2022-12-31-accounts

The York Diocesan Board of Finance Limited

Annual Report & Financial Statements for the year ended 31 December 2022

Company Registration Number: 225234 Charity Registration Number: 244976

THE YORK DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

For the year ended 31 December 2022

TABLE OF CONTENTS	Page Number
Legal Objects	3
Core Purpose	4
Strategic Report:
Strategic Aims	4
Activities and Achievements in the year	5
Future plans	12
Financial review	13
Principal risks and uncertainties	17
Structure and Governance	18
Trustees’ Responsibilities	23
Administrative details	25
Independent Auditor’s Report	27
Statement of Financial Activities	30
Income and Expenditure Account	31
Balance Sheet	32
Cash Flow Statement	33
Notes to the Financial Statements	34

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

For the year ended 31 December 2022

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 2022.

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:

a Directors’ Report of a charitable company,

• a Strategic Report under the Companies Act 2006 and

a Trustees’ Annual Report under the Charities Act 2011

LEGAL OBJECTS

The Diocese of York covers an area of 2,261 square miles, from the Humber to the Tees and from the A1 to the East Coast.

The principal object of the York Diocesan Board of Finance Limited (“YDBF”) is to promote, assist and advance the work of the Church of England in the Diocese of York by acting as the financial executive of the York Diocesan Synod.

The YDBF is constituted under the Diocesan Boards of Finance Measure 1925 and has the following principal statutory responsibilities:-

• i. the management of glebe property and investments to generate income to support the cost of stipends arising from the Endowment and Glebe Measure 1976 and under the provisions of the Church Property Measure 2018;

• ii. the provision of housing for office holders as the Diocesan Parsonage Board under the Ecclesiastical Offices (Terms of Service) Measure 2009;

• iii. the repair of benefice houses as the Diocesan Parsonage Board under the Repair of Benefice Buildings Measure 1972;

• iv. the functions of the Diocesan Board of Education, including the management of investments and the custodian of assets relating to church schools, set out within the Diocesan Boards of Education Measure 2021;

• v. the custodian of permanent endowment and real property assets relating to trusts held by Incumbents and Archdeacons and by Parochial Church Councils as Diocesan Authority under the Incumbents and Churchwardens (Trusts) Measure 1964 and the Parochial Church Councils (Powers) Measure 1956.

The strategic priorities of the company are established by the Diocesan Synod in consultation with Deanery Synods and PCCs, and the Archbishop of York (in respect of his responsibility for the provision of the cure of souls) who takes counsel with the Archbishop’s Council and the York Diocesan Leadership Team. 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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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

For the year ended 31 December 2022

CORE PURPOSE

The core purpose of the YDBF is to manage the assets of the Diocese so as to provide appropriate personnel, operational and financial resources to assist the Diocesan Synod, Archbishop’s Council, deaneries and parishes to further their missional and strategic priorities.

The directors of the YDBF are aware of the Charity Commission’s guidance on public benefit and have had regard to it in their administration of the Board. The YDBF believes that, by promoting the work of the Church of England in the Diocese of York, it helps to promote the whole mission of the Church (pastoral, evangelistic, social and ecumenical) more effectively, both in the diocese as a whole and in its individual parishes, and that in doing so it provides a benefit to the public by providing facilities for public worship, pastoral care and spiritual, moral and intellectual development, both for its members and for anyone who wishes to benefit from what the Church offers; and promoting Christian values and service by members of the Church in and to their communities, to the benefit of individuals and society as a whole.

STRATEGIC AIMS: LIVING CHRIST’S STORY

Following a consultation with the Deaneries, in November 2020 the Diocesan Synod approved a renewed statement of strategic priorities to underpin a 10 year plan to support individual congregations to grow both numerically and spiritually. It is this growth, both in membership and in the financial contributions made by those attending, that will provide the sustainability needed to secure their on-going mission and ministry for generations to come.

The key areas of focus, as we seek to be a family of worshipping communities who are “Living Christ’s Story” are:

• Becoming more like Christ

• Reaching people we currently don't

• Growing churches of missionary disciples

• Transforming our finances and structures

Following further extended consultation with the parishes in the first half of 2021, a framework for Deanery level deployment planning was adopted by Diocesan Synod in January 2022. Between January and November 2022, Deanery Leadership teams worked with bishops, archdeacons and other diocesan staff to create Deanery Mission & Ministry plans.

Following the appointment of a new Director of Mission & Ministry in September 2021, a restructured Mission & Ministry function brought together those involved in

• the deepening of discipleship and the nurturing of lay and ordained vocations;

• equipping lay and ordained for ministry and leadership;

• the largely externally funded Multiply and Mustard Seed programmes that seek to raise up local leadership and new worshipping communities in those places where we have historically not reached as many people as we would hope to: those living in places where life is tough and those who are in their 20s-40s.

Significant recruitment activity took place during the year to fill posts that had been held vacant, pending the restructuring of the team, and by the end of the year was complete. The new team is working closely with others who are also engaged in the key areas of focus listed above (including those supporting our work in Growing Faith, Generous Giving and Sustainable Churches) in delivering support to Deaneries in the delivery of their local plans.

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

For the year ended 31 December 2022

It was reported in the previous annual report that the DBF was successful in their bid to the Archbishops’ Council Strategic Investment Board for £825,000 of Strategic Capacity Funding (SCF). The Archdeacon of York had been seconded full-time from November 2021 to May 2022 to work on the bid and coordinate the planning for the Deanery Planning phase of the programme. Following confirmation of the grant, and an extended recruitment process, a full time Director for Strategic Transformation joined the diocese in November to oversee the detailed implementation of the Living Christ’s Story plans. The funding has also enabled the recruitment of additional project management capacity (which will also support the development of a Carbon Net Zero plan for the diocese) and additional capacity in the area of Discipleship, Digital Engagement and Data Analysis without additional calls on the Diocesan Common Fund.

A significant outcome sought from the 10 year plan is the transformation of our finances and structures. The overwhelming majority of PCCs do not cover the cost of ministry provided and, whilst investment returns have held up in recent years, it would not be prudent for the DBF to plan for year on year increases in operating deficits. This transformation therefore begins at parish level, where even discounting the adverse financial effect of Covid, only a minority of PCCs have been able to increase their Freewill Offer to the diocese in line with inflation. The overall Free Will Offer income from parishes in 2022 was still 13% below that received in 2019.

As well as offering support via the Generous Giving Team, there has been continued effort to communicate the complexities of the DBF’s finances to the parishes and to quantify the variance between the Free Will Offer pledged and the actual costs of ministry and other support being provided to groups of congregations under the oversight of a single ministry team. This analysis has been made available to Deanery Leadership Teams to support their local planning which will form the core of a sustainable ministry deployment plan to be implemented over the next 3-5 years.

The deanery and parish consultations over the last two years have confirmed that there is a significant issue around parish administration and its impact on clergy and lay members. As well as identifying areas where additional support would be welcomed, it was recognised that some areas of current engagement between the parishes and Diocesan Office would benefit from a review. Although delayed due to the timescales of appointing the new Director for Strategic Transformation, an externally facilitated review has been commissioned by the Board and is due to commence in Spring 2023.

ACTIVITIES AND ACHIEVEMENTS IN THE YEAR

Alongside progressing the strategic planning process, and the initial delivery of support for the four strands of Living Christ’s Story, there has continued to be a significant focus on other key areas of activity which either support the strategic goals or relate to our ongoing mission as a Church of England diocese:

• Maintaining an effective Christian presence in every parish.

• Embedding Safeguarding into the DNA of our life as a diocese.

• Promoting and support the work of our Church schools as well as providing support to clergy and others who are working in Community schools.

• Engaging in local debate and ensuring that Christian voices are heard in all areas of public life.

• Responding to areas of social need within our communities, working with other organisations to deliver a positive contribution to the wellbeing of the most vulnerable in our society.

The Coronavirus Pandemic continued to impact almost every aspect of diocesan life during the last year. The life of the diocese is primarily expressed through the ministry undertaken in the parishes and, and this continued to be impacted by restrictions until early 2022 (when the final Omicron

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

For the year ended 31 December 2022

restrictions around mask wearing were lifted). Church attendance has remained below 2019 levels in the majority of cases and the evidence is that contact with children and families and voluntary giving to parishes are significantly reduced.

Since the reopening of Diocesan Office in 2021, most DBF staff have been able to take advantage of patterns of working continue to permit some personal flexibility in regard to location for their work. The lockdowns of 2020-21 necessitated remote access to systems, albeit that some of the provision was, by necessity, ad-hoc and sub-optimal. The continued ability to offer hybrid working has been facilitated by greater use of technology, including a reduction of the reliance on on-premise servers through the migration to SharePoint and the Xledger accounting system in the course of 2022. It is envisaged that further investment in technology and training to improve effectiveness will be recommended following the Services Review and form a key areas of work for the Digital Transformation Lead who will be in role from Easter 2023.

Resourcing Parochial Ministry

As well as engaging in a wide variety of community and church projects, our licensed ministers usually carry out approximately 1,100 weddings, 3,700 funerals and 3,300 baptisms each year (2019 figures). During the pandemic the numbers were reduced significantly and are slowly returning to previous levels (2021: 900 weddings, 3300 funerals and 2000 baptisms). While the YDBF is responsible for funding of clergy stipend costs, the national clergy payroll is administered by the Archbishops’ Council, a charity which the YDBF reimburses regularly for the costs of stipendiary clergy deployed in the Diocese. Caring for the stipendiary parish based clergy (169 FTE at 28 Feb 2023 with 35 FTE vacancies) is a priority of the YDBF and represents by far its largest financial commitment. Although the YDBF does not employ the parish clergy, it is responsible for training them, paying and housing them, and paying into their pension fund. In addition to the stipendiary clergy, there are about 75 self-supporting licenced clergy and a further 300, the majority of whom are retired, who hold the Archbishop’s Permission to officiate and enable us to offer both Sunday worship and occasional offices across over 580 churches.

For many, the clergy house represents the domestic heart of the parish, serving not only as a home but also as a base for ministry. The YDBF recognises the importance of a safe, secure and well maintained house and strives to continue with this work as well as carrying out programmed refurbishments and improvements, as available money allows.

Over the year the average vacancy rate was approximately 16%. During all parish vacancies, the Area Deans worked closely with the churchwardens and ensured that scheduled services continued and, with very few exceptions, other activities within the community continued uninterrupted. This was largely made possible by the retired and self-supporting ministers in the diocese together with the Readers and huge numbers of lay volunteers.

Safeguarding

The work in this area continued to be overseen by the Diocesan Safeguarding Advisory Panel (DSAP), independently chaired by Professor Sue Proctor until February 2022, when retired DI Allan Harder was appointed as her successor. DI Harder had represented North Yorkshire Police on the panel prior to his retirement and had chaired the Past Case Review Reference Group. The DSAP includes representatives of local authorities, North Yorkshire Police, the Roman Catholic Diocese of Middlesbrough and a survivor support charity as well as senior diocesan leaders. The work of the Panel is supported by an Operational Group that brings together key staff within the diocese and York

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

For the year ended 31 December 2022

Minster who are involved in safeguarding, working with young people and vulnerable adults and the training of our clergy and lay leaders.

During 2022, in addition to supporting national workstreams, providing advice and support to parishes, managing core groups and managing a casework load, the team has continued to support the roll out of the Church of England Safeguarding Learning & Development Framework and the implementation of further changes in the House of Bishops Safeguarding guidelines, post IICSA. The Safeguarding Advisors continued to experience high levels of activity, alongside facilitating further external scrutiny of the handling of Safeguarding issues in the Church of England.

One of the commitments made by the Church of England to the Independent Inquiry into Child Sexual Abuse (IICSA) was to review the files of all licenced ministers and parish officers to ensure that there are no outstanding safeguarding issues relating to work with children young people or vulnerable adults that were not picked up by the 2010 Past Care Review (PCR) which had a narrower remit. This review (PCR2) of over 1800 files required significant resourcing, both in terms of staff time and the funding of a team of external reviewers. Progress was hampered due to the lockdowns which made it hard to access the files, but the work was finally completed in the autumn of 2021 and a final report published in Spring 2022. The local report identified a small number of cases where further review was recommended as well as a recommendation to formalise and publish a harassment and bullying policy for use at both parish and diocesan level. This policy was approved by Diocesan Synod in April 2022 and is available on the diocesan website.

Following the success of the inaugural Diocesan Safeguarding Week in 2021, a second week was held in November 2022. Designed to raise awareness and provide additional opportunities for learning and development, over 250 people attended 12 separate events, all but one of them delivered via Zoom. The sessions were delivered with the support of a number of external partners including the Police and Survivor support.

A significant amount of resource continues to be committed to providing training to licensed and authorised ministers, church officers and church members. In the course of 2022, 370 individuals attended the mandatory two session Safeguarding Leadership training for licensed and authorised ministers (2021: 366), with a total of 757 accessing the specialist Domestic Abuse or Safer Recruiting online training modules (2021: 243). 2495 foundation and basic e-learning courses were completed (2021: 1375). Additional Leadership Pathway options for Parish Safeguarding Officers (PSO) and Clergy with permission to officiate (PTO) were introduced during 2021 and were attended by 63 (PSOs) and 69 (PTOs)

Additional face to face sessions have been held for parish volunteers in relation to DBS administration and safer recruitment, as well as for those who are unable to access the basic and foundation e- learning material. This has been particularly welcomed by older participants as well as those with unreliable internet access.

Julie O’Hara, our Safeguarding Adviser (DSA), left the diocese to take up a national role in July 2022. Following a national recruitment exercise, Rob Marshall (previously Assistant DSA) was appointed in November to a reconfigured role of Head of Safeguarding. This anticipates the impending revision of Canon 42 that will require dioceses to appoint a qualified individual to the statutory role of Diocesan Safeguarding Officer “to have responsibility in the diocese, independent of the bishop, for the professional leadership on and management of matters relating to the safeguarding of children and vulnerable adults”. The Head of Safeguarding will fulfil this role for the Diocese of York.

The Head of Safeguarding is responsible for reporting any issues that meet statutory thresholds. He is in close contact with the relevant authorities and has ensured that any incidents relating to PCCs or the DBF that meet the threshold for reporting to the Charity Commission have been submitted.

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

For the year ended 31 December 2022

An appointment of a replacement Assistant Safeguarding Officer was made in February 2023, bringing the team back up to full strength. We anticipate that will provide the necessary capacity to manage a the casework load alongside awareness raising and working with the newly constituted Survivor Voice Working Group to improve our response to and care for those who have been subjected to abuse in church settings. Additionally, the Diocesan Secretary continues to contribute to the ongoing revision of a number of national policies and procedures.

