounts at £0m (2020: £11.8m). The property was revalued on 31 July 2020 by Andrew Lockhart BSc FRICS MCIArb from Venables Sherrott Lockhart and Partners Ltd.

ii) London Mission Fund

The London Mission property portfolio was valued by Richard Moss MRICS and John Barrett FRICS from Cluttons LLP on 31 July, 2020.

a) Hove Residential at 20 Bigwood Avenue with a fair value of £270k (2020: £270k)

b) Hostel at 229 King Street Hammersmith, London W6 9JT: £550k (2020: £550k)

c) Maida Vale Library,Sutherland Avenue, London W9 2QT: £425k (2020: £425k)

d) Central Hall Buildings, Archway, London N19 3UB: £1,700k (2020: £1,700k)

iii) Guy Chester Center

A property known as the Hazlehyrst, 7 Colney Hatch Lane, London N10 1PN was valued on 31 August, 2020 by James Gilmartin MRICS from Gilmartin Ley Ltd. The fair value is £3,620k (2020: £3,620k).

iv) Camden Town Methodist Church

Managing trusteeship of Camden Town Methodist Church transferred the property to Methodist Council during the financial year 31 August 2020. The property is located at 89 Plender Street, Camden Town, London NW1 0JN. The current market value as at 31 August 2020 was £454K.

iv) Oxford Place, Leeds

Managing trusteeship transferred from the Yorkshire West District to the Methodist Council during 2018/19. This property is located in Oxford Place, Leeds LS1 3AU. Following the decision to cancel the project to redevelop Oxford Place last year, the Methodist Council agreed to transfer the managing trusteeship back to the Yorkshire West District.

Whilst this transfer took place on 1 September 2021, it is evident that the value to the Council of the property as at 31 August 2021 was £0 (2020: £2.25m). Consequently, the value of Oxford Place is written down in the 2020/21 accounts.

Also included in the investment properties under 'Transfers' is the transfer of £418k from Barratt Trust to Chester & Stoke on Trent District as the purposes of this Trust are principally for the benefit of projects in that district.

Investments in Westminster College are deconsolidated - property valued at £11,750k; CFB and other investments valued at £3,780k.

The Church's policy is normally to revalue the investment properties every three years. For the period under review the trustees do not consider there to have been a change in the fair value of the remaining properties.

76

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

The Methodist Church in The Methodist Church in
Great Britain The Connexional Funds
15. Debtors 2021 2020 2021 2020
£000 £000 £000 £000
Prepayments and accrued interest 1,637 2,038 932 1,036
Loans to other entities 10 20 796 806
Concessionary loans 477 466 477 466
Other debtors
Total		 1,487
3,611		 1,321
3,845		 1,137
3,342		 1,174
3,482

Methodist International Centre - The Methodist Church in Great Britain and The Connexional Funds

In May 2020, the Methodist Council made a loan of £786k to MIC Ltd to support it through the Covid-19 lockdown. The Methodist Council have extended the period of the loan which will now be repaid fully in May 2024.

The Methodist Church in The Methodist Church in
Great Britain The Connexional Funds
16a. Creditors: amounts due within one year 2021 2020 2021 2020
£000 £000 £000 £000
Accruals 956 2,172 465 1,622
Loans 28 28 - -
Tax and social security 361 465 224 214
Grant commitments 7,618 8,525 7,513 8,212
Other creditors
Total		 5,409
14,372		 5,968
17,158		 5,223
13,425		 4,860
14,908
The Methodist Church in The Methodist Church in
Great Britain The Connexional Funds
16b. Creditors: amounts due after more than one year 2021 2020 2021 2020
£000 £000 £000 £000
Loans 668 196 - -
Deferred income -
3,595		 - -
Grant commitments
Total		 3,301
3,969		 5,169
8,960		 3,301
3,301		 4,238
4,238

Loans

Cliff College - The Methodist Church in Great Britain

At 31.8.21 the balance on the loan is £196K (2020: £224K) which was secured by a legal charge over the property known as 26 Ashenhurst Way, Leek, Staffordshire. ST13 5SB, with a carrying value of £407k. The loan is repayable in 20 equal capital instalments on the 30 June and 31 December each year plus interest accrued in the 6 month period at the rate of 2.94% (APR) variable.

Methodist International Centre - The Methodist Church in Great Britain and The Connexional Funds

MIC Ltd obtained a Coronavirus Business Interruption Loan (CBIL) of £500k, this amount is interest-free in the first 12 months, and the loan term is six years from the date of drawdown - 14 July 2021.

77

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

16c. Deferred Income

Deferred Income relates to a lease premium received by Westminster College Trust from Oxford Brookes University. The 100 year lease commenced on 1 August, 2017. A premium of £3.75m was paid and this is being spread over the life of the lease as per FRS 102 requirements.

2021
2020
2021
2020
£000
£000
£000
£000
The Methodist Church
in Great Britain
The Connexional Funds
Operating lease income receivable no later than 1 year
Operating lease income receivable later than 1 year but no later
than 5 years
Operating lease income receivable later than 5 years		 -
420
- -
-
1,680
- -
-
38,185
- -
-
40,285
- -

78

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

17. Stocks 2021
2020
2021
2020
£000
£000
£000
£000
The Methodist
Church in Great
Britain
The Connexional
Funds
Finished goods and goods for resale 54
60
36
41
Total 54
60
36
41

The difference between purchase price or production cost of stocks and their replacement cost is not material.

18. Financial instruments 2021
2020
2021
2020
£000
£000
£000
£000
The Methodist
Church in Great
Britain
The Connexional
Funds
Financial assets at fair value through profit or loss
Listed investments
William Leech Charities Fund and other investments		 139,946
123,385
136,726
116,746
14,184
12,282
14,087
12,133
Total 154,130
135,667
150,813
128,879
Financial assets that are debt instruments measured at amortised cost
Debtors
1,487
1,321
1,137
1,174
Total
1,487
1,321
1,137
1,174
Financial liabilities measured at amortised cost
Loans
696
224
--
Accruals
956
2,172
465
1,622
Other creditors
5,409
5,968
5,223
4,860
Total
7,061
8,364
5,688
6,482
Concessionary loans (at cost plus accrued interest less impairment)
Loans to ministers
477
446
477
446
Loan to Lesnes Abbey Circuit
10
20
10
20
Total
487
466
487
466

79

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

The Methodist Church in Great Britain

Balance at
1 September
2020		 Income Expenditure Actuarial losses
on DB pension
scheme		 Investment
gains/(losses)
& revaluation
reserve		 Transfers Balance as
at 31
August
19a. Unrestricted funds movements 2021
£000 £000 £000 £000 £000 £000 £000
General 54,139 16,899 (19,764) -
365		 1,575 53,214
Designated 19c 52,193 11,343 (6,020) -
9,205		 (629) 66,092
Defined Benefit Pension Scheme
Total		 (13,890)
92,442		 -
28,242
347
(25,437)		 12,213
12,213		 -
9,570		 -
946
(1,330)
117,976

The Connexional Funds

19b. Unrestricted funds Balance at
1 September
2020		 Income Expenditure Actuarial losses
on DB pension
scheme		 Investment
gains/(losses)
& revaluation
reserve
movements		 Transfers Balance as
at 31
August
2021
£000 £000 £000 £000 £000 £000 £000
General 52,904 15,966 (18,296) -
365		 1,575 52,514
Designated 19d 51,096 11,342 (6,030) -
9,205		 (629) 64,984
Defined Benefit Pension Scheme
Total		 (13,890)
90,110		 -
27,308		 -
(24,326)
12,213
12,213		 -
9,570		 -
946
(1,677)
115,821

Intercompany transfers occur as MCF pay on behalf of most other funds. Transfers in of £1.6m to the general fund principally comprise the net balance of the management levy received (£1.7m) and payment to the Long-term Renewal Fund (£0.1m) Note 22 page 88.

