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2020-12-31-accounts

ANNUAL REPORT AND

FINANCIAL STATEMENTS

For the year ended 31 December 2020

GUILDFORD DIOCESAN BOARD OF FINANCE

Company number - 225289

Registered charity number – 248245

GUILDFORD DIOCESAN BOARD OF FINANCE

ANNUAL REPORT

For the year ended 31 December 2020

TABLE OF CONTENTS Page Number
Annual Report 2
Legal Objects 2
Strategic Report:
Strategic Aims 3
Activities and Achievements in the year 4
Future plans 7
Financial review 8
Principal risks and uncertainties 10
Structure and Governance 11
Trustees’ Responsibilities 13
Administrative details 14
Independent Auditor’s Report 15
Consolidated Statement of Financial Activities 18
Consolidated & GDBF Balance Sheets 19
Consolidated Cash Flow Statement 20
Notes to the Financial Statements 21

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GUILDFORD DIOCESAN BOARD OF FINANCE

ANNUAL REPORT For the year ended 31 December 2020

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

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

This combined report satisfies the legal requirements for:

LEGAL OBJECTS

The Diocese of Guildford covers most of Surrey and North East Hampshire, one parish in West Sussex and one in the London Borough of Kingston.

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

The DBF has the following statutory responsibilities:

The strategic priorities of the DBF are established by the Diocesan Synod in communication with Deanery Synods, PCCs, and the Bishop of Guildford (in respect of his responsibility for the provision of the cure of souls).

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GUILDFORD DIOCESAN BOARD OF FINANCE

ANNUAL REPORT

For the year ended 31 December 2020

STRATEGIC AIMS

Guildford’s Diocesan mission strategy, Transforming Church, Transforming Lives (TCTL), launched in September 2016 has 12 goals:

1 Making disciples for every parish and chaplaincy to develop an appropriate plan for making
prayerful, confident disciples in daily life
2 Increasing believers together to increase the number of new Christians of all ages through
persistent prayer, confident faith sharing, life-giving worship, and the
development of a hundred new worshipping communities by 2027
3 Growing youth and
children’s ministry		 for every parish to develop a safe, attractive and spiritually-enriching children’s
and youth ministry, encouraging sharing of resources where appropriate
4 Developing lay leaders together to increase the number of leaders of all ages, who are called, trained
and deployed in the church and wider community
5 Recruiting more clergy together to grow the number of new clergy by 50% from 2021 and beyond
6 Cultivating community
partnerships		 together to increase the range, professionalism and spiritual fruitfulness of our
partnerships with the local community, to help create a safer, stronger, fairer
and more sustainable society
7 Reaching beyond
borders		 together to grow the number and depth of our partnerships with communities
beyond our Diocesan borders, in the holistic mission to which Jesus calls us
8 Nurturing education together to improve the standards and develop the Christian distinctiveness of
our Church schools, wholeheartedly embracing our contribution to education
across the Diocese
9 Encouraging generous
giving		 for every parish to encourage an increasing number of worshipping Christians
to commit to regular, proportional and sacrificial giving
10 Sharing expertise together to streamline our processes and share expertise, so as to release
fresh energy for mission
11 Communicating
effectively		 for every parish and chaplaincy to develop effective communications,
promoting a church that is visible, attractive and accessible
12 Improving church
buildings		 for every parish to work towards having church buildings that are fit for
purpose in supporting today’s ministry and mission

The TCTL mission strategy envisages individuals and church communities open to the transforming work of God’s Spirit in their own lives, and so becoming agents of Christ’s transformation to the world around them. It is not about asking people to work harder, but to work sharper - becoming more intentional and focussed in how we pray and what we are seeking to do. At its heart lies the vision of a growing, vibrant and generous Christian movement, empowered by the Spirit and rooted in word and sacrament, which confidently proclaims and lives out the Good News of Jesus Christ across the region and beyond.

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GUILDFORD DIOCESAN BOARD OF FINANCE

ANNUAL REPORT

For the year ended 31 December 2020

TCTL is a framework not a blueprint, encouraging multiple local initiatives to work towards our broader shared goals. Its ethos is:

The Trustees, having had regard to the Charity Commission’s guidance on public benefit, consider that in following this vision and by furthering the whole mission of the Church (pastoral, evangelistic, social and ecumenical), both in the Diocese as a whole and in its individual parishes, the DBF provides a benefit to the public.

The strategy seeks to address the slowly declining attendances that the Diocese has experienced for many years. Adjusting for population growth, attendances are down around 1.7% p.a. over the past decade. Our relatively large congregation sizes (average 149 weekly attendance per parish) and the relative wealth of the area mean that the old models of one vicar per church are largely intact, although starting to come under some pressure. The Diocese faces the same ageing demographics and increasingly “unchurched” population as the rest of the Church of England and urgently needs to engage more effectively with younger generations and unreached people groups if more rapid decline is not to take hold in future years. We therefore need to find better ways of engaging larger numbers of people with the good news of Jesus Christ. Covid-19 has meant that Churches have had to engage with their congregations in new ways and in many cases online attendance has grown but how that translates into the shape and nature of our parish congregations post-pandemic remains to be seen.

ACTIVITIES AND ACHIEVEMENTS

We were planning that 2020 would see the completion of establishing our new central team structure in Church House Guildford (CHG) and the start of its practical out-working in supporting parishes. Whilst we made good progress on implementing role and structure change Covid-19 (CV19) brought significant disruption to fully realising our plans for the new Parish Needs process as we moved our operations to remote working and shifted our focus to supporting our parishes as they responded to the impact of periods of lockdown and building closure.

Parishes responded very well in moving activities and services online as well as responding to the needs in their communities. Service attendance has in most cases increased during this period. However, the closure of church buildings has led to loss of rental incomes, collections, events and fees and therefore impacted the income for our parishes and their ability to pay parish share. On average Parish unrestricted incomes faced reductions of c.20% but they have partly mitigated this by cost savings and increasing donation income.

The DBF worked pro-actively to support our parishes by:

  1. Re-focussing of Church House support . We re-directed our newly part formed Parish Coordination and Mission Enabler teams towards supporting parish needs arising from CV19: supporting communities; allocating clergy to funerals; facilitating contact & contingency plans for our deaneries as the crisis started to hit; and then supporting a diocesan wide review of parish CV19 needs involving one to one conversations of our senior clergy with every incumbent. We also moved the whole of Church House Guildford to full remote working in just 4 days, with staff showing remarkable flexibility and understanding. We developed a series of Wednesday

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GUILDFORD DIOCESAN BOARD OF FINANCE

ANNUAL REPORT

For the year ended 31 December 2020

The following went well:

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GUILDFORD DIOCESAN BOARD OF FINANCE

ANNUAL REPORT

For the year ended 31 December 2020

However, the following could have gone better:

In addition to the above, the following sets out key activities and achievements against the specific priorities set for 2020:

1. Needs-based process: implement and normalise the gathering, reporting and tracking of parish needs, establishing a consultancy-based approach to the services that our Mission Enablers provide.

Our deanery pilot was interrupted by Covid-19 and we halted completing recruitment to vacant posts in our Mission Enabler team. However we successfully moved to a rapid-assessment of parish and deanery needs in facing Covid-19 and deployed a range of support to them supported by our Mission Enablers.

2. Training: develop and implement a role-based approach to our training provision, building on our LMP programme & supported by a single training plan

This was also disrupted by Covid-19 as we halted the intended recruitment of a Head of Training post. However, we commenced the development of a role-based approach to training, delivered targeted training in response to lockdown needs as well as a significant volume of our safeguarding and LMP training modules successfully moved online.

3. Communications: refocus our communication channels from a broadcast approach towards more personalised and tailored method, reviewing our website, developing a digital strategy and implementing a comms plan.

We developed a digital strategy and plan which we have started to successfully implement. The website was refreshed including more focussed role-based pages. Communications became more focussed with regular coordinated communication channels established through daily and then weekly briefs for parishes and staff.

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GUILDFORD DIOCESAN BOARD OF FINANCE

ANNUAL REPORT

For the year ended 31 December 2020

4. People: develop and start implementation of one people plan with revised Ministry Development review (MDR), appraisal, recruitment and clergy wellbeing approaches; and an Human Resource Information System; whilst continuing to ensure a safe environment for all

The clergy wellbeing policy was finalised and implemented despite CV19 delay. Safeguarding protocols were renewed to keep abuse victims and survivors central to our safeguarding. An HR Information system was implemented for staff details. The MDR revision was not started because of CV19.

5. Young people: develop our Growing Faith mission approach for Children and Young People, identifying initiatives and preparing practical toolsets in readiness for a diocesan year of focus in 2021

Consultations were undertaken and plans drawn up. However the launch has been delayed until later in 2021 because of CV19.

6. Sustainability: Deliver planned CHR changes; actively progress parishes requiring change; address share shortfalls.

CHR changes were implemented however not fully as the recruitment of a number of roles was put on hold to deliver CV19 cost savings. We worked closely with parishes to sustain share payments however there was still a significant drop in the year because of the impact of CV19.

7. Prayerful Confident Disciples: Foster lay engagement; continue to develop our prayer life at Church House, encouraging a mission & ministry focus in every role

Weekly webinars launched during CV19 have been well attended by both clergy and laity. Participation in the 4th cohort of the Setting God’s People Free Discipleship Learning Community continued and 6 pilot parishes across the Diocese were recruited to try out new ways of encouraging lay people to live out their faith in everyday life, whatever they do, Monday to Saturday. Daily staff prayers have continued online. Staff survey has been delayed because of CV19.

FUTURE PLANS

The major opportunities for 2021 will be:

The major challenges include:

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GUILDFORD DIOCESAN BOARD OF FINANCE

ANNUAL REPORT

For the year ended 31 December 2020

Team Objectives for Church House Guildford for 2021 are:

  1. Parish needs process – implement and normalise the gathering, reporting and tracking of parish needs, establishing a consultancy-based approach to the services that our Mission Enablers provide.