Working with Children & Young People in Schools and Parishes

The Diocesan Boards of Education Measure (2021) became law in April 2021 and required each Diocesan Synod to make a Scheme to designate the DBE for the Diocese. The Scheme relating to the York Diocesan Board of Education (YDBE) was made in June 2022 by Diocesan Synod. This Scheme created the YDBE as a statutory committee of the Diocesan Board of Finance (DBF). In addition to the education requirements of the DBE Measure, the York Diocesan Synod also deemed the YDBE to have oversight of Children and Youth work in the Scheme. Clear Terms of Reference were agreed both for the YDBE and its sub-committees and a general oversight report is provided to the DBF on a termly basis.

Much of our work with Children, Youth and Schools in 2022 focused on supporting homes, schools and churches aligned with the strategic vision of the YDBE. This strategic work is located within the diocesan vision of Living Christ’s Story and the national work set out within Growing Faith.

Post pandemic, diocesan support for churches continued to focus on resourcing households as well as in church activity as return to ‘in person’ gatherings in churches for children and families were slow to emerge. This included the development of a Big Bible Storybook Toddler Resource to support discipleship opportunities for those who bring young children to toddler groups and the hosting of an Early Years conference for those who work with young children in churches in October 2022. Generation to Generation development days across the diocese have prompted productive conversations on how to make services more inclusive, accessible and relevant to all ages. Children and Youth worker gatherings have been held in each of the Archdeaconries and the Children and Youth Adviser has been successful in gaining Growing Faith Foundation Research Funding to carry out further research on children and holiness.

As for schools, 122 of the 123 Church schools bought into the two-year Service Level Agreement provided by the Education team. This level of buy in promotes the strong working relationship with Church schools in developing their Christian vision as well as providing increased income into the diocese to fund the School Development Adviser posts.

At the beginning of 2022 there were ten Multi Academy Trusts (MATs) across the diocese, all of which were mixed MATs with Church and community schools working in partnership together. 2022 saw the publication of the Schools White Paper by the Department for Education (DfE) entitled, Opportunity for all: strong schools with great teachers for your child . One of the four strands in the White Paper was the desire for ‘A stronger and fairer school system’ with a timeline for all schools to join a MAT by 2030. This led to increased interest from Governing Bodies in exploring conversion to academy status over the course of 2022. However this was then tempered with the wider political uncertainty and subsequent withdrawal of the associated Schools Bill by the DfE. This means that a mixed system of maintained and academy schools will likely continue for the foreseeable future.

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

For the year ended 31 December 2022

Small school viability continues be a challenge for the YDBE especially when a school is judged to be inadequate by Ofsted. The YDBE continues to engage with MATs, Local Authorities and the DfE on possible solutions when a school finds itself in this position. Regrettably two Church schools closed during the course of 2022; one on viability grounds and one where the DfE was unable to find a sponsor for the school.

The diocese continues to be held accountable by the DfE and other statutory bodies, such as Ofsted, for the progress and attainment in Church schools. By the year-end, 103 of the 123 (84%) Church schools and academies were rated ‘Good’ or ‘Outstanding’ by Ofsted and under the statutory system for denominational Church school inspection (SIAMS), 121 (98%) of schools were rated ‘Good’ or ‘Outstanding/Excellent’.

Nurturing of lay and ordained discipleship, vocations and equipping for lay and ordained ministry

The Mission & Ministry Team has seen significant change during 2022 as the team was restructured to better support the strategic direction that has been set in response to the diocesan Living Christ’s Story consultation processes. A number of key appointments were made to fill vacancies (that had arisen as a result of retirements during 2021 and 2022) and new posts that have been funded via national strategic funding grants.

As part of the successful bid for Strategic Capacity Funding, the diocese obtained funding for a Discipleship Adviser, and Ms Sammi Tooze was appointed in the latter part of 2022. She has been working on resources to support the key priority around Becoming More Like Christ and, together with the Archbishop, has launched a set of materials introducing a diocesan Rhythm of Life which will be rolled out during Lent 2023.

She has been working closely with recently appointed colleagues who support both lay and ordained vocations. The Revd Canon Nick Bird, who had held the Diocesan Director of Ordinands (DDO) role on a voluntary basis alongside his parish work during the long term absence of the previous DDO, took up the role full-time in September.

Despite the resourcing challenges experienced in that area of work over the last few years, our largely volunteer team has continued to invest in nurturing vocations in the Diocese, with 20 ordinands in training (at 31 March 2022) of whom 4 commenced training in September 2022; a number of our ordinands are under 32 and there is a good gender-balance. Furthermore, 9 candidates attended Stage One Panels in the new Shared Discernment Process (SDP) in the 2022/23 selection year, and we continue to have a number of other candidates in the discernment pipeline, including 7 Distinctive Deacons who are exploring ordination to the priesthood.

A key aspect of the restructuring of the Mission & Ministry Team has been to draw together various strands of training for lay and ordained ministries together into a single Lifelong Learning Team. Two new roles were created to focus on the learning and development needs for lay and ordained ministers in the first five years of their ministry. Alongside the creation of the new role of Start of Lay Ministries advisor, the team is developing a revised set of learning pathways for lay ministries. These will be rolled out from September 2023 and will replace the current training offerings for Recognised Parish Assistants and Readers.

During 2022, the York School of Ministry (YSOM), based at the Diocesan Office but with hubs in Middlesbrough and Beverley, continued to provide higher education accredited training, validated by Durham University, for Readers, licensed and recognised lay ministers, ordinands and curates and those in discernment for a wide range of ministries, within and beyond the church. YSOM also continued to run the Recognised Parish Assistant training programme in a number of locations around

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

For the year ended 31 December 2022

the diocese and, in addition, offered a number of introductory courses aimed at a wider audience, including, for example, Children’s and Youth workers, Churchwardens and church administrators. It continued its partnership with St Hild’s College to support ordination training by contributing to the Yorkshire Theological Education Partnership.

Learning has been facilitated both on line and in person, as appropriate to the content. This has already both widened access and begun to reduce our carbon footprint.

Whilst, as reported last year, the programme of continuing ministerial education for Readers and clergy had been scaled back pending the review of provision for lifelong learning, a number of events were offered (both online and in person) in the course of 2022.

Wydale Hall’s schedule of bookings and events was much closer to pre-Covid norms. Whilst there are still challenges for group bookings either as a direct result of Covid related drop-outs, or because numbers are generally lower post-Covid, the team at Wydale have continued to be flexible and creative in responding to the needs of guests and the visitor feedback has been very positive. A full programme of Wydale events was scheduled for 2022 which included provision for remote participation in many events. We continue to be grateful to the prayerful and practical support of the extended community of volunteers who have met regularly online via Zoom and offered their practical skills as visitors have been able to be back on site.

Nationally Funded “Reach” Projects

MULTIPLY - New Worshipping Communities for 20s-40s and MUSTARD SEED – Growing disciples in places where life is tough

Both of these projects are reaching the mid-point of their funding and the last year has been one of consolidation. As reported in 2021, the remaining Multiply worshipping communities have continued to show growth and local leadership is emerging in a number of them which will help to secure ongoing sustainability beyond the current funding.

The Multiply Growth Fund continued to support Lay Minister programme continued during 2022. Whilst two projects came to an end due to leaders moving on, 10 continue and further projects are due to come on stream during 2023. The pandemic had a significant impact on local capacity to engage in new work and a significant amount of time continues to be spent in support the emerging leaders as they evaluate their future plans in the light of the continuing challenges presented by the social context in which many are working.

The Trustees remain grateful to the Benefact Trust (formerly Allchurches Trust) who agreed that their block grants to York Diocese for 2019-21 could be designated to create a fund to be expended over an extended period to meet the costs of the Mustard Seed Programme Lead and the development costs of the Stepping Up learning and development programmes.

As at December 2022, seven Stepping Up cohorts have completed their programmes and a further six cohorts are underway, with three more planned to start at Easter 2023. Of the 35 people who have completed the course to date, 21 have been locally commissioned as a Community Minister and a further 11 are in the process of discerning their role in mission. Participants have been drawn from 33 parishes.

The rollout of the Mustard Seed Ambassadors programme has been impacted by the Covid recovery period for many churches and also staff availability due to turnover in the core team. This will be revisited during 2023 to identify people from across the Diocese who have a passion to support mission in our poorest communities, willing to come alongside and build a supportive relationship with, and

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

For the year ended 31 December 2022

ANNUAL REPORT

commitment to, a Mustard Seed church and its community.

Wider service and partnership in communities experiencing social need to deliver a positive contribution to the wellbeing of the most vulnerable in our society

Whilst the strategic goals are focussing on the spiritual wellbeing of individuals in our most deprived communities, churches across the diocese have continued their wider involvement in each of their communities, often joining with other denominations to resource Foodbanks and support charities working with the poorest in our society. As a DBF, we continued to take an active role during 2022 in supporting a number of projects, for example by providing facilities to Westway Open Arms (Scarborough) which serves the Eastfield Estate in Scarborough, and St Margaret’s Welcome Centre (Longhill Estate, Hull) and funding the provision of ministry to the CofE parishes affiliated to Together Middlesbrough & Cleveland, a joint venture between the diocese and the Church Urban Fund, enabling those parishes to share their facilities and other resources in the support of those most in need within those communities.

Following the termination of the Longhill Bishop’s Mission Order and discussions with the local PCC, the DBF transferred its lease and the staff working at the St Margaret’s Welcome Centre to the new Longhill Community Charity (a CIO with links to the local PCC) with effect from January 1[st] 2023.

GENEROUS GIVING – supporting local financial sustainability

The team exists to support parish level financial sustainability (which in turn increases parish capacity to increase the level of contributions that they make to the Common Fund). Their primary area of work is around encouraging and developing personal generosity but they also seek to assist PCCs with other practical ways of increasing income and/or reducing expenditure.

As reported last year, there had been some staff vacancies during 2021 that were held pending a review of objectives and team roles in the light of the restated strategic priorities and the creation of a national framework for Generous Giving. A successful application was made for national Stewardship funding which enabled us to recruit a second advisor who joined the team at Easter 2022. Following the appointment of the final member of the original Generous Giving Team to the new role of Discipleship Enabler, a further recruitment took place at the end of the year to bring the team back to 2 for 2023.

Despite the resourcing challenges, at the end of the second year of operation of the Parish Giving Scheme, the number of parishes using the scheme increased from 29 parishes and 537 givers to 81 parishes (of whom 72 are actively promoting the scheme) with 817 givers, of whom 88% Gift Aid and 49% have signed up to the inflationary increase. In the month of March 2023, PGS processed £68,745 of gifts with £15,765 of Gift Aid. This represents an average weekly gift of £19.64 (excluding Gift Aid), compared with the diocesan average weekly gift across all forms of regular giving of £12.35.

Additionally, the team have continued to support the roll out of digital (contactless) giving devices to parishes (with plans for a nationally supported additional “push” in 2023) and we have continued to provide membership of the Association of Church Accountants and Treasurers (ACAT) for all PCCs.

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

For the year ended 31 December 2022

ANNUAL REPORT

FUTURE PLANS

Supporting parishes and communities as they continue to recover from the impact of the Coronavirus Pandemic and engage with the growth plans that have been contextually developed in each Deanery as part of Living Christ’s Story will continue to be a key priority for 2023. This will be the key focus for the Mission and Ministry teams. Other areas of support provided by the DBF to parishes will be the subject of an externally facilitated review to provide assurance to stakeholders that they represent an appropriate, efficient and cost-effective use of resources.

Living Christ’s Story seeks to respond to the challenges of falling attendance, with a strong focus on numerical and spiritual growth, together with the need to restructure the resourcing of ministry at both parish and diocesan level to enable us to create a credible and robust financial plan to respond to the phased reduction in Church Commissioners’ direct support for poorer dioceses that began in 2017. By 2026 the annual grant will be reduced by circa £1m per annum (at 2016 value) compared to the £2.2m received in 2016.

Financial modelling continues to underpin this major undertaking as we seek to increase the pool of volunteer ministers, encourage missionary discipleship and enable churches to grow within a broader mixed ecology which builds, for example, on the experience of on-line worship and the work of chaplaincies during the lockdown. The resulting plan assumes a modest reduction in the number of remunerated posts together with an increase in the donor base to offset the reduction in the Church Commissioners grant and halt the reduction in real terms in parochial contributions to the Common Fund.

It is anticipated that the majority of the structural changes arising from the consultations will be implemented by 2026, with resulting savings, increased investment income and the impact of growing congregations staring to come through in the following years such that by 2031 the clear target is that recurring expenditure of the diocese can be met via regular and reliable sources of income.

Another key element of the structural and financial transformation strategy within Living Christ’s Story, is to engage with the national aspiration that the CofE will achieve carbon net-zero by the end of 2030. It is clear that this will have significant financial implications for both parishes the DBF and, although the diocese has not made as much progress as some others in this area, there are plans in place to engage more intentionally in 2023. The DBF has successfully applied for funding to support the development of a costed net-zero plan (to be presented to the Trustees by the end of the 2023) and alongside implications for churches, schools and operational assets, will be looking at other environmental aspects of the stewardship of its land and investments in the course of the next 12 months, supported by its professional advisors.

In addition, we expect to make progress with our commitment to diversity and inclusion as the work of the Racial Justice Working Group continues following the adoption of the Diocesan Racial Justice Charter in July 2022.

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

For the year ended 31 December 2022

ANNUAL REPORT

FINANCIAL REVIEW

Financial Performance

The Trustees are grateful to all the parishes which gave generously into the Common Fund of the Diocese during the year, and especially to those parishes that give by monthly instalments, which is essential in supporting the cash flow of the Diocese.

Free Will Offers, the money given by Parishes to the Diocese to fund its mission and ministry, are the main incoming resource for the Diocese. These were higher than the previous year at £7,044,000 (2021: £6,816,000). Whilst current year contributions recovered by £221,000, it is still lower than the pre-pandemic levels in 2019 of £8,098,000. Based on submissions from parishes, the expectation is that, during 2023, Free Will Offers will recover further as parish income begins to recover, but it will be at least a further year before they return to pre-pandemic levels, due in no small part to the reduction in regular attendance in many churches coupled with the impact of energy inflation (particularly the price hike in standing charges) on local budgets. This does mean that income is not keeping pace with the levels of inflation experienced by the Diocese in relation to salaries and building repair costs.

Prior period adjustment: When awarded in 2019 the £3m Multiply Grant was recognised in full within restricted income at this point. The treatment of the Multiply Grant has been reassessed in the current year, including the existence of any performance-related conditions which might prevent upfront entitlement under the Charities SORP. As such, a prior period adjustment has been accounted for within these financial statements to recognise the income as the cost-related performance conditions are met over the life of the project. Further details are given in note 28.