The Methodist Church in Great Britain

The Methodist Church in Great Brita in
Balance at
1 September
2020		 Income Expenditure Actuarial losses
on DB pension
scheme		 Investment
gains/(losses)
& revaluation
reserve		 Transfers Balance as
at 31
August
19c. Designated funds movements 2021
£000 £000 £000 £000 £000 £000 £000
1) The Connexional Priority Fund 9,153 10,458 (4,220) - 1,204 (5,259) 11,336
2) The Epworth Fund 6,633 137 (235) - 1,223 (20) 7,738
3) The Connexional Travel Fund 244 1 (10) - 8 (243) -
4) The Designated Training Fund 1,086 -
(340)		 - - 350 1,096
5) The Pension Reserve Fund
Total		 35,077
52,193		 747
11,343		 (1,215)
(6,020)		 -
-		 6,770

9,205		 4,543
(629)		 45,922
66,092

The Connexional Funds

The Connexional Funds
Balance at
1 September
2020		 Income Expenditure Actuarial losses
on DB pension
scheme		 Investment
gains/(losses)
& revaluation
reserve		 Transfers Balance as
at 31
August
19d. Designated funds movements 2021
£000 £000 £000 £000 £000 £000 £000
1) The Connexional Priority Fund 9,145 10,457 (4,220) - 1,204 (5,259) 11,327
2) The Epworth Fund 6,625 137 (235) - 1,223 (20) 7,730
3) The Connexional Travel Fund 244 1 (10) - 8 (243) -
4) The Designated Training Fund 5 -
(350)		 - - 350 5
5) The Pension Reserve Fund
Total		 35,077
51,096		 747
11,342		 (1,215)
(6,030)		 -
-		 6,770

9,205		 4,543
(629)		 45,922
64,984

The transfers to the designated training fund is the contibution from the income generating centre (Guy Chester) towards the Learning Network. Transfers out of the Connexional Priority Fund principally relate to £0.6m management levy paid to the general fund and £4.6m to the Pension Reserve Fund (PRF). See Note 22 page 88.

80

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

The Methodist Church in Great Britain

19e. Unrestricted funds Balance at
1 September
2019		 **Income ** Expenditure Actuarial losses
on DB pension
scheme		 Investment
gains/(losses)
& revaluation
reserve
movements		 Transfers Balance as
at 31
August
2020
£000 £000 £000 £000 £000 £000 £000
General 54,813 22,885 (22,167) -
(1,447)		 55 54,139
Designated 19c 50,388 8,452 (5,923) -
(1,623)		 899 52,193
Defined Benefit Pension Scheme
Total		 (5,234)
99,967		 -
31,337
436
(27,654)		 (9,092)
(9,092)		 -
(3,070)		 -
954
(13,890)
92,442

The Connexional Funds

19f. Unrestricted funds Balance at
1 September
2019		 **Income ** Expenditure Actuarial losses
on DB pension
scheme		 Investment
gains and
revaluation
reserve
movements		 Transfers Balance as
at 31
August
2020
£000 £000 £000 £000 £000 £000 £000
General 53,626 18,115 (17,506) - (1,386) 55 52,904
Designated 19d 49,715 8,452 (6,346) - (1,624) 899 51,096
Defined Benefit Pension Scheme
Total		 (5,234)
98,107		 -
26,567
436
(23,416)		 (9,092)
(9,092)		 -
(3,010)		 -
954
(13,890)
90,110

Intercompany transfers occur as MCF pay on behalf of most other funds. Transfers in of £0.1m to the general fund principally comprise the net balance of the management levy received (£1.3m), payment to the Long-term Renewal Fund (£0.1m) and an MIC payment of £1.2m towards Learning Network. Note 22 page 88.

The Methodist Church in Great Britain

19g. Designated funds
1) The Connexional Priority Fund
2) The Epworth Fund
3) The Connexional Travel Fund
4) The Designated Training Fund
5) The Pension Reserve Fund
Total		 Balance at
1 September
2019
Income Expenditure
Actuarial losses
on DB pension
scheme
Investment
gains and
revaluation
reserve
movements
Transfers
Balance as
at 31
August
2020
£000
£000
£000
£000
£000
£000
£000
8,712 7,576
(3,311)
-
(277)
(3,547)
9,153
7,137 145
(413)
-
(217)
(19)
6,633
256 4
(12)
-
(4)
-
244
660
-
(994)
- -
1,420
1,086
33,623 727
(1,193)
-
(1,125) 3,045
35,077
50,388
8,452
(5,923)
-
(1,623)
899
52,193

The Connexional Funds

The Connexional Funds
19h. Designated funds Balance at
1 September
2019
Income Expenditure
Actuarial losses
on DB pension
scheme
Investment
gains and
revaluation
reserve
movements
Transfers
Balance as
at 31
August
2020
£000
£000
£000
£000
£000
£000
£000
1) The Connexional Priority Fund
2) The Epworth Fund
3) The Connexional Travel Fund
4) The Designated Training Fund
6) The Pension Reserve Fund
Total		 8,705 7,576
(3,311)
-
(278)
(3,547)
9,145
7,129 145
(413)
-
(217)
(19)
6,625
256 4
(12)
-
(4)
-
244
2
-
(1,417)
- -
1,420
5
33,623 727
(1,193)
-
(1,125) 3,045
35,077
49,715
8,452
(6,346)
-
(1,624)
899
51,096

The transfers to the designated training fund is the contibution from the income generating centres (Guy Chester and MIC Ltd) towards the Learning Network. Transfers out of the Connexional Priority Fund principally relate to £0.4m management levy paid to the general fund and £3.1m to the Pension Reserve Fund (PRF), See Note 22 page 88.

81

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

1) The Connexional Priority Fund (CPF)

The main source of income into this fund is primarily the levies charged on all capital proceeds from the disposal of Methodist land and buildings held for local, circuit or district purposes and any income arising therefrom is available for the purpose of (a) making grants to circuits and distribution to districts; (b) making an allocation by way of transfer between funds, to the Pension Reserve Fund in respect of the liabilities of the Methodist Ministers' Pension Scheme and the Pension and Assurance Scheme for Lay Employees of the Methodist Church and (c) funding the work of the Learning Network.