  2. Learning - review and develop an integrated approach to lay and ministry training; extend Unconscious Bias training across clergy, staff and lay roles; and encourage learning through Living in Love and Faith and response to the Independent Inquiry to Child Sexual Abuse report on the Church of England.

  3. Communications – Implement comms strategy; create and roll out intranet; prepare & tender for a replacement website 2022; implement our digital strategy, supporting self-service access.

  4. People – continue to develop & implement a one people plan with reviewed MDR, recruitment and appraisal approaches; provide clear SG signposting & reporting, keeping survivors & victims central

  5. Children and Young people – develop our Growing Faith mission approach through a focus on Children and Young People; supporting initiatives involving schools, churches & communities.

  6. Sustainability Foundations – effectively deliver change plans for balanced budget, zero deficit & School Endowment Fund assets by end 2022; establish a change programme for zero carbon; progress academisation of schools

7. Prayerful Confident Disciples Continue to develop our prayer life & unity at CHG & model it across our diocese, encouraging a mission & ministry focus in every staff role

FINANCIAL REVIEW

Financial Performance

Total income for the year was £14,329,000 (2019: £16,609,000). Parish share contributions were £11,087,000 (2019: £11,485,000). This represents a significant fall in the collection rate to 91.8% (2019: 98.7%) against the amount requested because of the impact of Covid-19 on parish finances. Income from statutory fees (weddings & funerals) were £342,000 (2019: £384,000). This year there were no transfers of disused school sites at valuation to the statutory education endowment funds (2019: £2.1m).

GDBF budgets to break even on its general fund before any capital gains/losses. Covid-19 had a significant impact on finances this year. Parish share receipts fell significantly as did fees and expenditure on curates also increased as many were unable to move on to new posts during the summer. The total negative impact from Covid-19 was some £0.8m. Against this GDBF made significant savings from a recruitment freeze, reducing expenditure and utilising the Coronavirus Job Retention Scheme. The net loss on the general fund at only £65,000 (2019: £24,000 surplus) represents the significant work to reduce costs and to work with parishes to help them sustain their finances during this period.

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GUILDFORD DIOCESAN BOARD OF FINANCE

ANNUAL REPORT

For the year ended 31 December 2020

GDBF also received a grant of £363,000 from Archbishops’ Council Sustainability fund which has been credited to GDBF‘s strategic change fund to help fund the re-organisation work that will be necessary to address the significant number of parishes that have become financially unsustainable.

There was an overall net increase in funds of £12,096,000 (2019: £11,177,000). Property values of tangible fixed assets continued to increase gaining by £10,080,000 (2019: £5,812,000) as did investments (including investment properties) increasing by £1,240,000 (2019: £969,000). After the significant reduction in the clergy pension liability last year resulting from the 2019 revaluation, there was minimal movement on pension fund actuarial liabilities at £2,000 loss (2019: gain of £1,776,000).

The financial stability of the DBF depends on the financial strength of its parishes. This applies particularly to Guildford which lacks historic reserves and has the highest dependency on parish share of any Diocese. Covid-19 has had a significant impact on parish finances reducing parish income on average by some 20% particularly because of disappearing rental income. Many were able to mitigate this through cost savings, raising additional donations from Church members and/or utilising reserves. However, we have moved from having c.10% of parishes with significant financial issues to c.30%. We implemented a ‘Health and viability’ review of all our parishes and during 2021 and 2022 we are planning to implement a significant programme of re-organisations including new plants and growth initiatives to address this with the aim restoring overall financial sustainability for our parishes and therefore for the DBF.

Balance sheet position

The balance sheet position remains strong. However, while net assets at the balance sheet date totalled £165m (2019: £154m), most of that represents properties in use for ministry whose value amounted to £146m (2019: £136m). 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. Note 21 gives further detail of the allocation of assets to funds.

Reserves policy

Free reserves

Recognising that the Diocese is heavily reliant on parish share receipts and that the major expenditure is on the clergy and lay staff to keep the organisation in operation, the Bishop’s Council has set a minimum level of general free reserves, excluding fixed assets, of two months’ staff and stipend costs which for 2020 was £1.4m. The balance of reserves excluding fixed assets on the general fund at 31 December was £1.7m (2019: £1.7m).

The DBF also has a policy of holding on deposit, or otherwise readily available within the Glebe, Pastoral Account or other suitable funds, sufficient cash over and above funds to meet normal cashflows to be able to purchase two houses of modest value. At 31 December 2020 the DBF had available cash balances less short-term borrowings of £2.1m (2019: £0.6m). The DBF has sold property to increase liquidity because of the financial uncertainties caused by Covid-19.

Designated funds

The Trustees may designate unrestricted reserves to be retained for an agreed purpose where this is considered to be prudent. Such designated reserves are reviewed on an annual basis and returned to the general fund in the event that the purpose of their designation is no longer considered to be adequate justification for their retention. The balances and the intended use of each reserve is set out in notes 21 and 22. At 31 December 2020 total designated reserves were £2.3m (2019: £1.9m).

Restricted and endowment funds

As at 31 December 2020 restricted funds were £1.7m (2019: £1.5m) and endowment funds £160.1m (2019: £148.6m). The balances and purposes of these are set out in notes 21 and 22.

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GUILDFORD DIOCESAN BOARD OF FINANCE

ANNUAL REPORT

For the year ended 31 December 2020

Grant making policy

The DBF gives grants from funds established in the annual budget which is approved by Synod and is in line with its objectives. The main grants given in the year are set out within note 9.

Investment policy and performance

The DBF has power to invest funds not immediately required for operational purposes in such concerns, securities or properties as it thinks fit. Non-property financial investments at 31 December 2020 had a market value of £4.7m (2019: £4.3m) of which £3.9m (2019: £3.7m) were invested within the CBF Church of England investment funds managed by CCLA Investment Management Limited. The performance of CCLA investment management is assessed against relevant benchmarks for the underlying investments. The total return on non-property financial investments was 10.3% (2019: 22.4%). The Trustees consider that the performance has been very good for the year. As a participant in the CBF Church of England Funds managed by CCLA Investment Management Limited, the DBF adopts the ethical investment policies of those funds.

Property investments are primarily in residential property with some glebe land within the Diocese of Guildford. It also includes £2.1m (2019 £2.1) of disused school sites. The total market value at 31 December 2020 was £14.0m (2019: £13.6m). The Trustees maintain a higher level of residential property investments than financial because a major potential area of expenditure for the Diocese is on residential property for delivering ministry and its residential property investments act as a hedge against that exposure. However, it is a non-diversified, non-liquid asset subject to the risks of the UK housing market and the Trustees have adopted a policy to move to an equal investment in residential property as in financial funds over a number of years. One investment property was sold during the year for that purpose. The Board of Education, with the DBF as trustees, review how best to realise value on the disused school sites to support Diocesan schools and education activities.

PRINCIPAL RISKS AND UNCERTAINTIES

The Trustees are responsible for the identification, mitigation and or 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. The key strategic risk is the slow decline in Church membership and the increasing age profile. Much of the report has detailed our strategy to respond to this. Other important risks are highlighted as follows with the associated mitigation strategies:

The Trustees consider that Brexit would not have any immediate financial impact on the organisation.

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GUILDFORD DIOCESAN BOARD OF FINANCE

ANNUAL REPORT

For the year ended 31 December 2020

STRUCTURE AND GOVERNANCE

Summary Information about the structure of the Church of England

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

The national church has a general synod comprised of ex-officio and elected representations from each Diocese and it agrees, and lays before Parliament, measures for the governance of the church’s affairs which, if agreed by Parliament, have the force of statute law. In addition to the general synod, the Archbishops’ Council has a coordinating role for work authorised by the synod; the Church Commissioners manage the historic assets of the Church of England; and the Church of England Pension Board administers the pension schemes for clergy and lay workers. Within each Diocese, overall leadership lies with the Diocesan bishop, who exercises that input as Bishop within the Diocesan synod. The Diocese itself is divided into twelve deaneries, each with its own synod, and within each parish there is a parochial church council which shares with the parish priest responsibility for the mission of the church in that place, in a similar way to that in which the bishop shares responsibilities with the Diocesan synod.

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

Organisational structure

The Guildford Diocesan Board of Finance (DBF) is a company limited by guarantee (No. 225289) and a registered charity (No. 248245) governed by its memorandum and articles of association.

The DBF’s principal activity is to promote, assist and advance the work of the Church of England within the Diocese of Guildford. It was established in its present form in 1927 and is successor in title to the Guildford Diocesan Trustees.

Governance and policy of the DBF is the responsibility of the Trustees, who are also members of the DBF and Trustees for the purposes of charity law. The details of Trustees who served during the year are set out on page 15.

The Diocesan synod, the statutory governing body of the Diocese, is an elected body drawn from across the Diocese with responsibility for setting the vision and strategy of the Diocese, guided by the bishop’s staff team. The synod membership is elected every three years, the last elections having been in September 2017. The Synod elects 12 Trustees of the DBF. Whilst the DBF 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 DBF 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.

Historical assets arising from unexpended accumulations of sale proceeds of redundant Church of England school properties are accounted for in the restricted Church Schools fund and are managed by the DBF in consultation with the Diocesan Board of Education.

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 Guildford are set by the Diocesan synod, and the DBF. The responsibility for ensuring that these priorities and strategies are delivered is delegated to the Diocesan Secretary and Bishop’s staff team. The DBF meets once a year in general meeting to receive and approve the annual report and financial

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GUILDFORD DIOCESAN BOARD OF FINANCE

ANNUAL REPORT

For the year ended 31 December 2020

statements and to appoint the auditors. The Diocesan Synod each year receives and agrees the annual budget, prepared and approved by the Trustees. The Trustees, meeting within the context of the Bishop’s Council & Standing Committee, hold 9 meetings during the year to formulate and coordinate policies on mission, ministry and finance by:

The Trustees are assisted in their work by the Finance and Audit Sub Committee which monitors management accounts and budget, the use of assets and investment policies and makes recommendations on areas such as grants and loans.

