2020-12-31-accounts

The Newcastle Diocesan Board of Finance Limited (A company limited by guarantee)

Annual Report & Financial Statements Year ended 31 December 2020

Company number 00650977 Registered charity number 247233

A large print version is available on request from

Church House St John’s Terrace North Shields NE29 6HS

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

FOR THE YEAR ENDED 31 DECEMBER 2020

TABLE OF CONTENTS	Page Number
Mission Statement	3
Legal Objects	4
Strategic Report:
Strategic aims	4
Objectives	5
Activities and achievements in the year	5
Future plans	10
Financial review	11
Principal risks and uncertainties	14
Structure and Governance	16
Trustees Responsibilities	19
Administrative details	20
Independent Auditor’s Report	22
Statement of Financial Activities	25
Income and Expenditure Account	26
Balance Sheet	27
Cash Flow Statement	28
Notes to the Financial Statements	29

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ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2020

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

Mission Statement

Our vision for growing church bringing hope expresses a deep longing to see our worshipping communities growing in numbers, in prayer and discipleship, in serving our communities, and above all in making a difference - sharing the hope we have, which is the power of God to transform us and our world.

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2020

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

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

This combined report satisfies the legal requirements for:

• 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 objects of the Diocese of Newcastle cover the local authorities of Northumberland, Newcastle, and North Tyneside and also small parts of County Durham and Cumbria.

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

The NDBF has the following 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

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

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

The strategic priorities of the company are established by the Diocesan Synod in consultation with Deanery Synods, Parochial Church Councils, and the Bishop of Newcastle (in respect of her responsibility for the provision of the cure of souls).

STRATEGIC AIMS

The strategic vision for growing church bringing hope was founded on the values of being generous, engaged and open in the way we follow Christ with a priority to invite others to join our pilgrimage of faith. The vision was launched at an Open Synod Forum held in Rothbury in March 2017 and is supported by five priority work streams with the following aims:

• We affirm that everything we do must be grounded in a deep prayerfulness and so we aim to create opportunities for deeper engagement with God in prayer.

• We aim to equip teams of lay people and clergy to work together for missional, spiritual and numerical growth.

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

FOR THE YEAR ENDED 31 DECEMBER 2020

• God calls churches to grow as they serve, worship and pray; therefore we aim to focus on the potential for numerical growth, enabling lay and ordained leadership, and encouraging local opportunities for those exploring Christian faith.

• We value the place of Newcastle city centre in the Diocese and will invest in the life of the city, engaging with civic life, seeking continued growth in areas of inherited strength, and developing fresh expressions to engage with areas of opportunity.

• We aim to recruit, train and support new ministry and mission teams in our rural parish benefices, with clergy and laity working together – in order to reshape the rural Church’s engagement with God’s mission.

OBJECTIVES

The goals to support the five priority work streams were:

• Prayer : by 2020, 250 people across the Diocese will have taken part in a Month of Guided Prayer , and 30 Prayer Guides will have been trained and resourced.

• Growth : by 2020, 60 parishes will have taken part in Leading your Church into Growth and will have seen the fruits of that in missional, spiritual and numerical growth.

• Impact : by 2022, impact and attendance will have increased in 20 identified parishes (some will be parishes currently having the lowest per capita attendance, others will be those with significant potential for further growth).

• City : by 2020, church life in Newcastle city will be more engaged, vibrant and growing – engaging with students, city workers and the vulnerable, growing congregations and planting at least one community exploring new forms of worship.

• Rural: by 2022, ministry in rural multi-parish benefices will have been re-imagined, and to enable this we will have simplified structures, identified lead/focal ministers and created new teams.

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

ACTIVITIES AND ACHIEVEMENTS

The events of the last 12 months have shown that we need to adapt quickly to a changing world that has impacted every one of us. However, before the impact of COVID-19, we had already recognised the need for transformation within the Diocese, to address the financial pressures of reducing income within the Diocese whilst also embodying the vision for a thriving, growing Diocese through new ministry models supported by a sustainable deployment plan. Assistance is being provided from the Strategic Capacity Fund of the National Church to develop this thinking into a funded transformation plan.

‘Do not remember the former things, or consider the things of old.

I am about to do a new thing; now it springs forth, do you not perceive it?’

Bishop Christine spoke from these verses in Isaiah about our need to reshape and reimagine ministry. Not doing more with less, but doing differently. It is a call to imagine a new normal. From our baptism onward, throughout our lives, we are summoned to witness to God’s love and to work for the coming of God’s kingdom, but our context and our challenges are changing, and changing

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2020

radically. We need to adapt to meet these new challenges and work out how to worship, work and witness in this new normal. Helping us to discern how we all do this together is the task of our Transformation Project.

The Transformation Project has begun, supported by a small core team, by engaging across the Diocese to discern what are the next steps for our Diocese in growing church bringing hope. Things are still emerging, and will continue to do so as we all pray, ponder and work out where God is leading us together. But there are some things already emerging:

We have expressed our values in a new way for the road ahead of us:

1. Open to God’s transforming love:

2. We want to be rooted and grounded even more in God’s love which flows outward into the world: rooted in our relationship with God, in our deepening prayer and in our growing faith which inspires our continued witnessing to that love.

2. Generous with God’s transforming gifts:

• We want to be even more generous with one another, sharing our gifts as the whole people of God, ordained and lay working in collaboration: generous in our attitudes, our finances and our resources.

• Engaged in God’s transforming work in the world:

• We want to be even more engaged in serving our communities and schools, working in partnership in outreach and evangelism, in care and compassion, and in helping to tackle urgent social justice and environmental concerns, locally, nationally and globally.

As we adjust to the ‘new normal’ we are working out together, we hope these values will help shape our actions and our priorities. We are also discerning three priorities for the coming years:

1. Bringing Good News

”The Spirit of the Lord is upon me, because he has anointed me to bring good news to the poor. He has sent me to proclaim release to the captives and recovery of sight to the blind, to let the oppressed go free, to proclaim the year of the Lord’s favour.” (Luke 4.18-19)

The Church does not just offer good advice, we bring the good news of Jesus Christ. We want to ensure all our outward facing activities as God’s people reflect the priorities of Jesus as written in Luke above. So many of the institutional pressures of finance and decline try and turn us inwards, but we pray for courage, grace and imagination to keep turning outwards in love and faith.

2. Growing in Christ

“As you therefore have received Christ Jesus the Lord, continue to live your lives in him, rooted and built up in him and established in the faith, just as you were taught, abounding in thanksgiving.” (Colossians 2.6-7)

So often we might be tempted to think we have made it, that we have got life sorted and nothing needs to change. But we always continue to grow, in our faith and understanding of God, in our calling and vocation. We never stop following Jesus and that means we are always on the move! We pray we can offer opportunities for anyone who wants to explore and

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

FOR THE YEAR ENDED 31 DECEMBER 2020

nurture their faith to do so, and to see growing faith in our own lives, our households, churches and schools.

3. Living Faith Fully

“I came that they may have life, and have it abundantly.” (John 10.10)

Jesus is about nothing less than life in all its fullness or abundance! We need to build up each other in faith, to help each other as we continue to trust in God and step out in faith. At times this will feel risky, but our faith assures us that God has given us everything we need to do this work.

What these three priorities mean for us is still being worked out, but we believe will result in transformation for us all, involving new models of parish ministry with new roles for our clergy and laity working collaboratively to more intentionally focus on the three priorities above. This isn’t about getting back to whatever used to be normal, but we are hoping to discover God’s ‘new thing’ for us. The National Church are encouraging the Diocese in this transformation and have indicated their willingness to provide financial support to help us move to a sustainable and thriving future, and we are already starting to take the first steps of our journey.

In parallel with the transformation project, work on the existing five priority work streams has progressed although to varying degrees due to COVID-19:

• Prayer : the aim for prayer to become the heartbeat of the Diocese has been impacted by COVID-19, but this is now opening up new opportunities to engage through digital and with the appointment of the new Bishop of Berwick this will now be integrated into our diocesan transformation project.

• Growth : the three planned courses to engage 60 parishes in Leading your Church into Growth are now complete and the project now moves into a monitoring and learning phase, initial results are very encouraging.

• Impact : COVID-19 has impacted progress, but also given a time for reflection and the early work of this strand will be instrumental for the transformation project.

• City: The first diocesan resource church based at St Thomas’ continues to go from strength to strength. The online congregation during lockdowns has swelled to c2k with small group meetings and enquirers courses thriving. Work has now started to refurbish and reorder the church building (largely funded by the national church) which will see the church ready to invite up to 400 freshers into a welcoming space in October 2021. St Thomas’ have also been instrumental in growing a new youth community in Byker/Walker and plans are in place to launch an Eden Team.

• Rural: With the appointment of a new Archdeacon of Lindisfarne, there is now a renewed commitment to reimagine the rural Diocese through new models of mission and ministry aligned with the transformation project.

The diocesan vision of growing church bringing hope is instrumental in promoting the whole mission of the church (pastoral, evangelistic, social and ecumenical) the trustees are confident (having had regard to Charity Commission guidance) that NDBF delivers public benefit through community engagement and supporting those in need both spiritually and physically.

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2020

The Christian Presence

Our licensed ministers form a central part in the life of churches in the Newcastle Diocese and carry out important roles in communities. As well as engaging in a wide variety of community and church projects, we carry out around 520 weddings, 2,150 funerals and 1,900 baptisms every year.

