2023-12-31-accounts - The Chester Diocesan Board Of Finance

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Chester Diocesan Board of Finance

Annual Report and Financial Statements 2023

Company limited by guarantee registered in England (no 00007826)

Registered charity (no 248968)

Bankers

National Westminster Bank plc, 33 Eastgate Street, Chester, CH1 1LG The Charity Bank Limited, Fosse House, 182 High Street, Tonbridge, Kent, TN9 1BE.

Investment managers

CCLA Investment Management Limited, One Angel Lane, London, EC4R 3AB.

Solicitors

Aaron & Partners, Grosvenor Court, Foregate Street, Chester, CH1 1HG HMD Registry Services Ltd, 53 Park Mount Drive, Macclesfield, SK11 8NS

Auditors

haysmacintyre LLP, 10 Queen Street Place, London EC4R 1AG

Chester Diocesan Board of Finance Annual Report and Financial Statements 2023

Registered Office: Church House, 5500 Daresbury Park, Daresbury, Warrington WA4 4GE.

Telephone: (01928) 718 834

Chester Diocesan Board of Finance is the financial executive of the Church of England in the Diocese of Chester. It is a company limited by guarantee registered in England (no 00007826) and is a registered charity (no 248968).

Throughout this document, “DBF” refers to Chester Diocesan Board of Finance.

Index

Membership of the Board	2
Key Management Personnel	3
Chairman’s Statement	4
Trustees’ Report	6
Strategic report	8
Clergy	8
Assisting Parochial Church Councils	10
Outreach	10
Education	11
Ministry Development	11
Grants	12
Retreats and Christian conferences	12
Safeguarding	13
Financial Review	14
Going concern	15
2024 and beyond	15
Risk Management	16
Structure, governance, and management	18
Trustees’ Responsibilities	29
Independent auditors’ report	31
Financial Statements
Statement of Financial Activities	36
Balance Sheet	37
Statement of Cash Flows	38
Notes to the accounts	39

Chester Diocesan Board of Finance Year ended 31 December 2023

Membership of the Board

The trustees of the registered charity and the directors of the charitable company are the same. Trustees/directors served for the full year, except where shown.

President: Rt Revd Mark S A Tanner Bishop of Chester Chairman: Mr Ian N Scott-Dunn

Trustees/Directors:

Rt Revd Julie A Conalty Bishop of Birkenhead Rt Revd Samuel J C Corley Bishop of Stockport Ven Dr Michael R Gilbertson Archdeacon of Chester Ven Ian G Bishop Archdeacon of Macclesfield (until 29 Sep 2023) Ven Jane E Proudfoot Archdeacon of Macclesfield (from 28 Apr 2024) Very Revd Timothy R Stratford Dean of Chester Cathedral Revd Simon Drew Chair, House of Clergy, Diocesan Synod Ms Julie H Withers Chair, House of Laity, Diocesan Synod Revd Joshua C Askwith Mr Peter Ball-Foster Dr J Graham Campbell Revd Canon Elaine Chegwin Hall (until 15 Nov 2023) Revd George T Crowder Revd Lesley S Currie Dr Alan Dowen Mr John J C Freeman Revd Simon R Gales Revd Andrew Q Greenhough Mrs Esme A Hammer Mr John S Haslam Mr David A Hermitt Revd Gary Kennaugh (from 18 May 2023) Mr David G Lowcock Dr Peter J Marshall Canon Dr John P Mason Revd Dr Robert S Munro (until 2 Feb 2023) Mrs Julie Okundaye Revd Richard L Pennystan Revd Michael L Ridley Revd Michael I A Smith Revd Christina P Upton Revd David A Vestergaard Dr Christine E Wetherell

Chester Diocesan Board of Finance Year ended 31 December 2023

Key Management Personnel

Mr George B Colville Diocesan Secretary until 30 Aug 2024 Mr Christopher R Penn Interim Diocesan Secretary from 4 Sept 2024 Revd Jennifer C Bridgman Interim Diocesan Secretary from 4 Sept 2024 Mrs Elizabeth A Geddes Director of Human Resources and Deputy Diocesan Secretary Revd Simon Chesters Director of Ministry Mr Sean Augustin Diocesan Safeguarding Adviser from 8 Feb 2023 Mr James M Butterworth Director of Communications until 31 Jul 2023 Revd Peter M Froggatt Director of Outreach Mr Jon Pocock Strategic Programme Director (from 2 Oct 2023) Mr Nigel Strange Head of Finance Mrs Harriet M Roberts Director of Development (Vision and Strategy) (until 2 Feb 2024); Interim Director of Communications from 22 Jul 2024