Trustee recruitment, selection and induction

Trustees are members of the Bishop’s Council & Standing Committee and are selected as set out above. Trustees are given induction at the outset of the triennium and at other times as appropriate. They are also informed before seeking membership and, at all other relevant times, of the role and function of the Committee. Some staff hold the title of ‘Director’, but this relates to their function within the organisation and has no legal meaning within the terminology associated with the Companies Act. All Trustees are required to sign the code of practice and maintain their entry in the record of declarations of interest and loyalty.

Remuneration of key management personnel

Emoluments of higher-paid employees are determined by the Bishop of Guildford in consultation with the Chair of the DBF and other members of Bishop’s Council as relevant. Procedures include regular appraisals and benchmarking of remuneration.

Delegation of day to day delivery

The Trustees and the sub-committee which assists 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 DBF. The Diocesan Secretary and other members of Bishop’s staff team are given specific and general delegated authority to deliver the business of the DBF in accordance with the policies framed by the Trustees.

Funds held as Custodian Trustee

The DBF is custodian Trustee of assets held on permanent trust by virtue of the Parochial Church Councils (Powers) Measure 1956 and the Incumbents and churchwardens (Trusts) Measure 1964 where the managing Trustees are parochial church councils and others. These assets are not aggregated in the financial statements as the DBF does not control them, and they are segregated from the DBF’s own assets by means of a separate bank account and accounting system. Further details of financial trust assets, whose market value amounted to £7.2m (2019: £7.0m) are summarised in note 24. Where properties are held as custodian Trustee, the deeds are identified as such and held in safe custody by the DBF’s solicitor.

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GUILDFORD DIOCESAN BOARD OF FINANCE

ANNUAL REPORT

For the year ended 31 December 2020

Funds held on behalf of schools

The Board of Education (as incorporated within the DBF) receives contributions from governors of church schools within the Diocese in connection with major repair and capital projects to church schools and also government grants in connection with the same. The Board of Education administers these monies as managing agent and makes appropriate payments to contractors for work carried out. The monies do not belong to the Board of Education and as such the receipts and payments are not treated as income and expenditure in the Statement of Financial Activities. Any monies held at the balance sheet date are treated as creditors on the balance sheet. The amount included in creditors as at 31 December is £1.3m (2019: £1.2m). The income and expenditure relating to school projects not reflected in the Statement of Financial Activities amounted to £2.1m and £2.1m respectively (2019: £4.3m and £4.3m).

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 DBF and of the surplus or deficit of the DBF 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 DBF 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 DBF 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 DBF’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:

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GUILDFORD DIOCESAN BOARD OF FINANCE

ANNUAL REPORT

For the year ended 31 December 2020

ADMINISTRATIVE DETAILS

Trustees

No Trustee had any beneficial interest in the DBF during 2020. The following Trustees served from 1 January 2020 up to the date of this report:

Ex-officio members The Bishop of Guildford The Right Reverend A J Watson The Archdeacon of Surrey The Venerable R P Davies The Archdeacon of Dorking The Venerable M C Breadmore Chair Mr N Lewis (to March 2021) Bishop nominees The Bishop of Dorking The Right Reverend J Wells The Dean of Guildford The Very Reverend D G Williams Mr J Alpass (to March 2020) Co-opted members The Revd R A Donovan Mrs A L Eccleston Elected by Synod House of Clergy Elected by Synod House of Laity The Revd C Blair (to March 2020) Canon P N E Bruinvels The Revd R Bushyager (to May 2020) Mr M Elson The Revd N P Hutchinson Mr G Everness The Revd J O Morris (from March 2020) Mr K R Malcouronne (Vice Chair) The Revd J E Vlach (to May 2020) Mr S P Roberts (Chair from March 2021) The Revd D C Williamson Mr N Stuart Key Management Personnel Diocesan Secretary Peter Coles Deputy Diocesan Secretary Chris Ellis Director of Mission Team The Revd Peter Harwood Director of Education Alex Tear Director of Finance Malcolm Twigger-Ross Director of HR & Safeguarding Lynda Donaldson Advisors Bankers Lloyds Bank PLC, High Street, Guildford, Surrey, GU1 3AD Auditors Mazars LLP, 6 Sutton Plaza, Sutton Court Road, Sutton, Surrey SM1 4FS Solicitors Lee Bolton Monier-Williams LLP, 1 The Sanctuary, Westminster SW1P 3JT Charles Russell Speechlys LLP, Bury Fields, Guildford, Surrey, GU2 4AZ Investment managers CCLA Investment Management Limited 80 Senator House, 85 Queen Victoria Street, London, EC4V 4ET Insurers EIG, Beaufort House, Brunswick Road, Gloucester, GL1 1JZ Registered Office: Church House Guildford, 20 Alan Turing Road, Guildford, Surrey GU2 7YF

In approving this Trustees’ Report, the Trustees are also approving the Strategic Report included on pages 3-10 within their capacity as company directors.

ON BEHALF OF THE TRUSTEES

S.P.Roberts Steve Roberts Chairman 7 June 2021

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GUILDFORD DIOCESAN BOARD OF FINANCE

INDEPENDENT AUDITOR’S REPORT TO MEMBERS OF GUILDFORD DIOCESAN BOARD OF FINANCE For the year ended 31 December 2020

Opinion

We have audited the financial statements of the Guildford Diocesan Board of Finance (the ‘parent charity’) and its subsidiary (‘the group’) for the year ended 31 December 2020 which comprise the Consolidated Statement of Financial Activities, the Consolidated and Charity Balance Sheets, the Consolidated Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

The other information comprises the information included in the Report of the Trustees, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the 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 there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In light of the knowledge and understanding of the charity and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors’ Report included within the Report of the Trustees.

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GUILDFORD DIOCESAN BOARD OF FINANCE

INDEPENDENT AUDITOR’S REPORT TO MEMBERS OF GUILDFORD DIOCESAN BOARD OF FINANCE For the year ended 31 December 2020

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

Responsibilities of Trustees

As explained more fully in the trustees’ responsibilities statement set out on page X, the trustees (who are also the directors of the parent charity 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 group’s and the parent charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charity or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the 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. Based on our understanding of the charity and its activities, we identified that the principal risks of non-compliance with laws and regulations related to the Charities Act 2011, UK tax legislation, pensions legislation, employment regulation and health and safety regulation, anti-bribery, corruption and fraud, money laundering, non-compliance with implementation of government support schemes relating to COVID-19, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements, such as the Companies Act 2006 and the Charities Statement of Recommended Practice.

We evaluated the trustees’ and management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, in particular in relation to use of restricted funds, and significant one-off or unusual transactions.

Our audit procedures were designed to respond to those identified risks, including non-compliance with laws and regulations (irregularities) and fraud that are material to the financial statements. Our audit procedures included but were not limited to:

Our audit procedures in relation to fraud included but were not limited to:

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GUILDFORD DIOCESAN BOARD OF FINANCE

INDEPENDENT AUDITOR’S REPORT TO MEMBERS OF GUILDFORD DIOCESAN BOARD OF FINANCE

For the year ended 31 December 2020

There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.

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

Use of the audit report

This report is made solely to the charity’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 charity’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 charity and the charity’s members as a body for our audit work, for this report, or for the opinions we have formed.

Signed: N.J. Wakefield

Nicola Wakefield (Senior Statutory Auditor) for and on behalf of Mazars LLP Chartered Accountants and Statutory Auditor 6 Sutton Plaza, Sutton Court Road, Sutton, Surrey SM1 4FS

Date: 4 August 2021

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GUILDFORD DIOCESAN BOARD OF FINANCE

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

Unrestricted funds Unrestricted funds Restricted Endowment Total Total
General
Designated		 Funds Funds 2020 2019
Note £'000 £'000 £'000 £'000 £'000 £'000
Income and endowments from
Donations
Parishes
2		 11,087
-
-
-
11,087
11,490
Archbishops’ Council
2		 28
363
615
-
1,006
441
Other
2		 118
105
43
-
266
226
2 11,233
468
658
-
12,359
12,157
Charitable activities
3		 488
-
175
-
663
3,337
Other trading activities
4		 512
-
60
-
572
483
Investments
5		 171
-
156
194
521
632
Other
6		 138
-
16
60
214
-
12,542
468
1,065
254
14,329
16,609
Expenditure on:
Raising funds
7		 (415) (12) (22) (31) (480) (270)
Charitable activities
8		 (11,772) (80) (1,077) (142) (13,071) (13,719)
9 (12,187) (92) (1,099) (173) (13,551) (13,989)
Net income/(expenditure) before
investment gains		 355
376
(34)		 81
778
2,620
Net gains on investments -
-
44
1,196
1,240
969
Net income/(expenditure) 355
376
10
1,277
2,018
3,589
Transfers between funds
11		 (420) 74
166
180
-
-
Net (expenditure)/income after transfers (65) 450
176
1,457
2,018
3,589
Other recognised gains/(losses)
Gains on revaluation of fixed assets -
-
-
10,080
10,080
5,812
Actuarial (losses)/gains on
pension schemes		 -
-
-
(2)		 (2) 1,776
Net movement in funds (65) 450
176
11,535
12,096
11,177
Total funds brought forward 1,722
1,864
1,541
148,572
153,699
142,522
Total funds carried forward 20 1,657
2,314
1,717
160,107
165,795
153,699

The net surplus of income over expenditure, together with details of income and expenditure required by the Companies Act, may be derived from net income before transfers, excluding movements on endowment funds, in the Statement of Financial Activities above.