The overall net movement in funds in 2022 was -£3,843,000 (2021: +£8,324,000, as restated). The significantly higher level in 2021 was due to gains on the sale of land and buildings and investment gains. Such exceptional items masked a larger underlying operational shortfall.

2022 General Designated Total £000 £000 £000 SOFA: Operational (shortfall)/gain (1,707) (70) (1,777) add back investment and property gains/transfers/exceptional items: Covid related grant awarded in the year - - - Income from closed school sale Gain on sale of properties/closed churches 1 - 1 Lay pension scheme surplus revaluation 261 - 261 Clergy pension scheme deficit reduction 344 - 344 (1,101) (70) (1,171) Investment gains/(losses) (1,456) - (1,456) Investment gains- land - - Transfer between funds -other 1,580 - 1,580 Transfer between funds - property (140) - (140) Transfer between funds - pension (344) - (344) (1,461) 70 - (1,531) Unrestricted	Restricted £000 232 - - - -	Endowed £000 (13) - 314 432 - - 733 (3,278) 1,312 - (183) 344 (1,072)	Total 2022 £000 (1,558) - 314 433 261 344 (206) (4,949) 1,312 - - - (3,843)	Total 2021 £000 (restated) (1,872) 620 - 4,918 317
	232 (215) - (1,580) 323 -			3,983 4,341 - - - -
	(1,240)			8,324

Unrestricted fund:

The unrestricted general fund showed an excess of expenditure over income of £1,171,000 before investment losses or transfers (2021: £479,000). However, if the gain on the sale of properties, and the year end lay and clergy pension scheme movements are excluded, there was an operational shortfall of £1,777,000 (2021: £1,995,000) which can be split into a £1,707,000 shortfall on general funds and a £70,000 drawdown from designated funds (2021: £2,068,000 shortfall on general funds £73,000 increase on designated).

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For the year ended 31 December 2022

This shortfall was slightly better than anticipated levels, with Free Will Offer income £1,054,000 lower than in 2019, the DBF continued to seek efficiency savings and unanticipated additional vacancies, whilst operationally challenging, once again had a positive impact on the operating shortfall.

A draw down from unrestricted reserves of up to £1.8 million (being £2.1 million less anticipated investment gains) was approved for 2023 by Diocesan Synod at its meeting in November 2022. This allowed for a combination of further investment in the Growth Strategy and also a continuing transitional necessity resulting from the reduction in income from the Church Commissioners and the lead time necessary to reach a corresponding uplift in Free Will Offerings. The Trustees assessed that the Diocese had adequate reserves to fund this in year shortfall. Safeguarding the future finances of the Diocese is a key part of the on-going strategic consultations and achieving sustainable parish giving will continue to be a vital factor in the Diocese’s financial security in the future.

Designated funds:

£70,000 was drawdown from designated funds (2021 £73k added) at the year-end towards the Mustard Seed Project (being the Allchurches Trust grant spent in support of that project in the year).

Restricted funds:

Restricted funds showed a net excess income over expenditure of £232,000 before investment losses or transfers (2021: £123,000). Grants from the National Church of £568,000 were received in 2022 to support clergy and Parishes with energy costs and had been substantially allocated before the end of the year.

Endowed funds:

Endowed funds showed an excess of income over expenditure of £733,000 before non property related investment gains or transfers (2021: £4,339,000 surplus). This related to gains arising following the sale of various properties.

The excess of expenditure over income across all funds amounted to £206,000 compared with a £3,983,000 surplus in 2021.

Fixed Asset investments are included on the balance sheet at year end valuation. The impact of net unrealised and realised investment losses for the year of £3,637,000 (2021: £4,341,000 gain) increased the net total deficit for the year to -£3,843,000 compared with an overall increase in funds of £8,324,000 in 2021. Out of this net income various transfers were made between funds, as detailed in note 13.

Significant Property Transactions

There were a number of property sales and purchases during 2022 as the Diocesan policy continues to be:

• to replace unsuitable properties;

• to accommodate the changing geographical deployment of clergy within the Diocese;

• to realise development potential in some properties, thereby using our resources more effectively for the ministry of the Church

£818,000 of land and buildings were purchased during the year compared to £1 million in 2021. During the year, the Diocese disposed of former clergy housing with a total book value of £121,000 realising net sales proceeds of £553,000 and a gain on sale of £432,000.

Glebe land, which is included within investments, was disposed of for £117,000 (2021: £200,000), representing a gain on sale of £53,000 (2021:£11,000 loss).

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

For the year ended 31 December 2022

ANNUAL REPORT

Balance sheet position

The Trustees consider that the balance sheet and notes demonstrate 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 £105,476,000 (2021: £109,319,000) it must be noted that included in this total are properties, mostly in use for the ministry, whose net book value amounted to £49,085,000 (2021: £48,391,000). Much of the remainder of the assets shown in the balance sheet are held in restricted funds or as endowments and cannot necessarily be expended for the general purposes of the YDBF.

Reserves policy

Free reserves

Having considered financial risk, liquidity requirement and the timing of cashflows throughout the year, the Trustees’ policy is to hold a balance of readily realisable assets in the general fund equivalent to 4 months budgeted unrestricted expenditure. At 31 December 2022 the amount required under this policy totalled £4.9m (2021: £4.9m). Actual free reserves as at 31 December totalled £8.1m (2021 £9.4m), which is equivalent to just over 7 months of budgeted unrestricted operating expenditure.

Whilst this level of reserves is above the minimum prudent level set by the trustees, it is considered to be currently necessary to hold them in the light of changes to the Church Commissioners’ funding for the Diocese, the budgeted operating shortfall for 2023 (which includes the fifth of six years’ match funding for the 20s-40s strategic investment), the decline in Free Will Offering, and also possible reduction of contributions to local parishes and/or Free Will Offerings in response to issues in the wider Church. The trustees are monitoring the rate at which the reserves are reducing and have plans to support the strategic initiatives via a release of fixed assets. The option to utilise Total Return legislation to release funding for future projects is kept under review by the Trustees as is the ability of the Common Fund to support the currently agreed levels of stipendiary ministry.

Reserves held as fixed assets

The general fund comprises net assets amounting to £12,850,000 of which £4,758,000 are tangible fixed assets.

Restricted and endowment funds

As set out in notes 20 to 22, YDBF holds and administers a number of endowment and restricted funds. As at 31 December 2022 endowment funds totalled £79.0m (2021: £80.1m) and restricted funds totalled £13.2m (2021: £14.5m). The capital in the endowment funds is not available for the general purposes of the YDBF. The Pastoral Account, as set up under the Pastoral Measure, is technically restricted and shown as such in the annual accounts. However, once obligations under the Measure are met, its purposes do allow funds to be transferred to the Stipends Capital Endowment fund or to be used for other purposes at the discretion of the Board. Further details are given in note 22. The sustainability model for Living Christ’s Story assumes that, over the next five years, some of the transfers to the Pastoral Account (from further planned asset disposals) will continue to be drawn down to help finance the period of transition to new patterns of ministry resourcing, with the remainder retained and invested for income to support stipends.

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

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

For the year ended 31 December 2022

considered a number of factors. The financial position of the YDBF, its net income for the year and cash flows as set out in the Statement of Financial Activities and Cash Flow Statement demonstrate the overall net cash position of the YDBF and the strength of its reserves. As a consequence, the Trustees believe that the YDBF is well placed to manage the business risks successfully despite the uncertainties surrounding the current general economic outlook.

Even allowing for the continuing impact of both the reduction in attendance and parish income, that has not yet recovered following the Coronavirus pandemic, and inflation on the level of parish contributions to the Common Fund, the Trustees have a reasonable expectation that the YDBF 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.

Grant making policy

The Memorandum of Association of the YDBF explicitly permits the YDBF to make grants in pursuance of its objects. The nature of grants made in 2022 is indicated in note 11.

Investment policy

The YDBF is empowered by its memorandum of association to invest monies not immediately required for its purposes. In addition, the YDBF acts as trustee of a number of trust funds, and these must be invested in accordance with the related trusts. The YDBF’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 21 provides details of the assets of each fund, together with the related purposes, and note 15 summarises the movements in investments during the year.

The Trustees’ investment policy is to spread the YDBF’s investments between Evelyn (previously called Smith & Williamson) and CCLA. Evelyn work on a discretionary basis and are mandated to achieve a total return of CPIH plus 5% over the medium term. Within the CCLA portfolio, the YDBF selects funds from the CBF range of funds for the Church of England, taking into account the objectives of each fund in the context of the YDBF’s own objectives for income and long term capital growth. The long term total return objective of the CBF Investment Fund is CPI plus 5% p.a. The CBF Property Fund aims to deliver a high income yield with capital growth over time. Both managers are required to adhere to the policies of the Church of England’s Ethical Investment Advisory Group. The investments held, and their return during the year, are set out in the following table:

CCLA Managed CBF Investment Fund CBF Property Fund CBF Deposit Fund Evelyn Managed	Funds at 31 December 2022 Proportion of Portfolio Income yield in year Total Return in year £'000s 12,971 39.5% 2.64% -9.16% 1,439 4.4% 4.4% -7.8% 570 1.7% 1.31% 1.31% 17,904 54.4% 2.4% -13.2% 32,884 100.0%

The Investment Group meets with the Investment Managers twice each year and regularly reviews the performance of the funds.

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

For the year ended 31 December 2022

ANNUAL REPORT

PRINCIPAL RISKS AND UNCERTAINTIES

The Trustees are responsible for the identification and management of risk. To achieve this, the Trustees have engaged with the management team to consider the principal risks to which the YDBF is exposed and to prioritise a mitigation strategy. The Risk Register is regularly reviewed by the appropriate sub-committees and officers (under the oversight of the Audit Committee), to ensure that all risks are proportionally addressed in line with the YDBF's risk management policy and that all mitigating controls are operating effectively.

The highest risk areas for the Company; those that could have a significant impact on the organisation's ability to achieve its strategic aims, have been identified as being in the following areas:

1. Safeguarding - the risk that there is an occurrence of abuse (or allegation of historic abuse) by someone working for or on behalf of the Diocese. The mitigating controls are as follows:

2. The YDBF retains appropriately trained safeguarding professionals who are following clear policies and protocols aligned to National Church guidelines;

3. Compulsory training is provided to all relevant staff;

4. An independently chaired safeguarding advisory panel governs the effectiveness of YDBF practices; and

5. All parishes are required to adhere to nationally agreed House of Bishops policies and practices with support provided by the safeguarding team.

6. Reliance on key management staff and clergy:

7. a) the risk that vacancies in key posts and under-resourcing of the Diocesan offices and key central functions could lead to a breakdown in the delivery of the Diocesan mission and stewardship of its assets. The mitigating controls are:

   • The Diocese fosters a culture of sharing and support ensuring that there is awareness and management of potential issues before they can escalate;

   • Shared access to systems and documented processes to enable continuity on core processes to be maintained for key activities in the event of a significant vacancy or absence; and

   • The Trustees will continue to review the staffing of central functions as part of the development of the strategic plans.

8. b) the risk that clergy and other key leaders will not have the capacity to deliver the strategic goals in relation to growth either due to individual capability or there being too many demands placed on limited parish resources. The mitigating controls are:

   • The Diocese fosters a culture of sharing and support ensuring that there is awareness and management of potential issues before they can escalate;

   • The Diocesan Leadership Team, supported principally by the Director for Strategic Transformation and the Director of Mission & Ministry, are responsible for ensuring that the demands being placed on parishes are being coordinated and accompanied by appropriate levels of support and training.

9. The risk that the YDBF is unable to meet its strategic aims due to financial constraints as a result of a decline in parish Free Will Offerings, adverse investment conditions or reduction in funding from the Church Commissioners. The mitigating controls are:

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

For the year ended 31 December 2022

• Strong engagement of the Diocesan Leadership Team, especially the Archdeacons, with parishes to ensure that commitments by parishes are honoured as far as is practically possible;

• Priority given to supporting clergy and lay leadership to grow local sustainability in terms of both attendance and giving;

• Strong budgetary control processes to identify adverse trends and consider the necessary medium and long term actions needed to address the underlying issues;

• Robust reserves policies to ensure that temporary shortfalls can be financed without the need for short term cuts; and

• Investment in strategic capacity to ensure that access to funding streams from the Church Commissioners is maximised.

In addition, the Trustees are keeping a number of areas of potentially significant extraordinary expenditure under close review. They will be factored into the ten year forecasts and the annual budget continues to allow for a contingency sufficient to cover immediate unanticipated costs. The areas being monitored for additional extraordinary and/or significant costs that would place financial pressures such that a reduction in core activities may become necessary include:

• Wydale Hall - Additional costs arising from non-insurable unanticipated shutdowns. Inability to cover the cost of major roof repairs from normal operating surpluses, requiring additional capital funding from YDBF reserves.

• Pensions – Fund liabilities increasing beyond currently forecasted levels.

• Safeguarding – Uninsured compensation payments for historic cases. Additional resource costs for compliance with legislation or House of Bishops Regulations.

• Carbon Net-Zero – the costs of achieving net-zero for DBF assets, support for parishes in achieving net-zero (including grants and impact on Free Will Offer), ongoing offsetting levies.

In additional to the fiscal policies identified in (3) above, close contact is maintained with the National Church Institutions and other dioceses to facilitate collaborative approaches to influence legislative changes that may lead to increased cost and seeking additional national funding streams to mitigate the impact of significant additional mandatory expenditure. This will be particularly important as the Trustees look at how to mitigate the risks, in terms of both financial and missional impact, associated with local disagreement with, for example, decisions made by the General Synod or the House of Bishops around same sex relationships.

STRUCTURE AND GOVERNANCE

Summary Information about the structure of the Church of England

The Church of England is the established church and HM The King is the Supreme Governor. It is organised into two provinces (Canterbury and York) and 42 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 comprising ex-officio and elected representatives from each Diocese and 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. Within each Diocese,

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

For the year ended 31 December 2022

overall leadership lies with the Diocesan Bishop, who exercises that input as Bishop within the Diocesan Synod. The Diocese itself is divided into twenty one deaneries, each with its own Synod and 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 partner with) neighbouring Dioceses and the National Church Institutions.

Organisational structure

The York Diocesan Board of Finance (YDBF) is a company limited by guarantee (No. 225234) and a registered charity (No. 244976) governed by its Standing Orders and its Memorandum and Articles of Association which were approved on 16 July 2009. The company’s principal activity is to promote, assist and advance the work of the Church of England within the Diocese of York. It was established in its present form in 1927 and is successor in title to the York Diocesan Trustees.