While the NDBF is responsible for the funding of clergy stipend costs, the national clergy payroll is administered by the Church Commissioners whom the NDBF reimburses monthly for the costs of stipendiary clergy deployed in the Diocese. Caring for the licensed clergy and lay workers in the Diocese is a priority of the NDBF and represents by far its largest financial commitment. Although the NDBF does not employ the parish clergy, it is responsible for training them, their continued development and, where applicable, resourcing their stipend, and paying into their pension fund. In 2011 terms of service were introduced in the form of Common Tenure under which all new clergy are appointed (some present clergy chose to retain their freehold). Common Tenure gives greater clarity on the rights and obligations of clergy and requires that they participate in a process of Continual Professional Development and Ministerial Development Review. It also gives clergy access to Employment Tribunals and other useful services.

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 NDBF recognises the importance of a safe, secure and well maintained house and through the Houses & Glebe Committee it strives to continue with this work as well as carrying out programmed refurbishments and improvements, as available money allows.

In January 2020 there was an establishment of 100.3 full-time equivalent (FTE) posts for permanent stipendiary ministry (incumbent, priest-in-charge, team vicar and associate clergy posts) and this establishment reduced to 98.1 FTE by the end of 2020. The average vacancy rate in the year was 16.4% and of the establishment there was an average of 82 FTE in post. This figure excludes curates in training posts, chaplains and the archdeacons.

During all interregnums the relevant area dean worked closely with the churchwardens of the vacant parishes and ensured that in every case scheduled services continued and, with very few exceptions, other activities within the community continued uninterrupted. This was largely made possible by the increasing pool of both retired and self-supporting ministers in the Diocese together with support from the Archdeacons.

Church Buildings

New procedures introduced by the Church of England to control the maintenance and development of its buildings are working well with parishes benefitting from the streamlining that has been introduced and the way in which permissions are sought.

There were 64 faculty full applications in the year, of which 48 (75%) were carried out via the Online Faculty System. Since the start of the COVID-19 lockdown situation 89% of applications have been carried out online. The use of the online faculty process continues to grow in popularity and significantly reduces the amount of paperwork involved in the process by all parties. Whilst other Dioceses have moved to a wholly electronic system, it is unlikely Newcastle would replicate this entirely as certain faculties cannot be dealt with via the online system (for example in 2020 there was a block of 8 identical faculties for the council for closed churchyards which could not be processed online).

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ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2020

In addition to faculty applications there are national lists of work that can be done without a faculty. List A an incumbent can authorise, and List B an Archdeacon authorises but needs to seek advice from a Diocesan Advisory Committee (DAC) member first. In 2020 52 List B cases were processed (down from 2019 which had 72 which reflect the COVID-19 lockdown situation). List B covers more minor types of work such as like-for-like repairs.

Through our Rural Churches for All programme work has continued with local church congregations to help achieve a sustainable future for church buildings as both living places of worship and buildings that are enjoyed by local communities. Church buildings continue to be welcoming places for tourists and pilgrims and unique heritage assets.

Community Engagement

Our churches are embedded in their communities and as a result have developed trusting relationships and networks, enabling churches to play an important part in responding to the challenges faced by neighbourhoods and communities today.

Over the past year Together Newcastle, setup as a joint venture between the Church Urban Fund (CUF) and the Diocese of Newcastle, has continued to develop connections and relationships with congregations across the Diocese and as a result has experienced an increase in requests to help set up activities in response to identified needs and issues.

Together Newcastle is a resource to churches, individuals and groups that are wanting to get involved in some form of community activity, as part of their mission and commitment to growing church bringing hope .

Other related parties

The major related parties with whom the NDBF works include:

• The Archbishops’ Council to which the NDBF pays a donation based on an apportionment system agreed by the General Synod for funding national training of ordinands and the activities of the various national boards and councils, as well as the costs of the General Synod.

• The Church Commissioners , from which the NDBF receives grants and which acts on behalf of clergy with HM Revenue and Customs. The NDBF reimburses the Commissioners for the stipends of those clergy holding appointments in the Diocese of Newcastle.

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

• The Newcastle Diocesan Education Board (“NDEB”) to which it pays a donation for funding the work of the Joint Education Team which resources the activities of the NDEB.

• The Lord Crewe’s Charity from which the NDBF receives grants to resource activities of the NDBF which support serving clergy within the Diocese of Newcastle.

Volunteers

The Diocese of Newcastle 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 NDBF values

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

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FOR THE YEAR ENDED 31 DECEMBER 2020

the considerable time given by all members of boards, committees and task groups across the Diocese in pursuit of the mission of the NDBF.

FUTURE PLANS

In 2021 COVID-19 continues to have a significant impact on the work of the Diocese, with Church buildings remaining closed and services moving online. Despite these challenges activities will continue to be in line with supporting the five priority work streams detailed in the objectives set out on page 5.

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

FOR THE YEAR ENDED 31 DECEMBER 2020

FINANCIAL REVIEW

Financial performance

Parish Share, the money given by parishes to the Diocese to fund its mission and ministry, is the main incoming resource for the Diocese. Including the arrears received from earlier years, share decreased in cash terms by £353k compared to 2019. The total share received when expressed as a percentage of the overall share requested was 90.2% (2019: 91.7%).

The trustees are thankful to all the parishes which completed their parish share contributions during 2020. The trustees are grateful to those parishes that were able to make their parish share contributions by monthly instalments which helped the NDBF to resource the monthly financial responsibilities associated with the payment of clergy stipends and the salaries of those employed by the NDBF.

The balance on the Unrestricted Fund went up by £415k in 2020 to £3,956k. There was an overall £318k net excess of income over expenditure (within this was a decrease of £353k in parish Share contributions) and our investment in equities, held with CCLA Investment Management Ltd (CCLA), was revalued upwards by £97k.

The trustees have prepared a budget for 2021 which contains a small deficit of £81k. The target for Parish Share collection uses the 2020 parish share request as a baseline together with advice from parishes on what they felt able to offer in 2021 against this baseline. A Diocesan Contingency Fund has been set to support parishes meet any gap between their offer and the baseline figure keeping in mind the COVID-19 financial pressures that parishes will continue to face into 2021. The 2021 parish share target summarises as:

sh	share target summarises as:
•	Baseline request	£4,564k
•	Funded by:
	o Parish offers	£3,910k
	o Contingency fund	£654k

Overall the NDBF’s funds have increased in 2020 by £638k. This breaks downs as an operating surplus on unrestricted funds of £318k, net incoming resources on designated funds of £44k, net incoming resources on restricted and endowment funds of £61k, a realised gain on investments of £3k and an unrealised gain on investments of £212k.

Accounting rules require the inclusion of two items within the operating surplus on unrestricted funds which do not form part of the NDBF’s regular day-to-day operating income and expenditure. The following illustration removes the two items to help to understand the underlying operating position for 2020, which was a surplus on unrestricted funds of £33k:

Reported surplus on unrestricted & designated funds £362k remove reduction in the pension liability (£330k) remove balance of Lowest Income Communities Funding to be used in future years[1] (£53k) Underlying operating deficit on unrestricted & designated funds £21k

Included within this surplus is a one-off donation of £100k so adjusting for that would give an underlying operating deficit of £121k.

1 This is the unspent balance of monies received from the National Church which are to be used in defined areas. The balance is transferred and held in a designated fund for use in those areas in future years.

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2020

Significant property transactions

During 2020 there were no significant property transactions.

Our housing policy continues to be:

• to replace unsuitable properties;

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

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

Balance sheet position

The trustees consider that the balance sheet together with details in note 18 show broadly that the restricted and endowment funds are held in an appropriate mix of investment and current assets given the purposes for which the funds are held. While the net assets at the balance sheet date totalled £25.230m (2019: £24.592m) it must be remembered that included in this total are properties, mostly in use for the ministry, whose value amounted to £18.631m (2019: £18.660m). Much of the remainder of the assets shown in the balance sheet are held in restricted funds, and cannot necessarily be used for the general purposes of the NDBF.

Reserves policy

Free reserves

Having considered financial risk, liquidity requirement and the timing of cash flows throughout the year, the trustees policy is to aim to maintain c.£2m in investments for future income generation (2020 actual £1.5m) with an additional 3 months expenditure (c. £1.8m) held in readily realisable assets (2020 actual £1.8m). The trustees are satisfied with reserves at the current level in line with the aims of the policy.

Reserves tied up in fixed assets

The general fund comprises net assets amounting to £3,956k of which £14k is tied up in tangible fixed assets.

Designated funds

The trustees may, with the approval of the board, designate additional unrestricted reserves to be retained for an agreed purpose where this is considered to be prudent. Such designated reserves are reviewed from time to time and returned to the General Fund in the event that the purpose of their designation is no longer considered to be adequate justification for their retention. A description of each reserve together with the intended use of the reserve is set out in note 19. At 31 December 2020 total designated reserves were £6.01m (2019: £5.93m).

The trustees will keep the designation of unrestricted funds under review throughout the remainder of 2021 in order to ensure funds are put to the best use, as the Diocese responds to the issues faced during the COVID-19 pandemic.

Restricted and endowment funds

As set out in note 18, NDBF holds and administers a large number of restricted and endowment funds. As at 31 December 2020 restricted funds totalled £1.81m (2019: £1.73m) and endowment funds totalled £13.45m (2019: £13.39m). Neither are available for the general purposes of the NDBF.

