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2020-12-31-accounts

LEEDS DIOCESAN BOARD OF FINANCE

ANNUAL REPORT AND FINANCIAL STATEMENTS

For the year ended 31 December 2020

LEEDS DIOCESAN BOARD OF FINANCE

Company number - 8823593 Registered charity number – 1155876

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TABLE OF CONTENTS

Page Numbers

Legal Objects 3
Strategic Report:
Strategic Aims 4
Objectives for the year 5
Activities and Achievements in the year 6
Future plans 9
Financial review 9
Principal risks and uncertainties 14
Structure and Governance 15
Trustees Responsibilities 20
Administrative details 21
Independent Auditors Report 23
Statement of Financial Activities 26
Income and Expenditure Account 27
Balance Sheet 28
Cash Flow Statement 29
Notes to the Financial Statements 30

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TRUSTEES REPORT 2020

The Trustees, who are also Directors for the purposes of company law, present their annual report, together with the audited financial statements, for the year ended 31 December 2020.

The Directors/Trustees are one and the same and in signing as Trustees they are also signing the strategic report sections in their capacity as Directors.

This combined report satisfies the legal requirements for:

LEGAL OBJECTS

The Diocese of Leeds is one of 41 Dioceses which cover the whole of England. The Diocese covers West Yorkshire, the western part of North Yorkshire, and parts of South Yorkshire, Lancashire and County Durham. The Diocese comprises five Archdeaconries which form the Episcopal Areas. It covers an area of around 2,425 square miles, housing a population of around 2,642,400. The Diocese has 600 church buildings in 450 parishes with 325 stipendiary clergy, 85 self-supporting clergy and 450 clergy with Permission To Officiate (“PTO”) along with 360 Readers, 80 authorised lay pastoral minsters and 35 chaplains. There are also 240 Church of England schools and academies within the Diocese.

The Leeds Diocesan Board of Finance’s (“LDBF”) principal objective is to promote, assist and advance the work of the Church of England in the Diocese of Leeds by acting as the financial executive of the Leeds Diocesan Synod.

The LDBF has the following statutory responsibilities:

The strategic priorities of the company are established by the Diocesan Synod in communication with Deanery Synods, PCCs and the Bishop of Leeds (in respect of his responsibility for the provision of the cure of souls). To this end, significant time and effort is committed to communication between and with these bodies, as well as with the church nationally.

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STRATEGIC AIMS

The main role of the LDBF is to identify and manage the financial aspects of ministry and mission within the Diocese, so as to provide appropriate personnel and financial resources to assist the Diocesan Synod, Bishop’s Council and parishes to further the mission and strategic priorities in the Diocese.

LDBF’s principal activity is to promote, facilitate and assist with the work and purposes of the Church of England for the advancement of the Christian faith in the Diocese of Leeds.

LDBF’s strategy for achieving its objectives is to develop and maintain a sound financial structure to enable it to continue supporting the clergy through the payment of stipends, manage parsonages and other ministerial housing, and also by providing other facilities and resources in support of the ministry of both clergy and lay people in parishes across the Diocese.

Diocese of Leeds Strategy

In March 2019, the Leeds Diocesan Synod approved a new strategy for 2019 – 2024, ‘Maturing in Christ’. The strategy framework is as follows:

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Sharing a vision for:
Confident Christians
Growing churches
Transforming communities
Characterised by:
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Loving
Living
Learning
Enabled by:
Clergy and lay together
Purposeful resourcing
Dynamic partnerships
Achieved by:
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Thriving as a distinctive diocese
Reimagining ministry
Nurturing lay discipleship
Building leadership pathways
Growing young people as Christians
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The diocesan strategy creates a route map for five years and aids our progress towards the diocesan vision of Confident Christians, Growing Churches, Transforming Communities. The five goals within it are the means by which we can mature into the kind of church we are called to be across this diverse diocese and by which we will be equipped to reach out to the world around us.

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Goal 1: Thriving as a distinctive diocese whose culture is shaped by a shared vision and values This goal is about how we all work together as a large, young diocese, from parishes, benefices and deaneries to episcopal areas and diocesan staff. Objectives cover our planning, culture and finances.

Goal 2: Reimagining ministry

This goal is about how we can meet the challenges of the 21[st] century in the way we run our churches and reach out to our communities. Objectives cover church growth, how clergy and lay lead together, our impact on the environment and local communities, and how we relate to those only slightly connected to church.

Goal 3: Nurturing lay discipleship

This goal is about helping people to grow in faith and live it out on a daily basis. Objectives cover running nurture courses, helping people to express their faith confidently, looking at undertaking deeper learning or training and linking Sunday worship with the rest of the week.

Goal 4: Building leadership pathways

This goal is about having the right mechanisms in place to help both lay people and clergy develop as leaders. Objectives cover supporting the laity in their call to be leaders, increasing the number of ordinands, curates and interns and helping people to grow as leaders outside the church.

Goal 5: Growing young people as Christians

This goal is about reversing the decline in young people coming to faith. Objectives cover making sure all churches are welcoming places for, and actively draw in, children and young people; enabling young people to participate in community-based initiatives; and supporting faith development in our church schools.

To view the full strategy documents please visit: www.leeds.anglican.org/strategy

OBJECTIVES FOR THE YEAR

In response to the above strategic aims the following objectives were set for 2020:

Through carrying out these objectives and in promoting the whole mission of the church (pastoral, evangelistic, social and ecumenical) the Trustees are confident (having had regard to Charity Commission guidance) that LDBF delivers public benefit through community engagement, resourcing education and supporting those in need both spiritually and physically.

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ACTIVITIES AND ACHIEVEMENTS IN THE YEAR

Support for the Diocese's mission and strategic aims is delivered by the Bishop and his senior team through the LDBF Board. The team is supported by a number of key advisers including Legal, HR, Finance, Education, Property and Safeguarding. The role of those employed to work in the central support of the Diocese is largely to:

Diocesan Strategy

The roll out of the strategy in 2020 was impacted as the response to the pandemic dominated much of the available capacity at diocesan and local church level. This meant that some planned activities were paused, whilst other initiatives where promoted as they added value as churches dealt with lockdown.

The strategy has been effective in providing a framework to help guide the prioritisation of resource within the diocese and encouragement has been provided to PCCs to also do this as they plan how they might emerge well in 2021.

The focus over the last year has been on establishing clear reporting of progress and establishing mechanisms to achieve this. Alongside existing data sources, a specific benchmark survey was prepared to be launched in November. However, the imposition of a second national lockdown, followed by Advent led to a decision to hold the survey until 2021 to ensure a greater response rate. The survey was developed with the Church Army and has been designed to be repeated each year to enable progress to be tracked.

Regular reporting to the Bishop’s Strategy Group and the Diocesan Board of Finance is provided and each goal now has a senior sponsor as well as a Diocesan Officer who has been assigned responsibility to championing action.

The following sections set out key developments over the past year against each of the five strategy goals:

1. Thriving as a distinctive diocese

Having put a clear plan for sustainability in place for the start of the year, the pandemic had a profound impact on 2020 planned income and much of the work through the year has been on ensuring the Diocese remains financially stable. Key highlights include:

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2. Reimagining ministry

During Covid 19, reimagining ministry has been a necessity, though survival rather than growth mode has been understandably common. Key highlights include:

SDF-funded programmes are running in both Leeds and Bradford – five Resource Churches in Leeds, Holy Trinity Boar Lane as a centre for weekday mission and ministry, the Diocesan Intern Programme, the City Centre Resource Church in Bradford (Fountains) and five Bradford Resourcing Churches.

3. Nurturing lay discipleship

The importance of our laity has been clear throughout 2020. Key highlights include:

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4. Building leadership pathways

Plans for 50% increases in ordinands and curates are progressing well. Progress has included the following:

5. Growing young people as Christians

The Education team and Children, Young People and Families Team have worked closely together over 2020. A number of key initiatives have been implemented, including:

The restriction on children and youth work through 2020 has limited the ability to progress on a number of key areas, but there has been significant activity to enable parents and schools to support young people access resources and talk about their faith.

Diocesan Board of Education (“DBE”)

The impact of Covid on the work of the DBE was significant given much of the engagement with schools would usually be face to face through school visits or training and CPD activity. Despite this, there was a continued increase in the growth in the number of schools working with the DBE with 90% taking up the service level agreement offer. The Team responded quickly to the need to move training and CPD work to a virtual offer and schools and other stakeholders were grateful for the continued support provided at this unprecedented time. The closure of schools saw the suspension of the statutory inspection schedule (SIAMS).

The DBE continue to deliver on Year 2 of the 5 year strategy and a particular highlight was the collaborative work with Children & Young Peoples Team on the Rhythm of Life initiative. The resources produced for schools for Advent were positively received and a similar resource pack will feature in 2021 for Lent. 2021 will undoubtedly focus on how schools recover after Covid and it is anticipated that DBE officers will continue to provide much needed professional and pastoral support to school leaders and governors.

Volunteers

The Diocese of Leeds is dependent on the huge number of people involved in church activities both

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locally and at diocesan level. We believe that the number of active volunteers (or volunteer hours) given to the mission and ministry of the church is a key indicator of the health of a church. The service provided to a community through church volunteering also has a significant impact on people’s relationship to the church particularly at times of crisis. We greatly value the considerable time and support given by all the volunteers across the Diocese in pursuit of our mission.

FUTURE PLANS

The majority of the budget continues to be directed towards supporting ministry and mission in every parish. The Trustees will continue to set annual budgets as appropriate and in line with the reserves policy. The ongoing objective is to resource Diocesan needs, as determined by Synod and informed by local and national Church institutions.

In addition to the day-to-day activities of the LDBF, the following will be a key focus for the Diocese and the LDBF in 2021:

FINANCIAL REVIEW

Financial Performance

In 2020 the LDBF recorded a net surplus before investment gains (excluding pension valuation movements) of £42,000 on unrestricted funds. This was £643,000 lower than the prior year outturn (2019: £685,000 surplus before investment gains and excluding pension valuation movements) but ahead of the 2020 budget. The 2020 surplus includes a £1,026,000 Sustainability Grant from the Archbishops Council and a £1,000,000 anonymous donation, and therefore, the underlying unrestricted result is a substantial deficit rather than a surplus. The LDBF expresses its deep thanks for these one-off contributions, which have had a significant impact on the final outturn.

In order to support the unrestricted position going forward, the LDBF agreed to make transfers from restricted funds to pay the 2020 clergy pension deficit contribution (£938,000) and expects to do the same for the remaining two years of the agreed contributions (2021: £576,000 and 2022: £532,000). Other fund transfers were made from restricted funds where expenditure was incurred within the general fund that was eligible for those funds (see Note 14).

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The Parish Share request for 2020 was £15,588,000 (2019: £15,542,000), of which it was budgeted that £13,992,000 would be received. Actual receipts relating to the 2020 Parish Share request amounted to £11,489,000 (2019: £13,454,000), representing a collection rate of 73.7% (2019: 86.6%). In addition, Parish Share receipts of £117,000 were received against the historic share outstanding from previous years (2019: £221,000) and voluntary contributions of £103,000 were made (2019: £204,000).

Note 2 to the financial statements has been prepared in accordance with the guidance agreed nationally to show the total receipt of income from parishes including receipts for a previous year. The Trustees are grateful to all parishes for their Parish Share payments and especially to those parishes that make their Parish Share payments by monthly instalments, which is essential in controlling the Diocese’s cash flow.

Expenditure from unrestricted funds on charitable activities reduced by £323,000 to £20,402,000 (2019: £20,725,000). The main reason for this was lower Support for ministry (£318k), Retreat Centre (£117k) and Education (£82k) costs, partly offset by higher Ministry and Mission (£140k) costs and higher contributions to Archbishops’ Council (£53k).

Unrestricted reserves at 1[st] January 2019 were reduced by £965,000, reflecting an increase in the value of Value-Linked Loans which it was identified had not been revalued correctly prior to 2018 (see Note 21).

Across all the funds, the capital values of investments increased by £1,107,000 (2019: £3,296,000). As a result, there was an overall funds increase of £1,300,000 (2019: £8,363,000).

The Trustees have prepared a budget for 2021 based on no increase in stipend and salary costs and targeting a share collection rate of 83%. Including the transfer of £500,000 from restricted reserves to fund applicable activities, the budget is for a deficit of £1,167,000. However, in light of the ongoing impact of Covid-19 achieving the 2021 budget appears to be challenging.

External factors affecting performance

The Parish Share, which is contributed by PCCs towards the ministry and other costs of the Diocese, is a voluntary contribution and is budgeted to provide 66% of the Diocesan income in 2021. In addition, the Diocese has significant payments to the clergy and staff pension schemes in order to contribute towards covering pension fund deficits.

Principal funding sources

In 2020 around 57.0% (2019: 64.2%) of unrestricted income of the LDBF came from the Parish Share and 20.5% (2019: 18.7%) from the National Church.