Its statutory governing body is the Diocesan Synod , which is an elected body with representation from all parts of the Diocese. Membership consists of ex officio members, including the Archbishop, Suffragan Bishops and Archdeacons; clergy members elected by the houses of clergy in Deanery Synods; lay members elected by the houses of laity in Deanery Synods; up to five persons who may be co-opted by the house of clergy or the house of laity; and a maximum of 10 members nominated by the Archbishop. The Diocesan Synod normally meets three times a year. Many of Diocesan Synod’s responsibilities have been delegated to the Archbishop’s Council and Standing Committee.

Archbishop’s Council

The members of the Archbishop’s Council and Standing Committee are also appointed to the Board of Directors, with the exception of the Bishop of Beverley and any member of the Council who is an employee of the Company. Archbishop’s Council consists of 13 ex officio members, including the Archbishop, the four Suffragan Bishops and the three Archdeacons, four clergy elected by the house of clergy from among their number and eight lay persons elected by the members of the house of laity representing deaneries and a maximum of six Synod members nominated by the Archbishop.

Decision making structure

Corporate priorities and the overall financial strategy for the Diocese, in its primary object to promote, assist and advance the work of the Church of England within the Diocese of York, are set by the Diocesan Synod and the YDBF. The responsibility for ensuring that these priorities and strategies are delivered is delegated to the Diocesan Chief Executive. The Diocesan Synod each year receives and agrees the annual budget, prepared and approved by the YDBF. The Trustees, meeting within the context of the Archbishop’s Council & Standing Committee, hold up to five meetings during the year to formulate and coordinate policies on mission, ministry and finance by:-

• Initiating proposals for action by the Synod and advising it on matters of policy

• Transacting business of the Synod when it is not in session subject to the directions of the Synod and in accordance with Synod Standing Orders

• Acting as the Trustees of the YDBF

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ANNUAL REPORT

For the year ended 31 December 2022

• Planning the business of the Synod, preparing the agenda for its session, and circulating to members information about matters for discussion

• Advising the Archbishop on any matters he may refer to the committee

• Initiating consideration of any restructuring of Synod Committees and Departments which may appear necessary and for the establishment of ad hoc review groups, their terms of reference and membership

• Carrying out such other functions as the Synod delegates to it

• Appointing members to committees and representatives to external bodies, subject to the direction of the Synod

The Trustees are assisted in their work by four sub-committees:-

Finance Sub-Committee : the role of the Finance Sub-committee is to provide focussed support to the directors of the YDBF so that they might better enable the mission of the diocese through sound financial management and transparent, open reporting. The responsibilities of the Finance SubCommittee include:

• Monitoring the financial performance of the Diocese against budget and forecast;

• Approving the Management Accounts;

• Ensuring that appropriate Financial Statements are drawn up;

• Making recommendations on and monitoring the operation of the Common Fund including the process of making Freewill Offers;

• Reviewing and giving first stage approval to the budget;

• Making recommendations for the Board’s approval on levels of stipends, salaries and pension provision;

• Acting for the Board in its capacity as Custodian Trustee in relation to third party investments;

• Making recommendations to the Board on the appointment of professional advisers;

• Monitoring entries in the Risk Register that relate to finance;

• Monitoring and reflecting updates to financial regulation;

• Ensuring the appropriate provision of HR expertise and policies in order to meet the obligations of the DBF; and

• Undertaking such other work as may be referred to it by the YDBF.

Property Sub-Committee: the Property Sub-Committee undertakes the YDBF’s responsibilities under the Church Property Measure 2018; the Repair of Benefice Building Measure 1972; the PCC (Powers) Measure 1956 and the Incumbents and Churchwardens (Trusts) Measure 1964 (with respect to parochial property); the Endowment and Glebe Measure 1976 (with regard to property assets); and the Ecclesiastical Offices (Terms of Service) Measure 2011.

Diocesan Board of Education Sub-Committee: the Education Sub-Committee is a statutory subcommittee that exists to fulfil the YDBF’s responsibilities under the Diocesan Boards of Education Measure 2021. In addition to its statutory responsibilities, the committee also oversees the support provided to parishes for their work with children, young people and families

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

For the year ended 31 December 2022

ANNUAL REPORT

Diocesan Pastoral & Mission Sub-Committee: as far as is permissible under Ecclesiastical Law the functions of the Pastoral and Mission Committee as set out in the Mission and Pastoral Measure 2011 have been delegated to the Pastoral and Mission Sub-Committee. The primary function of the Committee is pastoral reorganisation in the Diocese of York, taking account of available clergy numbers and making use of new patterns of ministry. It also oversee the work of diocesan staff in relation to the management of church buildings that have been closed for regular worship, pending their disposal.

Trustee recruitment and induction

Trustees are members of the Archbishop’s Council & Standing Committee and are selected as set out above. Trustees are given induction at the outset of the triennium and at other times as appropriate. They are also informed before seeking membership and, at all other relevant times, of the role and function of the Committee. All Trustees are required to provide updated declarations for the registers of skills and interests on a tri-annual basis. Some employees hold the title of ‘Director’, but this relates to their function within the organisation and has no legal meaning within the terminology associated with the Companies Act.

Governance Matters

During 2022, Diocesan Synod, the DBF and most Boards and Committees met on a pattern of online and in person meetings. Following elections to Diocesan Synod and Archbishop’s Council, the new term of office for those elected to serve as Trustees of the DBF commenced on 1 January 2022. Newly elected members received Trustee Training, including reference to the 2020 Charity Governance Code (produced by the Good Governance Group), at its first residential meeting. The ongoing monitoring of governance and the periodic review of terms of reference of sub-committees is overseen by the Audit Committee and the Chairs of the Houses of Clergy and Laity of the Diocesan Synod.

Volunteers

YDBF is dependent on the huge number of people involved in church activities both 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. Within this context, the YDBF greatly values and would want to acknowledge the considerable time given by all members of Boards, Committees and Working Groups – for each of them just a part of the practical outworking of what it means to be “Living Christ’s Story”.

Remuneration of key management personnel

Emoluments of key management personnel are determined through a process of job evaluation and with reference to market rates for equivalent jobs.

Delegation of day to day delivery

The Trustees and the sub-committees which assist them in the fulfilment of their responsibilities, rely upon the Diocesan Chief Executive and his colleagues for the delivery of the day to day activities of the company. The Chief Executive is given specific and general delegated authority to deliver the business of the YDBF in accordance with the policies framed by the Trustees.

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

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ANNUAL REPORT

Funds held as Custodian Trustee

The YDBF is 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 YDBF does not control them, and they are segregated from the YDBF’s own assets by means of separate bank and investment accounts. The market value of funds held as custodian amounted to £15,400,000 at 31 December 2022 (2021: £16,804,000). Custodian investments are summarised in note 29.

Funds held on behalf of schools

The Board of Education (as incorporated within the YDBF) receives contributions from governors of church schools within the Diocese in connection with major repair and capital projects to church schools and also government grants in connection with the same. The Board of Education administers these monies as managing agent and makes appropriate payments to contractors for work carried out. The monies do not belong to the Board of Education and as such the receipts and payments are not treated as income and expenditure in the Statement of Financial Activities. Any monies held at the balance sheet date are treated as creditors on the balance sheet. The amount included in creditors as at 31 December 2022 is £245,000 (2021: £116,000).

OTHER RELATED PARTIES

The Diocese of York Educational Trust, which acts as a member of Academy Trusts and Multi-Academy trusts on behalf of the YDBF (the DBE being unincorporated) is a related party. A small grant is made by the DBE to support governance costs and the Trustees work closely with members of the DBE and the education team to support the Church of England Academies in the diocese.

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 disclosure this is given in notes 27 to the financial statements.

Although the following are not related parties under accounting regulations, there are a number of bodies that the YDBF works closely with), these include:

• The Archbishops’ Council to which the YDBF pays a donation based on an apportionment system for funding national training of ordinands and the activities of the various national boards and councils, as well as General Synod. The Archbishop’s Council allocate funding to dioceses from the Church Commissioners under legislation and regulations established by the General Synod of the Church of England.

• The Church Commissioners from which the YDBF receives grants and which acts on behalf of clergy with HM Revenue and Customs. The YDBF pays for clergy stipends through the Church Commissioners.

• The Church of England Pensions Board, to which the YDBF pays retirement benefit contributions for stipendiary clergy and employees. It also offers schemes to provide housing for clergy in retirement.

• DBE Services, of which the YDBF is a member, provides services to Church Schools. Any profits are returned to the member dioceses via charitable donations and are designated by the trustees to support the work of the education team.

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

For the year ended 31 December 2022

• Together Middlesbrough and Cleveland, a charitable company limited by guarantee, which exists to work in partnership with Christian based charities in the north of the diocese for the relief of hardship and the wellbeing of those in need. YDBF is a member, alongside the Church Urban Fund, but receives no benefit and does not make any financial contribution.

TRUSTEES’ RESPONSIBILITIES

The trustees (who are also directors of YDBF 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:

• Select suitable accounting policies and apply them consistently

• Observe methods and principles in the Charities SORP (FRS102)

• Make judgements and estimates that are reasonable and prudent

• State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements

• Prepare the financial statements on the going concern basis unless it is inappropriate to assume that the company will continue in operation

The Trustees are also responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the YDBF 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 YDBF and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Trustees are responsible for the maintenance and integrity of the corporate and financial information included in the YDBF’s website. Legislation in England and Wales governing the preparation and dissemination of financial statements and other information included in Annual Reports may differ from legislation in other jurisdictions.

STATEMENT OF DISCLOSURE TO THE AUDITORS

So far as the Trustees are aware:

• a) there is no relevant audit information of which the charitable company’s auditors are unaware, and

• b) we have taken all the steps that we ought to have taken as Trustees in order to make ourselves aware of any relevant audit information and to establish that the charitable company’s auditors are aware of that information.

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

For the year ended 31 December 2022

ANNUAL REPORT

APPOINTMENT OF AUDITORS

Following a competitive tender exercise conducted by the Audit Committee on behalf of the Trustees, Saffery Champness LLP were appointed, at a General Meeting of the Company held on 27[th] November 2022 , to serve as auditor in succession to Haysmacintyre LLP.

Saffery Champness have expressed their willingness to continue in office as auditor for the next financial year and are deemed to be reappointed under Section 487 (2) of the Companies Act 2006 until otherwise resolved at a General Meeting of the Company.

Page 24

THE YORK DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

For the year ended 31 December 2022

ADMINISTRATIVE DETAILS

Trustees

No Trustee had any beneficial interest in the company during 2022. The following Trustees were in post at the date of this report (those who served for some of 2022 are shown in italics ):

Ex-officio: Chair– Mr C R Barton The Dean of York – The Right Reverend Jonathan Frost (resigned 18 January 2022) The Very Reverend Dominic Barrington (appointed 12 November 2022) The Archbishop of York – The Most Reverend & Right Honourable S Cottrell The Bishop of Whitby – The Right Reverend PJ Ferguson (Vice-Chairman) The Bishop of Selby – The Right Reverend Dr JB Thomson The Bishop of Hull – The Right Reverend AM White (resigned 28 February 2022) The Right Reverend E Sanderson (appointed 22 September 2022) The Archdeacon of Cleveland – The Venerable A Bloor The Archdeacon of the East Riding – The Venerable AC Broom The Archdeacon of York – The Venerable SJ Rushton The Chair of the House of Laity - Dr N Land The Chair of the House of Clergy - The Reverend R Walker

Elected by: Synod House of Clergy The Reverend FR Mayer-Jones The Reverend E Hassall The Reverend R Lumley The Reverend Canon S Sherriff Synod House of Laity Miss KM Banks Dr NA Burgess Mr D Millican Canon RPA Brewer Dr G Boag-Munroe (appointed 10 February 2022) Dr D Craven (appointed 10 February 2022) Dr G Parr (appointed 10 February 2022) Dr T Scott (appointed 10 February 2022) Co-opted by the Archbishop Mr B Hudson (resigned 31 December 2022)

Page 25

THE YORK DIQCESAN 8OARD OF FINANCE LIMITED ANNUAL REPORT For the year ended 31 December 2022 Senror staff and adviser5 Diocesan Secretary & Chief Executive Director of Finance Director of Education Director of Communic3tion5 & Parish Resourcing Director of Mission & Ministry Director for Strategic Transformation Head of Safeguarding Assistant Diocesan Secretary Canon PJ Warry Mrs K Rose Mr AK Smith Mr M Sheppard The Revd l Mclntosh Miss S Nicol Mr R Marshall Ms SA Davies Registered Office: Diocese of York, Amy johnson Way, Clifton Moor, York, Y030 4XT Bankers Barclays Bank PLC, 1-3 Parliament Street, York, YOI 8SE Auditor5 Saffery Champness LLP, Mitre House. North Park Road, Harrogate, HGI 5RX Solicitors Lupton Fawcett LLP. Stamford House, Piccadilly, York, YOI 9PP Investment advisers CCLA Investment Managerllent Ltd l Angel Lane, London, EC4R 3AB ond Evelyn Partners Investment Management LLP, 103 Colmore Row, Birmingham, B3 28J Glebe Agent5 Savills, River House, 17 Museum Street, York, YOI 7DJ rjnd Dee, Atkinson & Harrison, The Exchange, Exchange Street, Driffield. Y025 6LD Insurer5 Eccleslastical Insurance Office plc, Benefact House, 2000 Pioneer Avenue, Gloucester Business Park, Brockworth, Gloucester. GL3 4AW In approving this Trustees, Report, the Trustees are also approving the Strategic Report included on pages 4- 18 within their capacity as company directors. ON BEHALF OF THE TRUSTEES Mr CR Barton Chairman 26 April 2023 The Rlght Re¢d PJ Ferguson Vice Chair IL April 2023 Pa8e 26

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE YORK DIOCESAN BOARD OF FINANCE LIMITED

Opinion

We have audited the financial statements of the York Diocesan Board of Finance Limited for the year ended 31 December 2022 which comprise the Statement of Financial Activities, the Income and Expenditure Account, the Balance Sheet, the Cash Flow Statement and notes to the financial statements, including a summary of 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:

• give a true and fair view of the state of the charitable company’s affairs as at 31 December 2022 and of the charitable company’s net movement in funds, including the income and expenditure, for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

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 charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 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. 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

Page 27

Opinions on other matters prescribed by the Companies Act 2006

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

• the information given in the Annual Report (which includes the strategic report and the directors’ report) for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.

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 Annual Report and strategic report.

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

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of trustees’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

Responsibilities of trustees for the financial statements

As explained more fully in the trustees’ responsibilities statement set out on pages 23, the trustees (who are also the 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 but 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.

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 and the Church of England Measures.