Chester Diocesan Board of Finance Year ended 31 December 2023

Chairman’s Statement

I am pleased to present the Chairman’s Statement for Chester Diocesan Board of Finance. The organisation continued to pursue its core purpose, “to maintain and promote the spiritual teaching of the Church of England in the Diocese of Chester”. The DBF continued to provide a financial and support function to allow the parishes of the diocese to continue to operate effectively, by collecting contributions from the parishes, funding and housing the clergy, and through providing a number of support services.

In addition to its ongoing core functions, other events and processes involved the DBF and will influence its future.

“Casting the net wide”, a process of discerning a vision for the Diocese, came to completion, with a service of celebration in Chester Cathedral. We thank Harriet Roberts for all she has done in facilitating the process through community art, Vision Cafés, poetry, and other creative exercises.

We welcome Jon Pocock who will be assisting us on the way forward as we move to the strategy phase.

Proposals around Living in Love and Faith, a process of discernment and decision-making on questions of identity, sexuality, relationships, and marriage, were considered by General Synod. Prayers of Love and Faith have now been made available for use as part of regular worship.

I thank George Colville, Diocesan Secretary, and the staff of the DBF, who provide quality support to our parishes. I also thank all those who have left the DBF’s employment for the work they have done and welcome all the new members to the team at Daresbury and Foxhill. Of note, the Revd Jonathon Green completed seven years as Director at Foxhill and has moved on to become the Dean’s Vicar at Chester Cathedral. Ian Bishop, formerly Archdeacon of Macclesfield, became Bishop of Thetford in the Diocese of Norwich. New staff have arrived in several areas, in particular, vacancies in the Ministry and Safeguarding teams have been filled. Finally, I thank Bishop’s Council and all sub-committee members for their work throughout the year.

The DBF’s day-to-day financial performance showed a deficit, and in challenging circumstances, parish share collection has also declined a little. However, we continue to be very grateful to parishes who are the bedrock of the Diocese’s mission.

Investments gained in value, continuing the sideways fluctuations in value over the previous few years. Most of these investments are endowment

Chester Diocesan Board of Finance Year ended 31 December 2023

funds whose primary function is to generate income for stipends, so maintenance of dividends continues to be of higher importance than end of year valuations. CCLA, with whom the DBF’s investments are held, again increased its main dividend rate.

Economic circumstances for parishes and their parishioners remain challenging. Plans for the future, and the risks to be faced, will be continuously kept under review.

Our priority is to use our resources wisely in the pursuit of growing God's kingdom throughout the Chester Diocese and beyond. We pray that God's Holy Spirit may guide and inspire us all.

Finally, I am shortly to step down as chairman after nine years in the role. I am immensely grateful for relationships built, and assistance received, during that time. I wish my successor well, at a time full of challenge and opportunity.

Ian N Scott-Dunn Chairman

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

Trustees’ Report

Who we are

The parish is the core unit of Church of England activity; Chester Diocesan Board of Finance provides a financial executive and support function to enable parishes to operate effectively.

What we do

God has given us a Christian framework for living which benefits the members of the churches in the Diocese and the wider public generally. We provide facilities for public worship, pastoral care, and spiritual, moral and intellectual development; we promote Christian values and service by members of the Church in and to their communities, to the benefit of individuals and society. In practice, this means collecting contributions from parishes, paying and housing the clergy, and delivering diocese-wide services and projects.

Why we do it

The DBF’s core purpose is “to maintain and promote the spiritual teaching of the Church of England in the Diocese of Chester”. The directors all believe that the Christian message is relevant and that the DBF’s role is to support parishes in living it and telling people about it. Staff working for the DBF also believe this or are in sympathy with this purpose.