GDBF’s company only result (net movement in funds) for the year was £12.1m (2019: £11.2m).

All activities derive from continuing activities. The comparative fund analysis for 2019 is given in note 25.

The Notes form part of the financial statements.

Company Number – 225289

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GUILDFORD DIOCESAN BOARD OF FINANCE

BALANCE SHEETS

For the year ended 31 December 2020

Group Group GDBF GDBF
Note 2020 2019 2020 2019
£'000 £'000 £'000 £'000
Fixed assets
Tangible assets 12 146,262
136,969
146,262
136,969
Investments 13 19,014
18,257
19,014
18,257
165,276
155,226
165,276
155,226
Current assets
Property held for resale -
155
-
155
Debtors 14 3,292
2,885
3,219
2,814
Cash on deposit 2,645
1,492
2,645
1,492
Cash at bank and in hand 2,150
623
2,102
581
8,087
5,155
7,966
5,042
Liabilities
Creditors: amounts falling due within
oneyear		 15 (3,574) (2,042) (3,511) (1,985)
Net current assets 4,513
3,113
4,455
3,057
Total assets less current liabilities 169,789
158,339
169,731
158,283
Creditors: Amounts falling due after
more than one year		 16 (3,242) (3,278) (3,242) (3,278)
Provisions for Liabilities 17 (120) (120) (120) (120)
Net assets excluding pension scheme
liabilities		 166,427
154,941
166,369
154,885
Pension scheme liabilities 19 (632) (1,242) (632) (1,242)
Total net assets 165,795
153,699
165,737
153,643
The funds of the charity
Unrestricted income funds:
General funds 1,657
1,722
1,599
1,666
Designated funds 2,314
1,864
2,314
1,864
3,971
3,586
3,913
3,530
Restricted funds 1,717
1,541
1,717
1,541
Endowment funds 160,107
148,572
160,107
148,572
Total funds 21 165,795
153,699
165,737
153,643

The endowment fund balance above includes revaluation reserves of £70m (2019: £60m); the restricted fund balance revaluation reserves of £84,000 (2019: £65,000).

The Notes form part of these financial statements. The financial statements were approved by the Board of Trustees and authorised for issue on 7 June 2021 and signed on behalf of the Board by:

S.P.Roberts

K.R. Malcouronne

STEVE ROBERTS

KEITH MALCOURONNE FCA

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GUILDFORD DIOCESAN BOARD OF FINANCE

For the year ended 31 December 2020

CONSOLIDATED CASH FLOW

2020
2019
£'000
£'000
Cash flows from operating activities
Net cash generated/(used) in operating activities 693
(168)
Cash flows from investing activities
Dividends, interest and rents from investments 521
632
Purchase of property and equipment -
(1,082)
Sale of investments 449
-
Sales of property and equipment 786
-
Net cash generated/(used in) by investing activities 1,756
(450)
Cash flows from financing activities:
Repayments of lending 66
2
Cash inflows from new borrowing 200
-
Repayments of borrowing (35)
(27)
Net cash generated/(used in) financing activities 231
(25)
Change in cash and cash equivalents 2,680
(643)
Cash and cash equivalents at 1 January 2,115
2,758
Cash and cash equivalents at 31 December 4,795
2,115
Reconciliation of net income to net cash flow from operating activities
Net income 2,018
3,589
Adjustments for:
Depreciation charges 113
112
Gains on property and equipment 77
-
Receipt of disused school buildings & land -
(2,099)
Gains on investments (1,240)
(969)
Dividends, interest and rents from investments (521)
(632)
(Increase)/Decrease in debtors (473)
244
Increase/(Decrease) in creditors 719
(413)
Net cash used in operating activities 693
(168)
Analysis of cash and cash equivalents
Cash on deposit 2,645
1,492
Cash at bank and in hand 2,150
623
4,795
2,115

Cash on deposit includes £2,343,000 (2019: £1,175,000) held for the benefit of schools’ buildings.

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GUILDFORD DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

1. ACCOUNTING POLICIES

The trustees have considered the potential impacts of Covid-19 on the charity's activities and income streams. The Trustees have also reviewed working capital and capital expenditure requirements and as a result, are satisfied that it is appropriate to prepare these financial statements under the historical cost convention, with the exception of freehold properties, which are included at their fair value as determined under the applicable valuation method as detailed in e), and fixed asset investments, which are included at their market value at the balance sheet date. The financial statements have been prepared in accordance with the Statement of Recommended Practice for Charities (SORP 2019), the Companies Act 2006 and applicable accounting standards (FRS102). The charitable company’s own Statement of Financial activities has not been presented as permitted by s.408 of the Companies Act 2006.

The trustees have reviewed the 2021 budget and cash-flow forecasts to 30 June 2022 and believe that it is appropriate for these financial statements to be prepared on a going concern basis.

a) Income

All income is included in the Statement of Financial Activities (SOFA) when the DBF 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.

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.

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GUILDFORD DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

1. ACCOUNTING POLICIES (continued)

c) Tangible fixed assets and depreciation

Freehold properties

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

Properties subject to value linked loans

Properties which have been bought with the assistance of value-linked loans from the Church Commissioners are stated using the value of the related loan at the balance sheet date. Each year end the respective property and loan are carried at an index linked current valuation basis.

Investment properties

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

Parsonage houses

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

Assets under construction

New parsonages under construction are included within the functional fixed assets category at the value of costs incurred at the balance sheet date.

Cost values

For the purposes of the calculation of a revaluation reserve, where the actual cost is not known, the cost value is deemed to be the value at which the properties were brought into the current accounting system in 2005.

d) Other tangible fixed assets

All capital expenditure over £5,000 is capitalised and depreciated as follows. Depreciation is provided in order to write off the cost (less any ultimate disposal proceeds at prices ruling at the time of the asset’s acquisition) of other fixed assets over their currently expected useful economic lives at the following initial rates:Fixtures and fittings 15-30% per annum straight line basis Leasehold Property 1% - 10% per annum straight line over the life of the lease

e) Other accounting policies

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GUILDFORD DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

1. ACCOUNTING POLICIES (continued)

f) Fund balances

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

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

g) Judgements and key sources or estimation uncertainty

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

h) Financial Instruments

Financial assets measured at fair value comprise listed investments, unlisted investments, value linked loans to parishes and bank deposits. Financial assets at amortised cost comprise trade debtors, other debtors and loans to parishes. Financial liabilities measured at amortised cost comprise pension liabilities, bank loans, other creditors and amounts held for other bodies.

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GUILDFORD DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

2. DONATIONS

Unrestricted funds Unrestricted funds Restricted Endowment Total
2020 General Designated Funds Funds 2020
£'000 £'000 £'000 £'000 £'000
Parish Contributions
Current Year Request 12,075
-
-
-
12,075
Shortfall (988) -
-
-
(988)
11,087
-
-
-
11,087
Archbishops' Council 28
363
615
-
1,006
All Churches Trust -
105
-
-
105
City Church Fund 107
-
-
-
107
Legacies -
-
-
-
-
Other 11 43 54
Total 11,233
468
658
-
12,359
Unrestricted funds Unrestricted funds Restricted Endowment Total
2019 General Designated Funds Funds 2019
£'000 £'000 £'000 £'000 £'000
Parish Contributions
Current Year Request 11,636
-
-
-
11,636
Shortfall (151) -
-
-
(151)
Other donations -
5
-
-
5
11,485
5
-
-
11,490
Archbishops' Council -
-
441
-
441
All Churches Trust -
102
-
-
102
City Church Fund 90
-
-
-
90
Legacies -
-
34
-
34
Total 11,575
107
475
-
12,157

The majority of the Diocese's mission is funded through the contributions of parishes. In 2020, the Diocese received 91.8% (2019: 98.7%) of the total requested.

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GUILDFORD DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

3. CHARITABLE ACTIVITIES

Unrestricted funds Unrestricted funds Restricted Endowment Total
2020 General Designated Funds Funds 2020
£'000 £'000 £'000 £'000 £'000
Statutory fees 342
-
-
-
342
Social Responsibility projects grant income -
-
90
-
90
Other grants receivable and miscellaneous
income		 146
-
85
-
231
488
-
175
-
663
Unrestricted funds Unrestricted funds Restricted Endowment Total
2019 General Designated Funds Funds 2019
£'000 £'000 £'000 £'000 £'000
Statutory fees 384
-
-
-
384
Social Responsibility projects grant income -
-
294
-
294
Disused school buildings & land -
-
-
2,099
2,099
Other grants receivable and miscellaneous
income		 129
319
112
-
560
513
319
406
2,099
3,337

4. OTHER TRADING ACTIVITIES

Unrestricted funds Unrestricted funds Restricted Endowment Total
2020 General
Designated		 Funds Funds 2020
£'000
£'000		 £'000 £'000 £'000
School Buildings Project Management 80
-
-
-
80
Training Services to Schools 119
-
-
-
119
Rental income on functionalproperty 313
-
60
-
373
512
-
60
-
572
Unrestricted funds Restricted Endowment Total
2019 General Designated Funds Funds 2019
£'000 £'000 £'000 £'000 £'000
School Buildings Project Management 98
-
-
-
98
Training Services to Schools 122
-
-
-
122
Rental income on functionalproperty 263
-
-
-
263
483
-
-
-
483

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GUILDFORD DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

5. INVESTMENT INCOME

Unrestricted funds Unrestricted funds Restricted Endowment Total
2020 General Designated Funds Funds 2020
£'000 £'000 £'000 £'000 £'000
Dividends receivable 72
-
35
13
120
Interest receivable 2
-
2
2
6
Rents receivable 97
-
119
179
395
171
-
156
194
521
Unrestricted funds Unrestricted funds Restricted Endowment Total
2019 General Designated Funds Funds 2019
£'000 £'000 £'000 £'000 £'000
Dividends receivable 65
-
27
18
110
Interest receivable 37
-
15
2
54
Rents receivable 135
-
154
179
468
237
-
196
199
632