Page 28

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 for the audit of the financial statements is located 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

23 May 2023

Page 29

THE YORK DIOCESAN BOARD OF FINANCE LIMITED

STATEMENT OF FINANCIAL ACTIVITIES

For the year end 31 December 2022

Note Income and endowments from Grants and donations 2 Parish contributions Archbishops' Council Other grants and donations Charitable activities 3 Other activities 4 Investments 5 Other 6 Total Expenditure on Raising Funds 7 Charitable activities General charitable activities 8 (Gains)/losses on clergy pension 25 scheme Total Net (expenditure)/income before investment gains and losses Net (losses)/gains on investments 20 Net income Transfers between funds 13 Net movement in funds Total funds brought forward (restated) Total funds carried forward 20	Unrestricted funds £'000 7,044 1,694 74 926 332 1,355 1 11,426 293 12,449 (145) 12,597 (1,171) (1,456) (2,627) 1,096 (1,531) 14,714 13,183	Restricted funds £'000 - 1,431 194 649 - 48 - 2,322 - 2,090 - 2,090 232 (215) 17 (1,257) (1,240) 14,538 13,298	Endowment funds £'000 - - - 314 - - 432 746 - 13 - 13 733 (1,966) (1,233) 161 (1,072) 80,067 78,995	Total funds Total funds 2022 2021 (restated) £'000 £'000 7,044 6,816 3,125 3,635 268 247 1,889 1,480 332 247 1,403 1,275 433 4,918 14,494 18,618 293 204 14,552 14,418 (145) 13 14,700 14,635 (206) 3,983 (3,637) 4,341 (3,843) 8,324 - - (3,843) 8,324 109,319 100,995 105,476 109,319

All activities derive from continuing activities. The notes on pages 34 to 62 from part of the financial statements.

Page 30

THE YORK DIOCESAN BOARD OF FINANCE LIMITED

INCOME AND EXPENDITURE ACCOUNT For the year end 31 December 2022

Total income Total expenditure Operating deficit for the year Net (losses)/gains on investments Net (expenditure)/income for the year Other comprehensive expenditure/income Net assets transferred (to)/from endowments Total comprehensive income	Total Total 2022 2021 (restated) £'000 £'000 13,748 14,279 (14,687) (14,635) (939) (356) (1,671) 1,468 (2,610) 1,112 (161) 4,875 (2,771) 5,987

The Income and Expenditure Account is derived from the Statement of Financial Activities, with movements in endowment funds and investment gains/losses excluded to comply with company law. All income and expenditure is derived from continuing activities.

Page 31

THE YORK DIOCESAN BOARD OF FINANCf IIMITEO BALANCE SHEET At31 Detember 2022 Company number- 225234 zozi 2021 (r￿￿ted? Note f'ooo £'ooo £boo Axed a55ets Tangible a55ets Investsnents 14 15 49,OB5 51,683 100,768 48,391 55,196 103,587 Current a55ets Debtors C45h on dep051t Cash at bank and Sn h3nd 17 L133 4,fPJ4 1,217 6.354 1.173 3,996 2,458 7.627 Crediwr5.' amounts f3lllng dve within one year 18 11.5931 11,5811 NET CURRENT ASSETS 4,761 6.045 TOTAL ASSETS LESS CURRENT LIABILITIES 105,529 109,633 CrÈdltors: amount5 falling due after more tha ane year 19 13141 NET ASSETS 105,476 109.319 FUNDS Endowment funds Ilncluding Investment Valuation Re5etwe of £21,509,QLKI 12021.. £23,401,000)> Restrlcied Income funds IlrKluding Investmenivaluation Reserve of 492,WO 12021.. £121.￿01) Unrestrlcted Income funds- Ilncluding Inve5tmenrvaluation Reserve of £3,317,000 12021.. £4,975.(M)011 78.995 80.067 13,298 14.538 Gener31-other General- represented by tangible fixpd assets Design8tÈd 8.092 4.758 333 9.408 4,903 403 Total funds 22 105.476 109.319 The Cash Flow Stitement and the Notes form part of these financial 5tstementS. The financlal srdtements were approved by the Board of Trustees and authorised for Issue on 16April 2023 3nd 548ned behalf of the eoard by.. Mr CR Barton Chairma Pa8e 32

THE YORK DIOCESAN BOARD OF FINANCE LIMITED

CASH FLOW STATEMENT

For the year end 31 December 2022

Net cash (outflow) from operating activities Cash flows from investing activities Dividends and interest from investments Proceeds from sale of: Tangible fixed assets Fixed asset investments Closed Churches Purchase of: Tangible fixed assets for the use of the YDBF Fixed asset investments Net cash provided by investing activities Change in cash and cash equivalents in the reporting period Cash and equivalents at 1 January Cash and equivalents at 31 December Reconciliation of net income to net cash flow from operating activities Net (expenditure)/income for the year ended 31 December Adjusted for: Depreciation charges Write down of impaired asset Dividends and interest from investments Profit on sale of functional assets Profit on disposal of closed churches Decrease in debtors (Decrease) in creditors Net cash used in operating activities Analysis of cash and cash equivalents Cash at bank and in hand Notice deposits (less than 3 months)	£'000 £'000 £'000 £'000 (restated) (1,704) (2,052) 860 749 553 6,270 1,761 2,155 - - (818) (1,031) (1,885) (4,321) 471 3,822 (1,233) 1,770 6,454 4,684 5,221 6,454 (206) 3,983 3 11 - - (860) (749) (432) (4,918) - - 40 160 (249) (539) (1,704) (2,052) 1,217 2,458 4,004 3,996 5,221 6,454 2022 2021	£'000 £'000 £'000 £'000 (restated) (1,704) (2,052) 860 749 553 6,270 1,761 2,155 - - (818) (1,031) (1,885) (4,321) 471 3,822 (1,233) 1,770 6,454 4,684 5,221 6,454 (206) 3,983 3 11 - - (860) (749) (432) (4,918) - - 40 160 (249) (539) (1,704) (2,052) 1,217 2,458 4,004 3,996 5,221 6,454 2022 2021
		1,770 4,684
		6,454
		3,983 11 - (749) (4,918) - 160 (539)
		(2,052)
		2,458 3,996
		6,454

Page 33

THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

1. ACCOUNTING POLICIES

The financial statements have been prepared under the historical cost convention, with the exception of 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 (FRS102)) second edition effective 1 January 2019, 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. The financial position of the YDBF, its net income for the year and cash flows as set out in the Statement of Financial Activities and Cash Flow Statement demonstrate the overall net cash position of the YDBF and the strength of its reserves. As a consequence the Trustees believe that the YDBF is well placed to manage the business risks successfully despite the uncertainties surrounding the current general economic outlook and that there is no matrial uncertainty relating to going concern.

The Trustees have a reasonable expectation that the YDBF 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 income is included in the Statement of Financial Activities (SOFA) when the YDBF is legally entitled to them as income or capital respectively, ultimate receipt is probable and the amount to be recognised can be quantified with reasonable accuracy.

• i) Freewill Offering is recognised as income of the year in respect of which it is received.

• ii) Rent receivable is recognised as income in the period with respect to which it relates.

• iii) Interest and dividends are recognised as income when receivable.

• iv) Grants received which are subject to pre-conditions for entitlement specified by the donor which have not been met at the year-end are included in creditors to be carried forward to the following year.

Grant income in respect of the Coronavirus Job Retention Scheme is included in other income and is recognised in the same period as the staff costs to which it relates.

• v) Parochial fees are recognised as income of the year to which they relate.

• vi) Donations other than grants are recognised when receivable .

• vii) Gains on disposal of fixed assets for the YDBF’s own use (i.e. non-investment assets) are accounted for as other incoming resources. Losses on disposal of such assets are accounted for as other expenditure.

• viii) Permanent endowment funds (Stipends Capital Fund). This account is governed by the Diocesan Stipends’ Fund Measure 1953, as amended, and the use of the income is restricted for clergy stipends. However, the income is fully expended within the year of receipt and the legal restrictions, therefore, are satisfied. It is on this basis that the income and the (normally much larger) related expenditure are both included in the unrestricted column of the Statement of Financial Activities for the sake of greater clarity and simplicity in financial reporting.

• ix) Permanent endowment funds (Ordination Candidates Council Fund, First Lord Grimthorpe’s Trust and Local Trusts’ Stipend Fund). The income is fully expended within the year of receipt and the terms of the funds, therefore, are satisfied. It is on this basis that the income and the (normally much larger) related expenditure are both included in the unrestricted column of the Statement of Financial Activities for the sake of greater clarity and simplicity in financial reporting.

Page 34

THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

1. ACCOUNTING POLICIES (continued)

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.

• i) Costs of raising funds are constrained to costs relating to the temporary renting out of parsonages and investment management costs of glebe and any other investment properties.

• ii) Charitable expenditure is analysed between contributions to the Archbishops’ Council, expenditure on resourcing mission and ministry in the parishes of the diocese, expenditure relating to the running of the diocesan retreat centre, and expenditure on education and Church of England schools in the diocese.

• iii) Grants payable are charged in the year when the offer is conveyed to the recipient except in those cases where the offer is conditional on the recipient satisfying performance or other discretionary requirements to the satisfaction of the YDBF, such grants being recognised as expenditure when the conditions attaching are fulfilled. Grants offered subject to such conditions which have not been met at the year-end are noted as a commitment, but not accrued as expenditure.

• iv) Support costs consist of central management, administration and governance costs. The amount spent on raising funds and other activities is considered to be immaterial and all support costs are allocated to the purpose of charitable activities. Costs are allocated wherever possible directly to the activity to which they relate, but where such direct allocation is not possible, the remainder is allocated on an approximate staff time basis.

• v) Pension contributions . The YDBF's staff are members of the Church Workers Pension Fund and Clergy are members of the Church of England Funded Pensions Scheme (see note 25). The pension costs charged as resources expended represent the YDBF's contributions payable in respect of the accounting period, in accordance with FRS102. Deficit funding for the pension schemes to which YDBF participates is accrued at current value in creditors distinguished between contributions falling due within one year and after more than one year.

c) Tangible fixed assets and depreciation

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 YDBF 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 review the YDBF’s assets for indications of impairment each year. Where indicators of impairment are identified the affected assets are written down to the recoverable amount, which is the higher of the asset’s fair value and its value in use. The impairment losses are recognised in expenditure.

Where expenditure on refurbishing a property exceeds £15,000 it is capitalised if it adds value to the property.

Properties subject to value linked loans

Properties which have been bought with the assistance of value-linked loans, and the the associated loan from the Church Commissioners are stated at historical cost.

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

1. ACCOUNTING POLICIES (continued)

c) Tangible fixed assets and depreciation (continued)

Investment properties

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

Parsonage houses

The YDBF 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 YDBF 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 historical cost.

Valuation of fixed assets

Parsonages, team vicarages and general fund owned houses are carried at historical cost. A number of properties were first recognised at the relevant 1994 council tax band value, which is now treated as historical cost.

d) Other tangible fixed assets

All capital expenditure over £2,000 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:-

Computer Equipment 25% per annum straight line basis Furniture and equipment 25% per annum straight line basis

e) Other accounting policies

• i) Fixed asset investments are included in the balance sheet at market value and the gain or loss taken to the Statement of Financial Activities.

• ii) Leases . The YDBF has entered only into operating lease arrangements for the use of certain assets, the rental for which is charged in full as expenditure in the year to which it relates.

f) Fund balances

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

• Unrestricted funds are the YDBF’s corporate funds and are freely available for any purpose within the charitable company’s objects, at the discretion of the YDBF. There are two types of unrestricted funds:

• General funds which the YDBF intends to use for the general purposes of the YDBF and

• Designated funds set aside out of unrestricted funds by the YDBF for a purpose specified by the Trustees

• Restricted funds are income funds subject to conditions imposed by the donor as specific terms of trust, or else by legal measure.

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

1. ACCOUNTING POLICIES (continued)

• Endowment funds are those held on trust to be retained for the benefit of the charitable company as a capital fund. In the case of the endowment funds administered by the YDBF (Parsonage Houses and Schools), there are discretionary powers to convert capital into income and, as a result, these funds are classified as expendable endowment. Endowment funds where there is no provision for expenditure of capital are classified as permanent endowment.

“Special trusts” (as defined by the Charities Act 2011) and any other trusts where the company acts as trustee and controls the management and use of the funds, are included in the company’s own financial statements as charity branches. Trusts where the YDBF acts merely as custodian trustee with no control over the management of the funds are not included in the financial statements but are summarised in the notes to the financial statements.

g) 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:

• Assessment of residual value of freehold property when determining whether or not depreciation is required – see above;

• Calculation of depreciation – see details set out at 1d) above; and

• Accounting for pensions – the key assumptions underpinning the pension creditor reflected in these accounts are set by the Church of England Pensions Board and then reviewed and accepted or challenged by the Trustees.

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

2. DONATIONS

2a. Parish Contributions

The majority of donations are collected from parishes through the Freewill Offering system.

2022 Parish contributions to the Common Fund Current year contributions Receipts for previous years Total income 2021 comparative Parish contributions to the Common Fund Current year contributions Receipts for previous years Total income 2b. Archbishops' Council 2022 Resourcing Education Ministry Grant for low income dioceses Other grants Total income 2021 comparative I(restated) Resourcing Education Ministry Grant for low income dioceses Sustainability Funding Grant Other grants	Unrestricted Funds £'000 6,977 67 7,044 Unrestricted Funds £'000 6,756 60 6,816 Unrestricted Funds £'000 - 1,694 - 1,694 Unrestricted Funds £'000 - 1,755 620 - 2,375	Restricted Funds £'000 - - - Restricted Funds £'000 - - - Restricted Funds £'000 303 - 1,128 1,431 Restricted Funds £'000 369 - - 891 1,260	Endowment Funds £'000 - - - Endowment Funds £'000 - - - Endowment Funds £'000 - - - - Endowment Funds £'000 - - - - -	Total funds 2022 £'000 6,977 67
				7,044
				Total funds 2021 £'000 6,756 60
				6,816
				Total funds 2022 £'000 303 1,694 1,128
				3,125
				Total funds 2021 £'000 369 1,755 620 891
				3,635

The above are grants from the National Church.

Resourcing Ministerial Education is a funding stream to support the costs of ordinand training which was introduced for the 2017/18 academic year, replacing a previous model whereby the training was funded directly by the Church Commissioners.