2) The Epworth Fund

This fund was set up following the sale of Epworth House, City Road, London in 1987 as a designated fund. The income from the fund is used to support innovative initiatives within The Methodist Church.

3) The Connexional Travel Fund

This fund has two purposes: (a) to award grants to ministers on long-term sick leave to compensate them for the absence of business reimbursements and (b) to make grants for island and long mainland journeys. However, the Council agreed to transfer this fund to the MCF as its value significantly exceded the likely call upon it.

4) The Designated Training Fund

The main source of funding for the Designated Training Fund comes from the Methodist International and Guy Chester Centres respectively for the purpose of furthering the work of the Learning Network.

5) The Pension Reserve Fund

This fund was set up following a 2009 Conference decision to establish a Pension Reserve Fund outside of the Pension and Assurance Scheme for Lay Employees of the Methodist Church and Methodist Ministers' Pension Schemes which would be available if required to be used to meet future funding deficits.

82

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

The Methodist Church in Great Britain

The Methodist Church in Great Britain
20a. Restricted funds Balance at 31
August 2020
Income
Expenditure
Actuarial
losses on DB
pension
scheme
Investment
gains and
revaluation
reserve
movements
Transfers
Balance at 31
August 2021
£000
£000
£000
£000
£000
£000
£000
1) The Fund for the Support of
Presbyters and Deacons
9,727
592
(935)
-
1,485
(45)
10,824
2) Mission in Britain Fund
5,150
716
105
-
598
(48)
6,521
3) Centenary Hall Trust
25,311
39
(75)
- -
(26)
25,249
4) The Fund for Property
1,025
362
(52)
-
276
(68)
1,543
5) The Fund for Training
6,817
299
(186)
-
121
(15)
7,036
6) The World Mission Fund
23,522
2,622
(4,177)
-
2,597
(729)
23,835
7) The London Mission Fund
18,770
464
(465)
-
1,914
-
20,683
8) The Guy Chester Centre
29,230
1,232
(860)
-
376
-
29,978
9) Cliff College
7,392 1,433
(2,495)
-
18
-
6,348
10) Southlands Methodist Trust
10,196
473
(609)
-
358
-
10,418
11) Westminster College Oxford Trust
10,757
- - - - -
10,757
12)The Methodist Medical Benevolent Fu
2,202
46
(92)
-
424
-
2,580
Total funds with balances > £2m
150,098
8,278
(9,841)
-
8,167
(931)
155,772
Other - 28 funds with balances < £2m
2,021
3,966
(3,903)
80
2,425
(272)
4,317
Sub-total
152,119
12,244
(13,744)
80
10,592
(1,203)
160,088
De-consolidation of Westminster College
(10,757)
(10,757)
Total
152,119
12,244
(13,744)
80
10,592
(11,960)
149,331

The Connexional Funds

20b. Restricted funds Balance at 31
August 2020
Income
Expenditure
Actuarial
losses on DB
pension
scheme
Investment
gains and
revaluation
reserve
movements
Transfers
Balance at 31
August 2021
£000
£000
£000
£000
£000
£000
£000
1) The Fund for the Support of
Presbyters and Deacons
2) Mission in Britain Fund
3) Centenary Hall Trust
4) The Fund for Property
5) The Fund for Training
6) The World Mission Fund
7) The London Mission Fund
8)The GuyChester Centre		 9,713
592
(935)
-
1,485
(45)
10,810
5,150
716
105
-
598
(48)
6,521
25,471
39
(75)
- -
(25)
25,410
1,025
361
(52)
-
276
(68)
1,542
6,774
298
(186)
-
121
(15)
6,992
22,902
2,622
(4,548)
-
2,597
(729)
22,844
18,772
463
(465)
-
1,914
-
20,684
28,950
1,232
(860)
-
376
-
29,698
Total funds with balances > £2m
Other - 27 funds with balances < £2m		 118,757
6,323
(7,016)
-
7,367
(930)
124,501
4,505
451
(1,013)
80
1,808
(273)
5,557
Total 123,261
6,774
(8,029)
80
9,175
(1,203)
130,058

Transfers out of the World Mission Fund principally relate to £0.5m management levy paid to the general fund and £0.2m to William Leech for investment purposes.

83

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

The Methodist Church in Great Britain

The Methodist Church in Great Britain
Investment
Balance at 31
August 2019		 Income Expenditure Actuarial
losses on DB
pension		 gains and
revaluation		 Transfers Balance at 31
August 2020
scheme reserve
20c. Restricted funds movements
£000 £000 £000 £000 £000 £000 £000
1) The Fund for the Support of
Presbyters and Deacons 9,950 581 (442) -
(296)		 (66) 9,727
2) Mission in Britain Fund 4,893 925 (392) -
(216)		 (60) 5,150
3) Centenary Hall Trust 25,369 75 (108) - (25) 25,311
4) The Fund for Property 1,435 452 (765) -
(43)		 (54) 1,025
5) The Fund for Training 6,798 325 (245) -
(22)		 (39) 6,817
6) The World Mission Fund 27,406 2,778 (5,377) -
(541)		 (744) 23,522
7) The London Mission Fund 19,473 437 (374) -
(766)		 - 18,770
8) The Guy Chester Centre 29,146 1,190 (885) -
(221)		 - 29,230
9) Cliff College 8,503 1,602 (2,713) - - - 7,392
10) Southlands Methodist Trust 10,478 458 (589) -
(151)		 - 10,196
11) Westminster College Oxford Trust 10,311 567 (728) -
606		 - 10,756
12)The Methodist Medical Benevolent Fu 2,271 47 (43) -
(71)		 (2) 2,202
Total funds with balances > £2m 156,033 9,437 (12,661) -
(1,721)		 (990) 150,098
Other - 28 funds with balances < £2m 7,807 3,590 (4,021) (29) (5,129) (197) 2,021
Total 163,840 13,027 (16,682) (29) (6,850) (1,187) 152,119

The Connexional Funds

The Connexional Funds
20d. Restricted funds Balance at 31
August 2019
Income
Expenditure
Actuarial
losses on DB
pension
scheme
Investment
gains and
revaluation
reserve
movements
Transfers
Balance at 31
August 2020
£000
£000
£000
£000
£000
£000
£000
1) The Fund for the Support of
Presbyters and Deacons
2) Mission in Britain Fund
3) Centenary Hall Trust
4) The Fund for Property
5) The Fund for Training
6) The World Mission Fund
7) The London Mission Fund
8)The GuyChester Centre		 9,936
581
(442)
-
(296)
(66)
9,713
4,893
925
(392)
-
(216)
(60)
5,150
25,469
135
(108)
--
(25)
25,471
1,435
452
(765)
-
(43)
(54)
1,025
6,758
325
(248)
-
(22)
(39)
6,774
27,201
2,778
(5,792)
-
(541)
(744)
22,902
19,475
437
(374)
-
(766)
-
18,772
29,146
1,190
(885)
-
(221)
(280)
28,950
Total funds with balances > £2m
Other - 27 funds with balances < £2m		 124,313
6,823
(9,006)
-
(2,105)
(1,268)
118,757
10,188
560
(1,143)
(29)
(5,153)
81
4,504
Total 134,501
7,383
(10,149)
(29)
(7,258)
(1,187)
123,261

Transfers out of the World Mission Fund principally relate to £0.5m management levy paid to the general fund and £0.2m to William Leech for investment purposes.

