OpenCharities

This text was generated using OCR and may contain errors. Check the original PDF to see the document submitted to the regulator.

2022-12-31-accounts

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

Annual Report & Financial Statements Year ended 31 December 2022

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

E-mail: info@newcastle.anglican.org Telephone: 0191 270 4100

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

FOR THE YEAR ENDED 31 DECEMBER 2022

TABLE OF CONTENTS Page Number
Mission Statement 3
Legal Objects 4
Strategic Report:
Strategic aims and objectives 4
Activities and achievements in the year 5
Future plans 9
Financial review 10
Principal risks and uncertainties 13
Structure and Governance 14
Trustees Responsibilities 17
Administrative details 18
Independent Auditor’s Report 20
Statement of Financial Activities 23
Income and Expenditure Account 24
Balance Sheet 25
Cash Flow Statement 26
Notes to the Financial Statements 27

Page 2

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

FOR THE YEAR ENDED 31 DECEMBER 2022

Mission Statement

Our vision for growing church bringing hope expresses a deep longing to see our worshipping communities open to God’s transforming love, generous with God’s transforming gifts and engaged in God’s transforming work in the world.

Page 3

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2022

The Trustees, who are also Directors for the purposes of company law, present their annual report, together with the audited financial statements, for the year ended 31 December 2022.

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

This combined report satisfies the legal requirements for:

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:

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 the Bishop’s responsibility for the provision of the cure of souls). The Rt Revd Christine Hardman retired as Bishop of Newcastle on 30th November 2021. During the Vacancy in See the Rt Revd Mark Wroe, suffragan Bishop of Berwick was the Acting Bishop of Newcastle.

The Vacancy in See Committee, chaired by Sir Philip Mawer, consulted widely in the first quarter of 2022. The consultations helped the Committee to complete the diocesan statement of needs which the national Crown Nominations Commission used as part of its work in discerning the person to be nominated as the next Bishop of Newcastle. On 20th October 2022, Downing Street announced the appointment of the Rt Revd Dr Helen-Ann Hartley as the 13[th] Bishop of Newcastle. The Confirmation of Election took place at York Minster on 3[rd] February 2023.

STRATEGIC AIMS AND OBJECTIVES

Three values have long been core to our understanding of God’s mission in this place: generous, engaged, open. The Diocesan Synod recently revisited these values to help inform our strategy as we seek to be Open to God’s transforming love; Generous with God’s transforming gifts; Engaged in God’s transforming work in the world. Together, the values underpin our vision, Growing Church Bringing Hope.

Page 4

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2022

The six priorities agreed by the Diocesan Synod are:

ACTIVITIES AND ACHIEVEMENTS IN THE YEAR

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 370 weddings, 1,870 funerals and 1,080 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 ministerial formation, continued ministerial development and, where applicable, resourcing the stipend and paying into the 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 clergy participate in a process of Continual Professional Development and Ministerial Development Review (MDR). 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. 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 2022:

Page 5

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2022

An average of 76.4 full-time equivalent (FTE) paid clergy, holding incumbent, priest-in-charge, team vicar or associate clergy roles were in post. This meant an average of 17.4FTE incumbent status posts were vacant (in interregnum) in the year.

In addition to above establishment there was an average of 18.0FTE paid curates in training posts, 2.0FTE Archdeacons; 2.0FTE paid chaplains serving the universities in Newcastle and also Northumbria Police; 1.0FTE pioneer minister at Seaton Hirst; 1.0FTE Missioner at Denton and to the summer of 2022 1.0FTE Missioner serving Tynemouth Percy St John & Balkwell. 48 licensed Readers, 26 self-supporting clergy and 44 Authorised Lay Ministers also served in parishes across the Diocese in 2022.

The NDBF extends its gratitude to all those who have helped to provide worship during interregnums in 2022, particularly to Area Deans and Churchwardens who work closely to ensure scheduled services and other activities within the community continue uninterrupted.

The six priorities provided a new context for the Diocesan Mission and Pastoral Committee’s (DMPC) work. Together with the realities of diocesan finances and the impact of the coronavirus pandemic the priorities have helped to provide greater clarity about the application of formal procedures and how they can help to facilitate change in a positive way. An example of facilitating change has been supporting Parochial Church Councils (PCCs) exploring greater collaboration and simplification through the formation of Joint Parochial Church Councils (JPCCs).

In 2022 the DMPC carried out an extensive review of suspensions of presentation and carried out a formal consultation for a proposed reorganisation of the benefices of Haltwhistle & Greenhead and Haydon Bridge with Beltingham and Henshaw in Hexham Deanery. In September 2022 a new Bishop’s Mission Order (BMO) for South East Northumberland Transforming communities (SENT) was agreed. The Diocese of Oxford has generously provided funding, through national Lowest Income Communities Funding, for four years for the full-time Pioneer Minister serving the BMO which includes the parishes of Ashington, Seaton Hirst and Woodhorn with Newbiggin.

Church Buildings

2022 saw a resumption in the rate of enquiries and work handled by the Diocesan Advisory Committee (DAC). The Committee resumed face-to-face meetings in March 2022, and now offers a hybrid option for members. Meetings of the Standing Committee now take place wholly via video conferencing.

The faculty legislation was amended in July 2022 with an emphasis on the Church’s drive to be net zero by 2030. The implications for our church buildings is challenging but the Committee continues to support and advise parishes in this area.

Page 6

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2022

A number of membership changes occurred. Canon Dr Geoffrey Purves stood down from the Committee having served on the DAC for many years, including time as Chairman. The long-term archaeologist on the Committee, Peter Ryder, also retired. New members were appointed to the DAC – the Revd Simon White and Mr Aidan Evans were both appointed by the Bishop’s Council to represent the Diocesan Synod; Ninette Edwards, an experienced conservation architect replaced Canon Purves, and the Committee welcomed David Hillelson as its new archaeology advisor.