How our activities deliver public benefit

With further details provided below, our main activities aim to deliver public benefit in the following ways:

Clergy - providing parish and other clergy to offer Christian services and spiritual oversight
Parochial - Church Councils – assisting PCCs to provide churches, sacred spaces and worship services
Outreach - assisting parishes as they live out God’s love for the world, as expressed in the Anglican Communion’s Five Marks of Mission.
Education - contributing to the spiritual and moral education of children and young people
Training - providing training and assistance in order that parishes have clergy and volunteers who are competent, in providing Christian services, such as visiting the sick, and comforting the bereaved
Grants - making grants to enable the national church institutions to function and have a positive wider influence

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

Provision of retreats and Christian conferences - education, spiritual and physical refreshment at Foxhill House and Woodlands

The majority of the DBF’s activity takes place in the Diocese of Chester, which comprises Cheshire, the Wirral, and parts of Greater Manchester.

Who benefits from our services?

The DBF is a public benefit entity. The trustees confirm that they have complied with the duty of the Charities Act 2011 to have due regard to the public benefit guidance published by the Charity Commission in determining the activities undertaken by the charity. We also take account of the Charity Governance Code (see page 28) in ensuring that the charity is effective.

We aim to make our services open to as wide a section of the public as possible. For example:

Everywhere in the Diocese is part of a Church of England parish that has a member of clergy who has concern for the spiritual welfare of the individuals who reside in it.
Parishes in wealthier areas generally contribute somewhat more than the cost of their clergy in order that clergy can also be provided in less wealthy areas.
Training courses and retreats are offered at reduced or no cost where appropriate in order that ability to pay is not a bar.

Vision, and latterly, strategy

During the year “Casting the Net Wide”, a process for discerning a vision for the Diocese of Chester, was completed, with funding from the Archbishops’ Council Strategic Mission and Ministry Investment Board. The vision narrative is entitled “Together in Christ, sharing hope” and has four core themes which will shape a mission strategy. These are:-

Growing braver, fuller faith Blessing the 1.5 million, one life at a time Transformative loving service (in practice) Engaged locally, working together in loving generosity

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

To achieve this vision, the following priorities have been agreed which will assisting in planning the way forward:-

We believe in the Gospel. We believe in the local and seek transformation. We care about the environment, locally and globally.

We want to engage with young people and the ‘disconnected’. We want to do bigger, better, bolder things together simply. The 1.5 million people in our diocese matter. We want to build new communities of faith.

As we progress, the single most important question is:-

Does this make a difference to the lives of the 1.5 million?

Strategic Report

Clergy

Provision of clergy

Although the DBF does not employ the parish clergy, it is responsible for training them, paying them, and paying into their pension fund. With approximately 217 trained stipendiary clergy including Archdeacons and clergy who occupy a house and receive a reduced stipend, 43 of whom are curates, this responsibility is by far its largest financial commitment. It can only be met if the parishes pay their Parish Share. Stipend and pension levels are set nationally with some slight regional flexibility.

Some clergy are not paid stipends. These include self-supporting ministers, ministers in secular employment, and retired clergy. They give excellent service, but generally have part time roles and are not usually asked to take charge of a parish.

Almost all clergy in the Diocese are paid under the terms of Common Tenure, and all new posts are now appointed in this way.

Good clergy, well trained and with high morale, are at the heart of the DBF’s purpose. We must ensure that we can continue to raise the money to keep as many as possible in post, for the sake of the Church, the Gospel, and the people and communities of the Diocese.

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

We are pleased that God has continued to call people to serve in the Diocese and we continue to be able to appoint good clergy to benefices to fill vacancies as they arise.

Provision of clergy housing

The DBF is responsible for maintaining and insuring clergy houses. This includes carrying out repairs and maintenance works as they arise, and as highlighted in 5-yearly inspections. Major renovation works are usually carried out during vacancies. There is also a phased program of improving the overall standard of housing within the constraints of available funding.

Improvement projects including the replacement of a number of kitchens, bathrooms and boilers continued. A number of window replacements were also completed. Some of the improvement work has been grant funding received from Benefact Trust, the owner of Ecclesiastical Insurance.

A replacement for the vicarage at Daresbury was bought on a new development nearby. The vicarage at Bebington was replaced.

The vicar at Prestbury occupied the new vicarage that was built as part of a development on the site of the former vicarage.

The vicarage at Bowdon was sold, with a replacement due to be bought in 2024. A new vicarage was bought at Runcorn Weston with the intention of selling the existing large vicarage.