84

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

Notes on the purposes of the main funds

1) Fund for the Support of Presbyters and Deacons

This fund exists to provide additional assistance to supernumeraries; individuals who have been permitted or directed to become supernumerary; ministers,

deacons, probationers, widows or widowers and their dependent children who are in need; ministers and deacons who are in need as a result of illness or impairment, for the purpose of enabling them to continue in or resume active work. The Fund for the Support of Presbyters and Deacons also makes grants

to the Methodist Ministers' Housing Society.

2) Mission in Britain Fund

This fund exists to further the Church's mission by making grants to local churches and circuits and to bear witness to the global character of Christian

Mission by supporting work with and among ethnically diverse communities in Britain and Ireland which have their origin in other countries.

3) Centenary Hall Trust

This trust exists to manage Church House at 25 Marylebone Road.

4) The Fund for Property

This fund exists to support various mission property development projects around the Connexion by making grants and loans for property purposes to trustees of Methodist Properties in the districts.

5) The Fund for Training

The fund has three main purposes: (a) to provide initial and further training for presbyters, deacons, lay employees and other lay persons; (b) the provision

of maintenance grants for persons undergoing such training and their dependants; (c) the maintenance, management and staffing of the Learning Network,

and the Methodist contribution to the cost of joint theological colleges.

6) The World Mission Fund

This fund has five main purposes: (a) to initiate, maintain and encourage Christian mission in other countries; (b) to encourage the establishment of churches overseas which will themselves undertake that mission within and beyond their own borders; (c) to engage in a continuing relationship of mutual help and enrichment with churches (including united churches) in the life of which Methodist missions have played a part; (d) to foster and take part in ecumenical relationships in the field of world mission, including the work of the World Council of Churches and the Churches' Commission on Mission; (e) in furtherance of these purposes, to engage in education, advocacy recruitment and fundraising.

85

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

7) The London Mission Fund

The London Mission Fund derives from historic funds used to support ministry and property schemes in London. Since the reconfiguration of the London

Districts in 2006, the Fund no longer makes individual grants, but rather allocates block grants to the qualifying districts which in turn dispense the fund for

the support of ministry, mission and property projects as part of their own grant-making functions.

8) The Guy Chester Centre

The Guy Chester Centre manages the buildings and grounds of the North Bank Estate. The Centre works within the ethos and values of the Methodist Church as set out in Our Calling. The Centre provides funding for the Learning Network.

9) Cliff College

The College was founded in 1883 to provide training for mission and evangelism to people from diverse backgrounds. The college now offers degrees validated by the University of Manchester in the areas of theology and mission as well as providing a wide variety of short courses and training events. The College is used as training centre in the Learning Network.

10) Southlands Methodist Trust

As part of the work carried out through the Learning Network, the Trust exists: (a) to support in association with the College and University the

development of Christian, and specifically Methodist, scholarship, research and innovation of local, national and global significance and to facilitate the public dissemination of such developments; (b) to enable the members of the Methodist Community and wider public in Britain and internationally to

benefit from the academic and other expertise and experience within the College and University and the facilities available within them.

11) Westminster College Oxford Trust

This Trust exists to ensure that the property and assets used by the former Westminster College Oxford, and belonging to the Methodist Church, are committed to the objectives and activities authorised by the Church. The principal objects of the Trust are the advancement of education, in particular teacher training and the advancement of further and higher education.

12) The Methodist Medical Benevolent Fund (MMBF)

The purpose of this fund is to provide financial assistance to ministers suffering from stress and exhaustion to enable them to pay for appropriate recuperative treatment to facilitate recovery. This fund also helps ministers to pay for initial medical consultation, if it is not immediately available through the NHS, to facilitate speedy diagnosis and periodic health screening.

86

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

The Methodist Church in Great Britain

21a. Endowment funds
Rank Endowment Fund
William Leech Charities Fund
Other - 7 funds with balances <£2m
Total		 Balance at 1
September
2020
Income
Expenditure
Investment
gains &
losses
Transfers
Balance at
31 August
2021
£000
£000
£000
£000
£000
£000
6,183
-
(12)
983
23
7,177
11,234
- -
1,726
228
13,188
2,063
-
(15)
416
6
2,470
19,480
-
(27)
3,125
257
22,835
-
agrees
agrees
agrees
agrees-

The Connexional Funds

21b. Endowment funds
Rank Endowment Fund
William Leech Charities Fund
Other - 7 funds with balances <£2m
Total		 Balance at 1
September
2020
Income Expenditure
Investment
gains &
losses
Transfers
Balance at
31 August
2021
£000
£000
£000
£000
£000
£000
6,183
-
(12)
983
23
7,177
11,234
- -
1,726
228
13,188
2,063
-
(15)
416
6
2,470
19,480
-
(27)
3,125
257
22,835

Transfers of £0.2m to William Leech are principally for investment purposes.

The Methodist Church in Great Britain

The Methodist Church in Great Brita in
21c. Endowment funds Balance at 1
September
2019
Income
Expenditure
Investment
gains &
losses
Transfers
Balance at
31 August
2020
£000
£000
£000
£000
£000
£000
Rank Endowment Fund
William Leech Charities Fund
Other - 7 funds with balances <£2m
Total		 6,398
-
(13)
(208)
6
6,183
11,580
- -
(566)
220
11,234
2,135
-
(4)
(75)
7
2,063
20,113
-
(17)
(849)
233
(19,480)
- - - - - - 38,960.00

The Connexional Funds

21d. Endowment funds
Rank Endowment Fund
William Leech Charities Fund
Other - 7 funds with balances <£2m
Total		 Balance at 1
September
2019
Income Expenditure
Investment
gains &
losses
Transfers
Balance at
31 August
2020
£000
£000
£000
£000
£000
£000
6,398
-
(13)
(208)
6
6,183
11,580
- -
(566)
220
11,234
2,135
-
(4)
(75)
7
2,063
20,113
-
(17)
(849)
233
(19,480)

Transfers of £0.2m to William Leech are principally for investment purposes.