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2020

Going concern

The trustees have considered the potential financial effects of the ongoing COVID-19 situation on the availability of reserves and cash and upon the going concern basis of preparation of these financial statements. At the time of writing the 2021 cashflow forecast, based on the approved budget and reporting from parishes on what they feel able to contribute in parish share during 2021, projects a fall in cash of £747k during 2021. This is being mitigated through income from sales of property. So far in 2021 one property has been sold for £421k and a further 4 properties have potential to be sold in 2021 for a total of £1.45m. The trustees are keeping under constant review the COVID-19 situation in terms of the extent and duration of the control measures and consequent impacts on general reserves. If it is forecast that general reserves will temporarily fall below the level stated in the reserves policy, management would consider whether the designation of certain unrestricted reserves remained appropriate. In more severe scenarios, where virus control measures have to be applied for a longer duration, it is possible that the Board would need to consider reducing operations in order to limit expenditure, consider utilising certain restricted reserves beyond the budgeted amount, or realising assets. The trustees are comfortable that these measures, along with the current levels of cash and short term deposits, are sufficient to allow the Diocese to continue to operate as a going concern for the foreseeable future notwithstanding the current restrictions.

Grant making policy

The Memorandum of Association of the NDBF explicitly permits the NDBF to make grants in pursuance of its objects, and the nature of grants made in 2020 is indicated in note 10. Certain grants are built into the Diocesan Budget which is approved by Synod, whilst others are overseen by the Bishop’s Council, the Diocesan Finance Group and the Diocesan Mission and Pastoral Committee.

Investment policy

The Memorandum and Articles of Association of the charity permit wide powers of investment. NDBF's investment policies are based on two key criteria:

• Ethical investment - this includes ensuring that investments are held in companies which have high standards of corporate governance and act in a responsible way towards stakeholders.

• Long-term responsibilities - the trustees are aware of their long-term responsibilities in respect of endowed funds and as a result follow a correspondingly prudent approach to investment decisions.

These policies are achieved by holding all funds with CCLA.

Investment policy for long-term funds is aimed primarily at generating a sustainable income with due regard to the need for the preservation of capital value and the possible need to realise investments to meet operational needs. The glebe investments are held for the purpose of raising income to achieve the maximum contribution possible to clergy stipends on an on-going basis. Unrestricted and restricted fund investments are invested to balance income, liquidity and the maintenance of capital.

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2020

The investments held and their return during the year are set out in the following table:

Shares in CBF Investment Fund

Valuation at 1 Jan 2020 Dividend income % Revaluation % Total % return	£3,281,489
	3.77% 6.55%
	10.32%

----- Start of picture text -----
Glebe managed mainly by glebe agent
----- End of picture text -----

Valuation at 1 Jan 2020 Rental income % Revaluation % Total % return		£1,538,267
		1.85% 0.00%
		1.85%

RESPONDING TO COVID-19

Key aspects of the diocesan response to COVID-19 during 2020 were:

• Delivery of an expenditure savings package of £390k.

• Working with the National Church to secure an allocation of £498k sustainability funding support in respect of COVID-19 losses during 2020 and 2021. This sum was received in 2020 and is held for use in 2021 and forms part of deferred income within other creditors showing in note 15.

• Proactive support to parishes in particular through our Generous Giving Advisers. A key success here has been the support provided to parishes to secure business support grants from the local authorities with £533k support secured across 74 parishes.

The risks presented by COVID-19 have been considered and include increased liquidity, credit and reputational risk. The Charity has business continuity plans in place that support the continued operation of business activity and has resources that can withstand temporary disruption. At this stage there is no perceived material risk to the Charity’s viability resulting from the COVID-19 outbreak.

PRINCIPAL RISKS AND UNCERTAINTIES

The trustees are responsible for the identification, mitigation and management of risk. To achieve this, a register of all the risks identified is maintained and, alongside it, a management and mitigation

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strategy formed. This is subject to review by the trustees on an annual basis with the responsibility for delivery of the mitigation strategies identified by it being delegated to the Diocesan Secretary. In 2020 the Finance Group, a sub-committee of the Bishop’s Council, reviewed the management and mitigation strategy and revised the Risk Register.

The receipt of voluntary Parish Share contributions remains the major risk to the Board’s overall performance. The trustees have put in place a framework of support, including regular communication and active management through the Finance Group, to mitigate this risk.

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ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2020

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

STRUCTURE AND GOVERNANCE

Summary Information about the structure of the Church of England

The Church of England is the established church and HM The Queen is the Supreme Governor. It is organised into two provinces (Canterbury and York) and 42 Dioceses. Each Diocese is under the care of a Diocesan Bishop who is charged with the cure of souls of all the people within that geographical area. This charge is shared with priests within benefices and parishes which are sub-divisions of the Diocese.

The National Church has a General Synod comprised of ex-officio members and elected representations 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 Pensions Board administers the pension schemes for clergy and lay workers. Within each Diocese, overall leadership lies with the Diocesan Bishop, who exercises that input as Bishop within the Diocesan Synod. The Diocese of Newcastle is divided into twelve 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 application for partnership with neighbouring Dioceses.

Organisational structure

NDBF is a company incorporated in England, limited by guarantee (No. 00650977) and a registered charity (No. 247233) governed by its Memorandum and Articles of Association.

The company’s principal activity is to promote, assist and advance the work of the Church of England within the Diocese of Newcastle. It was established in its present form in 1882.

Governance and policy of the NDBF is the responsibility of the trustees, who are also members of the company and trustees for the purposes of charity law. There are nine ex-officio trustees and six lay members and three clergy members elected from and by the members of Diocesan Synod every three years. The most recent elections were held in November 2018. The next elections are scheduled to be held in Autumn 2021. The details of trustees who served during 2020 are set out on page 20.

The Diocesan Synod, the statutory governing body of the Diocese, is an elected body drawn from across the Diocese with responsibility for setting the vision and strategy of the Diocese, guided by the Bishop’s Staff Team. The Synod membership is elected every three years, the last elections having been in July 2018. Whilst the NDBF is a separate legal entity, with clear responsibilities under both company and charity law, as well as a governing memorandum and articles of association, by virtue of the National Institutions Measure 2000 the NDBF is subject to the direction of the Synod in all its activities, unless such direction is not in accordance with the governing documents or statutory regulations.

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ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2020

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 Newcastle are set by the Diocesan Synod, and the NDBF. The responsibility for ensuring that these priorities and strategies are delivered is delegated to the Diocesan Secretary. The members of the company meet once a year in general meeting to receive and approve the annual report and financial statements and to appoint the auditors. The Diocesan Synod each year receives and agrees the annual budget, prepared and approved by the NDBF. The trustees, meeting within the context of the Bishop’s Council & Standing Committee, hold up to seven 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 NDBF;

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

• Advising the Bishop on any matters she 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 Group : responsible for considering the financial affairs of the Diocese. Amongst other things, it draws up draft budgets for approval by the trustees prior to submission to Diocesan Synod and monitors expenditure and income. The group comprises eight members of whom six are trustees.

Houses & Glebe Committee : responsible for advising on policy concerning the management of parsonage houses in each benefice of the Diocese of Newcastle, including setting the policy for buying, repairing, maintaining and disposing of all parsonage houses, team vicarages and houses owned by NDBF, together with responsibility for determining policy and making decisions concerning the management of glebe property and investments for the benefit of the Diocesan Stipends Fund of NDBF.

Diocesan Mission & Pastoral Committee : responsible for advising on pastoral reorganisation in the Diocese of Newcastle, taking account of available clergy numbers and making use of new patterns of ministry. The Committee also advises on the finding of appropriate alternative uses for churches closed to regular public worship.

Diocesan Advisory Committee : advises on matters affecting churches and places of worship in the Diocese such as granting of faculties, architecture, archaeology, art and history of places of worship, the use and care of places of worship and their contents and the care of churchyards.

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

FOR THE YEAR ENDED 31 DECEMBER 2020

Trustee recruitment, selection and induction

The trustees are the members of the Bishop’s Council. There are ex-officio members, elected members, with elections taking place every three years, and there is provision for co-opted members. Trustees are given induction at the outset of the triennium and at other times as appropriate. They are informed about the role and function of the Bishop’s Council before seeking membership. All trustees are required to sign the code of practice and maintain their entry in the declarations of interest and loyalty.

Remuneration of key management personnel

Emoluments of higher-paid employees are determined by the Bishop of Newcastle, the Chair of the Board of Finance and the Human Resources Manager with reference to appraisals and remuneration and salary benchmarking.

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 Secretary and his colleagues for the delivery of the day to day activities of the company. The Diocesan Secretary is given specific and general delegated authority to deliver the business of the NDBF in accordance with the policies framed by the trustees.

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2020

TRUSTEES’ RESPONSIBILITIES

The trustees are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the trustees (as directors) to prepare financial statements for each financial year. Under that law the trustees have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of the affairs of the NDBF and of the surplus or deficit of the NDBF 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;

• 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 NDBF 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 NDBF 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 NDBF’s website. Legislation in England/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.

APPOINTMENT OF AUDITORS

The auditor is deemed to be reappointed under section 487 (2) of the Companies Act 2006 until otherwise resolved at a general meeting of the company.

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

FOR THE YEAR ENDED 31 DECEMBER 2020

ADMINISTRATIVE DETAILS

Ex officio trustees

The Bishop of Newcastle, the Right Reverend CE Hardman The Suffragan Bishop of Berwick, the Right Reverend MSA Tanner (to 14/07/20) The Suffragan Bishop of Berwick, the Right Reverend M Wroe (from 20/10/20) The Dean of Newcastle, the Very Reverend GV Miller The Archdeacon of Lindisfarne, the Venerable PJA Robinson (to 03/07/20) The Archdeacon of Lindisfarne, the Venerable DR CA Sourbut Groves (from 14/11/20) The Archdeacon of Northumberland, the Venerable M Wroe (to 19/10/20) The Chair of the Diocesan Board of Finance, Canon SR Harper The Chair of the House of Clergy, The Reverend Canon B Hurst (from 13/08/20) The Chair of the House of Laity, Canon C Wolstenholme (to 05/11/20)

The Chair of the Diocesan Mission and Pastoral Committee, the Reverend Canon PM Scott (to 20/02/20)

The Chair of the Diocesan Mission and Pastoral Committee, Mrs EA Kerry (from 04/05/20)

The Chair of the House of Clergy (The Reverend C Pickford) served to 12/08/20 and was also an employee of NDBF. The NDBF constitution does not allow employees to be a trustee therefore this individual is not included in the above list of Ex officio trustees.