6. OTHER INCOME

Unrestricted funds Unrestricted funds Restricted Endowment Total
2020 General
Designated		 Funds Funds 2020
£'000
£'000		 £'000 £'000 £'000
Gains on fixed asset disposals 1
-		 16 60 77
Coronavirus Job Retention Scheme 137
-		 -
-
137
138
-		 16 60 214
Unrestricted funds Restricted Endowment Total
2019 General Designated Funds Funds 2019
£'000 £'000 £'000 £'000 £'000
Gains on disposal of functional property -
-
-
-
-

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GUILDFORD DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

7. EXPENDITURE ON RAISING FUNDS

7. EXPENDITURE ON RAISING FUNDS
Unrestricted funds Restricted Endowment Total
2020 General
Designated		 Funds Funds 2020
£'000
£'000		 £'000 £'000 £'000
Schools Building Project Management 79
-
-
-
79
Training Services to Schools 61
-
-
-
61
Rental Management Fees 42
-
3
25
70
Investment Property Costs 79
2
19
6
106
Support Costs 154
10
-
-
164
415
12
22
31
480
Unrestricted funds Restricted Endowment Total
2019 General Designated Funds Funds 2019
£'000 £'000 £'000 £'000 £'000
Schools Building Project Management 61
-
-
-
61
Training Services to Schools 87
-
-
-
87
Rental Management Fees 41
-
-
-
41
Support Costs 81
-
-
-
81
270
-
-
-
270

8. CHARITABLE ACTIVITIES

8. CHARITABLE ACTIVITIES
Unrestricted funds
Restricted
Endowment
Total
2020 General
Designated
Funds
Funds
2020
£'000
£'000
£'000
£'000
£'000
National Church
Training for ministry 743
-
-
-
743
National Church Establishment 384
-
-
-
384
Retired clergy housing costs 183
-
-
-
183
Other 65
-
-
-
65
Indirect Support Costs 18
-
-
-
18
1,393
-
-
-
1,393
Ministry & Mission
Parish Ministry
Stipends & pension 5,980
-
-
-
5,980
Housing costs 1,577
-
-
38
1,615
Removal & resettlement grants 107
-
-
-
107
Other expenses 211
4
-
23
238
7,875
4
-
61
7,940
Ministry Support & Training 829
-
1,016
-
1,845
Indirect Support Costs 1,097
61
-
-
1,158
9,801
65
1,016
61
10,943
Education & Mission
Schools & Education 353
-
61
81
495
Indirect Support Costs 225
15
-
-
240
578
15
61
81
735
Total 11,772
80
1,077
142
13,071

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GUILDFORD DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

8. CHARITABLE ACTIVITIES (continued)

8.
CHARITABLE ACTIVITIES (continued)
Unrestricted funds Restricted Endowment Total
2019 General
Designated
Funds
Funds
2019
£'000
£'000
£'000
£'000
£'000
National Church
Training for ministry 766
-
-
-
766
National Church Establishment 406
-
-
-
406
Grants and provisions 43
-
-
-
43
Mission agency pension costs 5
-
-
-
5
Retired clergy housing costs 175
-
-
-
175
Support Costs 13
-
-
-
13
1,408
-
-
-
1,408
Ministry & Mission
Parish Ministry
Stipends, NI & Apprenticeship Levy 4,728
-
-
-
4,728
Clergy Pension Cost 1,052
-
-
-
1,052
Housing costs 1,615
-
18
46
1,679
Removal & resettlement grants 178
-
-
-
178
Other expenses 478
253
40
39
810
8,051
253
58
85
8,447
Discipleship, Vocations & Ministry Development 385
-
550
-
935
Parish Development & Evangelism 232
-
-
-
232
Community Engagement 138
-
374
-
512
Communications 152
-
-
-
152
Other support 1,199
143
1
-
1,343
10,157
396
983
85
11,621
Education & Mission 619
-
71
-
690
Total 12,184
396
1,054
85
13,719

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GUILDFORD DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

9. ANALYSIS OF EXPENDITURE INCLUDING ALLOCATION OF SUPPORT COSTS

9.
ANALYSIS OF EXPENDITURE INCLUDING		 9.
ANALYSIS OF EXPENDITURE INCLUDING		 ALLOCATION OF SUPPORT COSTS
Activities
undertaken
directly		 Grant
funding of
activities
Support
costs
Total
2020
£'000
£'000
£'000

-
164
480

965
19
1,393

71
1,158
10,943

-
240
735

1,036
1,581
13,551
Grant
funding of
activities
Support
costs
Total
2019
£'000
£'000
£'000

-
81
270

1,084
13
1,408

80
1,192
11,621

(56)
133
690

1,108
1,419
13,989
2020
£'000
Raising funds 316
Charitable activities
National Church 409
Ministry & Mission 9,714
Education & Mission 495
Total Expenditure 10,934
2019 Activities
undertaken
directly
£'000
Raising funds 189
Charitable activities
National Church 311
Ministry & Mission 10,349
Education & Mission 613
Total Expenditure 11,462
Grant Funding of activities
Total
2020 Number Individuals
Institutions
2020
From unrestricted funds £'000
£'000
£'000
Archbishops' Council 1 -
965
965
From restricted funds
Mission & development fund grants 6 -
71
71
-
1,036
1,036
2019 Total
Number Individuals
Institutions
2019
From unrestricted funds £'000
£'000
£'000
Archbishops' Council 1 -
1,084
1,084
Mission & development fund grants 16 -
75
75
Royal Holloway College for chaplain 1 -
5
5
From restricted funds
School building grants 2 -
(56)
(56)
-
1,108
1,108

Support costs are allocated by the direct allocation of certain costs that relate specifically to activities with the remaining costs allocated on the basis of staff employed in direct activities.

Included within support costs are fees payable to the auditors of £13,000 (2019: £12,670) in respect of audit services.

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GUILDFORD DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

9. ANALYSIS OF EXPENDITURE INCLUDING ALLOCATION OF SUPPORT COSTS (continued)

Support Costs 2020 2019
£'000 £'000
Diocesan Secretary's Office 152
249
Communications 111
-
Finance 196
174
Safeguarding 124
122
Human Resources 194
152
Diocesan Advisory Committee 71
86
Office Costs 419
365
IT 226
170
Other corporate costs 80
93
Closed Pension Schemes 8
8
1,581
1,419

Support costs increased because of the re-allocation of certain costs that had previously been included in direct costs.

10. STAFF & TRUSTEES

10. STAFF & TRUSTEES
Staff Costs 2020
2019
£'000
£'000
Wages and salaries 1,943
2,103
National insurance contributions 214
218
Pension costs 186
196
Total 2,343
2,517
Average number of full-time equivalent people employed by the
group during the year		 2020
2019
No.
No.
Support for parish ministry 18
18
Mission Team 20
28
Schools, Colleges & Universities 8
9
Other diocesan departments 4
4
Total 50
59
By Main Funding Source
Parish Share 46
45
Grants & TradingIncome 4
14
50
59
The average number of individual persons employed by the
group:		 2020
2019
No.
No.
Support for parish ministry 23
22
Mission team 27
40
Schools, Colleges & Universities 9
9
Other diocesan departments 5
7
Total 64
78

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GUILDFORD DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

10. STAFF & TRUSTEES (continued)

The number of employees whose emoluments (including benefits in kind but excluding pension contributions) amounted to over £60,000 in the year was as follows:

amounted to over £60,000 in the year was as follows:
Emoluments falling between: 2020 2019
No. No.
£90,001 to £100,000 1 1
£70,001 to £80,000 2 1
£60,001 to £70,000 1 -

Pension contributions of £22,000 (2019: £11,000) were paid in respect of these people.

The DBF paid an average of 167 (2019: 158) stipendiary clergy and licensed lay workers as office-holders holding parochial or Diocesan appointments in the Diocese.

2020
2019
£'000
£'000
Stipends 4,642
4,356
366
353
19
20
1,119
1,052
519
509
National Insurance
Apprenticeship Levy
Pension Contributions
Current year
Deficit reduction
6,665
6,290

Included within staff and stipend costs is £30,000 in respect of redundancy payments.

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. Key management personnel are set out on page 14. Remuneration, pensions and expenses for these employees amounted to £441,000 (2019: £455,000)

Trustees

No Trustee received any remuneration for services as Trustee. The Trustees received travelling and out of pocket expenses, totalling £15,000 (2019: £16,000) in respect of General Synod duties, duties as archdeacon or area/rural dean, and other duties as Trustees. The following table gives details of the Trustees who were in receipt of a stipend and/or housing provided by the DBF during the year:

or housing provided bythe DBF duringtheyear:
The Bishopof Dorking Stipend
-		 Housing
The Archdeacon of Dorking
The Archdeacon of Surrey
The Revd C Blair
The Revd R Bushyager
The Revd R A Donovan
The Revd N P Hutchinson
The Revd J O Morris
The Revd J E Vlach
The Revd D C Williamson

The DBF is responsible for funding via the Church Commissioners the stipends of licensed stipendiary clergy in the Diocese, other than bishops and cathedral staff. It is also responsible for the provision of housing for stipendiary clergy in the Diocese including the suffragan bishop but excluding Diocesan bishop and cathedral staff. The amount of stipend, funded by the DBF, for clergy who are trustees was £35,920 (2019: £35,920) for Archdeacons and £28,300 (2019: £28,300) for other clergy.