87

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

The Methodist Church in Great Britain and The Connexional Funds

----- Start of picture text -----
22. Fund Transfers 2021 2020
Transfers in Transfers out Net transfer Transfers in Transfers out Net transfer
£000 £000 £000 £000 £000 £000
Unrestricted
Connexional Priority Fund (Note 19 - (5,258) (5,258) - (3,547) (3,547)
Pension Reserve Fund (Note 19) 4,622 (80) 4,542 3,112 (67) 3,045
General Fund (Note 19) 1,728 (100) 1,628 1,322 (100) 1,222
Designated Training Fund 350 - 350 1,420 - 1,420
Methodist International Centre - (46) (46) - (1,166) (1,166)
Others - (270) (270) - (20) (20)
Total 6,700 (5,754) 946 5,854 (4,900) 954
Restricted
Long-term Renewal Fund 100 - 100 100 - 100
World Mission Fund (Note 20b) - (729) (729) - (744) (744)
Guy Chester Centre - (350) (350) - (280) (280)
Fund for Training - (15) (15) - (39) (39)
Mission in Britain - (48) (48) - (60) (60)
Fund for Support of Presbyters & Deacons 6 (59) (53) - (66) (66)
Fund for property 42 (96) (54) - (54) (54)
Centenary Hall Trust - (27) (27) - (25) (25)
Others - (27) (27) - (19) (19)
Total 148 (1,351) (1,203) 100 (1,287) (1,187)
Endowments
William Leech Charities Fund 239 (11) 228 232 (12) 220
Rank Endowment 57 (49) 8 13 (6) 7
Others 29 (8) 21 8 (2) 6
Total 325 (68) 257 253 (20) 233
Grand Total 7,173 (7,173) - 6,207 (6,207) -
----- End of picture text -----

88

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued

The Methodist Church in Great Britain

----- Start of picture text -----
Unrestricted Restricted Endowment 2021
23a. Analysis of net assets between funds Funds Funds Funds Total
£000 £000 £000 £000
Intangible fixed assets 64 12 - 76
Tangible fixed assets 16,219 75,593 4,135 95,947
Investments 94,600 79,321 19,654 193,575
Current assets 14,679 7,190 92 21,961
Creditors due within one year (5,036) (8,290) (1,046) (14,372)
Creditors due after more than one year (1,220) (2,749) - (3,969)
Defined benefit pension scheme liability (1,330) (1,746) - (3,076)
Total 117,976 149,331 22,835 290,142
The Connexional Funds
Unrestricted Restricted Endowment 2021
23b. Analysis of net assets between funds Funds Funds Funds Total
£000 £000 £000 £000
Intangible fixed assets 63 - - 63
Tangible fixed assets 16,061 67,170 4,135 87,366
Investments 94,600 67,737 19,654 181,991
Current assets 14,878 4,125 93 19,096
Creditors due within one year (7,730) (4,648) (1,047) (13,425)
Creditors due after more than one year (721) (2,580) - (3,301)
Defined benefit pension scheme liability (1,330) (1,746) - (3,076)
Total 115,821 130,058 22,835 268,714
----- End of picture text -----

The Methodist Church in Great Britain
23c. Analysis of net assets between funds		 Unrestricted
Funds
Restricted
Funds
Endowment
Funds
2020
Total
£000
£000
£000
£000
Intangible fixed assets
Tangible fixed assets
Investments
Current assets
Creditors due within one year
Creditors due after more than one year
Defined benefit pension scheme liability
Total		 83
16
-
99
18,857
75,374
-
94,231
81,196
88,603
19,313
189,112
12,610
9,745
147
22,502
(5,307)
(11,871)
20
(17,158)
(1,107)
(7,853)
-
(8,960)
(13,890)
(1,895)
-
(15,785)
92,442
152,119
19,480
264,041

89

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

90

The Connexional Funds

The Connexional Funds
Unrestricted Restricted Endowment 2020
23d. Analysis of net assets between funds Funds Funds Funds Total
£000 £000 £000 £000
Intangible fixed assets 83
 - - 83
Tangible fixed assets 18,535 67,780 - 86,315
Investments 81,196 61,799 19,313 162,308
Current assets 12,290 6,639 147 19,076
Creditors due within one year (6,992) (7,936) 20 (14,908)
Creditors due after more than one year (1,112) (3,126) - (4,238)
Defined benefit pension scheme liability (13,890) (1,895) - (15,785)
Total 90,110 123,261 19,480 232,851

24. Revaluation reserves

The revaluation reserves balances included in the restricted and unrestricted reserves are analysed as follows:

The Methodist Church in Great Britain

The Methodist Church in Great Britain
24a. Revaluation reserve 1 September
**2020 **		 Movement 31 August
2021
£000 £000 £000
Unrestricted 7,594 0 7,594
Restricted 54,282 946 55,228
Total 61,876 946 62,822

The Connexional Funds

The Connexional Funds
24b. Revaluation reserve 1 September
2020 Movement
31 August
2021
£000
£000
£000
Unrestricted
Restricted		 7,591
0
7,591
52,346
0
52,346
Total 59,937
0
59,937
The Methodist Church in Great Britain
24c. Revaluation reserve		 1 September
2019 Movement
31 August
2020
£000
£000
£000
Unrestricted
Restricted		 7,594
-
7,594
59,282
(5,000)
54,282
Total 66,876
(5,000)
61,876

The Connexional Funds

The Connexional Funds
24d. Revaluation reserve 1 September
2019 Movement
31 August
2020
£000
£000
£000
Unrestricted
Restricted		 7,591
-
7,591
57,346
(5,000)
52,346
Total 64,937
(5,000)
59,937

91

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

----- Start of picture text -----
2021 2020
25. Expenses reimbursed to the trustees Number of Number of
trustees £000 trustees £000
Travel and other expenses reimbursed 26 16 55 36
Total Remuneration
Pension Contributions including Pensions
26. Trustees' remuneration Total Total Total Total
2021 2020 2021 2020
£000 £000 £000 £000
Mr Doug Swanney 17 17 135 135
The Revd Dr Jonathan R Hustler 7 7 43 42
Deacon Karen McBride 7 7 42 41
The Revd Gillian M Newton 7 7 42 41
The Revd Leslie M Newton 7 7 42 41
The Revd Michaela A Youngson 7 7 42 41
The Revd Dr Jongikaya Zihle 7 7 42 41
The Revd Ruth Gee 6 7 40 42
The Revd Dr Barbara Glasson 3 7 20 42
The Revd Rachel Parkinson - 7 - 41
The Revd Dr Jennifer Hurd - 7 - 40
The Revd Richard J Teal - 7 - 37
Mrs Louise C Wilkins - 5 - 37
Total 68 99 448 621
----- End of picture text -----

Of the trustees listed above, 9 were in the Connexional team or District Chairs (2020: 13). Their aggregate total emoluments including pension contributions and national insurance for this work and not in their role as trustees amounted to £0.4m (2019: £0.6m). Their appointment as trustees is in accordance with Standing Order No. 210 of the Methodist Church.

27. Trustees, related parties and connected organisations

Outlined below is a list of those bodies considered to be the main related parties, which together with The Methodist Church in Great Britain report separately each year to the Methodist Conference, the ultimate controlling body. Details of the transactions occurring during the year and amounts owing by or to the related parties as at 31 August are stated for each one as appropriate.