Elected trustees

The Reverend Canon CL Brown The Reverend PD Dobson The Reverend L Chapman Canon I McDonald-Booth Dr JC Appleby Mrs EA Chadwick Professor G Holmes (from 04/06/20) Mrs E Doran (from 07/07/20) Dr A Thick (to 01/10/20)

Co-opted by the Board:

Mrs EA Kerry, the Vice Chair of the Diocesan Board of Finance (co-opted to 03/05/20)

Secretary: Canon S Waddle

Auditors: UNW LLP, Chartered Accountants & Statutory Auditors, Citygate, St. James' Boulevard, Newcastle upon Tyne, NE1 4JE

Bankers : Barclays Bank plc, Barclays House, 5 Queen Ann’s Street, Quayside, Newcastle upon Tyne, NE4 9BN

Solicitors: Sintons, The Cube, Barrack Road, Newcastle upon Tyne, NE4 6DB

Investment managers: CCLA Investment Management Ltd, Senator House, 85 Queen Victoria Street, London, EC4V 4ET

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

FOR THE YEAR ENDED 31 DECEMBER 2020

Glebe agents: Land Factor, Bywell Estate Office, Bywell, Stocksfield, NE43 7AQ Insurers: Ecclesiastical, Beaufort House, Brunswick Road, Gloucester, GL1 1JZ

Registered Office: Church House, St. John's Terrace, North Shields, NE29 6HS Telephone: [phone]

Website: www.newcastle.anglican.org Email: [e-mail] Company registration number: 00650977 Registered charity number: 247233

In approving this Trustees’ Report, the trustees are also approving the Strategic Report included on pages 4 – 15 within their capacity as company directors.

BY ORDER OF THE TRUSTEES

Canon S Harper

Canon S Waddle

Chair

Secretary

23 March 2021 23 March 2021

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

INDEPENDENT AUDITOR’S REPORT FOR THE YEAR ENDED 31 DECEMBER 2020

Independent Auditor’s Report to the members of The Newcastle Diocesan Board of Finance Limited

Opinion

We have audited the financial statements of The Newcastle Diocesan Board of Finance Limited for the year ended 31 December 2020 comprising the Statement of Financial Activities, the Income and Expenditure Account, the Balance Sheet, Statement of Cash Flows and related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the charitable company's affairs as at 31 December 2020 and of its incoming resources and application of resources, including its 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 and the Charities Act 2011.

Basis of opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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 entity'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.

Respective responsibilities of trustees and auditor

The trustees are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the 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.

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

INDEPENDENT AUDITOR’S REPORT FOR THE YEAR ENDED 31 DECEMBER 2020

We have nothing to report in this regard.

Opinion 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 trustees' report for which the financial statements are prepared is consistent with the financial statements, and the directors’ report included within the trustees’ report has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees' report.

We have nothing to report in respect of the following matters in relation to which 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' remunerations specified by law not made; or

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

Responsibilities of trustees

As explained more fully in the trustees' responsibilities statement, 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's or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

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 is detailed below:

We identified areas of law and regulations that could reasonably be expected to have a material effect on the financial statements from our general and sector experience and through discussions with the trustees and other management (as required by auditing standards) and from inspection of the charitable company's legal correspondence, and we discussed with the trustees and other management the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.

Firstly, the charitable company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies and charities legislation) and taxation

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

INDEPENDENT AUDITOR’S REPORT FOR THE YEAR ENDED 31 DECEMBER 2020

legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

Secondly the charitable company is subject to many other laws and regulations where the consequences of noncompliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect; data protection, safeguarding and certain aspects of company legislation, recognising the nature of the charitable company's activities. Auditing standards limit the required audit procedures to identify noncompliance with these laws and regulations to enquiry of the trustees and other management and inspection of regulatory and legal correspondence, if any. Through these procedures, we became aware of actual or suspected non-compliance and considered the effect as part of our procedures on the related financial statement items. The identified actual or suspected non-compliance was not sufficiently significant to our audit to result in any further disclosure within our report or the financial statements.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.

In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

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. Who are we reporting to

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 its members, as a body, for our audit work, for this report, or for the opinions we have formed.

Anne Hallowell BSC DChA FCA (Senior Statutory Auditor) For and on behalf of UNW LLP, Statutory Auditor

Newcastle upon Tyne

Date: 23 March 2021

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

STATEMENT OF FINANCIAL ACTIVITIES FOR YEAR ENDED 31 DECEMBER 2020

Note Income from Donations Parish contributions 2 Archbishops' Council 2 Other donations 2 Charitable activities 3 Other activities 4 Investments 5 Total income Expenditure on Raising funds 6 Charitable activities 7 Total expenditure Net incoming/(outgoing) resources before investment gains Net gains/(losses) on investments 13 Net income/(expenditure) Transfers between funds Net movement in funds Reconciliation of funds Total funds brought forward Total funds at 31 December 2020 18	Unrestricted Funds £ 4,055,373 1,285,071 601,460 408,500 416,338 143,678	Restricted Funds £ - - 504,731 - - 15,923	Endowment Funds £ - - - - - -	Total Funds 2020 £ 4,055,373 1,285,071 1,106,191 408,500 416,338 159,601	Total Funds 2019 £ 4,408,028 1,335,240 937,823 368,067 313,876 178,786
	6,910,420	520,654	-	7,431,074	7,541,820
	(62,120) (6,485,834)	- (447,839)	- (12,294)	(62,120) (6,945,967)	(143,190) (5,971,334)
	**(6,547,954) **	**(447,839) **	**(12,294) **	**(7,008,087) **	(6,114,524)
	362,466 135,194	72,815 -	(12,294) 79,730	422,987 214,924	1,427,296 517,085
	497,660 -	72,815 -	67,436 -	637,911 -	1,944,381 -
	497,660 9,472,053	72,815 1,733,568	67,436 13,386,503	637,911 24,592,124	1,944,381 22,647,743
	9,969,713	1,806,383	13,453,939	25,230,035	24,592,124

All incoming resources and resources expended relate to continuing activities.

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

INCOME AND EXPENDITURE ACCOUNT FOR YEAR ENDED 31 DECEMBER 2020

	Total	Total
	2020	2019
	£	£
Total incoming resources	7,431,074	7,541,820
Resources expended	(6,995,793)	(6,113,270)
	__	__
Operating surplus / (deficit) for the year	435,281	1,428,550
Net gains/(losses) on investments	135,193	334,388
	__	__
Net income for the year	570,474	1,762,938
	__	__
Total comprehensive income	570,474	1,762,938
	__	__

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

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

BALANCE SHEET AS AT 31 DECEMBER 2020

Note Fixed assets Tangible assets 12 Investments 13 Current assets Debtors 14 Investments Cash at bank Creditors: amounts falling due within one year 15 Net current assets Total assets less current liabilities Creditors: amounts falling due after more than one year 16 Net assets The funds of the charity: Endowment funds Including revaluation reserve: £610,263 (2019: £530,344) Restricted income funds Unrestricted income funds: General funds Including revaluation reserve: £527,396 (2019: £430,219) Designated funds Including revaluation reserve: £326,403 (2019: £288,385) Total funds 18	2020 £ 18,630,575 4,834,680	2019 £ 18,659,844 4,819,756
	23,465,255 244,129 1,771,199 1,167,138	23,479,600 142,187 1,065,578 1,039,932
	3,182,466 (1,170,123)	2,247,697 (571,134)
	2,012,342	1,676,563
	25,477,597 (247,563)	25,156,163 (564,039)
	25,230,035	24,592,124
	13,453,939 1,806,383 3,956,553 6,013,160	13,386,503 1,733,568 3,540,916 5,931,137
	25,230,035	24,592,125

The notes on pages 29 to 54 form part of these financial statements. The accounts were approved by the trustees of the Board on the 23 March 2021 and are signed on their behalf by:

Canon SR Harper Chair Company number 00650977

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

STATEMENT OF CASH FLOWS FOR YEAR ENDED 31 DECEMBER 2020

		2020		2019
	£	£	£	£
Net cash inflow from operating
activities		473,226		241,562
Cash flows from investing activities
Dividends, interest and rent from investments	159,601		178,786
Proceeds from the sale of:
Investments	200,000			-
Purchase of:
Tangible fixed assets for the use of the NDBF		-	(2,019)
	____		____
Net cash provided by investing
activities		359,601		176,767
Change in cash and cash equivalents in the
reporting period		832,827		418,329
Cash and cash equivalents at 1 January		2,105,510		1,687,181
Cash and cash equivalents at 31 December		2,938,337		2,105,510
				____
Reconciliation of net movements in funds to
net cash flow from opertating activities
Net movements in funds for the year ended
31 December		422,987		1,427,296
Adjustments for:
Depreciation charges		29,269		41,681
Dividends, interest and rent from investments		(159,601)		(178,786)
Decrease in debtors		(101,942)		107,259
Increase in creditors		612,512		251,787
Decrease in pension liability		(330,000)		(1,407,675)
		____		____
Net cash provided by/(used in) operating
activities		473,226		241,562
Analysis of cash and cash equivalents
Cash in hand		1,167,138		1,039,932
Deposits (less than 3 months)		1,771,199		1,065,578
		2,938,337		2,105,510

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

1 PRINCIPAL ACCOUNTING POLICIES

The financial statements have been prepared under the historical cost convention, with the exception of freehold properties and fixed asset investments. The majority of freehold properties are shown at their 1995 valuation, based on a desk-top study carried out by a Chartered Surveyor working for Black Horse Agencies. Property additions since 1995 are shown at cost or at a lower fair value where the trustees consider that this is appropriate. Fixed asset investments are included at their market value at the balance sheet date. The financial statements have been prepared in accordance with the Statement of Recommended Practice for Charities (SORP 2015), the Companies Act 2006 and applicable accounting standards (FRS 102).