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GUILDFORD DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

11. TRANSFERS BETWEEN FUNDS

Unrestricted funds
Restricted
Endowment
2020 General
Designated
Funds
Funds
£'000
£'000
£'000
£'000
From General Fund to Glebe Capital being the difference
between contributions paid less interest on Clergy Pension
Scheme		 (519)
-
-
519
To fund triennial clergy conference (15)
15
-
-
From General Fund to Growth Fund (85)
85
-
-
From Growth Fund to Strategic Development Fund (114)
114
From Board Endowment to Diocesan house fund -
88
-
(88)
From Schools Fund to General Fund to support education
activities		 149
-
(149)
-
Reclassification of certain Education restricted funds from
endowment		 201
(201)
From retirement fund to general fund for clergy retirement
costs		 50
-
-
(50)
(420)
74
166
180
Unrestricted funds
Restricted
Endowment
2019 General
Designated
Funds
Funds
£'000
£'000
£'000
£'000
From General Fund to Glebe Capital being the difference
between contributions paid less interest on Clergy Pension
Scheme		 (443)
-
-
443
To fund triennial clergy conference (15)
15
-
-
From General Funds to Growth Fund (85)
85
-
-
From EIG Fund to Growth Fund -
(100)
-
-
-
100
-
-
From EIG Fund toward police chaplaincy -
(12)
12
-
From Board Endowment to Diocesan house fund -
143
-
(143)
From Schools Fund to General Fund to support education
activities		 175
-
(175)
-
From retirement fund to general fund for clergy retirement
costs		 40
-
-
(40)
From general to community engagement fund for sensory
perception work		 (22)
-
22
-
From growth to general fund for vocations work 20
(20)
-
-
(330)
211
(141)
260

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GUILDFORD DIOCESAN BOARD OF FINANCE

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

12. TANGIBLE FIXED ASSETS

All of the properties in the balance sheet are freehold and are vested in the DBF, except for benefice houses which are vested in the incumbent. Some properties have been purchased with the help of value-linked loans mainly from the Church Commissioners; when disposed of the appropriate share of the net sale proceeds will be remitted to the lender, and the related loan liability extinguished. The value of such properties included above amounts to £1,150,000 (2019: £1,150,000).

Group and GDBF
Freehold
Land and
Buildings
Leasehold
Buildings
Office
Equipment
Total
£'000
£'000
£'000
£'000
Cost or valuation
Balance at 1 January 2020 136,248
923
435
137,606
Disposals (674)
-
-
(674)
Revaluation/impairment 10,080
-
-
10,080
Balance at 31 December 2020 145,654
923
435
147,012
Accumulated depreciation
Balance at 1 January 2020 -
267
370
637
Depreciation charge foryear -
91
22
113
Balance at 31 December 2020 -
358
392
750
Net book value
At 31 December 2020 145,654
565
43
146,262
At 31 December 2019 136,248
656
65
136,969

13. INVESTMENTS

Group and GDBF Group and GDBF
1 January
2020		 Additions Disposals Transfers Change in
market
value		 31
December
2020
£'000 £'000 £'000 £'000 £'000 £'000
Investment property 13,634
-
(483)		 -
879
14,030
CBF Investment Fund 3,683
-
-
-
254
3,937
Listed investments 611
-
-
-
107
718
Program related 329
-
-
-
-
329
18,257
-
(483)		 -
1,240
19,014

The CBF Investment Fund is managed by CCLA. A trustee is also a trustee director of the CBF Funds Trustee Limited. Program related investments are equity share loans on 2 properties for clergy housing in partnership with the Methodist church. Such investments are made directly in pursuit of the Board’s charitable purposes rather than for financial investment purposes. The amounts shown represent the sums originally advanced as required under FRS102. The loans are not expected to be repaid in the short term.

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GUILDFORD DIOCESAN BOARD OF FINANCE

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

13. INVESTMENTS (continued)

Investment in Subsidiary

Guildford Diocesan Board of Finance has one wholly owned subsidiary, Guildford Diocesan Services Limited (GDSL) which has a share capital of £1. The trading activities of GDSL primarily consist of the supply of building project management and training services to church schools in the Diocese. The profits of GDSL are normally wholly gift aided to the DBF. In accordance with revised guidance issued by the Financial Reporting Council these are now accounted for when paid and not set against the year to which they relate. A summary of the financial results and funds of GDSL which are consolidated in these financial statements is as follows:

Unrestricted funds Unrestricted funds Restricted Endowment Total
2020 General
Designated		 Funds Funds 2020
£'000
£'000		 £'000 £'000 £'000
Other trading activities 200
-
-
-
200
Fundraising costs (141)
-
-
-
(141)
Gift to GDBF (56)
-
-
-
(56)
Net income and net movement in funds 2
-
-
-
2
Funds at 1 January 56
-
-
-
56
Funds at 31 December 58
-
-
-
58
Unrestricted funds Restricted Endowment Total
2019 General Designated Funds Funds 2019
£'000 £'000 £'000 £'000 £'000
Other trading activities 220
-
-
-
220
Fundraising costs (164) -
-
-
(164)
Gift to GDBF (72) -
-
-
(72)
Net expenditure and net movement in funds (16) -
-
-
(16)
Funds at 1 January 72
-
-
-
72
Funds at 31 December 56
-
-
-
56

14. DEBTORS

Group
GDBF
2020
2019
2020
2019
£'000
£'000
£'000
£'000
Due within one year
Parish Share 87
151
87
151
Fees 73
83
73
83
Prepayments and accrued income 416
287
376
287
Other debtors 515
98
482
27
1,092
619
1,019
548
Due after more than one year
Loans to parishes -
64
-
64
Loans to parishes - housing 1,850
1,850
1,850
1,850
Loans to retired clergy - housing 325
325
325
325
Other loans 25
27
25
27
2,200
2,266
2,200
2,266
Total 3,292
2,885
3,219
2,814

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GUILDFORD DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

15. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Group GDBF GDBF
2020 2019 2020 2019
£'000 £'000 £'000 £'000
Amounts held on behalf of school governors (2,542) (1,311) (2,542) (1,311)
Other creditors and accruals (993) (692) (930) (635)
Loan repayment instalments due in oneyear (39) (39) (39) (39)
(3,574) (2,042) (3,511) (1,985)

16. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Group
GDBF
2020
2019
2020
2019
£'000
£'000
£'000
£'000
Loans in respect of house purchases
Church Commissioners value-linked loans (2,002)
(2,002)
(2,002)
(2,002)
Church Commissioners other loans (240)
(276)
(240)
(276)
Other bank loans (1,000)
(1,000)
(1,000)
(1,000)
(3,242)
(3,278)
(3,242)
(3,278)
The above loans fall due for repayment:
Between one and two years (39)
(39)
(39)
(39)
Between two and five years (117)
(117)
(117)
(117)
In fiveyears and more (3,086)
(3,122)
(3,086)
(3,122)
(3,242)
(3,278)
(3,242)
(3,278)

The loans from the Church Commissioners include £1.9m (2019: £1.6m) used to purchase houses for parishes and are matched by loans from parishes included in debtors.

17. PROVISIONS FOR LIABILITIES

Diocesan Office
Dilapidations Total
£'000 £'000
At 1 January 2020 and at 31 December 2020 120
120

The provision is in respect of reinstatement obligations related to 20 Alan Turing Road, Guildford, a leasehold property and will be utilised at the end of the lease.

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GUILDFORD DIOCESAN BOARD OF FINANCE

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

18. FINANCIAL INSTRUMENTS

18.
FINANCIAL INSTRUMENTS
2020 2019
£'000 £'000
Financial assets measured at fair value 9,404 6,409
Financial assets measured at amortised cost 2,788 2,447
Financial liabilities measured at amortised cost (7,096) (6,638)

19. PENSIONS

Defined Benefit Pension Liability Group Group GDBF GDBF
2020 2019 2020 2019
£'000 £'000 £'000 £'000
Church of England Funded Pension Scheme (Clergy) 621
1,138
621
1,138
Church Workers Pension Fund(layStaff) 11
104
11
104
632
1,242
632
1,242

Church of England Funded Pension Scheme (Clergy)

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

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

The scheme is considered to be a multi-employer scheme as described in Section 28 of FRS 102. This means it is not possible to attribute the Scheme’s assets and liabilities to each specific Responsible Body, and this means contributions are accounted for as if the Scheme were a defined contribution scheme. The pensions costs charged to the SoFA in the year are contributions payable towards benefits and expenses accrued in that year (2020:£1,119,000; 2019: £1,052,000), plus the figures highlighted in the table below as being recognised in the SoFA, giving a total charge of £1,131,000 for 2020 (2019: £702,000 credit).

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 2019. The 2019 valuation revealed a deficit of £50m, based on assets of £1,818m and a funding target of £1,868m, assessed using the following assumption

Following the 31 December 2019 valuation, a recovery plan was put in place until 31 December 2022 and the deficit recovery contributions (as a percentage of pensionable stipends) are as set out in the table below. .

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

As at 31 December 2017 and 31 December 2019 the deficit recovery contributions under the recovery plan in force at that time were 11.9% of pensionable stipends until December 2025. As at 31 December 2020 the deficit recovery contributions under the recovery plan in force were as set out in the above table. For senior office holders, pensionable stipends are adjusted in the calculations by a multiple, as set out in the Scheme’s rules.

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GUILDFORD DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

19. PENSIONS (Continued)

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

2020
2019
£'000
£'000
Balance sheet liability as at 1 January 1,138
3,401
Contributions paid (529)
(509)
Interest cost * 10
66
Remainingchange to the balance sheet liability* 2
(1,820)
Balance sheet liability as at 31 December 621
1,138
* Recognised in SOFA
Liability < 1 Year 62
114
Liability > 1 Year 559
1,024

The remaining change to the balance sheet liability comprises change in agreed deficit recovery plan and change in discount rate and assumptions between year-ends.