A development is underway at Poynton, which will result in the provision of a new vicarage, the sale of the existing vicarage, together with sale of part of the large existing garden plot to the developer.

Chaplains

The DBF also supports chaplains who provide a strong Christian influence in hospitals, hospices, schools, farming, prisons, local industry, Manchester Airport and Chester University.

Bishops

Bishops are the chief pastors of the Diocese. They provide overall focus and lead the mission of the Diocese.

Archdeacons

Archdeacons have the role of pastoral care of the clergy and their families, and oversight of church buildings and vicarages, together with supporting the

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

bishops.

There are two Archdeacons in the Diocese. The Ven Dr Michael Gilbertson is the Archdeacon of Chester. During the year, the Ven Ian Bishop, Archdeacon of Macclesfield became Bishop of Thetford in the Diocese of Norwich. In the spring of 2024, the Ven Jane Proudfoot, formerly vicar at Grappenhall, has been appointed the new Archdeacon of Macclesfield.

Assisting Parochial Church Councils

The DBF has continued to provide support to parishes in care and development of their church buildings through the work of the Diocesan Advisory Committee (DAC). It provides informal feedback to parishes and provides formal advice to the Diocesan Chancellor in respect of faculty applications.

The DAC dealt with faculty applications and other permissions, together with site visits where necessary. In addition, policy issues relating to reinforced autoclave aerated concrete (RAAC) and churchyard regulation were considered.

Outreach

The DBF aims to inspire and serve churches seeking spiritual and numerical growth. Its work involves parishes in the diocese, and links with the Anglican church in Melanesia and the Democratic Republic of Congo.

The DBF is guided by the Anglican Communion’s “Five Marks of Mission” in its approach: -

To proclaim the Good News of the Kingdom.
To teach, baptise and nurture new believers.
To respond to human need by loving service
To transform unjust structures of society, to challenge violence of every kind and pursue peace and reconciliation.
To strive to safeguard the integrity of creation and sustain and renew the life of the earth.

Much of the outreach work in the year was shaped by the ongoing development of the Vision for the Diocese, and, latterly moving towards strategy for delivering that vision.

The DBF continued work in a wide range of areas, including: -

Appointed a youth coordinator for Runcorn.

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

Running the Jesus shaped people project, assisting churches in working towards their outreach goals.

Worked with churches taking part in “Leading your Church into Growth” courses.

Following a Bishop’s Mission Order opening the church community “The Well” in the Wirral Waters development.

Continued accessibility audits and ran an “Enabling All” service.

Accessed funding for Minor Works and Improvements at churches and assisted parishes using the Energy Footprint Tool.

Assisted parishes with introducing digital methods of giving,

Counselling and supporting clergy and pastoral workers.

Education

The DBF works closely with and provides financial and other support to Chester Diocesan Board of Education (DBE) in its work. Together with the DBE the Board seeks to ensure that schools have high standards, are distinctively Christian, and support the Church’s mission to the Diocese, as well as reflecting the Church of England Education Office’s Vision for Education. More details can be found in the DBE annual report. The DBF also provided Chester Diocesan Academies Trust (CDAT) with office accommodation and IT services. CDAT has expanded over the last few years to encompass 14 schools at the year end. It moved to its own office premises early in 2024.

Ministry Development

The DBF administers vocational discernment, selection, initial training, and inservice training for lay and ordained licensed ministries.

In 2023, 12 deacons were ordained, and 24 curates completed their post ordination training. 12 people were recommended for ordination, and 12 new lay ministers were licenced.

The majority of ordinands train with Emmanuel Theological College, alongside residential training at other colleges around the country. During the year, reader training has also been moved to Emmanuel.

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

Following a number of retirements and people moving on, the ministry team was short staffed for much of 2023. Recruitment during the year and into early 2024 means that the ministry team is now refreshed and back to full strength.

Support to parishes in vacancy across a number of areas including ministry, safeguarding and finance is developing. The Foundations for Ministry programme continues to develop, now following the theme of the Diocesan Vision: Together in Christ, Sharing Hope. Training for those who occasionally find themselves leading worship is being developed.

Pastoral supervision and other support for lay and ordained ministers continues.