NDBF meets the definition of a public benefit entity under FRS 102.

The financial statements are prepared in sterling which is the functional currency of the charity and are rounded to the nearest £1.

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 NDBF 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. Parish Share is recognised as income of the year in respect of which it is receivable.

• 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 deferred income within creditors to be carried forward to the following year.

• 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 NDBF’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. Stipends fund income. The Stipends Fund Capital 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.

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, and expenditure which supports the two

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

charitable companies working alongside NDBF at Church House, i.e. the Newcastle Diocesan Education Board and Lindisfarne Regional Training Partnership.

• 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 NDBF, 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 NDBF's staff are members of the Church Workers Pension Fund and Clergy are members of the Church of England Funded Pensions Scheme (see note 23). The pension costs charged as resources expended represent the NDBF's contributions payable in respect of the accounting period, in accordance with FRS 102. Deficit funding for the pension schemes to which NDBF participates is accrued at current value within creditors.

c) Going concern

The trustees have considered the potential financial effects of the current COVID-19 situation on the availability of reserves and cash and upon the going concern basis of preparation of these financial statements. The risks presented by COVID-19 have been considered and include increased liquidity, credit and reputational risk. The Charity has business continuity plans in place that support the continued operation of business activity and has resources that can withstand temporary disruption. At this stage there is no perceived material risk to the Charity’s viability resulting from the COVID-19 outbreak. Further detail is given in the Trustees report on pages 13 & 14.

d) Tangible fixed assets and depreciation

Freehold properties

Depreciation is not routinely provided on buildings except in those few cases where the trustees feel that the net book value is higher than the fair value. In such cases annual depreciation is charged, on a straight line basis, at an amount equivalent to 2% of the excess of net book value over fair value. For the vast majority of properties depreciation is not regarded as a material amount due to the very long expected remaining useful economic life in each case, and because the expected residual value is not materially less than the carrying value. The NDBF has a policy of regular structural inspection, repair and maintenance, which in the case of residential properties is in accordance with the Repair of Benefices Buildings Measure 1972 and properties are therefore unlikely to deteriorate or suffer from obsolescence. In addition, disposals of properties occur well before the end of their economic lives and disposal proceeds are usually not less than their carrying value. The trustees perform annual impairment reviews in accordance with the requirements of FRS 102 to ensure that the carrying value is not more than the recoverable amount.

Investment properties

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

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

Parsonage houses

The NDBF has followed the requirements of FRS 102, in its accounting treatment for benefice houses (parsonages). FRS 102 requires the accounting treatment to follow the substance of arrangements rather than their strict legal form. The NDBF 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 capitalise as endowed assets at cost. Parsonage houses are not routinely revalued. Depreciation is not routinely provided on Parsonage houses except in those few cases where the trustees feel that the net book value is higher than the fair value. In such cases annual depreciation is charged, on a straight line basis, at an amount equivalent to 2% of the excess of net book value over fair value.

e) Other tangible fixed assets

All capital expenditure over £1,000 on computers and other office equipment 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:-

Computers and printers 25% per annum straight line basis Equipment, fixtures and fittings 10-25% per annum straight line basis

f) Fixed asset investments

Listed investments, which have been classified as fixed assets investments, are measured initially and subsequently at fair value. The statement of financial activities includes the net gains and losses arising on revaluations and disposals throughout the year.

g) Debtors

Trade and other debtors are recognised at the settlement amount. Prepayments are valued at the amount prepaid net of any trade discounts due.

h) Cash at bank and in hand

Cash at bank and in hand includes cash and highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.

i) Liabilities and provisions

Liabilities are recognised when there is an obligation at the balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably. Liabilities are recognised at the amount that the company anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide. Provisions are measured at the best estimate of the amounts required to settle the obligation. When the effect of the time value of money is material, the provision is based on the present value of those amounts, discounted at the pre-tax discount rate that reflects the risks specific to the liability. The unwinding of the discount is recognised within interest payable and similar charges.

j) Financial instruments

The company only enters into financial instruments transactions that result in the recognition of basic debt financial assets and liabilities like trade and other accounts receivable and payable, cash and bank balances and loans to or from related parties. All such instruments are due within one year, and are measured, initially and subsequently at the transaction price.

At the end of each reporting period debt financial assets are assessed for impairment, and their carrying value reduced if necessary. Any impairment charge is recognised in the statement of financial activities.

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NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

k) Fund balances

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

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

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

• Designated funds set aside out of unrestricted funds by the NDBF 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.

• 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 NDBF (Stipends Fund Capital, Parsonage Houses Fund but not the St Aidan’s Fund), 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.

l) Estimates and judgments

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

In preparing these financial statements the trustees do not consider there were any significant areas of judgment that were required in applying the company’s policies as set out above.

Estimates within these financial statements include depreciation and asset valuations (for example agricultural land). None of the estimates made in the preparation of these financial statements are considered to carry significant estimation uncertainty, nor to bear significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

2 DONATIONS

Parish Contributions

Parish share Current year's allocation Shortfall Parish contributions Arrears for previous years Archbishops' Council Lowest Income Communities funding Transitional funding Other donations All Churches Trust grant Lord Crewe's Charity grant Grants received for Inspired North East Project Grants received for Rural Churches for Everyone Project Church Commissioners - restructure funding Church Commissioners - strategic capacity funding Church Commissioners - strategic development funding Newcastle Diocesan Society Jesmond Holy Trinity Durham Diocesan Board of Finance Grants received from Government Other	Unrestricted Funds £ 4,496,184 (457,573)	Restricted Funds £ - -	Endowment Funds £ - -	Total Funds 2020 £ 4,496,184 (457,573)	Total Funds 2019 £ 4,807,066 (424,040)
	4,038,611 16,762	- -	- -	4,038,611 16,762	4,383,026 25,002
	4,055,373	-	-	4,055,373	4,408,028
	Unrestricted Funds £ 887,679 397,392	Restricted Funds £ - -	Endowment Funds £ - -	90.2% Total Funds 2020 £ 887,679 397,392	91.7% Total Funds 2019 £ 868,900 466,340
	1,285,071	-	-	1,285,071	1,335,240
	Unrestricted Funds £ 120,500 74,622 - - 81,252 82,532 - 110,200 3,555 25,934 11,122 91,743	Restricted Funds £ - - - 47,789 140,355 - 241,924 - - - 4,021 70,642	Endowment Funds £ - - - - - - - - - - - -	Total Funds 2020 £ 120,500 74,622 - 47,789 221,607 82,532 241,924 110,200 3,555 25,934 15,143 162,385	Total Funds 2019 £ 120,250 100,071 81,466 7,943 243,221 31,987 145,812 31,406 42,412 - - 133,255
	601,460	**504,731 **	-	1,106,191	937,823

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

For other donations in 2019 £141,036 from Church Commissioners and £124,050 from other funders were restricted (total £265,086) with the balance of £672,737 being unrestricted.

3 CHARITABLE ACTIVITIES

CHARITABLE ACTIVITIES
Statutory fees Chaplaincy income Guaranteed annuities & stipend grants	Unrestricted Funds £ 322,068 86,432 -	Restricted Funds £ - - -	Endowment Funds £ - - -	Total Funds 2020 £ 322,068 86,432 -	Total Funds 2019 £ 302,451 64,172 1,444
	408,500	-	-	408,500	368,067

In 2019 all income related to unrestricted funds.

4 OTHER TRADING ACTIVITIES

OTHER TRADING ACTIVITIES
Rental of houses Contributions for use of Church House Other contributions	Unrestricted Funds £ 381,388 25,927 9,023	Restricted Funds Endowment Funds £ £ - - - - - - - -	Total Funds 2020 £ 381,388 25,927 9,023	Total Funds 2019 £ 284,474 22,193 7,209
	416,338		416,338	313,876

In 2019 all income related to unrestricted funds.

5 INVESTMENT INCOME

INVESTMENT INCOME
Income from UK listed investments Bank interest receivable Rents from Glebe Other rental income	Unrestricted Funds £ 123,236 5,442 15,000 -	Restricted Funds £ 459 2,070 13,394 -	Endowment Funds £ - - - -	Total Funds 2020 £ 123,695 7,512 28,394 -	Total Funds 2019 £ 124,451 10,607 37,908 5,820
	143,678	15,923	-	159,601	178,786

In 2019 £905 from listed investments, £3,636 from bank interest receivable and £15,808 rents from glebe were restricted (total £20,349) with the balance of £158,437 being unrestricted.

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

6 FUNDRAISING COSTS

Unrestricted Funds Restricted Funds Endowment Funds £ £ £ Glebe costs 1,500 - - Parsonage rental costs 60,620 - - 62,120 - -	Total Funds 2020 Total Funds 2019 £ £ 1,50080,490 60,62062,700 62,120143,190

In 2019 all income related to unrestricted funds.