Financial sustainability

LDBF has sound financial management, however, the Trustees remain conscious of the risks associated with the Parish Share fund collection and therefore its ability to adequately resource Diocesan activity. This is particularly the case given the Covid-19 pandemic, which began in early 2020 and is still affecting the activities of parish churches and, therefore, the LDBF at the signing of these accounts. It is highly unlikely that Parish Share and some other income sources will return to “normal” levels in 2021. However, the Trustees are confident this can be absorbed through a combination of reductions in expenditure (as detailed in a Board approved Cost Review); the receipt of National Church liquidity support (automatically provided to all qualifying dioceses); and the appropriate utilisation of restricted reserves (e.g. Pastoral Fund and Stipends Fund).

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Going concern

The financial statements have been prepared on a going concern basis. The Trustees have taken note of the guidance issued by the Financial Reporting Council on Going Concern Assessments in determining that this is the appropriate basis of preparation of the financial statements and have considered a number of factors. As noted above, the Covid-19 pandemic has created a number of financial challenges that must be navigated. The Trustees are confident that plans in place will enable the LDBF to come through the ongoing disruption and that the Cost Review undertaken has provided a structure to balance the budget over the longer term. As a consequence, the Trustees have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts.

Key Management remuneration policy

The policy for remunerating key management is in accordance with the salary scales approved annually by the Leeds Diocesan Board.

Significant Property Transactions

Land and buildings purchased and disposed of during the year totalled £690,000 and £1,880,000 respectively. The Leeds Board’s policy is to:

During the year two properties were purchased, one for a curate and the second as a replacement benefice property with the sale of the previous vicarage due to complete in the first half of 2021.

During 2020 four properties were sold. Of the properties sold, three were DBF properties (either being surplus curate’s properties or former vicarages transferred to the DBF as part of pastoral schemes) and one was a parsonage property (with funds held in the Pastoral Fund pending either the completion of a pastoral scheme or the purchase of an alternative property).

Balance sheet position

The Trustees consider that the balance sheet together with details in note 23 show broadly that the restricted and endowment funds are held in an appropriate mix of investment and current assets given the purposes for which the funds are held. While the net assets at the balance sheet date totalled £200.1m (2019: £198.8m restated), it must be remembered that included in this total are properties, mostly in use for the ministry, whose value amounted to £159.2m (2019: £161.0m). Much of the remainder of the assets shown in the balance sheet are held in restricted funds, and cannot necessarily be used for the general purposes of the LDBF.

Reserves policy

Free reserves

The Reserves Policy sets a target free reserves range of £4.1m to £5.8m. The lower bound is based on an analysis of income sources and their potential vulnerability against budgeted performance – the

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largest portion of this relating to Parish Share (£2.8m). The upper bound remains based on 3 months budgeted unrestricted expenditure for the following financial year. The Trustees define the free reserves as the Unrestricted Net Current Assets Less the Assets Held for resale plus the unrestricted unlisted investments. Actual free reserves as at 31 December 2020 totalled £6.1m (2019: £5.2m).

Reserves tied up in fixed assets

The general fund comprises net assets amounting to £49.1m of which £46.0m relates to tangible fixed assets, £4.7m investments and £2.9m net current assets, offset by long-term liabilities of £4.6m.

Designated funds

The Trustees may designate additional unrestricted reserves to be retained for an agreed purpose where this is considered to be prudent. Such designated reserves are reviewed on an annual basis and returned to the general fund in the event that the purpose of their designation is no longer considered to be adequate justification for their retention. A description of each reserve together with the intended use of the reserve is set out in note 22. At 31 December 2020 total designated reserves were £961,000 (2019: £1,102,000).

Restricted and endowment funds

As set out in note 22 LDBF holds and administers a large number of restricted and endowment funds. As at 31 December 2020 restricted funds totalled £16.2m (2019: £16.7m) and endowment funds totalled £133.8m (2019: £137.0m). These funds are not available for the general purposes of the LDBF.

Grant making policy

Grants are made to the National Church to cover a proportion of its central costs and also to cover the cost of training for ministry (see note 8 to the financial statements). Grants are paid to other connected charities and to other charitable projects, which support the furtherance of LDBF's objectives.

Fundraising

The LDBF provides guidance to the parishes with regards to fundraising, but does not engage in fundraising activities itself. Due regard is given to the Fundraising Code of Practice set by the Fundraising Regulator when providing advice to the parishes.

Investment policy

LDBF’s investment policies are based on two key policies:

The Trustees have a policy to invest in accordance with the ethical investment policy of the Church of England Ethical Investment Advisory Group - this includes ensuring that investments are held in companies, which have high standards of corporate governance and act in a responsible way towards stakeholders.

Long-term responsibilities - the Trustees are aware of their long-term responsibilities in respect of endowed funds and as a result follow a correspondingly prudent approach to investment decisions. Investment policy for long-term funds is aimed primarily at generating a sustainable income with due regard to the need for the preservation of capital value and the possible need to realise investments to meet operational needs. The glebe investments are held for the purpose of raising income to achieve the maximum contribution possible to clergy stipends on an ongoing basis. Unrestricted and restricted fund investments are invested to balance income, liquidity and the maintenance of capital.

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The LDBF is empowered by its memorandum of association to invest monies not immediately required for its purposes. In addition, the LDBF acts as trustee of a number of trust funds, and these must be invested in accordance with the related trusts. The LDBF’s policy is to review regularly the assets of each fund for which it is responsible, in relation to the purposes of each fund, and to identify appropriate investment vehicles. Note 23 provides details of the assets of each fund, together with the related purposes, and Note 17 summarises the movements in investments during the year.

The CCLA investments total return performance against the benchmarks in 2020 were:

Fund Benchmark
CBF Church of England Investment Fund +10.20% +3.95%
CBF Church of England Global Equity Income Fund +22.69% +12.32%
CBF Church of England UK Equity Income Fund +0.81% -11.78%
CBF Church of England Property Fund -0.48% -1.65%

The five year performance against the benchmark and the benchmark composites are available from the CCLA and can be found on their website[1] .

1 https://www.ccla.co.uk/sites/default/files/CBF%20Quarterly%20Bulletin%20Report%20December%202020.pdf

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PRINCIPAL RISKS AND UNCERTAINTIES

The Trustees are responsible for the identification, mitigation and/or management of risk. To achieve this a risk register is maintained, which includes all risks identified, along with owners, mitigating actions and review dates. The register is maintained by management on an ongoing basis and is subject to review by the Audit Committee twice a year and by the Trustees on an annual basis, though an updated register is presented to the Board at every meeting. The responsibility for delivery of the mitigation strategies identified by the register are delegated to the Diocesan Secretary.

The risk register identifies key areas where the risk of either failure to act or the impact of the events is considered ‘high’. These areas and the associated mitigation strategies are:

Financial Risk: The risk of failing to achieve approved budget or having insufficient liquid resources to meet liabilities as they fall due.

Safeguarding & Inclusion: Where there is an occurrence of child, vulnerable adult or domestic abuse by someone working for or on behalf of the Church or involved in the life of the Church.

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STRUCTURE AND GOVERNANCE

Summary Information about the structure of the Church of England

The Church of England is the established church and HM The Queen is the Supreme Governor. It is organised into two provinces (Canterbury and York) and 41 Dioceses. Each Diocese is a See under the care of a Bishop, who is charged with the cure of souls of all the people within that geographical area. This charge is shared with priests within benefices and parishes, which are sub-divisions of the Diocese.

The National Church has a General Synod comprised of ex-officio and elected representatives from each Diocese. It agrees and lays before Parliament measures for the governance of the Church’s affairs which, if enacted by Parliament, have the force of statute law. In addition to the General Synod, the Archbishops’ Council has a coordinating role for work authorised by the Synod; the Church Commissioners manage the historic assets of the Church of England; and the Church of England Pension Board administers the pension schemes for clergy and lay workers. Each Diocese is episcopally lead and synodically governed. The Diocese itself is divided into 25 deaneries, each with its own Deanery Synod. Within each parish there is a parochial church council, which shares with the parish priest responsibility for the mission of the church in that place, in a similar way to that in which the Bishop shares responsibilities with the Diocesan Synod.

Whilst each Diocese is a separate legal entity, with a clear responsibility for a specific geographical area, being part of the Church of England requires and enables each Diocese to seek support from and application for partnership with neighbouring Dioceses.

Parochial Church Council (“PCC”)

The PCC is the elected governing body of an individual parish which broadly is the smallest pastoral area in the Church of England. Typically, each parish has one parish church. The PCC is made up of the incumbent as chair, the churchwardens and a number of elected and ex officio members. Each PCC is a charity and, in compliance with the Charities Act 2011, the majority of PCCs are currently exempt from registration with the Charity Commission. Since October 2008 all PCCs with gross income above £100,000 for the year are required to register with the Charity Commission. Except where shown, the transactions of PCCs do not form part of these financial statements. Financial statements of an individual PCC can be obtained from the relevant PCC treasurer.

Parishes

A benefice is a parish or group of parishes served by an incumbent who typically receives a stipend and use of a parsonage house from the Diocese for carrying out their duties.

A deanery is a group of parishes over which an area dean has oversight and an archdeaconry is a group of deaneries for which an archdeacon is responsible.

The Diocese is then the principal pastoral, and in turn financial and administrative, resource of the Church of England, encompassing the various archdeaconries under the spiritual leadership of the Diocesan Bishop.

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Organisational structure

The Leeds Diocesan Board of Finance (“LDBF”) is a company limited by guarantee (No. 8823593) and a registered charity (No. 1155876) governed by its Memorandum and Articles of Association.

The company’s principal activity is to promote, assist and advance the work of the Church of England within the Diocese of Leeds. It was established in its present form in December 2013.

The Members of LDBF under company law have a personal liability limited to £1 under their guarantee as company Members in the event of it being wound up.

Governance and policy of the Diocesan Board of Finance is the responsibility of the Diocesan Synod members, who are also members of the company. Following the changes in governance approved in March 2015, the Bishop of Leeds is the ex-officio Chair of the Diocesan Board of Finance. The trustees are the Diocesan Bishop, the Area Bishops, one Archdeacon, one Dean, the Chair of the House of Clergy of the Diocesan Synod, the Chair of the House of Laity of the Diocesan Synod, two Clergy and four lay people elected from and by the members of Diocesan Synod every three years, along with five people nominated by the trustees of the Diocesan Board of Finance and ratified by the Diocesan Synod. The most recent elections were held in September 2018 and the most recent trustee nomination were ratified in March 2019. The details of Trustees who served during the year are set out on page 21.

The Diocesan Synod, the statutory governing body of the Diocese, is an elected body drawn from across the Diocese with responsibility for setting the vision and strategy of the Diocese, guided by the Leeds Board. The Diocesan Synod membership is elected every three years, the last general elections having been in July 2018. The Synod elects six of the 21 Trustees of the Diocesan Board of Finance, and ratifies the nomination of a further five members. The LDBF is a separate legal entity with a governing memorandum and articles of association and has clear responsibilities under both company and charity law. Additionally, the LDBF is subject to the direction of the Synod in all its activities, unless such direction is not in accordance with the governing documents or statutory regulations.

The main features of the Diocesan Synod approved governance model are:

Decision-making structure

The Board is the Standing Committee of the Synod and addresses the issues of strategies, policies and priorities (including all financial aspects) needed to implement the overall vision. It is accountable directly to the Synod and includes all the functions of the traditional statutory boards.

The Diocesan Mission and Pastoral Committee delegates significant responsibilities relating to mission and pastoral activities to Area Mission & Pastoral Sub-Committees, thereby enabling the Area Bishops with local representatives to formulate local priorities. Deanery Synods are represented on Area

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Mission & Pastoral Sub-Committees and these are reflected in the Mission & Pastoral Constitution.

The Diocesan Advisory Committee and the Strategic Safeguarding Committee are highly specialised in their work and content, and these remain as separate entities.

Each Area Bishop is accountable to the Diocesan Bishop for the delivery of Mission and Ministry within the Area in line with delegated responsibilities laid down in Instruments and other formal measures.

The Diocesan Secretary is accountable for the functions of officers and employed staff in supporting parishes and Area Teams.

Diocesan Synod has delegated the following functions to the LDBF:

Committee structure

Leeds Diocesan Board of Finance

The Leeds Diocesan Board is the formal Bishop’s Council, Diocesan Board of Finance, the Diocesan Mission and Pastoral Committee and Parsonage Board; its membership is set out on page 20.

Trustees are provided with induction training when first appointed and receive ongoing training, as appropriate. Some senior staff have job titles incorporating the title ‘Director' but they are not Trustees of the company for the purposes of company law.

Diocesan Board of Education (“DBE”)

The DBE consists of three LDBF Board members and ten nominated appointments. The DBE oversees the setting of education strategy and reviews progress on an ongoing basis against this. The DBE has sub-committees with particular responsibility for Finance and Education Buildings.