Trustees for Methodist Church Purposes (a)
Methodist Ministers' Housing Society (MMHS) (b)
Methodist Ministers Pension Scheme (MMPS) (c)
Lesnes Abbey Circuit (d)
The Queen's Foundation for Ecumenical & Theological Education (e)
Methodist International Centre Ltd(f)		 2021
Income
from
related
party
Payments
to/(from)
related
party
Loans from
related
party
Amount
owed
by/(to)
related
£000
£000
£000
£000
16 190
- -
-
-
- -
66 - - -
- - - 10
120 1,042
- -
- 1
- 786

92

The Methodist Church in Great Britain

Notes to the consolidated financial statements For the year ended 31 August 2021 (continued)

(a) The payment to Trustees for Methodist Church Purposes (TMCP) is for various administration charges, including legal services rendered during the year. The income is for payroll administration charges.

(d) A loan advanced to the Lesnes Abbey Circuit in order to purchase the London Mission Fund's interest in a manse at 11 Eaglesfield Road, London. The loan is repayable in equal instalments over 9 years. Refer to note 16.

(e ) A payment of £1.04m (2020: £1.05m) was made to The Queen's Foundation for Ecumenical Theological Education being tuition fees for the 2020-21 academic year. Rent of £120k was received from The Queen's Foundation for the period Sep 20 to Aug 21.

In May 2020, the Methodist Council made a loan of £786k to MIC Ltd to support it through the Covid-19 lockdown. It is due to be repaid in full in May 2024.

2020
Income
from
related
party
Payments
to/(from)
related
party
Loans from
related
party
Amount
owed
by/(to)
related
party
£000
£000
£000
£000
9
185
- -
- 38
- -
85-- -
--- 20
120 1,046
- -
149 8
-
786
Trustees for Methodist Church Purposes (a)
Methodist Ministers' Housing Society (MMHS) (b)
Methodist Ministers Pension Scheme (MMPS) (c)
Lesnes Abbey Circuit (d)
The Queen's Foundation for Ecumenical & Theological Education (e)
Methodist International Centre Ltd(f)

In addition to this, as set out in Note 28, the PASLEMC has been treated as a group plan with the Methodist Council as the sponsoring employer with legal responsibility for the plan. Participation in a group pension plan is a related party transaction. In the absence of a contractual agreement or policy for charging the net defined benefit cost of the plan as a whole to individual group entities, the Council treats the contributions paid to the Scheme by other group employers as a credit in its Statement of Financial Activities.

There are also related party transactions included in the management of the Church's investment portfolio by the Central Finance Board (CFB). Further, numerous transactions and balances occur between the Methodist Council, the districts, circuits and churches. In theory the Methodist Council could have dealings with any part of the wider Methodist Church. The main activities being:

93

The Methodist Church in Great Britain

Notes to the consolidated accounts For the year ended 31 August 2021 (continued)

28. Defined benefit pension scheme commitments

The PASLEMC Scheme closed to new entrants and the future accrual of pensionable service with effect from 31 May 2019. Members who were active when the Scheme closed (“closure members”) are entitled to a retirement pension based on the better of:

The FRS 102 calculations have been carried out by Debra Smith, Fellow of the Institute and Faculty of Actuaries, BWCI Consulting Ltd. The scheme assets are stated at the fair values at the respective balance sheet dates.

The assets and liabilities of the schemes for both The Methodist Church in Great Britain and The Connexional Funds at 31 August are:

The assets and liabilities of the schemes for both The
August are:		 Methodist Church in Great Britain and The Conn exional Fund s at 31
Unrestricted Restricted 2021 2020
PASLEMC SSMP Total Total
£000 £000 £000 £000
Fair value of scheme assets 95,103
 - 95,103 81,507
Sub Total
Present value of scheme liabilities		 (96,433)
(1,330)		 (1,746)
(1,746)		 (98,179)
(3,076)		 (97,292)
(15,785)
Unrecognised assets - - - -
Net defined benefit liability (1,330) (1,746) (3,076) (15,785)

The amounts charged to the statement of financial activities for both The Methodist Church in Great Britain and The Connexional Funds in respect of the two schemes are:

Service cost (before contributions from other group employers)
Interest cost on scheme liabilities
Interest income on plan assets
Net finance costs
Total		 Unrestricted
Restricted
2021
2020
PASLEMC
SSMP
Total
Total
£000
£000
£000
£000
144 - 144 179
1,511 28 1,539 1,641
(1,297)
(31)
(1,328)
(1,562)
214
(3) 211
79
358
(3) 355
258

94

The Methodist Church in Great Britain

Notes to the consolidated accounts For the year ended 31 August 2021 (continued)

28. Defined benefit pension scheme commitments (continued)

The amounts recognised as other gains/(losses) in The Methodist Church in Great Britain and Connexional Funds statement o financial activities:

Actual return on scheme assets
Amounts included in net interest on the net defined liability
Other actuarial gains/losses
Re-measurement gains and losses recognised in SoFA
Movement in unrecognised assets		 Unrestricted Restricted
2021
2020
PASLEMC
SSMP
Total
Total
£000
£000
£000
£000
14,832 106
14,938
(2,475)
(1,297)
(31)
(1,328)
(1,562)
(1,322)
80
(1,242)
(5,119)
- - - -
12,213
155
12,368
(9,156)

The changes in present value of defined benefit pension obligations for both The Methodist Church in Great Britain and The Connexional Funds are analysed as follows:

At 1 September
Service cost
Interest on obligation
Contributions by members
Benefits paid
Actuarial gains/losses
At 31 August		 2021
2020
2021
2020
2021
2020
£000
£000
£000
£000
£000
£000
95,397 90,303
1,895 1,934 97,292 92,237
144 179
- - 144 179
1,511 1,609
28 32 1,539 1,641
- -
- - - -
(1,941)
(1,783)
(97)
(101)
(2,038)
(1,884)
1,322
5,089
(80)
30 1,242
5,119
96,433
95,397
1,746
1,895
98,179
97,292
Unrestricted
Restricted
PASLEMC
SSMP
TOTAL

The changes in the fair value of the plan assets during the year for both The Methodist Church in Great Britain and the Connexional Funds are analysed as follows:

----- Start of picture text -----
Unrestricted Restricted
PASLEMC SSMP TOTAL
2021 2020 2021 2020 2021 2020
£000 £000 £000 £000 £000 £000
At 1 September 81,507 85,069 - - 81,507 85,069
Interest on assets 1,297 1,525 - - 1,297 1,525
Contributions by employers 1,097 1,097 - - 1,097 1,097
Contributions by members - - - - - -
Administration expenses (392) (398) - - (392) (398)
Benefits paid (1,941) (1,783) - - (1,941) (1,783)
Actuarial return less interest income
- -
on plan assets 13,535 (4,003) 13,535 (4,003)
At 31 August 95,103 81,507 - - 95,103 81,507
- - - - - -
Unrecognised assets
Net Defined Benefit Liability 1,330 13,890 1,746 1,895 3,076 15,785
----- End of picture text -----