The number of faculty applications was slightly down on the previous year at 48 applications, all dealt with by the Online Faculty System. Applications ranged from relatively straight-forward work to more complex reordering cases. In addition, the Committee informally advised on 20 cases and carried out 11 site visits. Such visits are a good opportunity to have an open discussion with PCCs ahead of any proposed changes. The non-faculty work (authorised by the Archdeacon after review by a DAC member) amounted to 90 cases, a demonstration of the level of work required by our specialist Committee members.

Church buildings have stood at the heart of our rural communities for centuries, shaping the villages themselves and serving the communities living in these landscapes. As populations, work and lifestyles have shifted, and the ways we worship have developed, what people need from our rural church buildings has changed. Rural Churches for Everyone (RCfE), a project supported by the National Lottery Heritage Fund, ended in November 2022 with a conference, attended by over 90 people at St Bartholomew’s, Kirkwhelpington.

From October 2021 to November 2022 the RCfE Project Manager and Rural Development Consultant worked with 35 churches across deep rural Northumberland, 30 of which took part in a sustainability planning process designed and delivered by the RCfE team. The project supported four clusters of churches to work collaboratively to plan secure sustainable futures for their church buildings. The key output of the project was the production of four Church Buildings Sustainability Plans, one for each cluster.

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 Transforming Communities Together: Tyne to Tweed has continued to partner with the Diocese of Newcastle to develop connections and relationships with congregations across the Diocese and continues to see an increase in requests to help set up activities in response to identified needs and issues.

Transforming Communities Together: Tyne to Tweed 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 community engagement and social action.

A Safer Church Open to All

We have a deep commitment to safeguarding and making our churches safe places for all. As we seek for continuous improvement in our safeguarding arrangements, the Diocese of Newcastle has been an active participant in the governance and accountability pathfinders introduced by the

Page 7

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2022

national church as a result of the IICSA recommendations 1 and 8. In addition we have participated in the pilot of the new national case management system which has led to changes in the way safeguarding casework is supported and recorded. This particular initiative is making a big difference in addressing issues of coherence in record keeping identified in the Past Case Review 2 (PCR2) and in the Lessons Learned Reviews (LLRs).

The Diocesan Safeguarding Advisory Panel (DSAP) has continued to encourage and support survivor engagement. The Panel has been fortunate that a number of courageous survivors have been willing to share their experience, their energy and their commitment to help the church improve its response to victims and survivors.

Survivors have led the work on creating resources for the whole Church and a co-produced survivor strategy for the Diocese of Newcastle. In June 2022 the launch event for “If I told you, what would you do?” was held at Newcastle Cathedral. The videos, art work and music have been shared widely across the Church of England and in training sessions to wide acclaim and expect to be used in the national implementation of the ‘Responding well’ guidance.

The Diocese of Newcastle has been at the forefront of introducing the parish safeguarding data dashboard. The dashboard enables PCCs to ensure they are up to date with processes and responsibilities, such as safer recruitment and people management, and provides a clearer picture of compliance with safeguarding requirements. The dashboard also helps the safeguarding team to target support where it is needed.

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.

Other related parties

The major related parties with whom the NDBF works include:

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 the considerable time given by all members of boards, committees, diocesan and deanery synods across the Diocese in pursuit of the mission of the Church of England in the Diocese of Newcastle.

Page 8

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

FOR THE YEAR ENDED 31 DECEMBER 2022

FUTURE PLANS

In October 2022 Deanery Development Groups (DDGs) for each of the 12 deaneries began to work with a Deanery Planning Toolkit to develop deanery plans to support future mission and ministry. Supported by the Archdeacons, the DDGs initial work will help to inform future plans.

In addition, the NDBF continues to address the post pandemic challenges and the impact of more recent challenges from the national cost of living crisis.

Page 9

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2022

FINANCIAL REVIEW

Financial performance

Parish Share, the financial contribution given by parishes to the Diocese to fund mission and ministry, is the main incoming resource for the Diocese. Including the arrears received from earlier years, share decreased in cash terms by £38k compared to 2021. The total share received in 2022 when expressed as a percentage of the overall share offered was 97.2% (2021: 99.9%).

The Trustees extend their gratitude to all the parishes who completed their parish share contributions during 2022. The Trustees are thankful to 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 General Unrestricted Fund went down by £579k in 2022 to £877k. There was an overall £302k net excess of expenditure over income (within this was a decrease of £38k in Parish Share contributions) and our investment in equities, held with CCLA Investment Management Ltd (CCLA), was revalued downwards by £197k. There were funds transfers out of £80k.

The Trustees have prepared a budget for 2023 which includes a deficit of £50k. 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 2023 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 financial pressures that parishes have faced in 2020 to 2022 as a result of coronavirus restrictions and the cost of living crisis.

The 2023 Parish Share target summarises as:

• Baseline request £4,797k (includes inflationary impact since 2020)
• Funded by:
o Parish offers £3,882k
o Contingency fund £0,915k

Overall the NDBF’s funds have decreased in 2022 by £201k. This breaks downs as an operating deficit on unrestricted funds of £91k, net incoming resources on designated funds of £317k (within this was a surplus of £417k realised on the sale of two properties), net outgoing resources on restricted and endowment funds of £37k, and an unrealised loss on investments of £390k.

Accounting rules require the inclusion of three items within the operating surplus on unrestricted & designated funds which do not form part of the NDBF’s regular day-to-day operating income and expenditure. The following illustration removes the three items to help to understand the underlying operating position for 2021, which was a deficit of £447k:

Reported surplus on unrestricted & designated funds (£226k) remove surplus on sale of properties (£417k) remove reduction in the pension liability (£173k) remove balance of Lowest Income Communities Funding to be used in future years[1] (£083k) Underlying operating deficit on unrestricted & designated funds ( £447k)

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

Page 10

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2022

Significant property transactions

During 2022 two properties were sold as they were surplus to requirements. Proceeds have strengthened NDBF funds and the income has helped with the Diocesan Contingency funding support to Parishes. Some detail on these property sales is:

Our housing policy continues to be:

Balance sheet position

The Trustees consider that the balance sheet together with details in note 20 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 £26.312m (2021: £26.512m) it must be remembered that included in this total are properties, mostly in use for the ministry, whose value amounted to £17.200m (2021: £17.293m). 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 (2022 actual £1.5m) with an additional 3 months expenditure (c. £1.9m) held in readily realisable assets (2022 actual £1.7m). 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 £877k of which £4k is tied up in tangible fixed assets.