Diocesan Advisory Committee (“DAC”)

The DAC advises on matters affecting churches and places of worship such as the granting of faculties, architecture, archaeology, art and the history of places of worship, the use and care of places of worship and their contents and the care of churchyards.

Audit Committee

The Audit Committee consists of three Board members and two nominated appointments. The Audit Committee responsibilities include the appointment of the external auditor, the review and approval of the annual report and accounts before submission to the Board and the review of the effectiveness of internal control systems.

Diocesan Mission & Pastoral Committee (“DMPC”)

The membership of the Diocesan Mission and Pastoral Committee is the Leeds Board members with the exception of the five Area Bishops. The four Archdeacons who are non-Leeds Board members are ex officio members of the committee. The Committee is a statutory body as set out in the Mission and Pastoral Measure 2011. The DMPC has delegated its functions to five Episcopal Area Mission and Pastoral Committees.

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Strategic Safeguarding Group

The Group includes an independent chairperson, the Diocesan Bishop, an Area Bishop, a Cathedral Dean, an Archdeacon, the Lead Officer responsible for safeguarding, the Diocesan Secretary, the Registrar, the Bishop’s Chaplain, individuals representing external agencies involved in safeguarding and the Director of Ministry and Mission.

The Group is responsible for the oversight of policy, procedures, training and guidance to the directors, diocesan officers and parishes on safeguarding matters and is accountable for safeguarding work throughout the Diocese.

Finance, Assets and Investments Committee (‘FAIC’)

The Committee consists of four Board members and four nominated appointments. The FAIC monitors the monthly management accounts, the preparation of the budget and sustainability plan, the progress of major property sales, the performance of investment assets and development of strategic projects.

Delegation of day to day delivery

The Trustees and the committees and advisory and scrutiny groups which assist them in the fulfilment of their responsibilities, rely upon the Diocesan Secretary and his colleagues for the delivery of the day to day activities of the company. The Diocesan Secretary is given specific and general delegated authority to manage the business of the LDBF in accordance with the policies framed by the Trustees.

Funds held as Custodian Trustee

The LDBF is the custodian trustee of assets held on permanent trust by virtue of the Parochial Church Councils (Powers) Measure 1956 and the Incumbents and churchwardens (Trusts) Measure 1964 where the managing Trustees are parochial church councils and others. These assets are not aggregated in the financial statements as the LDBF does not control them, and they are segregated from the LDBF’s own assets by means of a separate bank account and accounting system. Further details of financial trust assets, whose market value amounted to £15,235,000 at 31 December 2020 (2019: £14,866,000), are available from the LDBF on request, and are summarised in Note 31. Where properties are held as custodian trustee, the deeds are identified as such and held in safe custody.

Related Parties

Related parties include:

Transactions with the main categories of related parties are identified in appropriate places throughout the financial statements. Where materiality of the transactions merits more detailed

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disclosure this is given in note 29 to the financial statements.

Connected charities

The Trustees consider the following to be connected charities:

The cathedrals are the mother churches of the Diocese and legally constituted as separate charities exempt from Charity Commission registration and supervision. Trustees' report and financial statements may be obtained from the:

The Leeds Board is sole trustee to the charities and trusts given below. The Leeds Diocesan Board of Finance does not benefit from these charities and they are not included in the annual accounts:

Other connected charities with which the Board co-operates in pursuit of its charitable objectives are:

The assets of the above charities and trusts are held separately by themselves and are segregated from the assets of the Company.

19

LEEDS DIOCESAN BOARD OF FINANCE

TRUSTEES’ RESPONSIBILITIES

The trustees (who are also directors of Leeds Diocesan Board of Finance for the purposes of company law) are responsible for preparing the Trustees’ Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law 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 charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company 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 charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In so far as the trustees are aware:

The trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company’s website. Legislation in the United Kingdom governing the reparation and dissemination of financial statements may differ from legislation in other jurisdictions.

20

LEEDS DIOCESAN BOARD OF FINANCE

ADMINISTRATIVE DETAILS

Trustees

No Trustee had any beneficial interest in the company during 2020. The following Trustees were in post either during the year and/or at the date of this report:

Chairman:

The Right Revd Nicholas Baines – Bishop of Leeds

Ex-officio:

The Right Revd Anthony Robinson – Area Bishop of Wakefield

The Right Revd Helen-Ann Hartley – Area Bishop of Ripon The Right Revd Paul Slater – Bishop of Kirkstall

The Right Revd Toby Howarth – Area Bishop of Bradford

The Right Revd Jonathan Gibbs – Area Bishop of Huddersfield

The Revd Canon Samuel Corley – Chair of the House of Clergy of the Diocesan Synod Mr Matthew Ambler - Chair of the House of Laity of the Diocesan Synod

Elected by the Deans:

The Very Revd John Dobson – Dean of Ripon Cathedral

Elected by the Archdeacons:

The Ven Paul Ayers (from 16 January 2020)

Elected by: Synod House of Clergy:

Vacancy

The Revd Nigel Wright

Synod House of Laity: Ms Kay Brown Mr Andrew Maude Mrs Anita Jane Wardman Canon Mrs Ann Nicholl

Nominated by the Board: Canon Mr Irving Warnett Canon Mr Simon Baldwin Mrs Marilyn Banister Canon Mrs Jane Evans The Revd Canon Kathryn Fitzsimons

21

LEEDS DIOCESAN BOARD OF FINANCE

Senior staff and advisers

Diocesan Secretary Mrs Deborah A Child (to 31[st] March 2020) Diocesan Secretary Mr Jonathan Wood (from 16[th] March 2020) Chief Financial Officer Mr Geoff Park Director of Ministry and Mission The Revd Canon Andrew Norman Director of Education Canon Richard Noake Registered Office: Church House, 17-19 York Place, Leeds, LS1 2EX Principal Bankers Santander, 44 Merrion Street, Leeds, LS2 8JQ Yorkshire Bank plc, 6-10 Northgate, Wakefield, WF1 1TA NatWest Bank plc, Leeds City Office, 8 Park Row, Leeds, LS1 1QS Barclays Bank plc, PO Box 245, 10 Market Street, Bradford, BD 1 1XW Auditors Saffery Champness LLP, Mitre House, North Park Road, Harrogate HG1 5RX Diocesan Registrar Peter W Foskett, Lupton Fawcett Denison Till Yorkshire House, East Parade, Leeds, LS1 5BD Investment advisers CCLA Investment Management Ltd Senator House, 85 Queen Victoria Street, London, EC4V 4ET Glebe Agents Dacre Son & Hartley, Station Road, Otley, LS21 3DR Stephenson & Son, York Auction Centre, Murton, York, YO19 5GF Insurance Brokers PIB Insurance Brokers, Poppleton Grange, York, YO26 6GZ Principal Insurers EIG, Beaufort House, Brunswick Road, Gloucester, GL1 1JZ

In approving this Trustees’ Report, the Trustees are also approving the Strategic Report included on pages 4 – 13 within their capacity as company directors.

ON BEHALF OF THE TRUSTEES

The Right Revd Nicholas Baines Chairman 12 May 2021

Jonathan Wood Secretary 12 May 2021

22

LEEDS DIOCESAN BOARD OF FINANCE

INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF LEEDS DIOCESAN BOARD OF FINANCE

Opinion

We have audited the financial statements of Leeds Diocesan Board of Finance for the year ended 31 December 2020 which comprise the statement of financial activities, balance sheet and the cash flow statement, 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 Financial Reporting Standard 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 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 charitable company 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 charitable company'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 trustees are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, 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, 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.

23

LEEDS DIOCESAN BOARD OF FINANCE

INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF LEEDS DIOCESAN BOARD OF FINANCE

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees’ Annual Report and Strategic Report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the Trustees’ Responsibilities Statement set out on page 20, the trustees (who are also directors of the charitable company for the purposes of company law) 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 charitable company’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 charitable company or to cease operations, or have no realistic alternative to do so.

Auditor’s responsibilities for the audit of the financial statements

We have been appointed as auditors under the Companies Act 2006 and report in accordance with regulations made under that Act.

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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the charitable company’s financial statements to material misstatement and how fraud might occur, including through discussions with the trustees, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended.

We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the charitable company by discussions with trustees and updating our understanding of the sector in which the charitable company operates.

24

LEEDS DIOCESAN BOARD OF FINANCE

INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF LEEDS DIOCESAN BOARD OF FINANCE

Laws and regulations of direct significance in the context of the charitable company include The Companies Act 2006, and guidance issued by the Charity Commission for England and Wales .

Audit response to risks identified:

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the charitable company’s records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the charitable company’s policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: 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 charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company’s members 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 charitable company and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Sally Appleton (Senior Statutory Auditor) for and on behalf of Saffery Champness LLP Chartered Accountants Statutory Auditors Mitre House North Park Road Harrogate HG1 5RX Date: 18 May 2021

Saffery Champness LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006

25

LEEDS DIOCESAN BOARD OF FINANCE

STATEMENT OF THE FINANCIAL ACTIVITIES For the year ended 31 December 2020

Unrestricted funds Unrestricted funds Restricted Endowment Total Total
funds funds
General Designated Funds Funds 2020 2019
Note £’000 £’000 £’000 £’000 £’000 £’000
Income and endowments RESTATED
from:
Donations 2
Parish contributions 11,709 - - - 11,709 13,879
Archbishop’s Council 4,212 - 1,833 - 6,045 4,686
Other donations 1,585 - 20 - 1,605 368
Charitable activities 3 1,300 - - - 1,300 1,629
Other activities 4 793 - - - 793 1,001
Investments 5 654 - 371 52 1,077 1,112
Other 6 289 - 172 5 466 394
------------------- ------------------ ---------------- --------------- ------------------ ------------------
Total 20,542 - 2,396 57 22,995 23,069
-------------------- ------------------ ---------------- --------------- ------------------ ------------------
Expenditure on:
Raising funds 7 97 - - - 97 79
Charitable activities 8 20,402 142 1,968 3 22,515 21,369
Pension deficit valuation
movements 28 (3) - - - (3) (3,612)
Other 9 1 - 96 96 193 166
------------------- ------------------ ---------------- --------------- ------------------ ------------------
Total 20,497 142 2,064 99 22,802 18,002
------------------- ------------------ ---------------- --------------- ------------------ ------------------
Net income/
(expenditure) before
investment gains		 45 (142) 332 (42) 193 5,067
Net gains on investments 58 1 573 475 1,107 3,296
------------------- ------------------ ---------------- --------------- ------------------ ------------------
Net income 103 (141) 905 433 1,300 8,363
Transfers between funds 14 585 - (1,394) 809 - -
------------------- ------------------ ---------------- ----------------- ------------------ ------------------
Net movement in funds 688 (141) (489) 1,242 1,300 8,363
------------------- ------------------ ----------------- ------------------ ------------------ ------------------
Total funds brought
forward (restated)		 22 48,371 1,102 16,732 132,554 198,759 190,396
------------------- ------------------ ------------------ ------------------ ------------------ ------------------
Total funds carried
forward		 23 49,059 961 16,243 133,796 200,059 198,759
========= ======== ========= ========= ========= =========

All activities derive from continuing activities. The notes on pages 30 to 61 form part of the financial statements

26

LEEDS DIOCESAN BOARD OF FINANCE

INCOME AND EXPENDITURE ACCOUNT For the year ended 31 December 2020

Total Total
2020 2019
£’000 £’000
Total Income 22,938 22,861
Expenditure (22,703) (17,988)
_ _
Operating surplus for the year 235 4,873
Net gains on investments 632 1,731
------------------- -------------------
Net income for the year 867 6,604
Other comprehensive income
Revaluation of fixed assets - -
Net assets transferred to endowments (809) (1,513)
------------------- -------------------
Total comprehensive income 58 5,091
========= =========

The income and expenditure account is derived from the Statement of Financial Activities with movements in endowment funds excluded to comply with company law. All income and expenditure is derived from continuing activities.