95

The Methodist Church in Great Britain

Notes to the consolidated accounts For the year ended 31 August 2021 (continued)

28. Defined benefit pension scheme commitments (continued)

Principal actuarial assumptions at the balance sheet date in respect of the two schemes were:

PASLEMC PASLEMC SSMP SSMP
2021 2020 2021 2020
%pa **%pa ** **%pa ** **%pa **
Discount rate at end of year 1.7 1.6 1.6 1.5
Discount rate at start of year 1.6 1.8 1.5 1.7
RPI Inflation 3.5 3.1 3.6 3.3
CPI Inflation 2.8 2.2 - -
Rate of increase in Pensionable earnings 2.8 2.2 - -
Rate of increase in deferred pensions pre 2009 LPI 5% 2.8 2.2 3.5 3.2
Rate of increase in deferred pensions post 2009 LPI 2.5% 2.5 2.2 3.5 3.2
Rate of increase in pension in payments fixed 5% 5.0 5.0 - -
Rate of increase in pension in payments LPI 5% 1 September 2019 3.3 3.0 - -
Rate of increase inpension inpayments LPI 2.5% 1 September 2019 2.3 2.1 - -

Mortality assumptions for the two schemes:

The mortality assumptions are based on standard mortality tables which allow for future mortality improvements. PASLEMC - The assumptions are that a member aged 65 will live on average until age 89 if they are male and until age 90 if female. For a member currently aged 50 the assumptions are that if they attain age 65 they will live on average until age 89 if they are male and until age 90 if female.

SSMP - The assumptions are that a member aged 65 will live on average until age 87 if they are male and until age 89 if female. For a member currently aged 60 the assumptions are that if they attain age 65 they will live on average until age 87 if they are male and until age 90 if female.

Analysis of scheme assets

2021 2020
2021
2020
PASLEMC
SSMP
Equities
Gilts
Corporate Bonds
Property
Cash
Liability Driven Investment
Annuities		 44.3
52.2
22.6
19.6
- -
55.8
58.6
4.9
4.8
12.2
12.8
8.4
9.1
5.4
5.1
7.6
8.6
4
3.9
30.4
20.0
- -
4.4
5.3
- -

96

The Methodist Church in Great Britain

Notes to the consolidated accounts For the year ended 31 August 2021 (continued)

28. Defined benefit pension scheme commitments (continued)

The Methodist Ministers' Pensions Scheme (MMPS)

The accounting treatment and judgements made in respect of the MMPS are set out in Note 2. The defined benefit pension scheme position in respect of the MMPS that would have been charged to these financial statements had the scheme been included are set out below. The FRS102 Calculations were carried out by Debra Smith, Fellow of the Institute and Faculty of Actuaries, BWCI Consulting Ltd.

a. The amounts that would have been charged to the Statement of Financial Activities are as follows:

2021 2020
£000 £000
Service cost 8,507 8,327
Interest cost on scheme liabilities 7,472 8,260
Interest Income on plan assets (7,254) (8,704)
Interest on unrecognised assets
Net Finance Costs		 -
218
 343
(101)

b. The amounts that would have been charged to the Statement of Financial Activities as recognised gains and losses are as follows:

Actual Return on Scheme assets
Amounts included in net interest on the net defined liability
Other Actuarial gains/losses
Movement in unrecognised assets
Re-measurement gains and losses recognised in SOFA		 2021
2020
£000
£000
96,072
(19,395)
(7,254)
(8,704)
(33,879)
(11,991)
(32,967)
20,524
21,972
(19,566)

c. The changes in the present value of the defined benefit obligation were:

----- Start of picture text -----
2021 2020
£000 £000
Opening defined benefit obligation 508,047 495,683
Service cost 8,507 8,327
Interest cost 7,472 8,260
Cost of benefit Changes - -
Contributions by members 3,487 3,402
Benefits paid (19,849) (19,617)
Actuarial (gains)/losses 33,879 11,992
Closing defined benefit obligation 541,543 508,047
----- End of picture text -----

The weighted average duration of the liabilities of the Scheme was 15 years as at 31 August 2021.

97

The Methodist Church in Great Britain

Notes to the consolidated accounts For the year ended 31 August 2021 (continued)

28. Defined benefit pension scheme commitments (continued)

The Methodist Ministers' Pensions Scheme (MMPS)

The accounting treatment and judgements made in respect of the MMPS are set out in Note 2. The defined benefit pension scheme position in respect of the MMPS that would have been charged to these financial statements had the scheme been included are set out below. The FRS102 Calculations were carried out by Debra Smith, Fellow of the Institute and Faculty of Actuaries, BWCI Consulting Ltd.

a. The amounts that would have been charged to the Statement of Financial Activities are as follows:

2021
2020
£000
£000
Service cost
Interest cost on scheme liabilities
Interest Income on plan assets
Interest on unrecognised assets		 8,507
8,327
7,472
8,260
(7,254)
(8,704)
-343
Net Finance Costs 218
(101)

b. The amounts that would have been charged to the Statement of Financial Activities as recognised gains and losses are as follows:

2021
2020
£000
£000
Actual Return on Scheme assets
Amounts included in net interest on the net defined liability
Other Actuarial gains/losses
Movement in unrecognised assets		 96,072
(19,395)
(7,254)
(8,704)
(33,879)
(11,991)
(32,967)
20,524
Re-measurement gains and losses recognised in SOFA 21,972
(19,566)

c. The changes in the present value of the defined benefit obligation were:

2021
2020
£000
£000
Opening defined benefit obligation
Service cost
Interest cost
Cost of benefit Changes
Contributions by members
Benefits paid
Actuarial (gains)/losses		 508,047
495,683
8,507 8,327
7,472 8,260
-
-
3,487
3,402
(19,849)
(19,617)
33,879
11,992
Closing defined benefit obligation 541,543
508,047

The weighted average duration of the liabilities of the Scheme was 15 years as at 31 August 2021.

98

The Methodist Church in Great Britain

Notes to the consolidated accounts For the year ended 31 August 2021 (continued)

28. Defined benefit pension scheme commitments (continued)

The mortality assumptions for the Methodist Ministers’ Pension Scheme were:

The mortality assumptions are based on standard mortality tables which allow for future mortality improvements. The assumptions are that a member aged 65 will live on average until age 89 if they are male and until age 89 if female. For a member currently aged 55 the assumptions are that if they attain age 65 they will live on average until age 89 if they are male and until age 90 if female.

The major categories of plan assets as percentage of total plan assets for the Scheme were:

2021 2020
% %
Equities 44.1 56.6
Gilts 0.1 0.1
Corporate Bonds 15.3 15.6
Index linked Bonds - -
Property 8.5 9.3
Cash 10.0 4.9
Liability driven Investment 19.2 12.1
Impact investing 2.8 1.4

29. Non-adjusting events after the end of the reporting period

In January 2022 the group entered into an agreement to sell Methodist Church House (the registered office and headquarters of the Methodist Church in Great Britain), which is expected to complete in June 2022. Additionally in January 2022, the group has entered into an agreement to purchase replacement premises. An estimate of the financial impact cannot be made at the point of signing the financial statements for the year ended 31 August 2021.