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

2. DONATIONS (continued)

2c. Other grants and donations

Benefact Trust Grant (previously All Churches Trust) Other grants and donations	Unrestricted Funds £'000 - 74 74	Restricted Funds £'000 168 26 194	Endowment Funds £'000 - - -	Total funds 2022 £'000 168 100
				268
2021 comparative Benefact Trust Grant (previously All Churches Trust) Other grants and donations 3. CHARITABLE ACTIVITIES Statutory fees Generated income Chaplaincy and other Diocesan Board of Education Wydale Hall 2021 comparative Statutory fees Chaplaincy and other Diocesan Board of Education Wydale Hall	Unrestricted Funds £'000 177 61 238 Unrestricted Funds £'000 611 23 135 157 - 926 Unrestricted Funds £'000 602 279 - - 881	Restricted Funds £'000 - 9 9 Restricted Funds £'000 - - 50 52 547 649 Restricted Funds £'000 - 63 187 349 599	Endowment Funds £'000 - - - Endowment Funds £'000 - - - 314 - 314 Endowment Funds £'000 - - - - -	Total funds 2021 £'000 (restated) 177 70
				247
				Total funds 2022 £'000 611 23 185 523 547
				1,889
				Total funds 2021 £'000 602 342 187 349
				1,480

Page 39

THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

4. OTHER TRADING ACTIVITIES

4. OTHER TRADING ACTIVITIES
	Unrestricted	Restricted	Endowment	Total funds
	Funds	Funds	Funds	2022
	£'000	£'000	£'000	£'000
Housing income	332	-	-	332
2021 comparative	Unrestricted	Restricted	Endowment	Total funds
	Funds	Funds	Funds	2021
	£'000	£'000	£'000	£'000
Housing income	247	-	-	247
5. INVESTMENT INCOME
	Unrestricted	Restricted	Endowment	Total funds
	Funds	Funds	Funds	2022
	£'000	£'000	£'000	£'000
Dividends receivable	804	44	-	848
Interest receivable	8	4	-	12
Rental receivable	543	-	-	543
	1,355	48	-	1,403
2021 comparative	Unrestricted	Restricted	Endowment	Total funds
	Funds	Funds	Funds	2021
	£'000	£'000	£'000	£'000
Dividends receivable	745	-	-	745
Interest receivable	2	2	-	4
Rental receivable	526	-	-	526
	1,273	2	-	1,275
6. OTHER INCOME
	Unrestricted	Restricted	Endowment	Total funds
	Funds	Funds	Funds	2022
	£'000	£'000	£'000	£'000
Gain on sale of properties	-	-	432	432
Disposal of closed churches	1	-	-	1
	1	-	432	433
2021 comparative	Unrestricted	Restricted	Endowment	Total funds
	Funds	Funds	Funds	2021
	£'000	£'000	£'000	£'000
Gain on sale of properties	579	-	4,339	4,918
Disposal of closed churches	-	-	-	-
	579	-	4,339	4,918

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

7. FUNDRAISING COSTS

7. FUNDRAISING COSTS
Investment Manager's Fees Property agent's fees Other rented property costs 2021 comparative Investment Manager's Fees Property agent's fees Other rented property costs 8. CHARITABLE ACTIVITIES Contributions to Archbishops' Council Training for ministry National Church responsibilities Grants & provisions Mission agency pension costs Retired clergy housing costs Ordinand maintenance grants - pooling adjustment Resourcing Ministry and Mission Parish ministry and chaplaincy Parochial clergy stipends, national insurance and pensions Housing costs Removal, resettlement and grants Other costs Resourcing Ministerial Education Support for parish ministry Wydale Hall Expenditure on Education Support for church schools and parishes	Unrestricted Funds £'000 32 168 93 293 Unrestricted Funds £'000 29 115 60 204 Unrestricted Funds £'000 350 215 30 15 132 86 828 6,362 2,225 100 62 - 8,749 2,333 - 11,082 539 12,449	Restricted Funds £'000 - - - - Restricted Funds £'000 - - - - Restricted Funds £'000 - - - - - - - 314 - - 72 275 661 896 522 2,079 11 2,090	Endowment Funds £'000 - - - - Endowment Funds £'000 - - - - Endowment Funds £'000 - - - - - - - - - - - - - - - - 13 13	Total funds 2022 £'000 32 168 93
				293
				Total funds 2021 £'000 29 115 60
				204
				Total funds 2022 £'000 350 215 30 15 132 86
				828
				6,676 2,225 100 134 275
				9,410 3,229 522
				13,161
				563
				14,552

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

8. CHARITABLE ACTIVITIES (continued)

2021 comparative Contributions to Archbishops' Council Training for ministry National Church responsibilities Grants & provisions Mission agency pension costs Retired clergy housing costs Ordinand maintenance grants - pooling adjustment Resourcing Ministry and Mission Parish ministry and chaplaincy Parochial clergy stipends, national insurance and pensions Housing costs Removal, resettlement and grants Other costs Resourcing Ministerial Education Support for parish ministry Wydale Hall Expenditure on Education Support for church schools and parishes	Unrestricted Funds £'000 351 245 30 16 129 70 841 6,301 2,301 230 54 - 8,886 2,579 - 11,466 363 12,670	Restricted Funds £'000 - - - - - - - 390 - - 55 304 749 356 425 1,529 218 1,747	Endowment Total funds Funds 2021 £'000 £'000 - 351 - 245 - 30 - 16 - 129 - 70 - 841 - 6,691 - 2,301 - 230 - 109 - 304 - 9,635 - 2,935 - 425 - 12,995 - 581 - 14,418

Page 42

THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year end 31 December 2022

9. ANALYSIS OF EXPENDITURE INCLUDING ALLOCATION OF SUPPORT COSTS

Raising Funds Charitable Activities: Contributions to Archbishops' Council Resourcing parish ministry Education Retreat Centre (Gains) on clergy pension scheme 2021 comparatives Raising Funds Charitable Activities: Contributions to Archbishops' Council Resourcing parish ministry Education Retreat Centre Loss on clergy pension scheme	Activities Undertaken Directly £'000 293 - 11,128 475 422 (145) 12,173 Activities Undertaken Directly £'000 204 - 11,515 496 326 13 12,554	Grant Funding of Activities £'000 - 828 826 2 - - 1,656 Grant Funding of Activities £'000 - 841 396 - - - 1,237	Support Costs £'000 - - 685 86 100 - 871 Support Costs £'000 - - 660 85 99 - 844	Total Costs 2022 £'000 293 828 12,639 563 522 (145)
				14,700
				Total Costs 2021 £'000 204 841 12,571 581 425 13
				14,635

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

10. ANALYSIS OF SUPPORT COSTS

Unrestricted Funds £'000 Central Support 394 Support for Schools 86 Retreat Centre - Governance: Boards and committees 9 External Audit 30 Registrar & Chancellor 131 Synodical costs 12 Allocation of central support costs 71 733 2021 comparative Unrestricted Funds £'000 Central Support2 407 Support for Schools 85 Retreat Centre - Governance: External Audit 26 Registrar & Chancellor 126 Synodical costs 8 Allocation of central support costs 69 721 11. ANALYSIS OF GRANTS MADE Number From unrestricted funds for national church responsibilities Contributions to Archbishops' Council 12 From unrestricted funds PCCs for faculty fees 145 PCCs for Repairs to Church Buildings 13 Ordinands in training 16 Clergy for training 38 Resettlement Grants 39 Diocese of York Educational Trust 1 Other grants 4 From restricted funds PCCs for Repairs to Church Buildings 7 Clergy for energy grants 38 PCCs for energy grants 440 Other grants 2 PCCs for Mustard Seed projects 16 759 Total 771 Page 44	Restricted Funds £'000 38 - 100 - - - - - 138 Restricted Funds £'000 24 - 99 - - - - 123 Individuals £'000 - - - 88 14 100 - - - 56 0 - - 258 258	Endowment Funds £'000 - - - - - - - - - Endowment Funds £'000 - - - - - - - - Institutions £'000 828 34 13 - - - 1 4 12 450 7 49 570 1,398	Total funds 2022 £'000 432 86 100 9 30 131 12 71
			871
			Total funds 2021 £'000 431 85 99 26 126 8 69
			844
			2022 Total £'000 828
			34 13 88 14 100 1 4 12 56 450 7 49
			828
			1,656

THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

11. ANALYSIS OF GRANTS MADE (continued)

2021 comparative From unrestricted funds for national church responsibilities Contributions to Archbishops' Council From unrestricted funds PCCs for church inspection fees PCC for faculty fees PCCs for Repairs to Church Buildings Ordinands in training Clergy for training Resettlement Grants Diocese of York Educational Trust From restricted funds PCCs for Repairs to Church Buildings Total 12. STAFF COSTS Employee costs during the year were as follows: Wages and salaries National insurance contributions Pension Costs - Current Year Pension Costs - (Surplus)/Deficit The average number of persons employed during the year : Parochial Posts Archdeaconry based roles Reach, Grow, Sustain posts Safeguarding and Pastoral Care Mission & Ministry - Training, Vocations and School of Ministry Education Other Diocesan Office based posts Longhill Wydale Hall Externally funded posts The average number of persons employed during the year based o Parochial Posts Archdeaconry based roles Reach, Grow, Sustain posts Safeguarding and Pastoral Care Mission & Ministry - Training, Vocations and School of Ministry Education Other Diocesan Office based posts Longhill Wydale Hall Externally funded posts	Number Individuals £'000 12 - 2 - 161 - 19 - 17 99 24 9 49 231 - - 5 - 277 339 289 339 n full-time equivalents:	Institutions £'000 840 - 34 11 - - - - 13 58 898 2022 £'000 2,248 231 251 2,730 (261) 2,469 Number 2.9 4.5 9.5 5.1 8.7 10.0 19.8 2.0 8.7 3.3 74.5 Number 2.4 2.7 8.0 4.2 8.0 8.7 18.9 0.7 6.0 2.7 62.3	2021 Total £'000 840
			- 34 11 99 9 231 - 13
			397
			1,237
			2021 £'000 2,257 221 249
			2,727 81
			2,808
			Number 2.8 4.3 9.2 4.3 8.0 10.0 22.2 2.2 9.9 3.9
			76.8
			Number 2.8 2.9 8.4 3.7 6.7 9.3 19.9 0.8 6.6 2.7
			63.9

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year end 31 December 2022

12. STAFF COSTS (continued)

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

		2022		2021
£60,000	- £70,000		2		2
£70,000	- £80,000		1		1

Pension payments of £31,305 (2021: £31,189) were made to these employees Payments on termination of employment of £25,000 (2021: £ni) have been made during the year

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 2022 they were:

Diocesan Chief Executive	Canon PJ Warry
Assistant Diocesan Secretary	Ms SA Davies
Director of Finance	Mrs K Rose
Diocesan Director of Education	Mr AK Smith
Director of Communications and Parish Resourcing	Mr M Sheppard
Director of Mission & Minsitry (appointed September 2021)	The Reverend I McIntosh
Director of Strategic Transformation	Ms S Nicol

Remuneration, pensions and benefits for these employees amounted to £476,947 (2021: £476,205).

Trustees’ emoluments

No Trustee received any remuneration for services as Trustee. 8 (2020: 14) of the Trustees received travelling and out of pocket expenses, totalling £11,287 (2021 - £14,438) in respect of General Synod duties, duties as archdeacon or area/rural dean, and other duties as Trustees.

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

the YDBF during the year:

	Stipend	Housing
The Most Reverend & Right Honourable S Cottrell	No		No
TheVery Reverend D Barrington (appointed 12 November 2022)	No		No
The Right Reverend J Frost (resigned 18 January 2022)	No		No
The Right Reverend PJ Ferguson	No		Yes
The Right Reverend JB Thomson	No		Yes
The Right Reverend Dr E Sanderson (appointed 22 September 2022)	No		Yes
The Right Reverend AM White (resigned 28 February 2022)	No		Yes
The Venerable AC Broom	Yes		Yes
The Venerable SJ Rushton	Yes		Yes
The Venerable A Bloor	Yes		Yes
The Reverend R Walker	Yes		Yes
The Reverend FR Mayer-Jones	Yes		Yes
The Reverend Canon S Sherriff (appointed 1 January 2022)	Yes		Yes
The Reverend R Lumley (appointed 1 January 2022)	Yes		Yes
The Reverend E Hassall (appointed 1 January 2022)	Yes		Yes

The YDBF is responsible for funding via the Church Commissioners the stipends of licensed stipendiary clergy in the diocese, other than bishops and cathedral staff. The YDBF is also responsible for the provision of housing for stipendiary clergy in the diocese including the suffragan bishops but excluding the Archbishop and cathedral staff.

Page 46

THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year end 31 December 2022

12. STAFF COSTS (continued)

The YDBF paid an average of 185 (2021 – 184) stipendiary clergy as office-holders holding parochial or diocesan appointments in the diocese, and the costs were as follows:

Stipends National insurance contributions Pension costs - current year Pension costs - deficit reduction	2022 2021 £'000 £'000 4,872 4,770 424 404 1,555 1,533 199 331 7,050 7,038

The stipends of the five Bishops were paid and funded by the Church Commissioners.

The stipends of the Archbishop and Suffragan Bishops are funded by the Church Commissioners and are in the range £38,050£73,630 (2021 range £37,670 - £72,900). The annual rate of stipend, funded by the YDBF, paid to Archdeacons in 2022 £37,188 (2021 £36,830) and other clergy who were Trustees were paid in the range £26,892- £27,564 (2021 range £26,265 - £26,892). Stipend levels are set on the basis that housing is provided, and that costs relating to the provided housing (including rent, Council Tax, water charges, maintenance, and building insurance) are paid on behalf of clergy.

13. ANALYSIS OF TRANSFERS BETWEEN FUNDS

Property related: Parsonages Houses Fund to Pastoral Account Diocesan Parsonages Board to Pastoral Account Pastoral Account to the Diocesan Parsonages Board General Fund to the Parsonage House Fund- property General Fund to the Stipend Capital Fund - property Other transfers: General fund (to)/from designated funds General fund from Education UST income fund Pastoral Account to the General Fund reduction of the clergy pension deficit Sundry other transfers	Unrestricted Funds £'000 - - (120) (20) 70 47 1,520 (344) 13 1,166	Designated Funds £'000 - - - - (70) - - - - (70)	Restricted Endowment Funds Funds £'000 £'000 323 (323) 57 (57) - - 120 - 20 0 - (47) - (1,520) - - 344 (13) - (1,257) 161

Many of the transfers made between funds during 2022 relate to property transactions. The other main transfers relate to:

• Movements between general and designated funds relating to funds set aside for Mustard Seed.