27

LEEDS DIOCESAN BOARD OF FINANCE

BALANCE SHEET At 31 December 2020

Company Number – 8823593 2020 2019
RESTATED
Note £’000 £’000 £’000 £’000
FIXED ASSETS
Tangible assets 16 159,232 160,983
Investments 17 35,866 34,589
----------------------- -----------------------
195,098 195,572
CURRENT ASSETS
Assets held for resale 1,225 610
Debtors 18 1,079 996
Cash on deposit 6,912 6,880
Cash at bank and in hand 1,495 1,699
Agency cash 3,662 2,624
-------------------- --------------------
14,373 12,809
CREDITORS: amounts falling
due within one year 19 (5,765) (4,897)
-------------------- --------------------
NET CURRENT ASSETS 8,608 7,912
------------------- -------------------
TOTAL ASSETS LESS CURRENT
LIABILITIES 203,706 203,484
CREDITORS: amounts falling due
after more than one year
Pension scheme liabilities 20 (958) (1,802)
Other creditors 20 (2,689) (2,923)
--------------------- ---------------------
NET ASSETS 200,059 198,759
========== ==========
FUNDS
Endowment funds 133,796 132,554
Restricted income funds 16,243 16,732
Unrestricted income funds: 49,059 48,371
Designated funds 961 1,102
--------------------- --------------------
TOTAL FUNDS 23 200,059 198,759
========== ==========

The Notes (pages 30 to 61) form part of these financial statements. The financial statements were approved by the Board of Trustees and authorised for issue on 12 May 2021 and signed on behalf of the Board by:

THE RIGHT REV’D NICHOLAS BAINES

28

LEEDS DIOCESAN BOARD OF FINANCE

CASH FLOW STATEMENT For the year ended 31 December 2020

ASH FLOW STATEMENT
or the year ended 31 December 2020
2020 2019
£’000 £’000 £’000 £’000
Net cash from operating activities (992) (1,129)
Cash flows from investing activities
Dividends, interest and rent from investments 1,077 1,112
Interest paid (123) (85)
Proceeds from the sale of:
Tangible fixed assets 2,011 5,657
Fixed asset investments 3,084 444
Purchase of:
Tangible fixed assets for the use of the LDBF (690) (995)
Fixed asset investments (3,255) (444)
------------------- --------------------
-
Net cash provided by investing activities 2,104 5,689
Cash flows from financing activities
Loans repaid to LDBF - 9
VLLs repaid due to property disposal (131) (5)
Permanent loans repaid (115) (123)
------------------- --------------------
-
Net cash used in financing activities (246) (119)
------------------- -------------------
Change in cash and cash equivalents in the
reporting period 866 4,441
Cash and cash equivalents at 1 January 11,203 6,762
------------------- -------------------
Cash and cash equivalents at 31 December 12,069 11,203
========== ==========
Reconciliation of net income before investment gains
Net income before investment gains 31 December 193 5,067
Adjustments for:
Depreciation charges 6 6
Dividends, interest and rent from investments (1,077) (1,112)
Interest paid 123 85
Loss on sale of fixed assets 98 130
Profit on sale of fixed assets (289) (394)
Increase in debtors (83) (260)
Increase/(Decrease) in creditors 37 (4,651)
------------------ ------------------
Net cash provided used in operating activities (992) (1,129)
======== ========
Analysis of cash and cash equivalents
Cash in hand 5,157 7,163
Notice deposits (less than 3 months) 6,912 4,040
------------------ ------------------
12,069 11,203
======== ========

29

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2020

1. ACCOUNTING POLICIES

The LDBF is a private company limited by guarantee (No. 8823593) and incorporated in England and Wales. Its registered address is Church House, 17-19 York Place, Leeds, LS1 2EX. It is a Public Benefit Entity as defined by FRS102.

The financial statements have been prepared under the historical cost convention, with the exception of freehold properties, which are included at their fair value as determined under the applicable valuation method as detailed in e), and fixed asset investments, which are included at their market value at the balance sheet date. The financial statements have been prepared in accordance with the Statement of Recommended Practice for Charities (SORP 2015), the Companies Act 2006 and applicable accounting standards (FRS102).

The financial statements have been prepared on a going concern basis. The Trustees have taken note of the guidance issued by the Financial Reporting Council on Going Concern Assessments in determining that this is the appropriate basis of preparation of the financial statements and have considered a number of factors. As noted above, the Covid-19 pandemic has created a number of financial challenges that must be navigated. The Trustees are confident that plans in place will enable the LDBF to come through the ongoing disruption and that the Cost Review undertaken has provided a structure to balance the budget over the longer term. As a consequence, the Trustees have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts.

The principal accounting policies and estimation techniques are as follows.

a) Income

All incoming resources, including gifts, donations and legacies are shown in the Statement of Financial Activities (SOFA) when the Board is legally entitled to them as income or capital respectively, ultimate receipt is reasonably certain and the amount to be recognised can be quantified with reasonable accuracy.

b) Expenditure

Expenditure is included on the accruals basis and has been classified under headings that aggregate all costs related to the Statement of Financial Activity category.

30

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

1. ACCOUNTING POLICIES (continued)

c) Tangible fixed assets and depreciation

Capitalisation of property expenditure

Property expenditure is only capitalised on the purchase of a property, or if the expenditure is for the structural or other enhancement of a property. Repairs expenditure is generally not capitalised.

Freehold properties

Depreciation is not provided on buildings as any provision (annual or cumulative) would not be material due to the very long expected remaining useful economic life in each case, and because their expected residual value is not materially less than their carrying value. The LDBF has a policy of regular structural inspection, repair and maintenance, which in the case of residential properties is in accordance with the Repair of Benefices Buildings Measure 1972 and properties are therefore unlikely to deteriorate or suffer from obsolescence. In addition, disposals of properties occur well before the end of their economic lives and disposal proceeds are usually not less than their carrying value. The Trustees perform annual impairment reviews in accordance with the requirements of FRS102 to ensure that the carrying value is not more than the recoverable amount. Freehold properties are revalued on a five-year cycle.

Properties subject to value linked loans

Properties which have been bought with the assistance of value-linked loans from the Church Commissioners are revalued on a five-year cycle, with the corresponding liabilities being adjusted accordingly.

Investment properties

Glebe properties which are held for investment purposes and rented out have been included at their fair value.

Parsonage houses

The LDBF has followed the requirements of FRS102, in its accounting treatment for benefice houses (parsonages). FRS102 requires the accounting treatment to follow the substance of arrangements rather than their strict legal form. The LDBF is formally responsible for the maintenance and repair of such properties and has some jurisdiction over their future use or potential sale if not required as a benefice house, but in the meantime legal title and the right to beneficial occupation is vested in the incumbent. The Trustees therefore consider the most suitable accounting policy is to capitalise such properties as expendable endowment assets and to carry them at their estimated current market value. Parsonage houses are revalued on a five-year cycle.

31

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

______________

1. ACCOUNTING POLICIES (continued)

Schools

The school property is shown at cost. Depreciation is provided on the building over a 50-year period (£6,000 pa) the expected useful economic life of the asset.

d) Other tangible fixed assets

Other capital expenditure over £25,000 is capitalised and depreciated as follows. Depreciation is provided in order to write off the cost (less any ultimate disposal proceeds at prices ruling at the time of the asset’s acquisition) of other fixed assets over their currently expected useful economic lives at the following initial rates:

Office equipment 33% straight line Computer equipment 33% straight line

Other tangible fixed assets additions less than £25,000 are depreciated in full during the year of purchase.

e) Key judgements

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements:

g) Fund balances

Fund Balances are split between unrestricted (general and designated), restricted and endowment funds.

32

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

1. ACCOUNTING POLICIES (continued)

2. DONATIONS

The majority of donations are collected from the parishes of the Diocese through the parish share system.

Parish contributions

contributions
Unrestricted funds Restricted Endowment Total Total
funds funds
General Designated Funds Funds 2020 2019
£’000 £’000 £’000 £’000 £’000 £’000
Apportionment 15,588 - - - 15,588 15,542
Shortfall in receipts (4,099) - - - (4,099) (2,088)
------------------- ----------------- ------------------ ------------------- ------------------- -------------------
11,489 - - - 11,489 13,454
Previous years share 117 - - - 117 221
Voluntary share 103 - - - 103 204
------------------- ----------------- ------------------ ------------------- ------------------- -------------------
Total Income 11,709 - - - 11,709 13,879
========= ======== ========= ========= ========= =========

Current year parish share receipts represent 73.7% of the total apportioned (2019 – 86.6%), or, when other voluntary contributions and receipts for previous years are included, 75.1% of the total apportioned (2019 – 89.3%). 2019 comparatives are for the general fund only.

Archbishops’ Council

Unrestricted funds Unrestricted funds Restricted Endowment Total funds
General Designated Funds Funds 2020
2020 £’000 £’000 £’000 £’000 £’000
Transition Funding and 3,186 - - - 3,187
Lowest Income
Sustainability Grant 1,026 - - - 1,026
Restructuring Grant - - - - -
RME Grant - - 360 - 359
SDF Grant - - 1,473 - 1,473
------------------- ----------------- ------------------ ------------------- ---------------
Total Income 4,213 - 1,833 - 6,045
========= ======== ========= ========= =========

33

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

______________

2. DONATIONS (continued)

Unrestricted funds Unrestricted funds Restricted Endowment Total funds
General Designated Funds Funds 2019
2019 £’000 £’000 £’000 £’000 £’000
Transition Funding and 3,373 - - - 3,373
Lowest Income
Sustainability Grant - - - - -
Restructuring Grant 674 - - - 674
RME Grant - - 287 - 287
SDF Grant - - 352 - 352
------------------- ----------------- ------------------ ------------------- -------------------
Total Income 4,047 - 639 - 4,686
========= ======== ========= ========= =========

The Lowest Income Communities Grant and The Transition Funding are annual grants for the parish mission fund, which may be used either for specific parish mission and development projects or for clergy stipends. The Sustainability Grant was provided by the Archbishops’ Council in response to the Covid-19 pandemic. The RME (‘Resourcing Ministerial Education’) Grant is the funds provided by the Archbishops’ Council for the training of ordinands. The SDF (‘Strategic Development Funding’) Grant is funding allocated by the Archbishops’ Council Strategic Development Unit towards specific strategic projects. In 2020 SDF grants were received principally in relation to developing Resourcing Churches in Leeds and Bradford and the Diocesan Intern Scheme.

Other donations

r donations
Unrestricted funds Restricted Endowment Total
General Designated Funds Funds Funds
2020 £’000 £’000 £’000 £’000 £’000
All Churches Trust Grant 302 - - - 302
Job Retention 244 - - - 244
Property Grants 6 - - - 6
Other Grants 33 - 20 - 53
Legacies - - - - -
Other Donations 1,000 - - 1,000
------------------- ----------------- ------------------ ------------------- -------------------
1,585 - 20 - 1,605
========= ======== ========= ========= =========

Other Donations of £1m was a single, one-off, anonymous donation.

Unrestricted funds Unrestricted funds Restricted Endowment Total
General Designated Funds Funds Funds
2019 £’000 £’000 £’000 £’000 £’000
All Churches Trust Grant 318 - - - 318
Property Grants 8 - - - 8
Other Grants 2 - 30 - 32
Legacies 10 - - - 10
------------------- ----------------- ------------------ ------------------- -------------------
338 - 30 - 368
========= ======== ========= ========= =========

34

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

______________

3. CHARITABLE ACTIVITIES

Unrestricted funds Unrestricted funds Restricted Endowment Total funds Total funds
General Designated Funds Funds 2020 2019
£’000 £’000 £’000 £’000 £’000 £’000
Statutory fees 904 - - - 904 1,002
Legal & Professional 79 - - - 79 73
School Services 248 - - - 248 259
Retreat Centre 69 - - - 69 295
------------------- ----------------- ------------------ ------------------- ------------------- -------------------
1,300 - - - 1,300 1,629
========= ======== ========= ========= ========= =========

2019 comparatives are for the general fund only.

4. OTHER TRADING ACTIVITIES

Unrestricted funds Unrestricted funds Restricted Endowment Total funds
General Designated Funds Funds 2020
2020 £’000 £’000 £’000 £’000 £’000
Housing income 685 - - - 685
Outside Funding 5 - - - 5
Training income 16 - - - 16
Miscellaneous 87 - - - 87
------------------ ------------------- ------------- ------------- ------------------
793 - - - 793
======== ======== ====== ====== ======
Unrestricted funds Restricted Endowment Total funds
General Designated Funds Funds 2019
2019 £’000 £’000 £’000 £’000 £’000
Housing income 772 - - - 772
Outside Funding 107 - - - 107
Training income 21 - - - 21
Miscellaneous 101 - - - 101
------------------ ------------------- ------------- ------------- ------------------
1,001 - - - 1,001
======== ======== ====== ====== ========

5. INVESTMENT INCOME

Unrestricted funds Unrestricted funds Restricted Endowment Total
General Designated Funds Funds Funds
2020 £’000 £’000 £’000 £’000 £’000
Dividends receivable 633 - 366 49 1,048
Interest receivable 21 - 5 3 29
------------------- ----------------- ------------------ ------------------- ------------------
654 - 371 52 1,077
========= ======== ========= ========= ==========
2019 £’000 £’000 £’000 £’000 £’000
Dividends receivable 663 - 373 48 1,084
Interest receivable 12 - 10 6 28
------------------- ----------------- ------------------ ------------------- ------------------
675 - 383 54 1,112
========= ======== ========= ========= ==========

35

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

6. OTHER INCOMING RESOURCES

Unrestricted funds Unrestricted funds Restricted Endowment Total funds
General Designated Funds Funds 2020
£’000 £’000 £’000 £’000 £’000
Gain on sale of properties 289 - 172 5 466
_ ______ _ _ _
289 - 172 5 466
========= ======== ========= ========= ==========
Unrestricted funds Restricted Endowment Total funds
General Designated Funds Funds 2019
£’000 £’000 £’000 £’000 £’000
Gain on sale of properties 50 - 190 154 394
_ ______ _ _ _
50 - 190 154 394
========= ======== ========= ========= ==========

7. FUND RAISING COSTS

Unrestricted funds Unrestricted funds Restricted Endowment Total funds Total funds
General Designated Funds Funds 2020 2019
£’000 £’000 £’000 £’000 £’000 £’000
Maintenance of Glebe 97 - - - 97 79
------------------- ----------------- ------------------ ------------------- ------------------- ------------------
97 - - - 97 79
========= ======== ========= ========= ========= ==========

2019 comparatives relate to the general fund only.