99

Trustee and Committee Memberships

The membership for 2020/2021 and 2021/2022 are listed below.

Methodist Council:

2020 / 2021

New Members from 1 September 2020 are marked with one asterisk (*)

Mrs Joanne Anderton Mrs E Jill Baker (Chair) Mr Timothy J Baker The Revd Paul H Booth The Revd Dr Adrian Burdon Mr David Burton The Revd Dr Joanne Cox-Darling The Revd Mark Dunn-Wilson Mrs Barbara Easton Mr Carl Fairclough The Revd Dr Andrew M Fox The Revd Ruth G S Fry The Revd Ruth M Gee The Revd Dr Barbara C Glasson Mr Bala Gnanapragasam Mr Peter Gregson The Revd Jeremy H A Hackett Ms Charlotte Hambly* The Revd Novette Headley

The Revd Sonia M Hicks The Revd Beverly Hollings Mrs Beti W T Holmes The Revd Dr Jonathan R Hustler The Revd Carmel Ieraci The Revd Ermal B Kirby Mr Joe Lambert Mrs Carolyn J Lawrence Mrs Heather Lovelady Mr Andrew Lowe Professor David Matthews Mrs Val Mayers* Deacon Karen McBride Mr Alister McClure Professor Clive Marsh Professor Ken Mortimer Dr Daleep S Mukarji The Revd Gillian M Newton The Revd Leslie M Newton

Mr Keith Norman Mrs Helen Norton The Revd Michael D Parker The Revd Malcolm Peacock Mr Michael Pryke Mr Graham Russell The Revd S Mark Slaney The Revd Billy Slatter Ms Sandie Smith The Revd Kate Strange The Revd O Mark Street Mr Douglas Swanney The Revd Timothy A Swindell The Revd Richard J Teal The Revd Alison E Walker Mrs Margaret Webber Mr Richard Wills The Revd Michaela A Youngson The Revd Dr Jongikaya Zihle

2021 / 2022

New Members from 1 September 2021 are marked with two asterisks (**)

Mrs Joanne Anderton Mrs Beti W T Holmes The Revd Michael D Parker Mr Stephen Arnold The Revd Dr Jonathan R Hustler The Revd Malcolm Peacock Mrs E Jill Baker (Chair) The Revd Ermal B Kirby Mr Graham Russell The Revd Karen Beecham The Revd Helen R Kirk The Revd S Mark Slaney Mr Anthony Boateng ** Mr Joe Lambert The Revd Billy Slatter The Revd Paul H Booth Mrs Carolyn J Lawrence Ms Sandie Smith Mr Mark Braithwaite The Revd Angela Long The Revd Kate Strange The Revd Dr Adrian Burdon Mr Andrew Lowe The Revd O Mark Street Mr David Burton Professor David Matthews Mr Douglas Swanney The Revd Dr Joanne Cox-Darling Mrs Val Mayers The Revd Timothy A Swindell Mrs Barbara Easton Deacon Karen McBride The Revd Rebekah Stennett The Revd Simon C Edwards Mr Alister McClure Mrs Jenny Taylor ** Mr Carl Fairclough Dr Daleep S Mukarji The Revd Richard J Teal The Revd Ruth G S Fry The Revd Gillian M Newton The Revd Graham Thompson Mr Bala Gnanapragasam The Revd Leslie M Newton The Revd Alison E Walker Mr Peter Gregson Mr Keith Norman Mrs Margaret Webber The Revd Jeremy H A Hackett Mrs Helen Norton Ms Verity Wild Ms Charlotte Hambly The Revd Nick Oborski The Revd Michaela A Youngson The Revd Sonia M Hicks Dr Hellen Okello** The Revd Dr Jongikaya Zihle

A full list of the trustees, being the members of the Methodist Conference, is available on request from the registered office and on the Charity Commission website.

100

The Strategy and Resources Committee

The membership for 2020/2021 and current year are listed below:

Voting Members

Ms Janet Arthur [to 31 August 2021] Dr Daleep S Mukarji (Chair) Mr Edward Awty [to 31 August 2021] The Revd Gillian M Newton Mrs Anne Bolton The Revd Michael D Parker Professor David Matthews The Revd Timothy A Swindell The Revd Loraine N Mellor The Revd Marcus Torchon The Revd Ruth Midcalf Ms Helen Woodall [to 31 August 2021] Mrs Shelagh Morgan

Non-voting members

Mrs Joanne Anderton The Revd Ruth M Gee [to 31 August 2021] The Revd Dr Jonathan R Hustler Mr Douglas Swanney The Revd Michaela A Youngson [from 1 September 2021]

Other members of the senior management group may attend by invitation as the business shall require.

Induction of new SRC members normally includes: conversations with the chair of SRC and the senior staff of the Connexional Team; a mentoring relationship with an experienced member of SRC; and invitations to share in the induction sessions for Council members.

The Finance Sub-Committee (FSC) of the Strategy and Resources Committee (SRC)

The membership of the committee is:

Voting Members Mr Edward Awty [to 31 August 2021] Mr Malcolm Pearson Mrs Helen Blair [from 1 September 2020] The Revd Stephen J Radford Mrs Sue Haworth The Revd Timothy A Swindell (Chair)

Members of the senior management group may attend by invitation as the business shall require.

The Audit and Risk Assurance Committee

The membership of the committee is:

Voting Members

Mrs Sarah Atwell-King Mrs Susan M Mortimer Mr Adrian Burton Mr Michael Rickard Mr Alan Kershaw (Chair)

Non-voting members Mr Edward Awty [to 31 August 2021] The Revd Timothy A Swindell

Members of the senior management group may attend by invitation as the business shall require.

101

Reference and Administrative Details

Names and addresses

The address of the Office of the Conference for the purposes of the Methodist Church Act 1976 and any other legislation is:

The Methodist Church Methodist Church House 25 Marylebone Road London NW1 5JR Tel: 020 7486 5502 Web: www.methodist.org.uk

Executive Officers

The Revd Dr Jonathan R Hustler The Revd Michaela A Youngson Mr Douglas Swanney Mrs Joanne Anderton

Custodian Trustee:

Trustees for Methodist Church Purposes Central Buildings Oldham Street Manchester M1 1JQ

Methodist Missionary Trust Association Methodist Church House 25 Marylebone Road London NW1 5JR

Investment Managers:

Central Finance Board of the Methodist Church 9 Bonhill Street London EC2A 4PE

Bankers:

HSBC plc Westminster Branch 4-8 Victoria Street London SW1H 0NJ

Independent Auditor:

RSM UK Audit LLP Statutory Auditor, Chartered Accountants St Philips Point Temple Row, Birmingham West Midlands, B2 5AF

Solicitors : Farrer & Co 66 Lincoln's Inn Fields London WC2A 3LH

102