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

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

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

Church Workers Pension Fund: Defined Benefits Scheme

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

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

Defined Benefits Scheme

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

For funding purposes, DBS is divided into sub-pools in respect of each participating employer as well as a further subpool, known as the Life Risk Pool. The Life Risk Pool exists to share certain risks between employers, including those relating to mortality and post-retirement investment returns. The division of the DBS into sub-pools is notional and is for the purpose of calculating ongoing contributions. They do not alter the fact that the assets of the DBS are held as a single trust fund out of which all the benefits are to be provided. From time to time, a notional premium is transferred from employers’ sub-pools to the Life Risk Pool and all pensions and death benefits are paid from the Life Risk Pool.

The scheme is a multi-employer scheme as described in Section 28 of FRS 102. It is not possible to attribute DBS assets and liabilities to specific employers, since each employer, through the Life Risk Section, is exposed to actuarial risks associated with the current and former employees of other entities participating in DBS. This means that contributions are accounted for as if DBS were a defined contribution scheme. The pensions costs charged to the SoFA during the year are contributions payable towards benefits and expenses accrued in that year (2020: £Nil, 2019: £Nil) plus the figures in relation to the DBS deficit highlighted in the table below as being recognised in the SoFA, giving a total charge of £Nil for 2020 (2019: £46,000).

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GUILDFORD DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

19. PENSIONS (Continued)

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

A valuation of DBS is carried out once every three years. The most recent was carried out as at 31 December 2020. In this valuation, the Life Risk Section was shown to be in deficit by £7.7m and £7.7m was notionally transferred from the employers’ sub-pools to the Life Risk Section. This increased the Employer contributions that would otherwise have been payable.

Following the valuation, the Employer has entered into an agreement with the Church Workers Pension Fund to pay expenses of £6,100 per year to March 2021 and £6,700 per year thereafter. In addition, deficit payments of £92,600 per year have been agreed until 1 October 2021 in respect of the shortfall in the Employer sub-pool. This obligation has been recognised as a liability within the Employer’s financial statements. Section 28.11A of FRS 102 requires agreed deficit recovery payments to be recognised as a liability. The movement in the provision is set out below:

2020
2019
£'000
£'000
Balance sheet liability as at 1 January 104
151
Contributions paid (93)
(93)
Interest cost* -
2
Remainingchange to the balance sheet liability* -
44
Balance sheet liabilityas at 31 December 11
104
* Recognised in SOFA

The remaining change to the balance sheet liability comprises change in agreed deficit recovery plan and change in discount rate and assumptions between year-ends.

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

December 2020 December 2019 December 2018
Discount Rate 0.0% 1.5% 0.0%

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

The next valuation of the scheme is being carried out as at December 2022.

Pension Builder Scheme

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

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

Pension Builder Classic provides a pension for members for payment from retirement, accumulated from contributions paid and converted into a deferred annuity during employment based on terms set and reviewed by the Church of England Pensions Board from time to time. 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 that members use to provide benefits at retirement. Pension contributions are recorded in an account for each member. This account may have bonuses added by the Board before retirement. The bonuses depend on investment experience and other factors. There is no requirement for the Board grant any bonuses. The account, plus any bonuses declared, is payable from members’ Normal Pension Age.

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

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GUILDFORD DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

19. PENSIONS (Continued)

The scheme is a multi-employer scheme as described in Section 28 of FRS 102 as it is not possible to attribute the Pension Builder Scheme’s assets and liabilities to specific employers. This means that contributions are accounted for as if the Scheme were a defined contribution scheme. The pensions costs charged to the SoFA in the year are contributions payable (2020: £186,000, 2019: £196,000)

The next valuation of the scheme is being carried out as at December 2020. The last valuation was carried out at 31 December 2016.

For the Pension Builder Classic section, the valuation revealed a deficit of £14.2m on the ongoing assumptions used. At the most recent annual review, the Board chose not to grant a discretionary bonus, which will have acted to improve the funding position. There is no requirement for deficit payments at the current time.

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

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

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GUILDFORD DIOCESAN BOARD OF FINANCE

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

20. SUMMARY OF FUND MOVEMENTS

2020 1 January
2019		 Income Expenditure Transfers Gains and
losses		 31
December
2020
£'000 £'000 £'000 £'000 £'000 £'000
Unrestricted funds
General 1,722
12,542
(12,187)		 (420) -
1,657
Designated
TCTL growth fund 876
105
-
(29)		 -
952
Strategic change fund 150
363
-
-
-
513
Development fund 812
-
-
-
-
812
Diocesan Premises reserve -
-
(88)		 88
-
-
Clergy conference fund 15
-
(4)		 15
-
26
Church fabric repair fund 11
-
-
-
-
11
1,864
468
(92)		 74
-
2,314
Restricted income funds
Pastoral fund 698
17
(3)		 -
27
739
Strategic Development Fund -
189
(303)		 114 -
Glebe income 297
19
(18)		 -
-
298
E M Woods trust income 111
10
-
-
-
121
Moor Park Trust 73
3
-
-
5
81
Regional Training 23
85
(78)		 -
1
31
Community Engagement 111
90
(171)		 -
-
30
Church Schools income 211
128
(23)		 (195) -
121
Church Schools Building Projects -
-
-
-
-
-
All Saints Fleet -
-
-
16
-
16
Moss Lane Fund -
50
(40)		 13
-
23
Partridge Fund -
5
-
218
11
234
Ministerial Education 17
469
(463)		 -
-
23
1,541
1,065
(1,099)		 166
44
1,717
Endowment funds
Expendable endowment
Board endowment 11,097
7
(10)		 (88) 824
11,830
Onslow bequest 466
-
-
-
14
480
E M Woods trust capital 288
-
-
-
20
308
Church schools capital 4,135
-
(80)		 (201) 326
4,180
Retired clergy housing 7,703
142
(62)		 (50) 187
7,920
Benefice houses fund 103,265
15
(6)		 -
8,113
111,387
Nugent fund 3,154
3
(12)		 -
166
3,311
Permanent endowment
Glebe capital fund 16,959
87
(3)		 519
1,521
19,083
E Newill trust 235
-
-
-
16
251
Budgen legacy 561
-
-
-
38
599
G Nash will 328
-
-
-
22
350
Power legacy 208
-
-
-
14
222
Toulmin will 81
-
-
-
6
87
St Agnes Lodge fund 92
-
-
-
7
99
148,572
254
(173)		 180
11,274
160,107
Total funds 153,699
14,329
(13,551)		 -
11,318
165,795

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GUILDFORD DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

20. SUMMARY OF FUND MOVEMENTS (continued)

2019 1 January
2019		 Income Expenditure Transfers Gains and
losses		 31
December
2019
£'000 £'000 £'000 £'000 £'000 £'000
Unrestricted funds
General 1,742
12,808
(12,454)		 (330) (44) 1,722
Designated
Mission & EIG fund 215
-
-
(111)		 -
104
TCTL growth fund 435
426
(253)		 164
-
772
Strategic change fund 150
-
-
-
-
150
Development fund 812
-
-
-
-
812
Diocesan Premises reserve -
(143)		 143
-
-
Clergy conference fund -
-
15
-
15
Church fabric repair fund 11
-
-
-
-
11
1,623
426
(396)		 211
-
1,864
Restricted income funds
Pastoral fund 664
37
(9)		 -
6
698
Glebe income 289
27
(19)		 -
-
297
E M Woods trust income 102
9
-
-
-
111
Moor Park Trust 57
2
-
-
14
73
Regional Training 26
132
(135)		 -
-
23
Community Engagement 189
294
(406)		 34
-
111
Church schools income 302
155
(71)		 (175) -
211
Ministerial Education 10
421
(414)		 -
17
1,639
1,077
(1,054)		 (141) 20
1,541
Endowment funds
Expendable endowment
Board endowment 10,718
8
-
(143)		 514
11,097
Onslow bequest 434
-
-
-
32
466
E M Woods trust capital 243
-
-
-
45
288
Church schools capital 1,920
2,099
-
-
116
4,135
Retired clergy housing 7,479
145
(39)		 (40) 158
7,703
Benefice houses fund 98,567
-
(13)		 -
4,711
103,265
Nugent fund 2,967
46
(33)		 -
174
3,154
Permanent endowment
Glebe capital fund 13,922
-
-
443
2,594
16,959
E Newill trust 198
-
-
-
37
235
Budgen legacy 472
-
-
-
89
561
G Nash will 277
-
-
-
51
328
Power legacy 175
-
-
-
33
208
Toulmin will 68
-
-
-
13
81
St Agnes Lodge fund 78
-
-
-
14
92
137,518
2,298
(85)		 260
8,581
148,572
Total funds 142,522
16,609
(13,989)		 -
8,557
153,699

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GUILDFORD DIOCESAN BOARD OF FINANCE

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

21. SUMMARY OF ASSETS BY FUND

As at 31 December 2020 Tangible
fixed assets		 Investments Current
assets		 Creditors Net assets
£'000 £'000 £'000 £'000 £'000
Unrestricted funds
General 41
269
2,243
(896)		 1,657
Designated
TCTL growth fund -
-
966
(14)		 952
Strategic change fund -
-
513
-
513
Development fund -
-
812
-
812
Diocesan Premises reserve 173
-
(53)		 (120) -
Clergy conference fund -
-
26
-
26
Church fabric repair fund -
-
11
-
11
173
-
2,275
(134)		 2,314
Restricted income funds
Pastoral fund -
785
(46)		 -
739
Strategic Development Fund -
-
-
-
-
Glebe income -
-
298
-
298
E M Woods trust income -
-
121
-
121
Moor Park Trust -
92
(11)		 -
81
Regional Training -
-
31
-
31
Community Engagement -
-
30
-
30
Church schools income 391
-
(257)		 (13) 121
Church Schools Building Projects -
-
2,549
(2,549)		 -
All Saints Fleet -
-
16
-
16
Moss Lane Fund -
-
23
-
23
Partridge Fund -
180
54
-
234
Ministerial Education -
-
23
-
23
391
1,057
2,831
(2,562)		 1,717
Endowment funds -
Expendable endowment -
Board endowment 12,601
2,751
(1,520)		 (2,002) 11,830
Onslow bequest -
213
267
-
480
E M Woods trust capital -
313
(5)		 -
308
Church schools capital 104
4,318
(194)		 (48) 4,180
Retired clergy housing 2,796
3,691
1,433
-
7,920
Benefice houses fund 114,826
-
(2,134)		 (1,305) 111,387
Nugent fund -
1,981
1,330
-
3,311
Permanent endowment
Glebe capital fund 15,330
2,815
1,559
(621)		 19,083
E Newill trust -
251
-
-
251
Budgen legacy -
599
-
-
599
G Nash will -
348
2
-
350
Power legacy -
222
-
-
222
Toulmin will -
87
-
-
87
St Agnes Lodge fund -
99
-
-
99
145,657
17,688
738
(3,976)		 160,107
Total funds 146,262
19,014
8,087.0
(7,568.0)		 165,795