36

LEEDS DIOCESAN BOARD OF FINANCE

?NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

8. CHARITABLE ACTIVITIES

Unrestricted funds Unrestricted funds Restricted Endowment Total funds
2020 General Designated Funds Funds 2020
£’000 £’000 £’000 £’000 £’000
Contributions to
Archbishops’ Council
Training for Ministry 500 - - - 500
National Church
Responsibilities 417 - - - 417
Mission agency pension
costs 19 - - - 19
Retired clergy housing
costs 179 - - - 179
Pooling of ordinands
maintenance grants 168 - - - 168
------------------- ----------------- ------------------ ------------------- -------------------
1,283 - - - 1,283
------------------- ----------------- ------------------ ------------------- -------------------
Resourcing Ministry and
Mission
Stipends and national
insurance 8,921 - - - 8,921
Pension contributions 2,051 - - - 2,051
Housing costs 3,315 - - - 3,315
Removal, resettlement
and grants 187 - - - 187
Other expenses 189 - - - 189
------------------- ----------------- ------------------ ------------------- -------------------
14,663 - - - 14,663
Support for parish ministry 3,676 142 1,922 3 5,743
Retreat Centre 157 - - - 157
------------------- ----------------- ------------------ ------------------- ------------------
19,779 142 1,922 3 21,846
------------------- ----------------- ------------------ ------------------- ------------------
Expenditure on Education
Church Schools 623 - 46 - 669
------------------- ----------------- ------------------ ------------------- ------------------
20,402 142 1,968 3 22,515
========= ======== ========= ========= ==========

37

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

______________

8. Charitable Activities (continued)

Unrestricted funds Unrestricted funds Restricted Endowment Total funds
2019 General Designated Funds Funds 2019
£’000 £’000 £’000 £’000 £’000
Contributions to
Archbishops’ Council
Training for Ministry 542 - - - 542
National Church
Responsibilities 397 - - - 397
Mission agency pension
costs 5 - - - 5
Retired clergy housing
costs 171 - - - 171
Pooling of ordinands
maintenance grants 115 - - - 115
------------------- ----------------- ------------------ ------------------- -------------------
1,230 - - - 1,230
------------------- ----------------- ------------------ ------------------- -------------------
Resourcing Ministry and
Mission
Stipends and national
insurance 8,880 - - - 8,880
Pension contributions 2,037 - - - 2,037
Housing costs 3,013 - - - 3,013
Removal, resettlement
and grants 237 - - - 237
Other expenses 356 - - - 356
------------------- ----------------- ------------------ ------------------- -------------------
14,523 - - - 14,523
Support for parish 3,993 - 580 14 4,587
ministry
Retreat Centre 274 - - - 274
------------------- ----------------- ------------------ ------------------- ------------------
18,790 - 580 14 19,384
------------------- ----------------- ------------------ ------------------- ------------------
Expenditure on
Education
Church Schools 705 - 50 - 755
------------------- ----------------- ------------------ ------------------- ------------------
20,725 - 630 14 21,369
========= ======== ========= ========= ==========

38

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

______________

9. OTHER RESOURCES EXPENDED

Unrestricted funds Unrestricted funds Restricted Endowment Total
2020 General Designated Funds Funds Funds
£’000 £’000 £’000 £’000 £’000
Funds returned to parish - - 96 96 192
Loss on Sale of Properties 1 - - - 1
Closed Churches costs written off - - - - -
------------------- ------------------ ------------------- ------------------- -------------------
1 - 96 96 193
========= ======== ========= ========= =========
Unrestricted funds Restricted Endowment Total
2019 General Designated Funds Funds Funds
£’000 £’000 £’000 £’000 £’000
Loss on Sale of Properties 130 - - - 130
Closed Churches costs written off - - 36 - 36
------------------- ----------------- ------------------ ------------------- ------------------
130 - 36 - 166
========= ======== ========= ========= ==========

10. ANALYSIS OF EXPENDITURE INCLUDING ALLOCATION OF SUPPORT COSTS

Activities Grant
Undertaken Funding of Support Total
Directly Activities Costs Costs
2020 £’000 £’000 £’000 £’000
Raising funds 97 - - 97
Charitable activities:
Contributions to Archbishops’ Council - 1,283 - 1,283
Resourcing parish ministry 19,133 475 799 20,407
Clergy pension deficit valuation (25) (25)
Education 538 - 130 668
Retreat Centre 157 - - 157
Lay pension deficit valuation 22 22
Other 193 - - 193
------------------ ------------------- ------------------ ------------------
20,115 1,758 929 22,802
========= ========= ========== =========
2019 £’000 £’000 £’000 £’000
Raising funds 78 - - 78
Charitable activities:
Contributions to Archbishops’ Council - 1,230 - 1,230
Resourcing parish ministry 17,316 577 901 18,794
Clergy pension deficit valuation (3,295) (3,295)
Education 599 - 156 755
Retreat Centre 274 - - 274
Lay pension deficit valuation (317) (317)
Other 483 - - 483
------------------ ------------------- ------------------ ------------------
15,138 1,807 1,057 18,002
========= ========= ========== =========

39

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

______________

11. ANALYSIS OF SUPPORT COSTS

Unrestricted funds Unrestricted funds Restricted Endowment Total funds Total
funds
General Designated Funds Funds 2020 2019
£’000 £’000 £’000 £’000 £’000 £000
Central 529 - - - 529 625
administration
Support for 130 - - - 130 156
Schools
Governance:
External audit 28 - - - 28 29
Registrar and
242		 - - - 242 245
Chancellor
Synodical costs - - - - - 2
------------------- ----------------- ------------------ ------------------- ------------------ ------------------
929 - - - 929 1,057
========= ======== ========= ========= ========== =========

2019 comparatives are for the general fund only.

12. ANALYSIS OF GRANTS MADE

2020 No. Individuals Institutions Total
£’000 £’000 £000
From unrestricted funds for
national Church responsibilities
Contributions to Archbishops’ 12 - 1,283 1,283
Council
------------------- ------------------ ------------------ ------------------
From unrestricted funds:
Ecumenical/ Churches Together - - - -
organisations
Clergy Training 696 47 - 47
Clergy Grants (Removal, First 125 187 - 187
appointment, resettlement)
Ordination 28 23 - 23
Vocation grants 514 160 - 160
Mission Grants 45 - 32 32
Youth - - - -
------------------- ------------------ ------------------ -----------------
1,408 417 32 449
------------------- ------------------ ------------------ -----------------
From restricted funds for
various purposes within
resourcing parish ministry:
PCCs’ Building Grants 10 - 8 8
Widows and dependants of 20 17 - 17
clergy ------------------- ------------------- ------------------ -----------------
46 17 8 25
------------------ ------------------- ----------------- ---------------
From endowment funds for
various purposes within
resourcing parish ministry:
Widows and dependants of 1 1 - 1
clergy ------------------- ------------------- ------------------ ------------------
1,467 435 1,323 1,758
========= ========= ========= ========

40

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

______________

12. ANALYSIS OF GRANTS MADE (continued)

2019 No. Individuals Institutions Total
£’000 £’000 £000
From unrestricted funds for
national Church responsibilities
Contributions to Archbishops’ 6 - 1,230 1,230
Council
------------------- ------------------ ------------------ ------------------
From unrestricted funds:
Ecumenical/ Churches Together 1 - 6 6
organisations
Clergy Training 792 85 - 85
Clergy Grants (Removal, First 184 237 - 237
appointment, resettlement)
Ordination 47 29 - 29
Vocation grants 424 146 - 146
Mission Grants 80 - 25 25
Youth - - - -
------------------- ------------------ ------------------ -----------------
1,528 497 31 528
------------------- ------------------ ------------------ -----------------
From restricted funds for
various purposes within
resourcing parish ministry:
PCCs’ Building Grants 26 - 12 12
Widows and dependants of 20 23 - 23
clergy ------------------- ------------------- ------------------ -----------------
46 23 12 35
------------------ ------------------- ----------------- ---------------
From endowment funds for
various purposes within
resourcing parish ministry:
Widows and dependants of 8 14 - 14
clergy ------------------- ------------------- ------------------ ------------------
1,588 534 1,273 1,807
========= ========= ========= ========

41

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

______________

13. STAFF COSTS

STAFF COSTS
2020 2019
£’000 £’000
Employee costs during the year were as follows:
Wages and salaries 2,761 2,764
Apprentice Levy - 7
National insurance contributions 253 255
Pension contributions 223 228
----------------- -----------------
Sub-total 3,237 3,254
----------------- -----------------
Pension deficit valuation movements 22 (317)
----------------- -----------------
Total Staff Costs 3,259 2,937
========= ========
The average number of persons employed by the LDBF during 2020 were:
Number Number
Support for Ministry 79 79
Education 11 10
Retreat House 12 13
----------------- -----------------
102 102
========= =========
The average number of persons employed by the
LDBF during the year based on full-time equivalents:
Number Number
Support for Ministry 62 62
Education 11 10
Retreat House 6 8
----------------- -----------------
79 80
========= =========

The numbers of staff whose emoluments (including benefits in kind and redundancy payments but excluding Pension contributions) amounted to more than £60,000 were as follows:

Number Number
£60,001 - £70,000 1 2
£70,001 - £80,000 2 1
£80,001 - £90,000 - 1
£90,000 - £100,000 - -
£100,001 - £110,000 - -
========= =========

Pension payments of £25,000 were made for these 3 employees (2019: 4 employees £39,000).

42

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

13. STAFF COSTS (continued)

Remuneration of key management personnel

Key management personnel are deemed to be those having authority and responsibility, delegated to them by the trustees, for planning, directing and controlling the activities of the Diocese. During 2020 they were:

Diocesan Secretary (to 31.3.2020) Mrs Debbie Child Diocesan Secretary (from 1.4.2020) Mr Jonathan Wood Chief Finance Officer Mr Geoff Park Director of Ministry & Mission The Revd Canon Andrew Norman Director of Education Canon Richard Noake

Remuneration, pensions and expenses for these 5 employees amounted to £324,000 (2019: 4 employees £316,000)

Trustees’ emoluments

No Trustee received any remuneration for services as Trustee. The Trustees received travelling and out of pocket expenses, totalling £Nil (2019 – Nil) in respect of Trustee duties.

The following table gives details of the Trustees who were in receipt of a stipend and/or housing provided by the LDBF during the year:

Stipend Housing
The Right Revd Anthony Robinson No Yes
The Right Revd Helen-Ann Hartley No Yes
The Right Revd Paul Slater No Yes
The Right Revd Toby Howarth No Yes
The Right Revd Jonathan Gibbs No Yes
The Revd Nigel Wright Yes Yes
Revd Canon Kathryn Fitzsimons Yes Yes
The Revd Canon Samuel Corley Yes Yes
The Ven Andy Jolley Yes Yes
The Ven Paul Ayers Yes Yes

No other trustees appointed during the year received a stipend or housing.

The LDBF is responsible for funding via the Church Commissioners the stipends of licensed stipendiary clergy in the Diocese, other than bishops and cathedral staff. The LDBF is also responsible for the provision of housing for stipendiary clergy in the Diocese including the Area Bishops but excluding the Diocesan Bishop and cathedral staff.

43

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

13. STAFF COSTS (continued)

The LDBF paid an average of 317 (2019 – 320) stipendiary clergy as office-holders holding parochial or diocesan appointments in the Diocese, and the costs were as follows:

2020 2019
£’000 £’000
Stipends 8,234 8,186
Apprentice Levy 37 37
National insurance contributions 650 656
Pension contributions 2,051 2,038
----------------- -----------------
Sub-total 10,972 10,917
Pension deficit valuation movements (25) (3,295)
----------------- -----------------
Total 10,947 7,622
========= =========

Stipends includes two redundancy payments totalling £33,558 (2019 – nil).