• Transfer of funds from the Uniform Statutory Trust income account, which were used towards the work of the education team

• A £1.5million transfer from the Pastoral account to the General fund as budgeted, to replenish the general fund for the Diocesan share of the Mustard Seed and Multiply projects

• Transfer relating the clergy pension deficit (note 25)

2021 comparative Parsonages Houses Fund to Pastoral Account Parsonages Houses Fund to the Benefice Building Fund General Fund to the Pastoral Account - property related General Fund to the Pastoral Account- other Pastoral Account to the Diocesan Parsonages Board Diocesan Parsonages Board to Pastoral Account Parsonages Houses Fund to General fund From the General Fund to the Stipends Capital Fund for the reduction of the clergy pension deficit General fund to designated funds	Unrestricted Funds £'000 - - (860) 501 - - 195 (317) (76) (557)	Designated Funds £'000 - - - - - - - - 76 76	Restricted Funds £'000 2,870 2,127 860 (501) (260) 260 - - - 5,356 -	Endowment Funds £'000 (2,870) (2,127) - - - - (195) 317 -
				(4,875)

All of the transfers made between funds during 2021 relate to property transactions with the exception of the transfer relating to the clergy pension deficit, those to designated funds and £501,000 transferred from the Pastoral to the General Fund, being a contribution agreed by the Board towards the impact of Covid and also the investment gains in excess of inflation on the Pastoral Account.

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

14. TANGIBLE FIXED ASSETS - Land & Buildings

Cost At 1 January 2022 Additions Disposals At 31 December 2022 Depreciation At 1 January 2022 Charge for the year Impairment Disposals At 31 December 2022 Net book value At 31 December 2022 At 31 December 2021	Wydale Hall £000 1,950 - -	Education Properties £000 81 - - 81 - - - - - 81 81	Freehold Properties £000 46,014 818 (121) 46,711 625 - - - 625 46,086 45,389	Diocesan Office £000 963 - -	Office Equipment £000 154 - (20) 134 146 3 - (20) 129 5 8	Total £000 49,162 818 (141)
	1,950			963		49,839
	- - - -			- - - -		771 3 - (20)
	-			-		754
	1,950			963		49,085
	1,950			963		48,391

All of the properties in the balance sheet are freehold and are vested in the YDBF, except for benefice houses which are vested in the incumbent. Some properties have been purchased with the help of a 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 above amounts to £148,000 (2021: £148,000).

15. FIXED ASSET INVESTMENTS

Investment Property Listed Investments Unlisted Investments 16. FINANCIAL INSTRUMENTS Financial assets measured at fair value	At 1 January 2021 £000 17,551 20,083 17,562 55,196	Additions £000 - 1,863 22 1,885	Disposals £000 (64) (922) (724)	Change in Market Value £000 1,312 (3,051) (1,949) (3,688) 2022 £000 32,577	At 31 December 2022 £000 18,799 17,973 14,911
			(1,710)		51,683
					2021 £000 36,667

Financial assets measured at fair value comprise listed and unlisted investments and value linked loans to parishes. Financial assets measured at amortised cost comprise cash and debtors. Financial liabilities measured at amortised cost comprise loans and other creditors.

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

17. DEBTORS

Due within one year Capital Work in Progress Other debtors and prepayments Due after more than one year Loans to parishes Total debtors 18. CREDITORS: amounts falling due within one year Trade creditors Other taxation and social security Other creditors and accruals Amounts held for other bodies Pension Scheme Liabilities Church Workers' Pension Fund Clergy Pension Scheme Total creditors amounts falling due within one year 19. CREDITORS: amounts after more than one year Loan repayment instalments due after more than one year Church Commissioners value-linked loans Pension scheme liabilities Church Workers' Pension Fund Clergy Pension Scheme Total creditors: amounts falling due after more than one year The maturity of the above loans may be analysed as follows: In five years and more	2022 £'000 40 902 942 191 1,133 2022 £'000 173 69 910 441 - - 1,593 2022 £'000 53 - - 53 53 53	2021 £'000 (restated) 68 887
		955
		218
		1,173
		2021 £'000 173 56 531 397 80 344
		1,581
		2021 £'000 53 261 -
		314
		53
		53

Value-linked loans (VLLs) represent amounts advanced to the DBF for the purchase of properties on an equity sharing basis and are repayable on the disposal of the related property. As at 31[st] December 22 the Board had no intention of disposing of any of those properties funded via VLLs.

During 2011 and 2012 a significant programme of mechanical and engineering work was carried out at Wydale Hall. The work was financed by a value-linked loan of £375,000 from the general reserves of the Diocese which is secured on the Hall. During 2015 the loan was increased by a further £47,000 to facilitate the refurbishment of the General Manager’s living accommodation. There is no fixed term for repayment of the loan.

Page 49

THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

20. SUMMARY OF FUND MOVEMENTS

UNRESTRICTED FUNDS General Designated Mustard Seed Fund RESTRICTED FUNDS Diocesan Parsonages Board Pastoral Account Resourcing Ministerial Education Benefice Building Fund Faith in Education Fund Mission Support Fund Bishops' IT First Lord Grimthorpe's Trust Ministry Fund Wydale Hall Board of Education Multiply (20s-40s) Restructuring Mustard Seed Fund Strategic Capacity Fund Giving Advisor Fund Energy Grant Funds Longhill Roof Alarm & Building Grants Funds Multiply grant fund South Africa Link Fund Benefact Trust ENDOWMENT FUNDS Expendable Parsonages Houses Fund Board of Education Permanent Stipends Capital Fund Ordination Candidates Council First Lord Grimthorpe's Trust Local Trusts' Stipend Fund Total funds	Balances at 1 January 2022 £'000 (restated) 14,311 403	Income £'000 11,426 -	Expenditure £'000 (12,597) -	Gains and losses £'000 (1,456) -	Balances at 31 December Transfers 2022 £'000 £'000 1,166 12,850 (70) 333 1,096 13,183 57 3,910 (1,253) 3,848 - 188 - 3,499 - - - 33 - 11 - 7 (10) - - 1,373 (47) 111 - - - 37 - - - - - 8 - 62 - 4 (4) 20 - 18 - 1 - 168 (1,257) 13,298 (303) 32,290 - 2,306 464 43,544 - 237 - 49 - 569 161 78,995 - 105,476
	14,714	11,426	(12,597)	(1,456)
	3,853 5,315 160 3,454 1 33 11 13 (2) 1,348 116 - 186 - - - - 24 26 - - -	- - 303 45 - - - 2 50 547 52 340 - 177 20 24 568 - - 25 1 168	- 1 (275) - (1) - - (8) (38) (522) (10) (340) (149) (177) (20) (16) (506) (20) (2) (7) - -	- (215) - - - - - - - - - - - - - - - - - - - -
	14,538	2,322	(2,090)	(215)
	32,329 2,300 44,475 262 54 647	264 314 168 - - -	- (13) - - - -	- (295) (1,563) (25) (5) (78)
	80,067	746	(13)	(1,966)
	109,319	14,494	(14,700)	(3,637)

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

20. SUMMARY OF FUND MOVEMENTS (continued)

2021 comparative (restated) UNRESTRICTED FUNDS General Designated Roof Alarm Grants Fund Mustard Seed Fund RESTRICTED FUNDS Diocesan Parsonages Board Pastoral Account Resourcing Ministerial Education Benefice Building Fund Faith in Education Fund Mission Support Fund Bishops' IT First Lord Grimthorpe's Trust Ministry Fund Wydale Hall Board of Education Learning to Lead Religious Education Multiply (20s-40s) Restructuring Mustard Seed Fund Longhill Kingswood Roof Alarm & Building Grants Funds ENDOWMENT FUNDS Expendable Parsonages Houses Fund Board of Education Permanent Stipends Capital Fund Ordination Candidates Council First Lord Grimthorpe's Trust Local Trusts' Stipend Fund Total funds	Balances at 1 January 2021 £'000 14,002 28 303	Income £'000 12,409 - -	Expenditure £'000 (12,884) (4) -	Gains and losses £'000 1,341 - -	Balances at 31 December Transfers 2021 £'000 £'000 (557) 14,311 (24) - 100 403 (481) 14,714 260 3,853 3,262 5,315 - 160 1,834 3,454 - 1 - 33 - 11 - 13 - (2) - 1,348 - 116 - - - - - 186 - - - 24 - - - 26 5,356 14,538 (5,192) 32,329 - 2,300 317 44,475 - 262 - 54 - 647 (4,875) 80,067 - 109,319
	14,333	12,409	(12,888)	1,341
	3,593 1,937 96 1,618 1 33 11 11 2 1,424 147 - - - - 17 3 39	- - 368 2 - - - 2 63 349 182 5 406 370 115 8 - -	- (11) (304) - - - - - (67) (425) (213) (5) (406) (184) (115) (1) (3) (13)	- 127 - - - - - - - - - - - - - - - -
	8,932	1,870	(1,747)	127
	33,182 2,086 41,606 232 48 576	4,339 - - - - -	- - - - - -	- 214 2,552 30 6 71
	77,730	4,339	-	2,873
	100,995	18,618	(14,635)	4,341

Page 51

THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

21. SUMMARY OF ASSETS BY FUND

	Fixed	assets	Current		Net
	Tangible	Investments	Assets	Creditors	Assets
	£'000	£'000	£'000	£'000	£'000
UNRESTRICTED FUNDS
General	4,758	7,943	782	(633)	12,850
Designated					-
Mustard Seed Fund	-	-	333	-	333
	4,758	7,943	1,115	(633)	13,183
RESTRICTED FUNDS
Diocesan Parsonages Board	3,910	-	-	-	3,910
Pastoral Account	-	3,457	391	-	3,848
Resourcing Ministerial Education	-	-	189	(1)	188
Benefice Building Fund	-	-	3,499	-	3,499
Faith in Education Fund	-	-	-	-	-
Mission Support Fund	-	-	33	-	33
Bishops' IT	-	-	11	-	11
First Lord Grimthorpe's Trust	-	-	7	-	7
Ministry Fund	-	-	-	-	-
Wydale Hall	1,950	-	197	(774)	1,373
Board of Education	-	1	110	-	111
Multiply (20s-40s)	-	-	-	-	-
Restructuring	-	-	43	(6)	37
Mustard Seed	-	-	1	(1)	-
Strategic Capacity Fund	-	-	-	-	-
Giving Advisor Fund	-	-	8	-	8
Energy Grants fund	-	-	281	(219)	62
Longhill	-	-	4	-	4
Roof Alarm & Building Grants Funds	-	-	20	-	20
Multiply grant fund	-	-	20	(2)	18
South Africa Link Fund	-	-	1	-	1
Benefact Trust	-	-	168	-	168
	5,860	3,458	4,983	(1,003)	13,298
ENDOWMENT FUNDS
Expendable
Parsonages Houses Fund	32,290	-	-	-	32,290
Board of Education	81	2,007	218	-	2,306
Permanent
Stipends Capital Fund	6,096	37,418	30	-	43,544
Ordination Candidates Council	-	239	(2)	-	237
First Lord Grimthorpe's Trust	-	49	-	-	49
Local Trusts' Stipend Fund	-	569	-	-	569
	38,467	40,282	246	-	78,995
Total funds	49,085	51,683	6,344	(1,636)	105,476

Page 52

THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year end 31 December 2022

21. SUMMARY OF ASSETS BY FUND (continued)

2021 Comparatives (restated) UNRESTRICTED FUNDS General Designated Roof Alarm Grants Fund Mustard Seed Fund RESTRICTED FUNDS Diocesan Parsonages Board Pastoral Account Resourcing Ministerial Education Benefice Building Fund Faith in Education Fund Mission Support Fund Bishops' IT First Lord Grimthorpe's Trust Ministry Fund Wydale Hall Board of Education Learning to Lead Religious Education Multiply (20s-40s) Restructuring Mustard Seed Longhill Kingswood Roof Alarm & Building Grants Funds ENDOWMENT FUNDS Expendable Parsonages Houses Fund Board of Education Permanent Stipends Capital Fund Ordination Candidates Council First Lord Grimthorpe's Trust Local Trusts' Stipend Fund Total funds	Tangible Investments £'000 £'000 4,903 9,431 - - - - 4,903 9,431 3,853 - - 2,607 - - - - - - - - - - - - - - 1,950 - - - - - - - - - - - - - - - - - 5,803 2,607 32,329 - 81 2,007 5,275 39,018 - 262 - 54 - 647 37,685 41,988 48,391 54,026 Fixed assets	Current Assets £'000 691 0 403 1,094 - 2,708 160 3,454 1 33 11 12 (2) (75) 116 3 - 186 - 24 - 26 6,657 - 518 528 - - - 1,046 8,797	Creditors £'000 (714) - - (714) - - - - - - - 1 - (527) - (3) - - - - - - (529) - (306) (346) - - - (652) (1,895)	Net Assets £'000 14,311 - 0 403
				14,714
				3,853 5,315 160 3,454 1 33 11 13 (2) 1,348 116 - - 186 - 24 - 26
				14,538
				32,329 2,300 44,475 262 54 647
				80,067
				109,319

Page 53

THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

22. DESCRIPTION OF FUNDS

General fund	The general fund is the YDBF’s unrestricted undesignated fund available for any of the YDBF’s
	purposes without restriction.
Roof alarm & building grants	The roof alarm and building grants funds represents funds received from third parties and
	those designated by the York Diocesan Board of Finance, to support Churches within the
	Diocese to obtain roof alarms and with building works.
Mustard seed funds	The mustard seed funds represent funds designated by the Trustees to be used towards the
	mustard seed project and restricted grants towards that project.
Pastoral account	The diocesan pastoral account was set up under the provisions of the Pastoral Measure 1983.
	The restricted purposes for which the account may be used are:
	 to defray costs incurred for the purposes of the Measure or any scheme or order made
	under the Measure except for salaries of regular diocesan employees
	 to make loans or grants for the provision, restoration, improvement or repair of
	churches and parsonage houses in the diocese
	 other purposes of the diocese or any benefice or parish in the diocese
	 to make grants or loans to any other diocese
	 to transfer funds to the diocesan stipends fund income or capital accounts.
Stipends capital fund	The diocesan stipends capital fund has been created from the diocesan stipends fund capital
	account assets held on behalf of the diocese by the Church Commissioners under the
	Endowments and Glebe Measure 1976 to provide income for clergy stipends. It represents
	the accumulated sale proceeds of glebe property, sale proceeds of benefice houses and
	surplus benefice endowments following pastoral reorganisation. Capital funds may be used
	for the purchase, improvement and maintenance of glebe property and benefice houses. The
	funds are invested as part of the YDBF’s portfolio and managed by CCLA or Smith
	&Williamson.
Parsonages houses fund	This fund represents the carrying value of all the benefice houses (parsonages) in the Diocese.
	These are expendable endowments in that the Board has the power to convert certain sale
	proceeds to income with various consents obtained locally and from the Church
	Commissioners by being transferred to the Diocesan Pastoral Account and then converted to
	an income account at a later date.
Ordination candidates’ council
	The ordination candidates’ council fund relates to invested bequests, the income from which
	is to provide assistance to candidates training for the Anglican priesthood.
First Lord Grimthorpe’s Trust
	The First Lord Grimthorpe’s Trust provides income for repairs to churches of the evangelical
	tradition within the Diocese of York.
Local Trusts’ Stipend Fund	The Local Trusts’ Stipend Fund relate to specific investments, the income from which is to
	augment stipends.
Diocesan Parsonage Board	The Diocesan Parsonages Board holds houses which are used to accommodate certain office
	holders who do not have incumbent status.
Benefice Building Fund	The Benefice Building Fund holds proceeds from parsonage sales pending replacement of the
	property. Any surplus remaining after purchase of a new benefice house or following
	Pastoral Reorganisation is transferred to the Pastoral Account subject to the consents set out
	in the Church Property Measure.