Designated funds

The Trustees may, with the approval of the board, designate 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 21. At 31 December 2022 total designated reserves were £6.46m (2021: £6.03m).

Page 11

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2022

Restricted and endowment funds

As set out in note 20, NDBF holds and administers a number of restricted and endowment funds. As at 31 December 2022 restricted funds totalled £1.89m (2021: £1.86m) and endowment funds totalled £17.08m (2021: £17.14m). Neither are available for the general purposes of the NDBF.

Going concern

The Trustees have considered the 2023 operating environment and availability of reserves and cash and the impact upon the going concern basis of preparation of these financial statements. At the time of writing the 2023 cashflow forecast, based on the approved budget and reporting from parishes on what they feel able to contribute in parish share during 2023, projects a fall in cash of £1,151k during 2023. This is being mitigated through £2.3m income since 2021 from sales of property. The Trustees are keeping the operating environment under constant review and consequent impacts on general reserves. If the operating environment becomes more challenging than expected, 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.

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 2022 is indicated in note 11. Certain grants are built into the Diocesan Budget which is approved by the Diocesan 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:

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.

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.

As part of the Diocesan Synod’s ongoing pledge to tackle the climate emergency and become netzero carbon by 2030, the NDBF has confirmed its commitment not to invest in companies involved in the extraction of fossil fuels, and pledged not to invest in fossil fuel companies in future. The NDBF has joined Operation Noah’s Bright Now campaign. Operation Noah is a Christian charity working

Page 12

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2022

with the Church to inspire action on the climate crisis and is calling on all UK churches to divest from fossil fuels and invest in clean alternatives.

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 2022
Dividend income %
Revaluation %
Total % return		 £1,603,683
8.16%
-24.30%
-16.14%

Glebe managed mainly by glebe agent

Valuation at 1 Jan 2022
Rental income %
Revaluation %
Total % return		 £1,603,683
2.89%
3.53%
6.42%

During 2023 the value of shares in the CBF Investment Fund has risen. At 31st March 2023 the bid value was £21.3245 which represents a rise of 3.29%.

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 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 2022 the Finance Group, a sub-committee of the Bishop’s Council, reviewed the Risk Register.

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

Page 13

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2022

STRUCTURE AND GOVERNANCE

Summary Information about the structure of the Church of England

The Church of England is the established church and HM The King is the Supreme Governor. It is organised into two provinces (Canterbury and York) and 42 Dioceses. Each Diocese is 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. In 2021 six representatives from the Diocese of Newcastle (three lay and three clergy) were elected to serve on the General Synod for the current quinquennium. The General Synod 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 Deanery 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 October 2021. The next elections are scheduled to be held in Autumn 2024. The details of Trustees who served during 2022 are set out on page 18.

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’s membership is elected every three years, the last elections having been in July 2021. 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.

Page 14

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2022

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:

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. The committee comprises 6 members of whom 2 are Trustees.

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. The committee comprises 9 members of whom 4 are Trustees.

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. The committee comprises 18 members of whom 3 are Trustees.

Page 15

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

FOR THE YEAR ENDED 31 DECEMBER 2022

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.

Page 16

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2022

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:

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:

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.

Page 17

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

FOR THE YEAR ENDED 31 DECEMBER 2022

ADMINISTRATIVE DETAILS

Ex officio Trustees

The Bishop of Newcastle, the Right Reverend H-A Hartley (from 03/02/23)

The Suffragan Bishop of Berwick, the Right Reverend M Wroe (also Acting Bishop of Newcastle from 01/12/21 to 02/02/23)

The Dean of Newcastle, the Very Reverend GV Miller (to 30/11/22)

The Archdeacon of Lindisfarne, the Venerable DR CA Sourbut Groves

The Archdeacon of Northumberland, the Venerable RA Wood

The Chair of the Diocesan Board of Finance, Canon SR Harper The Chair of the House of Clergy, The Reverend Canon B Hurst The Chair of the House of Laity, Canon I McDonald-Booth The Chair of the Diocesan Mission and Pastoral Committee, Mrs EA Kerry

Elected Trustees

Dr JC Appleby Professor G Holmes Mrs E Doran Mrs L Craggs (from 01/01/22) The Reverend L Taylor-Kenyon (from 18/10/22) The Reverend Y Daniel (from 19/11/22)

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, Newcastle upon Tyne, NE1 3DX Solicitors : Sintons LLP, The Cube, Barrack Road, Newcastle upon Tyne, NE4 6DB Investment Manager : CCLA Investment Management Ltd, Senator House, 85 Queen Victoria Street, London EC4V 4ET Glebe Agent : 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: 0191 270 4100 Website: www.newcastle.anglican.org E-mail: info@newcastle.anglican.org Company registration number: 00650977 Registered charity number: 247233

Page 18

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

ANNUAL REPORT

FOR THE YEAR ENDED 31 DECEMBER 2022

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

BY ORDER OF THE TRUSTEES

Canon S Harper

Canon S Waddle

Chair

4 May 2023

Secretary

4 May 2023

Page 19

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

INDEPENDENT AUDITOR’S REPORT FOR THE YEAR ENDED 31 DECEMBER 2022

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 2022 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:

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 other information comprises the information included in the Trustees annual report, other than the financial statements and our auditor’s report thereon. The Trustees are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

Page 20

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

INDEPENDENT AUDITOR’S REPORT FOR THE YEAR ENDED 31 DECEMBER 2022

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:

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

Page 21

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

INDEPENDENT AUDITOR’S REPORT FOR THE YEAR ENDED 31 DECEMBER 2022

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: 4 May 2023

Page 22

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

STATEMENT OF FINANCIAL ACTIVITIES FOR YEAR ENDED 31 DECEMBER 2022

Note
Income from
Donations
Parish contributions
2
Archbishops' Council
2
Other donations
2
Charitable activities
3
Other activities
4
Investments
5
Other
6
Total income
Expenditure on
Raising funds
7
Charitable activities
8
Total expenditure
Net incoming/(outgoing) resources before
investment gains
Net gains/(losses) on investments
15
Net income/(expenditure)
Transfers between funds
13
Net movement in funds
Reconciliation of funds
Total funds brought forward
Total funds at 31 December 2022
20		 Unrestricted
Funds
£
3,867,918
1,257,138
779,077
348,495
467,752
166,266
416,781
Restricted
Funds
£
-
-
766,307
-
-
7,434
-
Endowment
Funds
£
-
-
-
-
-
61,286
-
Total Funds
2022
£
3,867,918
1,257,138
1,545,384
348,495
467,752
234,986
416,781
Total Funds
2021
£
3,905,920
1,292,801
3,092,434
426,928
431,380
178,182
320,674
7,303,427 773,741 61,286 8,138,454 9,648,319
(67,729)
(7,009,101)		 -
(863,171)		 -
(9,352)		 (67,729)
(7,881,624)		 (78,518)
(8,824,226)
**(7,076,830) ** **(863,171) ** **(9,352) ** **(7,949,353) ** (8,902,744)
226,597
(280,538)		 (89,430)
-		 51,934
(109,227)
189,101
(389,765)
745,575
536,879
(53,941)
(128,669)		 (89,430)
128,669		 (57,293)
-		 (200,664)
-		 1,282,454
-
(182,610)
7,518,297		 39,239
1,854,591		 (57,293)
17,139,601		 (200,664)
26,512,489		 1,282,454
25,230,035
7,335,687 1,893,830 17,082,308 26,311,825 26,512,489

All incoming resources and resources expended relate to continuing activities.

Page 23

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

INCOME AND EXPENDITURE ACCOUNT FOR YEAR ENDED 31 DECEMBER 2022

Total Total
2022 2021
£ £
Total incoming resources 8,077,168 9,589,048
Resources expended (7,940,001) (9,092,197)
__ __
Operating surplus for the year 137,167 496,851
Net gains/(losses) on investments (280,538) 296,097
__ __
Net income/(deficit) for the year (143,371) 792,948
__ __
Total comprehensive income (143,371) 792,948
__ __

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.

Page 24

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

BALANCE SHEET AS AT 31 DECEMBER 2022

Note
Fixed assets
Tangible assets
14
Investments
15
Current assets
Debtors
16
Investments
Cash at bank
Creditors: amounts falling due within one
year
17
Net current assets
Total assets less current liabilities
Creditors: amounts falling due after more
than one year
18
Net assets
The funds of the charity:
Endowment funds
Including revaluation reserve:
£743,716 (2021: £852,944)
Restricted income funds
Unrestricted income funds:
General funds
Including revaluation reserve:
£540,628 (2021: £737,119)
Designated funds
Including revaluation reserve:
£331,883 (2021: £415,929)
Total funds
20		 2022
£
17,235,199
4,981,794		 2021
£
17,300,599
5,371,559
22,216,993
244,535
3,832,164
505,573		 22,672,158
492,729
3,477,767
520,721
4,582,272
(482,396)		 4,491,217
(647,687)
4,099,876 3,843,530
26,316,869
(5,044)		 26,515,688
(3,199)
26,311,825
17,082,308
1,893,830
877,041
6,458,646
26,311,825		 26,512,489
17,139,601
1,854,591
1,455,649
6,062,648
26,512,489

The notes on pages 27 to 51 form part of these financial statements. The accounts were approved by the Trustees of the Board on the 4 May 2023 and are signed on their behalf by:

Canon SR Harper Chair Company number 00650977

Page 25

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

STATEMENT OF CASH FLOWS FOR YEAR ENDED 31 DECEMBER 2022

Net cash inflow from operating
activities
Cash flows from investing activities
Dividends, interest and rent from investments
Proceeds from the sale of:
Property
Net cash provided by investing
activities
Change in cash and cash equivalents in the
reporting period
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
Reconciliation of net movements in funds to
net cash flow from operating activities
Net movements in funds for the year ended
31 December
Adjustments for:
Profit on sale of assets
Fixed asset additions
Depreciation charges
Dividends, interest and rent from investments
Decrease in debtors
Decrease in creditors
Decrease in pension liability
Net cash provided by/(used in) operating
activities
Analysis of cash and cash equivalents
Cash in hand
Deposits (less than 3 months)		 £
£
£
£
(557,299)
(718,935)
234,986
178,182
661,562
1,600,904
896,548
1,779,086
339,249
1,060,151
3,998,488
2,938,337
4,337,737
3,998,488
____
189,101
745,575
(416,781)
(320,674)
(206,730)
-
27,349
49,746
(234,986)
(178,182)
248,194
(248,600)
9,554
(568,800)
(173,000)
(198,000)
(557,299)
(718,935)
505,573
520,721
3,832,164
3,477,767
4,337,737
3,998,488
2021
2021

Page 26

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

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.

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.

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

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.

Page 27

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

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 page 12.

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.

Page 28

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

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.

Page 29

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

k) Fund balances

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

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.