The stipends of the five Bishops were paid and funded by the Church Commissioners. The stipends of the Diocesan Bishop and Area Bishops are funded by the Church Commissioners and are in the range £37,670 - £46,560 (2019: £36,930 - £45,650). The annual rate of stipend, funded by the LDBF, paid to Archdeacons in 2020 was £36,830 (2019: £36,100) and other clergy who were Trustees were paid in the range £25,265 - £28,650 (2019: £24,930 – £28,367).

14. ANALYSIS OF TRANSFERS BETWEEN FUNDS

Unrestricted funds Unrestricted funds Restricted Endowment
General Designated Funds Funds
£’000 £’000 £’000 £’000
From General fund to Stipends endowment for
reduction of pension deficit (938) - - 938
Transfer of Pension funds to General Funds to
support clergy pension deficit payments 129 - - (129)
Transfer of Pastoral funds to General Funds to
support Mission and Pastoral activities and clergy
pension deficit payments 988 - (988) -
Transfer of S554 funds to General Funds to support
Board of Education expenditure 300 - (300) -
Transfer of Inglefield funds to General Funds to
support Lay and Clergy education 44 - (44) -
Transfer of Training for Ministry funds to General
Funds to support ordinands’ training. 62 - (62) -
-------------- ------------- --------------- -------------
585 - (1,394) 809
====== ====== ====== ======

During 2020, £0.9m of general funds were used to pay the clergy pension scheme deficits, with transfers from restricted Pension and Pastoral funds used to fund these payments.

Other transfers from restricted to unrestricted funds of £0.6m were undertaken to support education work, ordinands’ training, missions and pastoral activities.

44

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

15. FINANCIAL INSTRUMENTS

2020 2019
£’000 £’000
Financial assets measured at fair value 31,250 29,973
Financial assets measured at amortised cost 1,079 996
========= =========
Financial liabilities measured at amortised cost 7,276 7,354
Financial liabilities measured at fair value 2,136 1,303
========= =========

Financial assets measured at fair value comprise unlisted investments and value linked loans to parishes. Financial assets measured at amortised cost comprise trade debtors, other debtors, other loans to parishes and schools and other receivables.

Financial liabilities measured at fair value comprise Church Commissioners’ value linked loans.

Financial liabilities measured at amortised cost comprise pension scheme liabilities, other creditors and amounts held for other bodies and Church Commissioners’ other loans.

16. TANGIBLE FIXED ASSETS

Cost or valuation
At 1 January 2020
Additions
Disposals
Reclassified – in period
Transfer to/from
properties for resale
At 31 December 2020
Depreciation
At 1 January 2020
Disposals
Charge for the year
At 31 December 2020
Net Book Value
At 31 December 2020
At 31 December 2019		 Freehold
properties
Office
equipment
Benefice
properties
School
House
Glebe
properties
Total
£’000
£’000
£’000
£’000
£’000
£’000
47,276
821
96,976
308
16,485
161,866
335
-
355
-
-
690
(650)
-
(425)
-
(135)
(1,210)
-
-
-
-
-
-
(915)
-
-
-
(310)
(1,225)
46,046
821
96,906
308
16,040
160,121
-
821
-
62
-
883
-
-
-
-
-
-
-
-
-
6
-
6
-
821
-
68
-
889
46,046
-
96,906
240
16,040
159,232
47,276
-
96,976
246
16,485
160,983

All of the properties in the balance sheet are freehold and are vested in the LDBF, except for benefice houses which are vested in the incumbent. Some properties have been purchased with the help of permanent and/or value-linked loan from the Church Commissioners; when disposed of, the appropriate share of the net sale proceeds will be remitted to the Commissioners, and the related loan liability extinguished. The value of such properties (included in the above) amounts to £6,850,000 (2019: £7,015,000). Of the total land and buildings at 31 December 2020, £ nil are valued at cost (2019: £nil), but all at valuation.

Properties are subject to a five-year cycle of survey and consequent revaluation, with the last market valuation being as at 31st December 2018 by David Chary BSc FRICS of Sanderson Weatherall, 6th Floor, Central Square, 29 Wellington Street, Leeds LS1 4DL.

45

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

______________

17. FIXED ASSETS INVESTMENTS

At Change in At 31
1 January Transfers Market December
2020 Additions Disposals Value Value 2020
£’000 £’000 £’000 £’000 £’000 £’000
Unrestricted funds
Unlisted investments 2,667 650 - 1,323 58 4,698
------------------ ----------------- ------------------ ------------------ ------------------ ------------------
Designated funds
Unlisted investments 13 - - - 1 14
------------------ ----------------- ------------------ ------------------ ------------------ ------------------
Restricted funds
Unlisted investments 11,671 - (475) (1,194) 653 10,655
------------------ ----------------- ------------------ ------------------ ------------------ ------------------
Endowment funds
Investment property 4,616 - - - - 4,616
Unlisted investments 15,622 2,605 (2,629) (129) 414 15,883
------------------ ----------------- ------------------ ------------------ ------------------ ------------------
20,238 2,605 (2,629) (129) 414 20,499
------------------ ----------------- ------------------ ------------------ ------------------ ------------------
Total 34,589 3,255 (3,104) - 1,126 35,866
======== ======== ======== ======== ======== ========
18. DEBTORS
2020 2019
£’000 £’000
Due within one year
Loans to parishes 22 17
Loans to schools - 27
Other debtors and prepayments 1,005 895
----------------- -----------------
1,027 939
----------------- -----------------
Due after more than one year
Loans to parishes 52 57
Other debtors - -
----------------- -----------------
52 57
----------------- -----------------
Total debtors 1,079 996
========= =========

46

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

______________

19. CREDITORS: amount falling due within one year

CREDITORS: amount falling due within one year
2020 2019
£’000 £’000
Loan repayment instalments due in one year
Church Commissioners other loans 110 123
Other taxes and social security 68 65
Other creditors and accruals 4,746 3,487
Pension scheme liabilities:
Lay Defined Benefit Scheme 309 309
Clergy Pension Scheme 532 913
----------------- -----------------
Total creditors: amounts falling due within one year 5,765 4,897
======== ========

20. CREDITORS: amount falling due after more than one year

2020 2019
RESTATED
£’000 £’000
Loan repayment instalments due after more than one year
Church Commissioners value-linked loans 2,136 2,268
Church Commissioners other loans 553 655
Pension scheme liabilities:
Lay Defined Benefit Scheme 382 669
Clergy Pension Scheme 576 1,133
----------------- -----------------
Total creditors: amounts falling due after more than one year 3,647 4,725
========= =========
The maturity of the above loans may be analysed as follows:
Between one and two years 101 123
Between two and five years 301 367
In five years or more 2,287 2,433
----------------- -----------------
2,689 2,923
========= =========

Church Commissioners other loans consist of permanent loans in collection which are mortgage loans for the purchase of clergy houses; of the amount falling due after more than one year, £273k relates to the Benefice Property Fund (2019 - £321k), £20k to the Glebe Estate (2019 - £29k) and £260k to the General Fund (2019 - £305k). These loans are repayable over terms ranging from 5 to 25 years in quarterly instalments and bear interest rates between 6.1% and 7.7%, which is borne by the LDBF. In the event of sale, the loan would be settled out of the proceeds and there would be no further charge to the LDBF.

Value-linked loans (VLLs) are funds advanced to the LDBF for the purchase of properties on an equity sharing basis and are repayable on the disposal of the related property. The loans are held at fair value based on the latest valuations of the linked properties.

47

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

______________

21. PRIOR PERIOD ADJUSTMENT

Unrestricted Unrestricted Restricted Endowment Total
General Designated Funds Funds Funds
£’000 £’000 £’000 £’000 £’000
Original total funds brought forward 1.1.2019 42,638 10 14,981 133,732 191,361
Adjustment in respect of Value-linked loans (965) - - - (965)
------------------- ------------------ ------------------ ------------------ ------------------
Revised total funds brought forward 1.1.2019 41,673 10 14,981 133,732 190,396
2019 movement in funds 6,698 1,092 1,751 (1,178) 8,363
------------------- ------------------ ------------------ ------------------ ------------------
Revised total funds carried forward
31.12.2019		 48,371 1,102 16,732 132,554 198,759
========= ======== ========= ========= =========

The Value–linked loan portfolio has seen an increase in liability valuation following the receipt of information supplied by the National Church confirming the equity percentage the Church Commissioners hold in the properties acquired using Value-linked loans. As a result of this information, it has been possible to ascertain the current loan liability with relation to the value of each property, which is significantly in excess of the book values previously recorded.

When the latest property valuation was carried out as at 31 December 2018 the linked liabilities were revalued in line with the movement in assets (i.e. the same percentage change was applied). However, it is now clear the opening balances at that point were significantly out-of-step with the asset values.

48

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

22. SUMMARY OF FUND MOVEMENTS

2020 Balances at Balances at
1 January Gains and 31 December
2020 Income Expenditure Transfers Losses 2020
£’000 £’000 £’000 £’000 £’000 £’000
UNRESTRICTED FUNDS
General 48,371 20,542 (20,497) 585 58 49,059
------------------ ----------------- ------------------ ------------------- ------------------ ------------------
DESIGNATED FUNDS
Archdeacons Discretionary 12 - (1) - 1 12
Ingrow Fund 90 - (62) - - 28
Mission Fund 700 - (79) - - 621
Carbon Reduction Fund 300 - - - - 300
------------------ ----------------- ------------------ ------------------- ------------------ ------------------
1,102 - (142) - 1 961
------------------ ----------------- ------------------ ------------------- ------------------ ------------------
RESTRICTED FUNDS
Section 554 Education 6,776 204 (46) (300) 195 6,829
Clergy & Dependants 75 21 (15) - 3 84
hardship funds
Bradford Summer Camps 1 - - - - 1
Local Educational Funds 32 2 (2) - 1 33
Retreat House support funds 31 - - - - 31
Local Parochial purposes 13 - - - - 13
Appeal funds & other specific 72 - - - - 72
purposes
Church building repair funds 436 1 (103) - 25 359
Pastoral Account 6,781 268 - (988) 228 6,289
Managing Trustees funds 51 - - - - 51
Inglefield funds 1,536 42 - (44) 68 1,602
Training for ministry funds 821 383 (380) (62) 53 815
Strategic Development Funds 107 1,475 (1,518) - - 64
------------------ ----------------- ------------------ ------------------- ------------------ ------------------
16,732 2,396 (2,064) (1,394) 573 16,243
------------------ ----------------- ------------------ ------------------- ------------------ ------------------
ENDOWMENT FUNDS
Permanent
Stipends fund capital 14,833 1 - 938 295 16,067
Expendable
General purposes & 212 - - - - 212
administration support funds
Maintenance of Ministry 1,038 1 - - 71 1,110
Pensions 216 - - (129) 13 100
Training for ministry funds 103 2 - - 6 111
Clergy & dependants 1,110 29 (4) - 57 1,192
hardship funds
Local Parochial purposes 539 - - - 2 541
Glebe Land 4,792 5 - - - 4,797
Church building repair funds 602 18 - - 14 634
Glebe Properties 17,279 - (2) - - 17,277
Benefice Properties 91,553 - (93) - - 91,460
Religious Education support 235 - - - 17 252
Appeal funds & other specific 42 1 - - - 43
purposes
------------------ ----------------- ------------------ ------------------- ------------------ ------------------
132,554 57 (99) 809 475 133,796
-------------------- ----------------- ------------------ ------------------- ------------------ --------------------
Total funds 198,759 22,995 (22,802) - 1,107 200,059
========== ========== ========== ========== ========= ==========

49

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

22. SUMMARY OF FUND MOVEMENTS (continued)

2019 Balances at Balances at
RESTATED 1 January Gains and 31 December
2019 Income Expenditure Transfers Losses 2019
£’000 £’000 £’000 £’000 £’000 £’000
UNRESTRICTED FUNDS
General 41,673 21,619 (17,322) 2,250 151 48,371
------------------ ----------------- ------------------ ------------------- ------------------ ------------------
DESIGNATED FUNDS
Archdeacons Discretionary 10 - - - 2 12
Ingrow Fund - - - 90 - 90
Mission Fund - - - 700 - 700
Carbon Reduction Fund - - - 300 - 300
------------------ ----------------- ------------------ ------------------- ------------------ ------------------
10 - - 1,090 2 1,102
------------------ ----------------- ------------------ ------------------- ------------------ ------------------
RESTRICTED FUNDS
Section 554 Education 6,229 219 (50) (300) 678 6,776
Clergy & Dependants 59 32 (23) - 7 75
hardship funds
Bradford Summer Camps 1 - - - - 1
Local Educational Funds 29 3 - - - 32
Retreat House support funds 31 - - - - 31
Local Parochial purposes 12 1 - - - 13
Appeal funds & other specific 72 - - - - 72
purposes
Church building repair funds 380 1 (12) - 67 436
Pastoral Account 6,051 280 (36) (44) 530 6,781
Managing Trustees funds 51 - - - - 51
Inglefield funds 1,368 44 - (50) 174 1,536
Training for ministry funds 698 310 (290) (19) 122 821
Strategic Development Funds - 352 (255) 10 - 107
------------------ ----------------- ------------------ ------------------- ------------------ ------------------
14,981 1,242 (666) (403) 1,578 16,732
------------------ ----------------- ------------------ ------------------- ------------------ ------------------
ENDOWMENT FUNDS
Permanent
Stipends fund capital 9,538 2 - 4,208 1,085 14,833
Expendable
General purposes & 212 - - - - 212
administration support funds
Maintenance of Ministry 874 - - - 164 1,038
Pensions 225 - - (50) 41 216
Training for ministry funds 85 3 - - 15 103
Clergy & dependants 967 27 (14) - 130 1,110
hardship funds
Local Parochial purposes 511 - - - 28 539
Glebe Land 4,791 - - - 1 4,792
Church building repair funds 515 23 - - 64 602
Glebe Properties 17,167 82 - 30 - 17,279
Benefice Properties 98,607 71 - (7,125) - 91,553
Religious Education support 198 - - - 37 235
Appeal funds & other specific 42 - - - - 42
purposes
------------------ ----------------- ------------------ ------------------- ------------------ ------------------
133,732 208 (14) (2,937) 1,565 132,554
-------------------- ----------------- ------------------ ------------------- ------------------ --------------------
Total funds 190,396 23,069 (18,002) - 3,296 198,759
========== ========= ========= ========= ========= ==========