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

22. DESCRIPTION OF FUNDS (continued)

Faith in Education Fund	The Faith in Education Fund aims to pioneer links between churches and schools in Hull by	The Faith in Education Fund aims to pioneer links between churches and schools in Hull by
	contributing creatively toward addressing problems particularly at secondary level of poor
	attainment, low aspirations and falling rolls.
Mission Support Fund	The Mission Support Fund relates to donations for projects in Hull and Middlesbrough.
Bishops’ IT	Bishop’s IT is a central allocation by the Church Commissioners for Bishops’ information
	technology needs.
Ministry Fund	The Ministry Fund represents donations from private individuals and grant awarding trusts to
	support specific ministry posts in the diocese.
Wydale Hall	Wydale Hall is a special restricted fund and operates as a conference and retreat house
	primarily for the benefit of the Church of England. In event of a sale of the property	the
	proceeds would have to be applied either in the purchase of another property to be used for
	the same purposes or invested and the resultant income applied for the promotion	and
	holding of retreats and of religion. Its sole trustee is the York Diocesan Board of Finance
	Limited.
Diocesan Board of Education	DBE funds are restricted in accordance with the Uniform Statutory Trust legislation.	The
	funds are proceeds from site disposals, donations and income from educational services	and
	can be used to support Church Schools. The income can be used by the DBE to fund	the
	provision of services to schools. Capital and income can also be used to assist with school
	building projects.
Learning to Lead Religious	This represents donations from specific organisations to cover direct costs
Education	of supporting the development of religious education.
Resourcing Ministerial	Funding from Ministry Division specifically for ordinand training.
Education
Strategic Capacity Funding	Funding from Archbishops Council for specific activities relating to the renewal and reform
	agenda.
Multiply (20s-40s)	Strategic Development Funding from the Church of England Strategic Investment Board
	awarded for the establishment of new worshipping communities for the 20 to 40 age range.
Restructuring	Funding from the Church of England Strategic Investment Board to be drawn down for use on
	projects that will support increased financial sustainability and resilience.
Longhill	Grants and donations restricted for use within the Longhill Bishop's Mission Order (BMO).
Giving Advisor Fund	The Giving Advisor Fund is to support part of the cost of one of the Giving
	advisors.
Energy Grants Fund	The Energy Grants Fund relate to income from the National Church to be
	allocated towards support for Parishes and clergy.
South Africa Link	The South Africa Link Fund relates to donations specifically towards the link
	project.
Benefact Trust Fund	The Benefact Trust Fund is used for projects as agreed with the Trust in advance
	each year.
Multiply Grant Fund	The Multiply Grant Fund represents funds received from third parties towards

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

23. CAPITAL COMMITMENTS

At 31 December 2022 the YDBF had capital expenditure commitments authorised but not contracted for of £nil (2021 - £nil), and contracted for but not yet due of £nil (2021 - £61,760).

24. CONTINGENT LIABILITIES

There are no contingent liabilities at the balance sheet date.

25. PENSIONS

The DBF participates in two pension schemes administered by the Church of England Pensions Board, which holds the assets of the schemes separately from those of the DBF 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 .

These schemes are multi-employer last man standing defined benefit pension schemes for which the DBF is unable to identify its share of the underlying assets and liabilities as each employer is exposed to actuarial risks associated with the current and former employees of other entities participating in the scheme. For multi-employer schemes where this is the case, paragraph 28.11 of FRS102 requires the DBF to account for pension costs on the basis of contributions actually payable to the scheme in the year and, where contributions are affected by a surplus or deficit in the scheme, to disclose information about the surplus or deficit and the implications of the surplus or deficit for the DBF. A valuation of each scheme is carried out once every three years.

Church of England Funded Pension Scheme

York DBF participates in the Church of England Funded Pensions Scheme for stipendiary clergy, a defined benefit pension 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 (see below).

A valuation of the Scheme is carried out once every three years. The most recent Scheme valuation completed was carried out at 31 December 2021. The 2021 valuation revealed a surplus of £560m, based on assets of £2,720m and a funding target of £2,160m, assessed using the following assumptions:

• An average discount rate of 2.7% p.a.;

• RPI inflation of 3.6% p.a. (and pension increases consistent with this);

• CPIH inflation is in line with RPI less 0.8% pre 2030 moving to RPI with no adjustment from 2030 onwards;

• Increase in pensionable stipends in line with CPIH;

• Mortality in accordance with 90% of the S3NA_VL tables, with allowance for improvements in mortality rates in line with the CMI 2020 extended model with a long term annual rate of improvement of 1.5%, a smoothing parameter of 7 and an initial addition to mortality improvements of 0.5% pa and an allowance or 2020 data of o%. .

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

25. PENSIONS (continued)

Church of England Funded Pension Scheme (continued)

Following the 31 December 2018 valuation, a recovery plan was put in place until 31 December 2022 and the deficit recovery contributions payable (as a percentage of pensionable stipends) are as set out in the table below. An interim reduction to deficit contributions to 3.2% of pensionable stipends was made with effect from 1 April 2022. Following finalisation of the 31 December 2021 valuation, deficit contributions ceased with effect from 1 January 2023, since the Scheme was in surplus.

As at 31 December 2020 and 31 December 2021 the deficit recovery contributions under the recovery plan in force were as set out in

% of pensionable stipends Deficit repair contributions	January 2018 to January 2021 to December 2020 December 2022 11.9% 7.1%

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. However, as there is no agreed deficit recovery payments from 1 January 2023 onwards, the balance sheet liability as at 31 December 2022 is nil. The movement in the balance sheet liability over 2021 and over 2022 is set out in the table below.

Balance sheet liability as at 1 January Deficit contribution paid Interest cost (recognised in SOFA) Remaining change to the balance sheet liability* (recognised in SOFA) Balance sheet liability as at 31 December	2022 £'000 344 (199) - (145) -	2021 £'000 661 (331) 1 13
		344

• Comprises change in agreed deficit recovery plan, and change in discount rate and assumptions between year-ends.

This liability represents the present value of the deficit contributions agreed as at the accounting date and has been valued using the following assumptions. No assumptions are needed for December 2022 as there are no agreed deficit recovery payments going forward. No price inflation assumption was needed for December 2021 since pensionable stipends for the remainder of the recovery plan were already known.

Rates at 31 December:	2022		2021	2020
Discount rate		n/a	0.0%pa	0.2%pa
Price inflation		n/a	n/a	3.1%pa
Increase to total pensionable payroll		n/a	-1.5%pa	1.6%pa

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

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

25. PENSIONS (continued)

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.

The YDBF and Wydale Hall participate in both the Defined Benefits Scheme section and the Pension Builder Scheme section of the CWPF for lay staff. 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.

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.

The Church Workers Pension Fund Defined Benefit Scheme has been closed to future accrual with effect from 31 March 2018. Members of that scheme who remain in employment by the Diocese of York have joined the Pension Builder Classic scheme. The decision to close the scheme and the determination of future pension arrangements followed a consultation with members.

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 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 Section, 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 of the DBS charged to the SoFA in the year are contributions payable towards benefits and expenses accrued in that year ( 2022 DBF £nil and Wydale £nil ; 2021: DBF £nil and Wydale £nil), plus any impact of deficit contributions (see below).

If, following an actuarial valuation of the Life Risk Pool, there is a surplus or deficit in the pool and the Actuary so recommends, 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.

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

25. PENSIONS (continued)

Church Workers Pension Fund – Defined Benefits Scheme (continued)

A valuation of the DBS is carried out once every three years, the most recent 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. This increased the Employer contributions that would otherwise have been payable. The overall deficit in the DBS was £11.3m. The next actuarial valuation is due at 31 December 2022.

Following the valuation, the Employer has entered into an agreement with the Church Workers Pension Fund to pay expenses of £9,000 per year in respect of YDBF and £2,000 per year in respect of Wydale Hall. In addition deficit payments of £66,365 per year for YDBF and £13,001 per year for Wydale hall were agreed for 5.08 years from 1 April 2021 in respect of the shortfall in the Employer sub-pool.

Due to the improvements in the projected funding position of the Fund, the Church of England pensions Board agreed that deficit contributions should ceases with effect from 31 December 2022 for employers whose pools were estimated to be materially in surplus. As a result no obligation has been recognised as a liability within the Employer’s financial statements as at 31 December 2022. A liability has been recognised at earlier dates.

The movement in the provision is set out below:

Balance sheet liability as at 1 January Deficit contribution paid Interest cost (recognised in SOFA) Remaining change to the balance sheet liability* (recognised in SOFA) Balance sheet liability as at 31 December	2022 2021 2022 2021 £'000 £'000 £'000 £'000 279 281 60 56 (68) (66) (14) (13) 3 1 1 - (214) 63 (47) 17 - 279 - 60 Wydale YDBF	2022 2021 £'000 £'000 339 337 (82) (79) 4 1 (261) 80 - 339 Total	2022 2021 £'000 £'000 339 337 (82) (79) 4 1 (261) 80 - 339 Total
			339

• Comprises change in agreed deficit recovery plan and change in discount rate between year-ends.

The 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:

Discount rate at 31 December

2022	2021	2020
0.0%pa	1.4%pa	0.4%pa

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

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

25. PENSIONS (continued)

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. The York Diocesan Board of Finance only offers Pension Builder Classic to its employees.

Pension Builder Classic provides a pension, 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. Discretionary increases may also be added, depending upon the investment returns and other factors.

Pension Builder 2014 is a cash balance scheme that provides a lump sum which members use to provide benefits at retirement. Pension contributions are recorded in an account for each member. Discretionary bonuses may be added before retirement, depending on investment returns and other factors. The account, plus any bonuses declared, is payable, unreduced from age 65.

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 ( 2022: DBF £236,535 and Wydale £14,455 ; 2021: DBF £237,578 and Wydale £11,356).

A valuation of the Pension Builder Scheme is carried out once every three years. The most recent was carried out as at December 2019. The next valuation is due at 31 December 2022.

For the Pension Builder Classic section, the valuation revealed a deficit of £4.8m on the ongoing assumptions used. At the most recent annual review, the Board chose to grant a discretionary bonus of 10.1%, following improvements in the funding position over 2022. There is no requirement for deficit payments at the current time.

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

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

STATEMENT OF THE FINANCIAL ACTIVITIES For the year end 31 December 2022

26. PRIOR YEAR COMPARATIVE SOFA

Note Income and endowments from Donations 2 Parish contributions Archbishops' Council Other donations Charitable activities 3 Other activities 4 Investments 5 Other 6 Total Expenditure on Raising Funds 7 Charitable activities General charitable activities 8 (Gains) on clergy pension scheme 25 Total Net income/(expenditure) before investment gains and losses Net gains/(losses) on investments 20 Net income Transfers between funds 13 Net movement in funds Total funds brought forward Total funds carried forward 20	Unrestricted funds £'000 6,816 2,375 238 881 247 1,273 579 12,409 204 12,671 13 12,888 (479) 1,341 862 (481) 381 14,333 14,714	Restricted funds £'000 - 1,260 9 599 - 2 - 1,870 - 1,747 - 1,747 123 127 250 5,356 5,606 8,932 14,538	Endowment funds £'000 - - - - - - 4,339 4,339 - - - - 4,339 2,873 7,212 (4,875) 2,337 77,730 80,067	Total funds Total funds 2021 2020 (restated) (restated) £'000 £'000 6,816 7,338 3,635 2,745 247 315 1,480 1,553 247 222 1,275 1,173 4,918 566 18,618 13,912 204 187 14,418 14,152 13 29 14,635 14,368 3,983 (855) 4,341 3,684 8,324 2,829 - - 8,324 2,829 100,995 98,166 109,319 100,995

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THE YORK DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year end 31 December 2022

27. RELATED PARTY TRANSACTIONS

Having made enquiries, the directors are not aware of any related party transactions in 2022 (2021: £nil) other than the grant paid to The Diocese of York Educational Trust.

The Diocese of York Educational Trust (DYET) was incorporated in February 2012. The Trust has seven Trustees; three appointed by the Diocesan Board of Education, three appointed by the Archbishop and the Diocesan Director of Education on an ex officio basis. The Objects of DYET are to advance for the public benefit education in the Diocese of York or elsewhere, in particular but not exclusively, by:

• promoting the efficiency and effectiveness of Educational Institutions and the efficient and effective application of resources for such purposes including by promoting and disseminating models of good practice and by the delivery of support services generally to such institutions;

• advancing the education of people who work or volunteer in or govern Educational Institutions in order to assist those persons to deliver a high quality education to the pupils and to communities served by those institutions;

• establishing, sponsoring and maintaining Academies (primarily but not exclusively Church of England Academies) under the direction of the Diocesan Board of Education.

The YDBF made a grant of £1,500 to DYET during 2022 (2021: £nil).

28. FUNDS HELD AS CUSTODIAN TRUSTEE

The YDBF 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 YDBF does not control them. The financial assets held in this way may be summarised as follows:

CBF Church of England Investment Fund CBF Church of England Fixed Interest Fund CBF Church of England Property Fund shares COIF income and accumulation shares Other common investment fund holdings CBF Church of England Deposit Fund Cash at bank Total assets held as custodian trustee	2022 2021 £'000 £'000 3,980 4,450 196 226 31 36 329 363 8,789 9,464 1,697 1,661 378 604 15,400 16,804

29. PRIOR PERIOD ADJUSTMENT

The comparative figures on the statement of financial activities and balance sheet have been restated to reflect a material correction to the recognition of the Multiply 20s to 40s grant, to ensure consistency with other similar grants recognised in later accounting periods.

Reserves brought forward 1 January 2021 per 2021 accounts Impact of prior period adjustment Restated reserves brought forward 1 January 2021 Net movement in funds per 2021 accounts Impact of prior period adjustment Restated reserves carried forward 31 December 2021	Unrestricted Restricted Endowed Total £'000 £'000 £'000 £'000 14,333 11,186 77,730 103,249 - (2,254) - (2,254)
	14,333 8,932 77,730 100,995 381 5,200 2,337 7,918 - 406 - 406
	14,714 14,538 80,067 109,319

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