Page 30

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

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 Rural Churches for Everyone Project
Grants received for Resource Church Project
Church Commissioners - restructure funding
Church Commissioners - strategic capacity funding
Church Commissioners - strategic development funding
Church Commissioners - sustainability funding
Church Commissioners - giving adviser funding
Church Commissioners - parish utilities support funding
Newcastle Diocesan Society
Newcastle St Andrew
Newcastle St Luke
Durham Diocesan Board of Finance
Ely Diocesan Board of Finance
Archbishops' Council
Bishop's House
Other		 Unrestricted
Funds
£
3,980,416
(132,760)
Restricted
Funds
£
-
-
Endowment
Funds
£
-
-
Total Funds
2022
£
3,980,416
(132,760)
Total Funds
2021
£
3,909,904
(7,884)
3,847,656
20,262		 -
-		 -
-		 3,847,656
20,262		 3,902,020
3,900
3,867,918 - - 3,867,918 3,905,920
Unrestricted
Funds
£
999,986
257,152
Restricted
Funds
£
-
-
Endowment
Funds
£
-
-		 97.2%

Total Funds
2022
£
999,986
257,152		 99.9%

Total Funds
2021
£
968,295
324,506
1,257,138 - - 1,257,138 1,292,801
Unrestricted
Funds
£
121,000
115,786
-
-
-
-
-
-
32,000
1,668
10,600
28,627
-
107,294
78,205
6,772
44,064
233,061
Restricted
Funds
£
-
-
82,150
28,337
187,065
-
330,555
-
-
-
-
-
-
-
-
-
-
138,200
Endowment
Funds
£
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total Funds
2022
£
121,000
115,786
82,150
28,337
187,065
-
330,555
-
32,000
1,668
10,600
28,627
-
107,294
78,205
6,772
44,064
371,261
Total Funds
2021
£
120,750
117,959
46,743
245,203
157,784
66,432
1,360,594
498,000
-
-
10,400
28,341
27,808
59,031
38,330
-
-
315,059
779,077 **766,307 ** - 1,545,384 3,092,434

Page 31

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

For other donations in 2021 £1,518,378 from Church Commissioners and £454,943 from other funders were restricted (total £1,973,321) with the balance of £1,119,113 being unrestricted.

3 CHARITABLE ACTIVITIES

Statutory fees (funerals,weddings)
Chaplaincy income		 Unrestricted
Funds
Restricted
Funds
£
£
298,706 -
49,789 -
348,495 -
Endowment
Funds
Total Funds
2022
£
£
-298,706
-49,789

- 348,495
Total Funds
2021
£
295,541
131,387
426,928

In 2021 all income related to unrestricted funds.

4 OTHER TRADING ACTIVITIES

Rental of houses
Contributions for use of Church House
Other contributions		 Unrestricted
Funds
Restricted
Funds
Endowment
Funds
£
£
£
444,672 - -
19,755 - -
3,325 - -
467,752 - -
Total Funds
2022
£
444,672
19,755
3,325
Total Funds
2021
£
405,296
22,360
3,724
467,752 431,380

In 2021 all income related to unrestricted funds.

5 INVESTMENT INCOME

INVESTMENT INCOME
Income from UK listed investments
Bank interest receivable
Rents from Glebe		 Unrestricted
Funds
£
68,632
51,229
46,405
Restricted
Funds
£
998
6,436
Endowment
Funds
£
61,286
-
-
Total Funds
2022
£
130,916
57,665
46,405
Total Funds
2021
£
126,612
1,570
50,000
166,266 7,434 61,286 234,986 178,182

In 2021 £965 from listed investments and £256 from bank interest receivable were restricted (total £1,221) with the balance of £176,961 being unrestricted.

Page 32

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

6 OTHER INCOMING RESOURCES

OTHER INCOMING RESOURCES
Profit on sale of assets
FUNDRAISING COSTS
Glebe costs
Parsonage rental costs		 Unrestricted
Funds
£
416,781
Restricted
Funds
£
-

-

Restricted
Funds
£
-
-
Endowment
Funds
£
-
Total Funds
2022
£
416,781
Total Funds
2021
£
320,674
416,781 - 416,781
 320,674
Unrestricted
Funds
£
3,350
64,379
Endowment
Funds
£
-
-
Total Funds
2022
£
3,350
64,379
Total Funds
2021
£
6,083
72,435
78,518
67,729 - - 67,729

7 FUNDRAISING COSTS

In 2021 all income related to unrestricted funds.

Page 33

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

8 CHARITABLE ACTIVITIES

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		 Unrestricted
Funds
£
171,934
105,306
14,509
7,180
59,451
46,646

405,026

2,909,891
733,465
741,358
110,217
81,768
Restricted
Funds
£
-
-
-
-
-
-
Endowment
Funds
£
-
-
-
-
-
-
Total Funds
2022
£
171,934
105,306
14,509
7,180
59,451
46,646
Total Funds
2021
£
171,935
120,144
14,691
7,700
63,274
76,331
-
 - 405,026 454,075
59,578
17,168
12,541
-
-		 -
-
9,352
-
-		 2,969,469
750,633
763,251
110,217
81,768		 2,814,823
810,464
709,372
94,818
149,873
4,576,699
2,027,376		 89,287
773,884		 9,352
-		 4,675,338
2,801,260		 4,579,350
3,790,801
6,604,075 863,171 9,352 7,476,598 8,370,151
7,009,101 863,171 9,352 7,881,624 8,824,226

£2,083,382 of 2021 expenditure related to restricted, -£189,453 to endowment and £6,76,222 to unrestricted funds.

Page 34

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

9 ANALYSIS OF EXPENDITURE INCLUDING ALLOCATION OF SUPPORT COSTS

Activities
Undertaken
Directly
£
Raising funds
67,729
Charitable activities:
Contributions to Archbishops' Council
-
Resourcing parish ministry
6,402,988
6,470,717

Grant
Funding of
Activities
£
-
405,026
187,628

Support Costs
£
-
-
885,982		 Total costs
2022
Total costs
2021
£
£
67,72978,518
405,026454,075
7,476,5988,370,151
7,949,3538,902,744
592,654 885,982

10 ANALYSIS OF SUPPORT COSTS

Central administration
Governance
External audit
Registry and other legal costs
Synodical costs		 Unrestricted
Funds
Restricted
Funds
£
£
771,157 3,459
990 -
94,663 -
15,713 -
882,523 3,459
Endowment
Funds
£
-
-
-
-
Total costs
2022
£
774,616
990
94,663
15,713
Total costs
2021
£
758,977
15,696
95,200
12,715
- 885,982 882,588