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

7 CHARITABLE ACTIVITIES

Contributions to Archbishops' Council Training for ministry National church responsibilities Grants and provisions Mission agency pension contributions Retired clergy housing costs (CHARM) Pooling of ordinand candidates' costs Resourcing Ministry and Mission Parish Ministry Stipends and national insurance Pension contributions Housing costs Removal, resettlement and grants Other expenses Support for parish ministry Grants to linked charitable companies Newcastle Diocesan Education Board	Unrestricted Funds £ 171,937 129,269 14,448 6,449 61,731 76,213	Restricted Funds £ - - - - - -	Endowment Funds £ - - - - - -	Total Funds 2020 £ 171,937 129,269 14,448 6,449 61,731 76,213	Total Funds 2019 £ 171,938 136,714 14,579 1,811 58,791 14,303
	460,047	-	-	460,047	398,136
	2,809,433 679,453 573,208 89,984 70,536 4,222,614 1,721,923	28,107 9,834 2,058 - -	- - 12,294 - -	2,837,540 689,287 587,560 89,984 70,536	2,811,625 (307,701) 697,571 105,407 131,881
		39,999 407,840	12,294 -	4,274,907 2,129,763	3,438,783 2,034,415
	5,944,537	447,839	12,294	6,404,670	5,473,198
	81,250	-	-	81,250	100,000
	81,250	-	-	81,250	100,000
	6,485,834	447,839	12,294	6,945,967	5,971,334

£149,155 of 2019 expenditure related to restricted and £5,822,179 to unrestricted funds.

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

8 ANALYSIS OF EXPENDITURE INCLUDING ALLOCATION OF SUPPORT COSTS

Raising funds Charitable activities: Contributions to Archbishops' Council Resourcing parish ministry Grant to Newcastle Diocesan Education Board (a related charitable company)	Activities Undertaken Directly £ 62,120 - 5,463,195 -	Grant Funding of Activities £ - 460,047 151,739 81,250	Support Costs Total costs 2020 £ £ -62,120 -460,047 789,7366,404,669 -81,250 789,736 7,008,086	Total costs 2019 £ 143,190 398,136 5,473,198 100,000
	5,525,315	693,036		6,114,524

9 ANALYSIS OF SUPPORT COSTS

ANALYSIS OF SUPPORT COSTS
Unrestricted Funds £ Central administration 670,107 Governance External audit 19,630 Registry and other legal costs 90,724 Synodical costs 9,275 789,736	Restricted Funds £ - - - -	Endowment Funds £ - - - -	Total costs 2020 £ 670,107 19,630 90,724 9,275	Total costs 2019 £ 652,899 19,890 87,804 10,040
	-	-	789,736	770,633

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

10 ANALYSIS OF GRANTS MADE

From unrestricted funds to support national Church responsibilities Contributions to Archbishops' Council From unrestricted funds Support for ordinands Newcastle Cathedral Shepherds Dene Retreat House Alnmouth Friary North East Churches Acting Together Northumbrian Industrial Mission Together Newcastle Continuing Ministerial Development grants Ministry Experience Scheme grants Other grants From restricted funds Support for ordinands Diocesan Pastoral fund Partners fund From unrestricted funds to support the Diocesan Education Board Newcastle Diocesan Education Board Total Grants Made	Number 6	Individuals £ -	Institutions £ 460,047	Total costs 2020 £ 460,047
	18 1 1 1 1 1 1 39 4 2	28,198 - - - - - - 8,476 13,200 -	18,800 3,250 4,063 1,097 3,656 1,056 15,000 3,574 - 260	46,998 3,250 4,063 1,097 3,656 1,056 15,000 12,050 13,200 260
	69	49,874	50,756	100,630
	18 3 1	16,085 - -	21,824 9,000 4,200	37,909 9,000 4,200
	22	16,085	35,024	51,109
	1	-	81,250	81,250
	1	-	81,250	81,250
	98	65,959	627,077	693,036

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

Grant funding of activities in previous year From unrestricted funds Contributions to Archbishops' Council Contributions to Diocesan-based charities Newcastle Diocesan Education Board Other grants From restricted funds Other grants	2019 No. of grants 6 1 146 1	2019 £ 398,136 100,000 189,243 6,600
	154	693,979

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

11 STAFF COSTS

STAFF COSTS
Employee costs during the year were as follows: Wages and salaries National insurance contributions Pension costs The average number of persons employed during the year: Administration and financial management Supporting ministers & chaplains Property Safeguarding Resource Church The average number of persons employed during the year based on full-time equivalents Administration and financial management Supporting ministers and chaplains Property Safeguarding Resource Church The number of staff whose emoluments (including benefits in kind but excluding pension contributions) amounted to more than £60,000 were as follows: £60,000 - £70,000		2020 £ 1,050,700 90,921 95,307		2019 £ 913,430 89,261 123,039
		1,236,928		1,125,730
		Number 15 20 2 3 7		Number 16 15 2 2 3
		47		38
		Number 10.3 14.9 2.0 1.6 4.4		Number 11.0 11.2 2.0 1.4 1.6
		33.2		27.2
		2020 number 1		2019 number 1

Pension payments of £6,415 (2019:£6,384) were made for this employee.

In 2020 staff working for the Resource Church and were employed by the Newcastle Diocesan Board of Finance in lieu of the Resource Church achieving its own legal entity status.

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NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

	2020	2019
	£	£
Stipends	2,560,996	2,596,071
National insurance contributions	217,287	215,554
Pension costs - current year	691,758	(307,701)
	____	____
	3,470,041	2,503,924
	____	____

Remuneration of key management personnel

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

Diocesan Secretary and Company Secretary Shane Waddle MSc, FCIPP Canon Director of Ministry & Mission Rob Saner-Haigh (from April 2020) Property Manager Ian D Beswick MSc, MRICS Finance Manager Philip D Ambrose BA, CPFA

Remuneration, pensions and expenses for these employees amounted to £230,389 (2019: £261,433).

Trustees’ emoluments

No trustee received any remuneration for services as trustee. The trustees received travelling and out of pocket expenses totalling £4,528 and this sum was paid out to 6 trustees in respect of General Synod duties, duties as Archdeacon or Area Dean, and other duties as trustees. (In 2019 £20,519 was paid out to 4 trustees).

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

	Stipend	Housing
The Right Revd MSA Tanner	No	Yes
The Venerable PJA Robinson	Yes	Yes
The Venerable M Wroe	Yes	Yes
The Venerable DR CA Sourbut Groves	Yes	Yes
The Revd Canon PM Scott	Yes	Yes
The Revd L Chapman	Yes	No
The Revd PD Dobson	Yes	Yes
The Revd Canon B Hurst	Yes	Yes

The NDBF is responsible for funding, via the Church Commissioners, the stipends of licensed stipendiary clergy in the Diocese, other than bishops and cathedral staff. The NDBF is also responsible for the provision of housing for stipendiary clergy in the Diocese including the assistant bishop but excluding the diocesan bishop and cathedral staff.

The NDBF paid an average of 99.4 (2019: 103.7) stipendiary clergy working in the Diocese within stipendiary ministry, and the costs were as follows:

The stipends of the Diocesan Bishop and Assistant Bishop are funded by the Church Commissioners and are in the range of £37,670 - £46,180 (2019: range £36,930 - £45,270). The annual rate of stipend funded by the NDBF paid to Archdeacons in 2020 was in the range £35,400 - £37,674 (2019: range £35,400 - £37,674) and other clergy who were trustees were paid in the range £25,860 - £28,444 (2019: range £25,860 - £28,444).

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

12 TANGIBLE FIXED ASSETS

At cost or valuation At 1 January 2020 Additions At 31 December 2020 Accumulated depreciation At 1 January 2020 Charge for the year At 31 December 2020 Net book value at 31 December 2020 Net book value at 31 December 2019	Property Office Equipment £ £ 5,100,705 128,139 - - 5,100,705 128,139 600,443 108,270 14,717 6,005 615,160 114,275 4,485,545 13,864 4,500,262 19,869 Unrestricted funds	Property Office Equipment £ £ 5,100,705 128,139 - - 5,100,705 128,139 600,443 108,270 14,717 6,005 615,160 114,275 4,485,545 13,864 4,500,262 19,869 Unrestricted funds	Parsonages Glebe Property £ £ 15,185,888 1,720,193 - - 15,185,888 1,720,193 2,459,885 306,483 8,547 - 2,468,432 306,483 12,717,455 1,413,710 12,726,003 1,413,710 Endowment funds	Parsonages Glebe Property £ £ 15,185,888 1,720,193 - - 15,185,888 1,720,193 2,459,885 306,483 8,547 - 2,468,432 306,483 12,717,455 1,413,710 12,726,003 1,413,710 Endowment funds	TOTAL £ 22,134,925 -
	5,100,705	128,139	15,185,888		22,134,925
	600,443 14,717	108,270 6,005	2,459,885 8,547	306,483 -	3,475,081 29,269
	615,160	114,275	2,468,432	306,483	3,504,350
	4,485,545	13,864	12,717,455 12,726,003	1,413,710	18,630,575
	4,500,262	19,869		1,413,710	18,659,844

Investments

Properties

These properties were purchased using either unrestricted reserves, the Pastoral Account or the Stipends Capital and Glebe Fund. Included in this category is £429k (2019:£429k) which is attributable to the Bishop Bilbrough Fund, being part of the cost of the new Church House office accommodation paid for from the proceeds of the former Church House building. The balance of the cost of Church House is held within the Mary Wilkinson Legacy Fund. The other NDBF properties are included in the NDBF Houses Fund, an unrestricted fund.