50

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

23. SUMMARY OF ASSETS BY FUND

2020 Fixed assets Current Net
Tangible Investments Assets Creditors Assets
£’000 £’000 £’000 £’000 £’000
Unrestricted funds – General 46,046 4,698 2,930 (4,615) 49,059
------------------ ------------------ ------------------- ------------------ ------------------
Unrestricted - designated
Archdeacons Discretionary - 14 1 (3) 12
Ingrow Fund - - 28 - 28
Mission Fund - - 621 - 621
Carbon Reduction Fund - - 300 - 300
------------------ ------------------ ------------------- ------------------ ------------------
- 14 950 (3) 961
------------------ ------------------ ------------------- ------------------ ------------------
Restricted
Section 554 Education 240 5,636 953 - 6,829
Clergy & Dependants hardship funds - 49 35 - 84
Bradford Summer Camps - - 1 - 1
Local Educational Funds - 12 21 - 33
Retreat House support funds - - 31 - 31
Local Parochial purposes funds - - 13 - 13
Appeal funds & other specific - - 75 (3) 72
purposes
Church building repair funds - 367 13 (21) 359
Pastoral Account 2,781 2,565 943 - 6,289
Managing Trustees - - 51 - 51
Inglefield funds - 1,273 329 - 1,602
Training for ministry funds - 753 62 - 815
Strategic Development Funds - - 64 64
Schools LCVAP Building Programme - - 3,662 (3,662) -
------------------ ------------------ ------------------- ------------------ ------------------
3,021 10,655 6,253 (3,686) 16,243
------------------ ------------------ ------------------- ------------------ ------------------
Endowment
Permanent
Stipends fund capital 4,219 12,719 1,450 (1,108) 16,067
Expendable
Benefice houses 89,906 - 341 - 91,460
General Purposes - - 212 - 212
Maintenance of Ministry - 1,109 1 - 1,110
Glebe Property 16,040 - 1,237 - 17,277
Pensions - 100 - - 100
Training for Ministry - 111 - - 111
Clergy & Dependants hardship funds - 881 311 - 1,192
Local Educational Funds - 97 1 - 98
Local Parochial purposes funds - 353 188 - 541
Glebe Land - 4,616 181 - 4,797
Church building repair funds - 357 277 - 634
Religious Education support funds - 154 - - 154
Appeal funds & other specific - 2 41 - 43
purposes
------------------ ------------------ ------------------- ------------------ ------------------
110,165 20,499 4,240
(1,108)		 133,796
-------------------- ------------------ ------------------- ------------------ ------------------
Total funds 159,232 35,866 14,373 (9,412) 200,059
========== ========= ========= ========= ==========

51

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

23. SUMMARY OF ASSETS BY FUND (continued)

2019 Tangible Investments Assets Creditors Assets
RESTATED £’000 £’000 £’000 £’000 £’000
Unrestricted funds – General 47,276 2,667 3,376 (4,948) 48,371
----------------- ------------------ ------------------- ------------------ ------------------
Unrestricted - designated
Archdeacons Discretionary - 13 1 (2) 12
Ingrow Fund - - 90 - 90
Mission Fund - - 700 - 700
Carbon Reduction Fund - - 300 - 300
----------------- ------------------ ------------------- ------------------ ------------------
- 13 1,091 (2) 1,102
----------------- ------------------ ------------------- ------------------ ------------------
Restricted
Section 554 Education 246 5,741 789 - 6,776
Clergy & Dependants hardship - 46 29 - 75
funds
Bradford Summer Camps - - 1 - 1
Local Educational Funds - 11 21 - 32
Retreat House support funds - - 31 - 31
Local Parochial purposes funds - - 13 - 13
Appeal funds & other specific - - 74 (2) 72
purposes
Church building repair funds - 423 13 - 436
Pastoral Account 2,781 3,437 563 - 6,781
Managing Trustees - - 51 - 51
Inglefield funds - 1,249 287 - 1,536
Training for ministry funds - 764 57 - 821
Strategic Development Funds - - 107 107
Schools LCVAP Building Programme - - 2,624 (2,624) -
----------------- ------------------ ------------------- ------------------ ------------------
3,027 11,671 4,660 (2,626) 16,732
----------------- ------------------ ------------------- ------------------ ------------------
Endowment
Permanent
Stipends fund capital 3,006 12,422 1,451 (2,046) 14,833
Expendable
Benefice houses 91,190 - 363 - 91,553
General Purposes - - 212 - 212
Maintenance of Ministry - 1,038 - - 1,038
Glebe Property 16,484 - 795 - 17,279
Pensions - 216 - - 216
Training for Ministry - 103 - - 103
Clergy & Dependants hardship funds - 824 286 - 1,110
Local Educational Funds - 91 - - 91
Local Parochial purposes funds - 438 101 - 539
Glebe Land - 4,616 176 - 4,792
Church building repair funds - 344 258 - 602
Religious Education support funds - 144 - - 144
Appeal funds & other specific - 2 40 - 42
purposes
------------------ ------------------ ------------------- ------------------ ------------------
110,680 20,238 3,682
(2,046)		 132,554
-------------------- ------------------ ------------------- ------------------ --------------------
Total funds 160,983 34,589 12,809 (9,622) 198,759
========== ========= ========= ========= ==========

52

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

24. DESCRIPTION OF FUNDS

ESCRIPTION OF FUNDS
Funds included in this
Fund category Purpose category
General fund The general fund is the LDBF’s unrestricted
undesignated fund available for any of the
LDBF’s purposes without restriction.
Archdeacons Represents grants received set aside to be used
Discretionary Fund at the discretion of Archdeacons.
Ingrow Fund Funds from the bequest of Nora Curry left for
the benefit of the parish of Ingrow.
Mission Fund Funds to support future SDF projects and the
creation of a Parish Growth Fund.
Carbon Reduction Fund Funds to enable adjustments to our buildings
that reduce their carbon footprint
Section 554 Established under S86 of the Education Act
1993. Capital monies to develop or build new
or existing voluntary aided schools or maintain
such schools or contribute to educational
purposes.
Clergy and dependents Funds to provide relief of clergy and their Clergy Stipend Trust, Clergy
hardship funds dependents in financial hardship. Widows and Dependents,
Queen Victoria Trust, Leeds
Diocese Charitable Society
Trust, Aid to Parish Clergy,
Widows, Clergy Retirement,
Education Grants
Bradford Summer Funds to provide support to children & youths
Camps Bursary to enable them to attend summer camps in
cases of financial hardship.
Local educational funds For educational purposes in the areas named Shipley cum Heaton District
CofE School Trust, Keighley
St Peter Educational Trust
Retreat House support Support towards the Diocesan Retreat House Friends of Parcevall Hall,
funds Parcevall Hall Bursary
Local Parochial For general parochial purposes in the area North Wing Mission,
purposes funds named. Guiseley Carleton, Keighley
All Saints McNish
Appeals and special Funds comprise donations received for specific Interfaith fund, Youth
purposes funds appeals and purposes, including work in Links Evangelism, Special Appeals,
Dioceses. Northern Sudan, Kadugli
Appeal, Church in the World,
TM Wright Sudan relief, St
Martin in the Field,
Duker (deaf ministry)

53

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

24. DESCRIPTION OF FUNDS (continued)

Fund category Purpose Funds included in this
category
Church building repair For repairs to churches of the Evangelical The First Lord Grimethorpe
funds tradition in the Church of England within the Charity, Church building
Diocese. fund, Harrogate Churches,
Church Building Repair, Davy
bequest
Strategic Development Funds major change projects which lead to a
Funds significant difference in dioceses’ mission and
financial strength.
Pastoral Account This fund includes the proceeds of buildings
closed for regular public worship, parsonages
and land sales. The purpose for which this
account may be used are laid down in Section
94 of the Pastoral Measure 2011.
Inglefield Created from sale of Diocesan Retreat House at
Barrowby, and assets transferred from the
Booker Bequest. Income used to aid Diocesan
Synod, conferences and theological courses.
Training for ministry Income used towards cost of training Resourcing Ministerial
ordinands. Education (RME)
General purposes and Funds from bequests to be used to support
administration administration and general purposes
Maintenance of Funds from bequests to be used to support
ministry stipends in specific parishes
Pensions Funds from bequests to be used in supporting
clergy pensions.
Funds to provide Funds to support the provision of loans to assist
church building repair major works to be carried out on church
loans buildings. Loan fund, Kiddle Bequest
Stipends Fund Capital The income of the fund can only be used for
clergy stipends (but since 1993 capital can be
used for improvements to parsonage houses)
and is governed by the Diocesan Stipends
Measure 1953.
Glebe Land This fund is governed by the Endowments and
Glebe Measure 1976; It represents the value
of agricultural or commercial land in the
Diocese, primarily held to generate
sustainable income to support clergy stipends.

54

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

Fund category

Purpose

Funds included in this category

Benefice Properties This represents the value of all benefice housing (parsonages) in the Diocese after deducting any loans due on the properties. Funds for support of Income used to support schools work, and Schools fund, religious education to meet the office and travel costs of Religious education religious education advisers. advisor expenses support

25. CAPITAL COMMITMENTS

At 31 December 2020 the LDBF had £nil capital expenditure commitments authorised but not contracted (2019 - £nil), and contracted for but not yet due of £71k (2019 - £nil).

26. OPERATING LEASES

Total amounts payable under non-cancellable operating leases are as follows:

2020 2019
£’000 £’000
Land and buildings
Within one year of the balance sheet date 30 30
In the second to fifth year of the balance sheet date 119 119
After the fifth year of the balance sheet date 117 147
======== ========

27. POST BALANCE SHEET EVENTS AND CONTINGENT LIABILITIES

There were no post balance sheet events or contingent liabilities at the balance sheet date.

28. PENSIONS

During 2020 the LDBF participated in two pension schemes administered by the Church of England Pensions Board, which holds the assets of the schemes separately from those of the LDBF and the other participating employers. One of these is the Church of England Funded Pensions Scheme for stipendiary clergy. The other is the Church Workers Pension Fund. The Church Workers Pension Fund has a section known as the Defined Benefits Scheme, a deferred annuity section known as Pension Builder Classic and a cash balance section known as Pension Builder 2014.

Church of England Funded Pension Scheme

With effect from 1 January 1998, diocesan clergy became members of the Church of England Funded Pensions Scheme. This defined benefit scheme provides benefits based on the National Minimum Stipend in the year before their date of retirement and provides for that part of the benefit that relates to pensionable service after 1 January 1998. Benefits are currently being accrued on the basis of half of the National Minimum Stipend (NMS) being paid as the normal pension on reaching the age of 68 on completion of maximum service of 41.5 years, or 1.25 times this amount for archdeacons, plus a lump sum of three times the pension based on the previous year’s NMS payable from the scheme. Pensions in respect of pensionable service before 1 January 1998 will be provided for by the Church Commissioners under the previous arrangements.

December 2020 December 2019
Number of members 322 329

55

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

28. PENSIONS (continued)

Leeds DBF participates in the Church of England Funded Pensions Scheme for stipendiary clergy, a defined benefit scheme. This scheme is administered by the Church of England Pensions Board, which holds the assets of the schemes separately from those of the Responsible Bodies.

Each participating Responsible Body in the scheme pays contributions at a common contribution rate applied to pensionable stipends.