Page 35

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

11 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
Together Newcastle
Continuing Ministerial Development grants
Ministry Experience Scheme grants
Other grants
From restricted funds
Support for ordinands
Partners fund
Other grants
Total Grants Made
Grant funding of activities in previous year
From unrestricted funds
Contributions to Archbishops' Council
Contributions to Diocesan-based charities
Other grants
From restricted funds
Other grants		 Number
6
10
1
1
1
38
3
15		 Individuals
£
-		 Individuals
£
-		 Institutions
£
405,026		 Total costs
2022
£
405,026
49,260
-
-
-
8,662
4,200
280		 -
4,000
5,000
20,000
13,902
-
49,193		 49,260
4,000
5,000
20,000
22,564
4,200
49,473
69 62,402 92,095 154,497
10
6
1		 17,178
-
528
17,706		 -
15,425
-		 17,178
15,425
528
17 15,425 33,131
92 80,108 512,546 592,654
2021
No. of grants
6
63
19
88		 2021
£
454,075
134,464
46,677
635,216

Page 36

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

12 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 mission & ministry
Property
Safeguarding
Newcastle St Thomas’, Diocesan Resource Church
The average number of persons employed during the year based on
full-time equivalents
Administration and financial management
Supporting mission & ministry
Property
Safeguarding
Newcastle St Thomas’, Diocesan Resource Church

2022
£
1,217,737
117,671
130,731		 2021
£
1,152,922
102,093
100,957
1,466,139 1,355,972
Number
14
21
2
2
6		 Number
14
22
2
3
6
45 47
Number
11.0
15.8
2.2
2.0
5.7		 Number
10.2
16.5
2.0
2.3
4.3
36.7 35.3

The Diocesan Resource Church excludes the 2 full-time office holders (Leader & Curate)

2022 2021
number number
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 1 1

Pension payments of £12,355 (2021:£6,512) were made for this employee.

In 2022 staff working for the Newcastle St Thomas’, Diocesan Resource Church were employed by the Newcastle Diocesan Board of Finance in lieu of the Resource Church achieving its own legal entity status.

Page 37

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

2022 2021
£ £
Stipends 2,728,738 2,593,968
National insurance contributions 240,731 220,855
Pension costs - current year 750,633 815,143
____ ____
3,720,102 3,629,966
____ ____

Remuneration of key management personnel

Key management personnel are deemed to be those having authority and responsibility, delegated to them by the Trustees, for planning, directing and controlling the activities of the Diocese. During 2022 they were:

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

Remuneration, pensions and expenses for these employees amounted to £232,980 (2021: £243,314).

Trustees’ emoluments

No Trustee received any remuneration for services as Trustee. The Trustees received travelling and out of pocket expenses totalling £6,200 and this sum was paid out to 4 Trustees in respect of General Synod duties, duties as Archdeacon or Area Dean, and other duties as Trustees. (In 2021 £3,810 was paid out to 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 M Wroe No Yes
The Venerable RA Wood Yes Yes
The Venerable DR CA Sourbut Groves Yes Yes
The Revd Canon B Hurst Yes Yes
The Revd L Taylor-Kenyon Yes Yes
The Revd Y Daniel 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 94.4 (2021: 99.5) stipendiary clergy working in the Diocese within stipendiary ministry, and the costs were as follows:

The stipends of the Diocesan Bishop and Assistant Bishop were funded by the Church Commissioners and are in the range of £38,050 - £46,640 (2021: range £37,670 - £46,180). The annual rate of stipend funded by the NDBF paid to Archdeacons in 2022 was in the range £37,198 - £38,633 (2021: range £36,830 - £38,250) and other clergy who were Trustees were paid in the range £27,514 - £28,444 (2021: range £25,937 - £28,085).

Page 38

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

13 TRANSFERS BETWEEN FUNDS

Analysis of transfers between funds

Analysis of transfers between funds
General Fund contribution to Resource Church
Strategic Mission Fund contribution to Resource Church
General Fund contribution to Ministerial Education		 Unrestricted
Funds
£
(88,702)
(38,642)
(1,325)
Restricted
Funds
£
88,702
38,642
1,325
Endowment
Funds
£
-
Total Funds
2022
£
-
-
-
**(128,669) ** 128,669 - -

Page 39

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

14 TANGIBLE FIXED ASSETS

At cost or valuation
At 1 January 2022
Additions
Disposals
At 31 December 2022
Accumulated depreciation
At 1 January 2022
Disposals
Charge for the year
At 31 December 2022
Net book value at 31 December 2022
Net book value at 31 December 2021		 Property
Office
Equipment
£
£
3,756,522 128,139
- 30,768
(293,495) -
3,463,027 158,907
586,551 120,130
(48,714) -
15,019 3,783
552,856 123,913
2,910,171 34,994
3,169,971 8,009
Unrestricted funds		 Property
Office
Equipment
£
£
3,756,522 128,139
- 30,768
(293,495) -
3,463,027 158,907
586,551 120,130
(48,714) -
15,019 3,783
552,856 123,913
2,910,171 34,994
3,169,971 8,009
Unrestricted funds
Parsonages
Glebe
Property
£
£
15,185,888 1,720,193
- 175,962
- -
15,185,888 1,896,155
2,476,979 306,483
- -
8,547 -
2,485,526 306,483
12,700,362 1,589,672
Endowment funds
Parsonages
Glebe
Property
£
£
15,185,888 1,720,193
- 175,962
- -
15,185,888 1,896,155
2,476,979 306,483
- -
8,547 -
2,485,526 306,483
12,700,362 1,589,672
Endowment funds
TOTAL
£
20,790,742
206,730
(293,495)
20,703,977
3,490,143
(48,714)
27,349
3,468,778
17,235,199
3,463,027 158,907 15,185,888
586,551
(48,714)
15,019		 120,130
-
3,783		 2,476,979
-
8,547		 306,483
-
-
552,856 123,913 2,485,526 306,483
2,910,171 34,994 12,700,362 1,589,672
3,169,971 8,009 12,708,909 1,413,710
17,300,599

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 (2021: £427k) 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.