Parsonage houses

Rectories and vicarages (other than team vicarages) are vested in individual benefices. However the NDBF is responsible for the maintenance and repair of all parsonage houses and carries substantially all the risks of ownership. Following a scheme for pastoral reorganisation the net proceeds of the sale of a parsonage house may be credited to the Diocesan Pastoral Account, which is recognised as an asset of the NDBF.

Glebe team vicarages

Team vicarages are included as glebe but they are not held as investments. The proceeds of any sale must be credited to the Stipends Capital Account.

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

13 FIXED ASSET INVESTMENTS

Within the United Kingdom At 1 January 2020 Disposals Revaluation At 31 December 2020 Cost at 31 December 2020	Investment property £ 1,538,267 - -	Unlisted investments Listed investments £ £ - 3,281,489 - (197,152) - 212,076 - 3,296,413 - 3,281,489	TOTAL £ 4,819,756 (197,152) 212,076 4,834,680
	1,538,267 1,450,042
			4,731,531

Investment Properties

An estimate of the value of Glebe land and properties held as investments at the end of the year is £1,538,267. This figure has been provided by the Diocesan Property Manager, Mr I Beswick MRICS.

Listed investments

Listed investments are valued at middle market value at the year-end.

14 DEBTORS

Due within one year Church Commissioners: sundry debtors Prepayments Loans for parish buildings Other debtors Due after one year Loans for parish buildings > 1 year	2020 £ 4,065 - 24,000 211,064	2019 £ 4,065 2,967 23,735 106,420
	239,129	137,187
	5,000	5,000
	5,000	5,000
	244,129	142,187

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

15 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Taxation and social security Other creditors Accruals and deferred income Pension liabilities Falling due within one year Included within accruals and deferred income is deferred income Balance at 1 January 2020 Released in the year Deferred in the year Carried forward at 31 December 2020	2020 2019 £ £ 40,348 38,417 56,657 7,957 945,966 384,085 127,151 140,675 1,170,123571,134 £ 296,828 (54,180) 643,289 885,937

16 CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Deposit held on glebe property Pension liabilities Falling due after more than one year	2020 £ 3,714 243,849	2019 £ 3,714 560,325
	247,563	564,039

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

17 SUMMARY OF FUND MOVEMENTS

17 SUMMARY OF FUND MOVEMENTS
Unrestricted Funds General Unrestricted Fund Designated Funds: Mary Wilkinson Fund DBF Houses Fund Bishop Bilbrough Fund Mission Development Fund Strategic Mission Fund Training (Pooling) Fund Sanderson Bequest Fund Building Grants and Loans Fund Allchurches Grant Fund Clergy Expenses Fund Lowest Income Communities Fund Lord Crewe Fund Restricted Funds Partners Fund New Church Building Fund Diocesan Pastoral Fund Winchester Project Fund Archdeacons Fund Training for Ordinands Fund Botswana Donations Fund Church House Wallsend Fund Resourcing Ministerial Education Fund Resource Church Fund Rural Churches for Everyone Fund Endowment Funds Stipends Capital and Glebe Fund Parsonages Houses Fund St Aidan's Fund	Balance at 1 Jan 2020 £ 3,540,916 378,563 3,846,994 737,786 22,219 299,491 60,627 2,424 103,597 224,029 10,647 244,760 -	Income £ 5,822,558 45 - - - 4,579 - - 437 120,500 - 887,679 74,622	Expenditure £ (5,504,097) - (14,717) - - - - - 132 (120,500) - (834,150) (74,622)	Transfers £ - - - - - - - - - - - - -	Gains and losses £ 97,176 - - 27,498 - 10,520 - - - - - - -	Balance at 31 Dec 2020 £ 3,956,553 378,608 3,832,277 765,284 22,219 314,590 60,627 2,424 104,166 224,029 10,647 298,289 -
	9,472,053	6,910,419	**(6,547,954) **	-	135,193	9,969,713
	83,532 149,333 1,210,676 8,951 55,912 122,543 9,116 5,999 11,562 75,944 -	(683) 541 62 - 689 - 125 13,394 140,355 314,361 51,810	(4,200) - (11,191) - - - - (2,666) (114,174) (263,798) (51,810)	- - - - - - - - - - -	- - - - - - - - - - -	78,649 149,874 1,199,547 8,951 56,601 122,543 9,241 16,727 37,743 126,507 -
	1,733,568	520,655	**(447,839) **	-	-	1,806,383
	3,823,127 9,498,190 65,186	- - -	(3,737) (8,557) -	- - -	75,247 - 4,483	3,894,637 9,489,633 69,669
	13,386,503	-	**(12,294) **	-	79,730	13,453,939
	24,592,125	7,431,074	**(7,008,087) **	-	214,924	25,230,035

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

18 SUMMARY OF ASSETS BY FUND

18 SUMMARY OF ASSETS BY FUND
Unrestricted Income Funds: General Unresticted Fund Designated Funds Mary Wilkinson Fund DBF Houses Fund Bishop Bilbrough Fund Mission Development Fund Strategic Mission Fund Training (Pooling) Fund Sanderson Bequest Fund Building Grants and Loans Fund The Allchurches Grant Fund Clergy Expenses Fund Lowest Income Communities Fund Lord Crewe Fund Restricted Income Funds: Partners Fund New Church Building Fund Diocesan Pastoral Fund Winchester Project Fund Archdeacons Fund Training for Ordinands Fund Botswana Donations Fund The Church House Wallsend Fund Resourcing Ministerial Education Fund Resource Church Fund Rural Churches for Everyone Fund Endowment Funds: Stipends Capital and Glebe Fund Parsonages Houses Fund St Aidan's Fund Total Funds	Fixed assets Tangible £ 13,864 - 4,485,545 - - - - - - - - - -	Fixed assets Investments £ 1,466,403 - - 427,370 - 163,494 - - - - - - -	Current assets £ 2,480,000 378,608 (653,268) 337,914 22,219 151,096 60,627 2,424 104,166 224,029 10,647 298,289 -	Long term liabilities £ (3,714) - - - - - - - - - - - -	Net assets £ 3,956,553 378,608 3,832,277 765,284 22,219 314,590 60,627 2,424 104,166 224,029 10,647 298,289 -
	4,499,409	2,057,267	3,416,751	**(3,714) **	9,969,713
	- - - - - - - - - - -	- - - - - - - - - - - -	78,649 149,874 1,199,547 8,951 56,601 122,543 9,241 16,727 37,743 126,507 -	- - - - - - - - - - -	78,649 149,874 1,199,547 8,951 56,601 122,543 9,241 16,727 37,743 126,507 -
	-		~~-~~ 1,806,383	-	1,806,383
	1,413,710 12,717,456 -	2,707,743 - 69,670	(226,816) (2,983,974) (1)	- (243,849) -	3,894,637 9,489,633 69,669
	14,131,166	2,777,413	**(3,210,791) **	**(243,849) **	13,453,939
	18,630,575	4,834,680	2,012,344	**(247,563) **	25,230,035

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

Summary of assets by fund (2019 comparatives)

Unrestricted Income Funds: General Unresticted Fund Designated Funds Mary Wilkinson Fund DBF Houses Fund Bishop Bilbrough Fund Mission Development Fund Strategic Mission Fund Training (Pooling) Fund Sanderson Bequest Fund Building Grants and Loans Fund The Allchurches Grant Fund Clergy Expenses Fund Lowest Income Communities Fund Restricted Income Funds: Partners Fund New Church Building Fund Diocesan Pastoral Fund Winchester Project Fund Archdeacons Fund Training for Ordinands Fund Botswana Fund The Church House Wallsend Fund Resourcing Ministerial Education Fund Resource Church Fund Rural Churches for Everyone Fund Endowment Funds: Stipends Capital and Glebe Fund Parsonages Houses Fund St Aidan's Fund Total Funds	Fixed assets Tangible £ 19,331 363,286 3,813,462 323,514 - - - - - - - 538	Fixed assets Investments £ 1,569,225 - - 399,872 - 152,975 - - - - - -	Current assets £ 1,956,074 15,277 33,532 14,400 22,219 146,516 60,627 2,424 103,597 224,029 10,647 244,222	Long term liabilities £ (3,714) - - - - - - - - - - -	Net assets £ 3,540,916 378,563 3,846,994 737,786 22,219 299,491 60,627 2,424 103,597 224,029 10,647 244,760
	4,520,131	2,122,072	2,833,564	**(3,714) **	9,472,053
	- - - - - - - - - - -	- - - - - - - - - - - -	83,532 149,333 1,210,676 8,951 55,912 122,543 9,116 5,999 11,562 75,944 -	- - - - - - - - - - -	83,532 149,333 1,210,676 8,951 55,912 122,543 9,116 5,999 11,562 75,944 -
	-		~~-~~ 1,733,568	-	1,733,568
	1,413,710 12,726,003 -	2,632,497 - 65,187	(223,080) (2,667,488) (1)	- (560,325) -	3,823,127 9,498,190 65,186
	14,139,713	2,697,684	**(2,890,569) **	**(560,325) **	13,386,503
	18,659,844	4,819,756	1,676,563	**(564,039) **	24,592,124

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

19 DESCRIPTION OF FUNDS

The General or Unrestricted Fund is available for any purpose within the objects of the Board. It is principally used for payment of stipends, national insurance, pension contributions and housing costs of clergy and licensed lay-workers in parish ministry. It also provides the assets and liquidity for the NDBF to carry out its objectives, including statutory compliance and administration of funds.