The scheme is considered to be a multi-employer scheme as described in Section 28 of FRS 102. This means it is not possible to attribute the Scheme’s assets and liabilities to each specific Responsible Body, and this means contributions are accounted for as if the Scheme were a defined contribution scheme. The pensions costs charged to the SoFA in the year are contributions payable towards benefits and expenses accrued in that year, plus any impact of deficit contributions are shown in Note 13 (see also below).

A valuation of the Scheme is carried out once every three years. The most recent Scheme valuation completed was carried out at as 31 December 2018. The 2018 valuation revealed a deficit of £50m, based on assets of £1,818m and a funding target of £1,868m, assessed using the following assumptions:

Following the 31 December 2018 valuation, a recovery plan was put in place until 31 December 2022 and the deficit repair contributions payable (as a percentage of pensionable stipends) are as set out in the table below.

% of pensionable stipends January 2019 to January 2021 to
December 2020 December 2022
Deficit repair contributions 11.9% 7.1%

As at 31 December 2018, the deficit recovery contributions under the recovery plan in force at that time were 11.9% of pensionable stipends until December 2025. As at 31 December 2019 and 31 December 2020 the deficit recovery contributions under the recovery plan in force were set out in the above table.

For senior office holders, pensionable stipends are adjusted in the calculations by a multiple, as set out in the Scheme’s rules.

Section 28.11A of FRS 102 requires agreed deficit recovery payments to be recognised as a liability. The movement in the balance sheet liability over 2019 and 2020 is set out in the table below.

2020 2019
Balance sheet liability at 1 January 2,046,000 6,254,000
Deficit contribution paid (913,000) (913,000)
Interest cost (recognised in SoFA) 17,000 122,000
Remaining change to the balance sheet liability* (recognised in SoFA) (42,000) (3,417,000)
Balance sheet liability at 31 December 1,108,000 2,046,000

56

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

28. PENSIONS (continued)

This liability represents the present value of the deficit contributions agreed as at the accounting date and has been valued using the following assumptions set by reference to the duration of the deficit recovery payments:

ments:
Dec 2020 Dec 2019 Dec 2018
Discount rate 0.2% pa 1.1% pa 2.1% pa
Price inflation 3.1% pa 2.8% pa 3.1% pa
Increase to total pensionable payroll 1.6% pa 1.3% pa 1.6% pa

The legal structure of the scheme is such that if Responsible Body fails, the Diocese of Leeds could become responsible for paying a share of that Responsible Body’s pension liabilities.

Church Workers Pension Fund – Defined Benefits Scheme

Until 31 December 2018 the Leeds DBF participated in the Defined Benefits Scheme section of CWPF for lay staff of the former three dioceses. The Scheme is administered by the Church of England Pensions Board, which holds the assets of the schemes separately from those of the Employer and the other participating employers.

The Church Workers Pension Fund has a section known as the Defined Benefits Scheme, a deferred annuity section known as Pension Builder Classic and a cash balance section known as Pension Builder 2014.

Defined Benefits Scheme

The Defined Benefits Scheme (“DBS”) section of the Church Workers Pension Fund provides benefits for lay staff based on final pensionable salaries.

For funding purposes, the DBS is divided into sub-pools in respect of each participating employer as well as a further sub-pool, known as the Life Risk Pool. The Life Risk Pool exists to share certain risks between employers, including those relating to mortality and post-retirement investment returns.

The division of the DBS into sub-pools is notional and is for the purpose of calculating ongoing contributions. They do not alter the fact that the assets of the DBS are held as a single trust fund out of which all the benefits are to be provided. From time to time, a notional premium is transferred from employers’ sub-pools to the Life Risk Pool and all pensions and death benefits are paid from the Life Risk Pool.

The scheme is considered is a multi-employer scheme as described in Section 28 of FRS 102. It is not possible to attribute the scheme’s assets and liabilities to specific employers, since each employer, through the Life Risk Pool, is exposed to actuarial risks associated with the current and former employees of other entities participating in the DBS. This means that contributions are accounted for as if the Scheme were a defined contribution scheme. The pensions costs charged to the SoFA in the year are contributions payable towards benefits and expenses accrued in that year, plus any impact of deficit contributions are shown in Note 13 (see also below).

If, following an actuarial valuation of the Life Risk Pool, there is a surplus or deficit in the pool, further transfers may be made from the Life Risk Pool to the employers’ sub-pools, or vice versa. The amounts to be transferred (and their allocation between the sub-pools) will be settled by the Church of England Pensions Board on the advice of the Actuary.

57

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

28. PENSIONS (continued)

A valuation of DBS is carried out once every three years. The most recently finalised was carried out as at 31 December 2019. In this valuation, the Life Risk Section was shown to be in deficit by £7.7m and £7.7m was notionally transferred from the employers’ sub-pools to the Life Risk Section. The overall deficit in DBS was £11.3m. This is an improvement from the 2016 valuation.

As the valuation as at 31 December 2019 was completed in March 2021, the contributions agreed at that valuation will be reflected in the figures disclosed in the 2021 accounts.

Following the previous valuation, the Leeds DBF entered into an agreement with the Church Workers Pension Fund for the DBS Schemes as follows:

Leeds DBF (Bradford) DBS

Following the valuation, the Diocese of Leeds has entered into an agreement with the Church Workers Pension Fund to pay expenses of £5,100 pa. In addition, deficit payments of £56,213 per year have been agreed for 5 years from 1 April 2018 in respect of the shortfall in the Diocese of Leeds sub-pool.

Leeds DBF (Ripon & Leeds) DBS

Following the valuation, the Diocese of Leeds has entered into an agreement with the Church Workers Pension Fund to pay expenses of £9,200 pa. In addition, deficit payments of £199,114 per year have been agreed for 5 years from 1 April 2018 in respect of the shortfall in the Diocese of Leeds sub-pool.

Leeds DBF (Ripon & Leeds Education Team) DBS Following the valuation, the Diocese of Leeds has entered into an agreement with the Church Workers Pension Fund to pay expenses of £1,800 pa. In addition, deficit payments of £21,645 per year have been agreed for 5 years from 1 April 2018 in respect of the shortfall in the Diocese of Leeds sub-pool.

Leeds DBF (Wakefield) DBS

Following the valuation, the Diocese of Leeds has entered into an agreement with the Church Workers Pension Fund to pay expenses of £11,400 pa. In addition, deficit payments of £119,444 per year have been agreed for 5 years from 1 April 2018 in respect of the shortfall in the Diocese of Leeds sub-pool.

These obligations have been recognised as a liability within the financial statements.

Section 28.11A of FRS 102 requires agreed deficit recovery payments to be recognised as a liability. The movement in the provision is set out below:

2020 2019
Balance sheet liability at 1 January 978,000 1,604,000
Deficit contribution paid (309,000) (309,000)
Interest cost (recognised in SoFA) 9,000 28,000
Remaining change to balance sheet liability*(recognised in SoFA) 13,000 (345,000)
Balance sheet liability at 31 December 691,000 978,000

58

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

28. PENSIONS (continued)

This liability represents the present value of the deficit contributions agreed as at the accounting date and has been valued using the following assumptions, set by reference to the duration of the deficit recovery payments:

ayments:
Discount rate December 2020 December 2019 December 2018
Leeds DBF (Bradford) DBS 0.30% 1.20% 1.90%
Leeds DBF (Bradford & Ripon
Education Team) DBS 0.30% 1.20% 1.90%
Leeds DBF (Wakefield) DBS 0.30% 1.20% 1.90%
Leeds DBF (Ripon & Leeds) DBS 0.30% 1.20% 1.90%

Pension Builder Scheme

The Pension Builder Scheme of the Church Workers Pension Fund is made up of two sections, Pension Builder Classic and Pension Builder 2014, both of which are classed as defined benefit schemes.

Pension Builder Classic provides a pension for members for payment from retirement, accumulated from contributions paid and converted into a deferred annuity during employment based on terms set and reviewed by the Church of England Pensions Board from time to time. Bonuses may also be declared, depending upon the investment returns and other factors.

Pension Builder 2014 is a cash balance scheme that provides a lump sum that members use to provide benefits at retirement. Pension contributions are recorded in an account for each member. This account may have bonuses added by the Board before retirement. The bonuses depend on investment experience and other factors. There is no requirement for the Board to grant any bonuses. The account, plus any bonuses declared, is payable from members’ Normal Pension Age.

There is no sub-division of assets between employers in each section of the Pension Builder Scheme.

The scheme is considered to be a multi-employer scheme as described in Section 28 of FRS 102. This is because it is not possible to attribute the Pension Builder Scheme’s assets and liabilities to specific employers and that contributions are accounted for as if the Scheme were a defined contribution scheme. The pensions costs charged to the SoFA in the year are contributions payable (see Note 13 and above).

A valuation of the scheme is carried out once every three years. The most recent scheme valuation completed was carried out as at 31 December 2016. This revealed, on the ongoing assumptions used, a deficit of £14.2m. At the most recent annual review, the Board chose not to grant a discretionary bonus, which will have acted to improve the funding position. There is no requirement for deficit payments at the current time.

A valuation as at 31 December 2019 was underway as at 31 December 2020. The contributions agreed at that valuation will be reflected in the figures disclosed in the 2021 accounts.

For the Pension Builder 2014 section, the 31 December 2018 valuation revealed a surplus of £1.8m on the ongoing assumptions used. There is no requirement for deficit payments at the current time.

The legal structure of the scheme is such that if another employer fails, the Leeds DBF could become liable for paying a share of that employer’s pension liabilities.

From 1 January 2019 all lay staff employed by the LDBF are enrolled in the Pension Builder Classic scheme.

59

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

29. PRIOR PERIOD COMPARATIVE SOFA

Unrestricted funds Unrestricted funds Restricted Endowment Total
funds
General Designated Funds Funds 2019
Note £’000 £’000 £’000 £’000 £’000
Income and endowments
from:
Donations 2
Parish contributions 13,879 - - - 13,879
Archbishop’s Council 4,047 - 639 - 4,686
Other donations 338 - 30 - 368
Charitable activities 3 1,629 - - - 1,629
Other activities 4 1,001 - - - 1,001
Investments 5 675 - 383 54 1,112
Other 6 50 - 190 154 394
------------------- ------------------ ---------------- --------------- ------------------
Total 21,619 - 1,242 208 23,069
-------------------- ------------------ ---------------- --------------- ------------------
Expenditure on:
Raising funds 7 79 - - - 79
Charitable activities 8 20,725 - 630 14 21,369
Pension deficit valuation
movements 27 (3,612) - - - (3,612)
Other 9 130 - 36 - 166
------------------- ------------------ ---------------- --------------- ------------------
Total 17,322 - 666 14 18,002
------------------- ------------------ ---------------- --------------- ------------------
Net income before
investment gains 4,297 - 576 194 5,067
Net gains/ (losses) on
investments		 151 2 1,578 1,565 3,296
------------------- ------------------ ---------------- --------------- ------------------
Net income 4,448 2 2,154 1,759 8,363
Transfers between funds 14 2,250 1,090 (403) (2,937} -
------------------- ------------------ ---------------- ----------------- ------------------
Net movement in funds 6,698 1,092 1,751 (1,178) 8,363
------------------- ------------------ ------------------ ------------------ ------------------
Total funds brought 41,673 10 14,981 133,732 190,396
forward
------------------- ------------------ ------------------ ------------------ ------------------
Total funds carried
forward		 21 48,371 1,102 16,732 132,554 198,759
========= ======== ========= ========= =========

60

LEEDS DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

30. RELATED PARTY TRANSACTIONS

The Board enters into transactions, on a regular basis, with other autonomous organisations within the Church of England - e.g. Parishes, the Cathedrals, the Central Board of Finance, the Archbishops Council of the Church of England and the Church Commissioners. From time to time Directors and key managers of the Board may serve on committees of other bodies, or the General Synod. It is not considered appropriate to report the detail of such transactions since no person or group of people so serving have any significant influences over any material transactions.

There are no unusual transactions with such bodies reflected in these financial statements.

31. FUNDS HELD AS CUSTODIAN TRUSTEE

The LDBF acts as Diocesan Authority or custodian trustee for many trust funds by virtue of the Parochial Church Councils (Powers) Measure 1956 and the Incumbents and Churchwardens (Trusts) Measure 1964 where the managing trustees are parochial church councils and others. Assets held in this way are not aggregated in these financial statements as the LDBF does not control them. The financial assets held in this way may be summarised as follows:

way may be summarised as follows:
2020 2019
£000 £000
CBF Church of England Investment Fund income shares 11,390 10,979
CBF Church of England Investment Fund accumulation shares 32 42
CBF Church of England UK Equity shares 68 70
CBF Church of Global Equity shares 500 420
CBF Church of England Fixed Interest Securities Fund shares 396 421
CBF Church of England Property Fund shares 372 391
Other common investment fund holdings 581 535
Direct holdings in UK equities 340 386
CBF Church of England Deposit Fund 1,556 1,622
---------------- ----------------
Total assets held as custodian trustee 15,235 14,866
======== ========

61