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GUILDFORD DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

21. SUMMARY OF ASSETS BY FUND (continued)

As at 31 December 2019 Tangible
fixed assets		 Investments Current
assets		 Creditors Net assets
£'000 £'000 £'000 £'000 £'000
Unrestricted funds
General 65
270
2,169
(782)		 1,722
Designated
Mission & EIG fund -
-
118
(14)		 104
TCTL growth fund -
-
772
-
772
Strategic change fund -
-
150
-
150
Development fund -
-
812
-
812
Diocesan Premises reserve 260
-
(140)		 (120) -
Clergy conference fund -
-
15
-
15
Church fabric repair fund -
-
11
-
11
260
-
1,738
(134)		 1,864
Restricted income funds
Pastoral fund -
758
(60)		 -
698
Glebe income -
-
297
-
297
E M Woods trust income -
-
111
-
111
Moor Park Trust -
86
(13)		 -
73
Regional Training -
-
23
-
23
Community Engagment -
-
111
-
111
Church schools income -
-
211
-
211
Ministerial Education -
-
17
-
17
-
844
697
-
1,541
Endowment funds -
Expendable endowment -
Board endowment 11,889
2,640
(1,430)		 (2,002) 11,097
Onslow bequest -
199
267
-
466
E M Woods trust capital -
293
(5)		 -
288
Church schools capital 495
4,164
787
(1,311)		 4,135
Retired clergy housing 2,684
3,616
1,403
-
7,703
Benefice houses fund 106,710
-
(2,130)		 (1,315) 103,265
Nugent fund -
2,298
856
-
3,154
Permanent endowment
Glebe capital fund 14,866
2,431
800
(1,138)		 16,959
E Newill trust -
235
-
-
235
Budgen legacy -
561
-
-
561
G Nash will -
325
3
-
328
Power legacy -
208
-
-
208
Toulmin will -
81
-
-
81
St Agnes Lodge fund -
92
-
-
92
136,644
17,143
551
(5,766)		 148,572
Total funds 136,969
18,257
5,155.0
(6,682.0)		 153,699

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GUILDFORD DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

22. DESCRIPTION OF FUNDS

General fund

The general reserve is the DBF’s unrestricted undesignated fund available for any of the DBF’s purposes without restriction.

Mission & EIG fund Designated fund to help with parish growth initiatives. TCTL Growth fund Designated fund for Transforming Church, Transforming Lives initiatives. Strategic change fund Designated fund to implement change processes deriving from transforming

Designated fund to implement change processes deriving from transforming church, transforming lives initiatives.

Development fund Designated fund for development projects of the Diocese. The principal designation is to fund a move of Diocesan House up to the Cathedral site. This project is being held back by planning considerations.

Diocesan Premises reserve

Clergy conference fund Church fabric repair fund Pastoral fund

Designated fund to spread the impact of rent-free periods and costs of refurbishment and dilapidations.

Designated fund for the triennial Diocesan clergy conference.

Designated fund from which to make grants to parishes for fabric repair.

The Diocesan pastoral account is regulated by the provisions of the Pastoral Measure 2011. The restricted purposes for which the account may be used are:

Glebe income fund

E M Woods trust income

Accumula t ed income from glebe capital used for clergy stipends and housing costs.

Accumulated investment income for needy and retired clergy and their dependants.

Moor Park Trust Expendable gift from Moor Park College for adult Christian education work.

Regional training Community Engagement Church Schools income

Church Schools Building Projects All Saints Fleet

Moss Lane Fund

Restricted fund for the activity of the regional training Diocesan partnership.

Grants and related activity for Community Engagement projects.

Accumulated income from uniform statutory trusts (church schools fund capital) used for supporting church schools in the Diocese, both buildings and education.

Funds for Church School Building Projects.

Funds to support mission in All Saints Fleet.

Funds to support mission in Godalming.

Partridge Fund Funds to support Church of England Schools.

Ministerial Education

Income and Expenditure on the ministerial education of ordinands.

Board endowment Expendable endowment fund for capital growth. Income is credited to the general fund for the general purposes of the Diocese.

Onslow bequest

E M Woods trust capital

Expendable endowment for the support of clergy and building churches in Surrey.

Expendable endowment to produce income for the benefit of needy or retired clergy and their dependants.

.

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GUILDFORD DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

22. DESCRIPTION OF FUNDS (continued)

Church schools fund capital Expendable endowment arising from sale proceeds of redundant Church of England School properties. Its use is restricted by law to capital and maintenance work to Church of England schools in the Diocese. Income arising may be used to support education generally in the Diocese. The DBF is Trustee of these funds, which are managed on a day to day basis by and in consultation with the Board of Education Glebe capital fund The glebe capital fund was created from the Diocesan stipends fund capital account held on behalf of the Diocese by the Church Commissioners under the Endowments and Glebe Measure 1976, and glebe assets, to provide income for clergy stipends. It represents glebe assets, the accumulated sale proceeds of glebe property, sale proceeds of benefice houses and surplus benefice endowments following pastoral reorganisation. Capital funds may be used for the purchase, improvement and maintenance of glebe property and benefice houses. Besides glebe property, the funds may be invested in the CBF Church of England Property, Investment or Fixed Interest Securities Funds, or simply held on deposit. Income is credited to the general fund for the payment of stipends and benefice house outgoings. Retired clergy fund Expendable endowment for the provision of housing for retired clergy. Income is credited to this same fund. Benefice houses fund The benefice houses fund consists of resources restricted to provision of benefice houses in the Diocese. They are represented by the benefice houses or by sale proceeds of former benefice houses held on suspense by the Church Commissioners. Although benefice houses are vested in incumbents for the time being of benefices concerned, the DBF is obliged to maintain them, to ensure that there are sufficient benefice houses for the pastoral structure of the Diocese, and receives the sale proceeds of benefice houses surplus to requirements into the Diocesan pastoral account. Nugent fund Expendable endowment created by the lifetime gift of the late Lord Nugent. E Newill trust Permanent endowment to provide income for family needs. Income is credited to the general fund. Budgen legacy Permanent endowment to provide income for general church purposes. Income is credited to the general fund. G Nash will Permanent endowment to provide income for any DBF purposes. Income is credited to the general fund. Power legacy Permanent endowment to provide income for clergy stipends. Income is credited to the general fund. Toulmin will Permanent endowment to provide income for the training of ordination candidates. Income is credited to the general fund. St Agnes Lodge fund Permanent endowment arising from the sale of St Agnes Lodge, to provide income for social responsibility work in the Diocese. Income is credited to the general fund.

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GUILDFORD DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

23. CAPITAL AND OTHER COMMITMENTS

At 31 December, the board had no capital commitments (2019: None).

The DBF had the following future minimum lease payments under non-cancellable operating leases for each of the following periods:

following periods:
2020
2019
Payment due: £'000
£'000
Not later than one year 249
249
Later than oneyear and not later than fiveyears 162
411
411
660

The DBF had no other off-balance sheet arrangements.

24. FUNDS HELD AS CUSTODIAN TRUSTEE

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

2020
2019
£'000
£'000
CCLA Church of England Investment Fund (income) 4,823
4,500
CCLA Church of England Fixed Interest Securities Fund 138
133
CCLA Property Fund 48
52
Other common investment fund holdings 1,637
1,275
Direct holdings in UK equities 53
539
CCLA Church of England Deposit Fund 488
504
Total assets held as custodian trustee 7,198
7,015

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GUILDFORD DIOCESAN BOARD OF FINANCE

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

25. PRIOR YEAR COMPARATIVE SOFA

Unrestricted funds
Restricted
Endowment
Total
General
Designated
Funds
Funds
2019
£'000
£'000
£'000
£'000
£'000
Income and endowments from
Donations
Parishes 11,485
5
-
-
11,490
Archbishops’ Council -
-
441
-
441
Other 90
102
34
-
226
11,575
107
475
-
12,157
Charitable activities 513
319
406
2,099
3,337
Other trading activities 483
-
-
-
483
Investments 237
-
196
199
632
Other -
-
-
-
-
12,808
426
1,077
2,298
16,609
Expenditure on:
Raising funds (270)
-
-
-
(270)
Charitable activities (12,184)
(396)
(1,054)
(85)
(13,719)
(12,454)
(396)
(1,054)
(85)
(13,989)
Net income before investment
gains		 354
30
23
2,213
2,620
Net gains on investments -
-
20
949
969
Net income 354
30
43
3,162
3,589
Transfers between funds (330)
211
(141)
260
-
Net income after transfers 24
241
(98)
3,422
3,589
Other recognised gains/(losses)
Gains on revaluation of fixed
assets		 -
-
-
5,812
5,812
Actuarial (losses)/gains on
pension schemes		 (44)
-
-
1,820
1,776
Net movement in funds (20)
241
(98)
11,054
11,177
Total funds brought forward 1,742
1,623
1,639
137,518
142,522
Total funds carried forward 1,722
1,864
1,541
148,572
153,699

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