Page 40

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

15 FIXED ASSET INVESTMENTS

Within the United Kingdom
At 1 January 2022
Revaluation
At 31 December 2022
Cost at 31 December 2022		 Investment
property
£
1,603,683
56,546
Unlisted
investments
Listed
investments
£
£
- 3,767,876
- (446,311)

- 3,321,565

- 3,767,876
TOTAL
£
5,371,559
(389,765)

1,660,229
1,450,042
4,981,794

5,217,918

Investment Properties

An estimate of the value of Glebe land and properties held as investments at the end of the year is £1,660,228. This figure has been provided by the Diocesan Property Manager, Mr I Beswick MRICS.

Listed investments

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

16 DEBTORS

Due within one year
Church Commissioners: sundry debtors
Loans for parish buildings
Other debtors
Due after one year
Loans for parish buildings > 1 year		 2022
£
4,065
24,000
213,470		 2021
£
4,065
24,000
461,664
241,535 489,729
3,000 3,000
3,000 3,000
244,535 492,729

Page 41

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

17 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2022
2021
£
£
Taxation and social security
48,021 43,087
Other creditors
40,902 124,905
Accruals and deferred income
393,473 306,695
Pension liabilities
- 173,000
Falling due within one year
482,396647,687
Included within accruals and deferred income
is deferred income
£
Balance at 1 January 2022
229,247
Released in the year
(121,358)
Deferred in the year
109,383
Carried forward at 31 December 2022
217,272
18 CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
2022
2021
£
£
Deposit held on glebe property
5,044 3,199
Pension liabilities
- -
Falling due after more than one year
5,0443,199		 2022
£
48,021
40,902
393,473
-
482,396
£
229,247
(121,358)
109,383
217,272		 2021
£
43,087
124,905
306,695
173,000
647,687

Page 42

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

19 SUMMARY OF FUND MOVEMENTS

19
SUMMARY OF FUND MOVEMENTS
Unrestricted Funds
General Unrestricted Fund
Designated Funds:
Mary Wilkinson Fund
DBF Houses Fund
Bishop Bilbrough Fund
Strategic Mission 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
Archdeacons Fund
Training for Ordinands Fund
Botswana Donations Fund
Church House Wallsend Fund
Resourcing Ministerial Education Fund
Resource Church Project Fund
Resource Church Giving Fund
Rural Churches for Everyone Fund
Endowment Funds
Stipends Capital and Glebe Fund
Parsonages Houses Fund
St Aidan's Fund		 Balance at 1 Jan
2022
£
1,455,649
357,718
4,104,394
796,966
60,610
110,693
192,010
7,112
433,145
-
Income
£
5,642,885
140
416,781
-
4,904
1,359
121,000
-
999,986
116,374		 Expenditure
£
(5,944,975)
-
(15,019)
-
-
-
(90,232)
(2,742)
(917,491)
(106,374)		 Transfers
£
(80,027)
-
-
-
(38,642)
-
-
-
-
(10,000)		 Gains and
losses
£
(196,491)
-
-
(57,174)
(26,872)
-
-
-
-
-
Balance at 31
Dec 2022
£
877,041
357,858
4,506,156
739,792
-
112,052
222,778
4,370
515,640
-
7,518,297 7,303,429 **(7,076,833) ** **(128,669) ** **(280,537) ** 7,335,687
67,493
149,942
1,196,802
57,713
122,543
9,242
15,194
68,099
-
167,563
-		 4,606
1,685
3,307
1,685
-
150
-
187,065
357,882
135,210
82,150		 (15,462)
-
(3,459)
-
-
(1,525)
(7,506)
(147,709)
(605,359)
-
(82,150)		 -
-
-
-
-
-
-
1,325
247,477
(120,133)
-		 -
-
-
-
-
-
-
-
-
-
-		 56,637
151,627
1,196,650
59,398
122,543
7,867
7,688
108,780
-
182,640
-
1,854,591 773,740 **(863,170) ** 128,669 - 1,893,830
4,508,162
12,551,910
79,529		 61,286
-
-		 (805)
(8,547)
-		 -
-
-		 (99,907)
-
(9,320)		 4,468,736
12,543,363
70,209
17,139,601 61,286 **(9,352) ** - **(109,227) ** 17,082,308
26,512,489 8,138,455 (7,949,355) - **(389,764) ** 26,311,825

Page 43

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

20 SUMMARY OF ASSETS BY FUND

Unrestricted Income Funds:
General Unresticted Fund
Designated Funds
Mary Wilkinson Fund
DBF Houses Fund
Bishop Bilbrough Fund
Strategic Mission 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
Archdeacons Fund
Training for Ordinands Fund
Botswana Donations Fund
The Church House Wallsend Fund
Resourcing Ministerial Education Fund
Resource Church Project Fund
Resource Church Giving 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
£
4,223
352,486
2,243,771
313,914
-
-
30,768
-
-
-		 Fixed assets
Investments
£
1,477,388
-
-
430,678
164,761
-
-
-
-
-		 Current
assets
£
(599,526)
5,372
2,262,385
(4,800)
(164,761)
112,052
192,010
4,370
515,640
-		 Long term
liabilities
£
(5,044)
-
-
-
-
-
-
-
-
-		 Net assets
£
877,041
357,858
4,506,156
739,792
-
112,052
222,778
4,370
515,640
-
2,945,162 2,072,827 2,322,742 **(5,044) ** 7,335,687
-
-
-
-
-
-
-
-
-
-
-
-		 -
-
-
-
-
-
-
-
-
-
-
-		 56,637
151,627
1,196,650
59,398
122,543
7,867
7,688
108,780
-
182,640
-
 -
-
-
-
-
-
-
-
-
-
-		 56,637
151,627
1,196,650
59,398
122,543
7,867
7,688
108,780
-
182,640
-
~~-~~
1,893,830		 - 1,893,830
1,589,672
12,700,363
-		 2,838,759
-
70,209		 40,305
(157,000)
-		 -
-
-		 4,468,736
12,543,363
70,209
14,290,035 2,908,968 **(116,695) ** - 17,082,308
17,235,197 4,981,795 4,099,877 **(5,044) ** 26,311,825