The Mary Wilkinson Fund is a bequest fund which can be used for general purposes. It has been used to provide part of the costs for buying, modifying and fitting out Church House. In 2015 the fund was used to purchase the Church House caretaker’s bungalow from the Newcastle Diocesan Education Board.

The DBF Houses Fund is a designated fund for holding those houses which are neither personages nor team vicarages.

The Bishop Bilbrough Fund is a bequest which can be used for general purposes. It has been used to provide part of the costs for buying, modifying and fitting out Church House.

The Mission Development Fund represents monies received from the Archbishops’ Council to support planned mission work in the Diocese in future years. Our final receipt into the fund was in 2016 and the fund will be wound down over the next year.

The Strategic Mission Fund has been set up as a designated fund so that NDBF can set aside funds to enable it to bid for matched project funding from the National Church.

The Training (Pooling) Fund has been set up as a designated fund in order to assist the Board’s contribution to training costs which are pooled nationally across all Dioceses. Where the Diocese has higher training costs these are subsidised by Dioceses with lower training costs. The amounts are controlled by a national pooling mechanism.

The Sanderson Bequest Fund represents the balance remaining from a sum bequeathed to the NDBF in 2009. This money has been taken out of the Unrestricted Fund and designated to resource lay participation on the Leading Your Church into Growth course (LyCiG). This is part of the Diocesan Strategic Vision for growing church bringing hope .

The Building Grants and Loans Fund is a designated fund to make loans and grants to parishes to enable them to carry out work on their existing church buildings.

The Allchurches Grant Fund is a designated fund which uses the annual grant from the Allchurches Trust to support and resource the NDBF’s ministry and activity expenditure.

The Clergy Expenses Fund is a designated fund set up to help ensure that clergy can be reimbursed the level of expenses they are entitled to, particularly those working in more deprived areas.

The Lowest Income Communities Fund is a designated fund representing funding from the National Church to help resource ministry in the most deprived areas of the Diocese.

The Lord Crewe Fund is a designated fund representing funding from the Lord Crewe Charity to help clergy in need.

The Partners Fund is a restricted fund used for making relatively small grants to community-based projects.

The New Church Building Fund is a restricted fund used, but not frequently, for making grants and loans to parishes to enable them to acquire new church buildings.

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

The Diocesan Pastoral Fund includes the proceeds of redundant churches and parsonages. The purposes for which the account may be used are laid down in Section 78 of the Pastoral Measure 1983.

The Winchester Project Fund is a restricted fund which holds the balance remaining from historic grants made to Newcastle Diocese by Winchester Diocese over a number of years.

The Archdeacons’ Fund is a restricted fund which is spent at the discretion of the Archdeacons to help clergy who experience financial difficulties.

The Training for Ordinands Fund, formerly the McFarlane Bequest Fund, is a restricted fund used to help provide for clergy training. A sum in excess of £100,000 was left to the NDBF in 2015. In 2019 a donation of £25,000 was received from Shirley Chamney.

The Botswana Fund receives donations from parishes and individuals which are used to assist projects within our partner Diocese of Botswana.

The Wallsend Church House Fund was set up when the Wallsend Church House building was recognised as a glebe asset in the NDBF accounts. At the same time, accumulated rental income was passed across to NDBF from Wallsend Parish. Rental income continues to be paid into the fund and expenditure relating to the Wallsend property is charged against the fund.

The Resourcing Ministerial Education Fund receives Block Grants from the Archbishops’ Council for ministerial education training for the ordinands sponsored by the Diocese. The Grants may only be expended on initial ministerial education pathways which have been approved by Ministry Division at accredited Theological Education Institutions (TEIs).

The Resource Church Fund was set up to receive donations which are contributions to the Resource Church. Funds will be transferred out to the legal body for the Resource Church once it is established.

The Rural Churches for Everyone Fund receives grant funding for a project working with 40 churches across rural Northumberland aiming to develop a collective future of their church buildings, securing sustainable outcomes for heritage and communities.

The Stipends Capital and Glebe Fund is governed by the Diocesan Stipends Measure 1953. The income of this endowment fund can only be used for clergy stipends but, since 1993, capital can be applied for improvements to parsonage houses.

The Parsonage Houses Fund is an endowment fund. The balance represents the book value of the benefice houses (parsonages) in the Diocese. The fund also holds a cash balance, the proceeds from the sale of a parsonage house, and a liability which relates to the deficit on the clergy pension scheme.

The St Aidan’s Fund is an endowment fund. The balance is held as units in the Central Board of Finance Investment Fund. Dividend income is paid into the unrestricted fund and is used for ordination training.

20 CONTINGENT LIABILITIES AND POST BALANCE SHEET EVENTS

There are no contingent liabilities.

There were no post balance sheet events which have an impact on the figures within these financial statements.

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

21 PENSIONS

Clergy

Newcastle 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 (2020: £691,758, 2019: credit of £307,701), plus the figures highlighted in the table below as being recognised in the SoFA, giving a total charge of £697,758 for 2020 (2019: credit of £269,701).

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

• An average discount rate of 3.2% p.a.;

• RPI inflation of 3.4% p.a. (and pension increases consistent with this);

• Increase in pensionable stipends of 3.4% p.a.;

• Mortality in accordance with 95% of the S3NA_VL tables, with allowance for improvements in mortality rates in line with the CMI2018 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.

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

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

As at 31 December 2018 the deficit recovery contributions under the recovery plan in force at that time were 11.9% of pensionable stipends until December 2025.

As at 31 December 2019 and 31 December 2020 the deficit recovery contributions under the recovery plan in force were as set out in the above table.

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

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

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

	2020	2019
Balance sheet liability at 1 January	678,000	1,939,000
Deficit contribution paid	-306,000	-295,000
Interest cost (recognised in SoFA)	6,000	38,000
Remaining change to the balance sheet liability* (recognised in	-23,000	-1,004,000
SoFA)
Balance sheet liability at 31 December	355,000	678,000

• 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 set by reference to the duration of the deficit recovery payments:

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

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

Lay staff

Newcastle DBF (DBS) participates in the Defined Benefits Scheme section of CWPF for lay staff. The Scheme is administered by the Church of England Pensions Board, which holds the assets of the scheme separately from those of the Employer and the other participating employers.

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

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

Defined Benefits Scheme

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

For funding purposes, 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 DBS 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 DBS. This means that contributions are accounted for as if DBS were a defined contribution scheme. The pensions costs charged to the SoFA during the year are contributions payable towards benefits and expenses accrued in that year (2020: £nil, 2019: £nil) plus the figures in relation to the DBS deficit highlighted in the table below as being recognised in the SoFA, giving a total charge of £nil for 2020 (2019: £nil).

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

A valuation of DBS is carried out once every three years. The most recently finalised was carried out as at 31 December 2016. In this valuation, the Life Risk Section was shown to be in deficit by £2.6m and £2.6m 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 DBS was £26.2m.

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

Following the valuation, the Employer has entered into an agreement with the Church Workers Pension Fund to pay expenses of £3,300 per year. In addition deficit payments of £7,263 per year have been agreed for 5.00 years from 1 April 2018 in respect of the shortfall in the Employer subpool. This obligation has been recognised as a liability within the Employer’s financial statements. Section 28.11A of FRS 102 requires agreed deficit recovery payments to be recognised as a liability. The movement in the provision is set out below:

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

	2020	2019
Balance sheet liability at 1 January	23,000	29,000
Deficit contribution paid	-7,000	-7,000
Interest cost (recognised in SoFA)	0	0
Remaining change to the balance sheet liability*(recognised in SoFA)	0	1,000
Balance sheet liability at 31 December	16,000	23,000

• Comprises change in agreed deficit recovery plan and change in discount rate 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, set by reference to the duration of the deficit recovery payments:

	December 2020	December 2019	December 2018
Discount rate	0.30%	1.20%	1.90%

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

Pension Builder Scheme

Apart from the DBS referred to above, the NDBF participates in the Pension Builder Scheme (PB Classic) section of CWPF. This is a deferred annuity scheme and it is operated by the CEPB.

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

Pension contributions are recorded in an account for each member. This account may have bonuses added by the CEPB before retirement. The bonuses depend on investment experience and other factors. There is no requirement for the CEPB to grant any bonuses. The account, plus any bonuses declared, is payable from members’ Normal Pension Age.

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

The Scheme is considered to be a multi-employer scheme as described in Section 28 of FRS 102. This is because it is not possible to attribute the Pension Builder Scheme’s assets and liabilities to specific employers and that contributions are accounted for as if the Scheme were a defined contribution scheme. During 2016 staff in this scheme were transferred across to the PB Classic defined

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THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2020

contributions scheme therefore, the pensions costs charged to the SOFA in the year are contributions payable (2020: £16,000, 2019: £23,000).

22 RELATED PARTY TRANSACTIONS

----- Start of picture text -----
Charity Income £ Expenditure £ Debtor £ Creditor £
Newcastle Diocesan Education Board
Common Trustees. NDBF provides - -
10,384 81,250
accommodation and a payroll service for
NDEB. It also pays a grant to NDEB.
Newcastle Diocesan Society
Common Trustees. NDBF receives grant - - -
110,200
income and a contribution towards costs from
NDS.
Lord Crewe's Charity
-
Common Trustee. Receipt of grants from 74,622 74,622 15,378
Charity.
Lindisfarne College of Theology
Common Trustee. NDBF provides
- -
accommodation and a payroll service for 7,269 89,540
LCoT. It also pays fpr services provided by
LCoT.
----- End of picture text -----

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