Page 44

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

Summary of assets by fund (2021 comparatives)

Summary of assets by fund (2021 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
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 Project Fund
Resource Church Giving 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
£
8,006
352,486
2,503,571
313,914
-
-
-
-
-
-
-
-
-		 Fixed assets
Investments
£
1,673,879
-
-
487,852
-
191,633
-
-
-
-
-
-
-		 Current
assets
£
(223,039)
5,232
1,600,823
(4,800)
-
(131,023)
-
-
110,693
192,010
7,112
433,145
-		 Long term
liabilities
£
(3,199)
-
-
-
-
-
-
-
-
-
-
-
-		 Net assets
£
1,455,648
357,718
4,104,394
796,966
-
60,610
-
-
110,693
192,010
7,112
433,145
-
3,177,977 2,353,365 1,990,153 **(3,199) ** 7,518,297
-
-
-
-
-
-
-
-
-
-
-
-
-		 -
-
-
-
-
-
-
-
-
-
-
-
-		 67,493
149,942
1,196,802
-
57,713
122,543
9,242
15,194
68,099
-
167,563
-
 -
-
-
-
-
-
-
-
-
-
-
-		 67,493
149,942
1,196,802
-
57,713
122,543
9,242
15,194
68,099
-
167,563
-
~~-~~
1,854,591		 - 1,854,591
1,413,710
12,708,911
-		 2,938,666
-
79,530		 155,786
(157,002)
-		 -
-
-		 4,508,162
12,551,909
79,530
14,122,621 3,018,196 **(1,216) ** - 17,139,601
17,300,598 5,371,560 3,843,528 **(3,199) ** 26,512,489

Page 45

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

21 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 parsonages 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 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 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 grant income from the Allchurches Trust (now Benefact Trust) to support and resource the NDBF’s mission and ministry 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.

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 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 Mrs Shirley Chamney.

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

Page 46

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

The Church House Wallsend 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 is 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 of Newcastle. The Grants may only be expended on initial ministerial education pathways which have been approved by the Archbishops’ Council’s Ministry Division at accredited Theological Education Institutions (TEIs).

The Resource Church Project Fund holds the income and expenditure of the Resource Church project.

The Resource Church Giving Fund receives donations which are contributions to St Thomas’ Newcastle, the Diocesan Resource Church. Funds will be transferred to the legal body for St Thomas’ once the legal body is established.

The Rural Churches for Everyone Fund receives grant funding for a fixed-term project supported by Heritage Lottery Funding.

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.

Page 47

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

22 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.

23 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 scheme separately from those of the Responsible Bodies.

Each participating Responsible Body in the Church of England Funded Pensions 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. 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 (2022: £750,633 , 2021 : £815,143), plus the figures in relation to the Scheme's deficit highlighted in the table below as being recognised in the SoFA, giving a total charge of £681,633 for 2022 (2021: £816,143).

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 2021. The 2021 valuation revealed a surplus of £560m, based on assets of £2,720m and a funding target of £2,160m, assessed using the following assumptions:

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

Page 48

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

December 2021 valuation, deficit contributions ceased with effect from 1 January 2023, since the Scheme was in surplus.

As at 31 December 2020 and 31 December 2021 the deficit recovery contributions under the recovery plan in force were as set out in the table below. For senior office holders, pensionable stipends are adjusted in the calculations by a multiple, as set out in the Scheme’s rules.

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

Section 28.11A of FRS 102 requires agreed deficit recovery payments to be recognised as a liability. However, as there are no agreed deficit recovery payments from 1 January 2023 onwards, the balance sheet liability as at 31 December 2022 is nil. The movement in the balance sheet liability over 2021 and over 2022 is set out in the table below.

2022 2021
Balance sheet liability at 1 January 173,000 355,000
Deficit contribution paid -104,000 -180,000
Interest cost (recognised in SoFA) 0 1,000
Remaining change to the balance sheet liability* (recognised in -69,000 -3,000
SoFA)
Balance sheet liability at 31 December 0 173,000

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

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

Page 49

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

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 failed Responsible Body’s pension liabilities.

Lay staff

Newcastle DBF participates in the Pension Builder Scheme section of CWPF for lay staff. CWPF is administered by the Church of England Pensions Board, which holds the CWPF assets separately from those of the Employer and other participating employers.

CWPF has two sections:

  1. the Defined Benefits Scheme

  2. the Pension Builder Scheme, which has two subsections;

  3. a. a deferred annuity section known as Pension Builder Classic, and,

  4. b. a cash balance section known as Pension Builder 2014.

Pension Builder Scheme

Both sections of the Pension Builder Scheme are classed as defined benefit schemes.

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

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

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

The scheme is considered to be a multi-employer scheme as described in Section 28 of FRS 102. This is because it is not possible to attribute the Pension Builder Scheme’s assets and liabilities to specific employers and means that contributions are accounted for as if the Scheme were a defined contribution scheme. The pensions costs charged to the SoFA in the year are the contributions payable (2022: £nil, 2021: £nil ).

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

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

For the Pension Builder 2014 section, the valuation revealed a surplus of £5.5m on the ongoing assumptions used. There is no requirement for deficit payments at the current time.

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

Page 50

THE NEWCASTLE DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2022

24 RELATED PARTY TRANSACTIONS

----- Start of picture text -----
Charity Income £ Expenditure £ Debtor £ Creditor £
Newcastle Diocesan Education Board
Common Trustees. NDBF provides - - -
10,760
accommodation and a payroll service for
NDEB.
Newcastle Diocesan Society
Common Trustees. NDBF receives a 10,600 - - -
contribution towards costs from NDS.
Lindisfarne College of Theology
Common Trustee. NDBF provides
- -
accommodation and a payroll service for 5,540 91,270
LCoT. It also pays for services provided by
LCoT.
Transforming Communities Together Tyne
to Tweed
- - -
Common Trustee. NDBF provides funding 20,000
towards social responsibility work carried out
by TCTTtoT.
----- End of picture text -----

Page 51