Grants

The DBF makes certain grants to support clergy and parishes in their work. The Diocese of Chester is also a part of the wider Church of England. In this capacity the DBF contributes funds to the national church to enable it to provide functions that are better carried out at a national level. Examples include funding for theological training colleges, promoting the Church of England’s place and views in wider society, and the provision of specialist advice and support.

Retreats and Christian conferences

‘Foxhill should be a centre of prayer and should work to further the mission of the diocese, while being a blessing to the wider church and world. It should aim to support the church communities and ministers of the diocese in growing Christian disciples, enabling people to love Jesus more and other people more effectively. This support should give particular attention to work with children and young people, and those who have not easily accessed Foxhill in the past.’ Bishop Mark

During the year, a number of staff including Jonathon Green, retired or left. Revd Lucy Brewster took over as director, with her husband, David as chaplain. Some new staff started, and existing staff took on developed roles so that there is now a full team to take on the next few years.

A full program of individual and group retreats took place. Alongside traditional retreats, there were also retreats set around art, icon painting, walking, photography, and music, as well as a retreat for those who don’t do retreats.

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

Some were popular, others had to be cancelled due to limited interest as people perceptions of retreats develop.

Unfortunately, the woodland remains closed following an extensive tree survey. A partnership has been formed with Reaseheath College and work is due to start in 2024 which will lead to the reopening of the woodland.

Safeguarding

Safeguarding advice and expertise continued to be vital element of support offered to parishes, and central to the functioning of the diocese.

Following the publication of the National Safeguarding Report Past Cases Review 2 (PCR2) by the Church of England, a three-year plan was put in place in the diocese.

Sean Augustin was appointed as the new Diocesan Safeguarding Adviser, with a deputy and assistant also appointed. By the end of the year the safeguarding delivery team was close to being complete.

Partnerships are being developed with victims and survivors in order to deliver a better diocesan response in future.

Dashboards have been set up providing a support and recording tool for parishes. These are due to be rolled out in 2024.

The safeguarding team have started to use MyConcern, the national Church of England case recording platform.

The training and records backlog that arose during the years of the pandemic is being cleared.

Constructive partnerships are being developed with statutory bodies such as the police, probation service, social services. Partnerships are also being built with voluntary bodies such as charities working in mental health and domestic abuse.

Cases raised by parishes during PCR2 are now subject to quality assurance by the Diocesan Safeguarding Advisory Panel in order that they can be brought to a conclusion.

All of the work taking place supports the National Safeguarding Standards set by the Church of England nationally.

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

Financial Review

Net income after investment gains amounted to £714k (2022 net expenditure after investment losses £1,788k). Investments gained in value by £1,032k (2022 loss £1,455k), continuing the fluctuations of the previous few years. The dividend income on which the DBF relies to supplement parish share income, continued to increase.

Contributions received from parishes declined to £11.0m (2022 £11.3m) with the parish share collection rate falling to approximately 87%.

There were a number of parsonage replacements, but with the completion of a number of projects cash generated by sales outweighed that used for purchases. As a result, cash again rose during the period. The Board has a policy of recycling funds raised from the sale of parsonage houses to fund new parsonage houses and improvements to existing houses, though on occasions, surpluses on the sale and replacement of parsonages are also being used to support day to day activities.

The DBF received a grant from Benefact Trust of £150,500, which has been applied to continued support to parishes in respect of using church buildings for mission, and the provision of improved clergy housing.

The most significant item of expenditure remained parochial clergy and archdeacons’ stipends, national insurance, pension contributions, housing maintenance and ordination training, amounting to £10.9m (2022 £10.6m).

Since 2007, parochial contributions have been requested under a parish share system based on number of allocated clergy and a socio-economic factor; this approach is intended to foster mission and growth.

Following earlier changes to accounting policy, and the inclusion of benefice property on the balance sheet, all property has been subject to at least a desktop review of valuation on at least a five-year rolling basis, and more frequently where appropriate. Property showed a rise in value, in part due to better valuation as a result of moving from desktop reviews to on-site reviews of valuation at the same time as inspections.

Holdings in the CBF Church of England Investment Fund showed a gain of 9.5% in capital value. The dividend yield at the end of the year was 2.73%. The return on

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

invested cash rose from 3.2% at the start of the year to 5.3% at the end.

The majority of the DBF’s investment assets are held by endowment funds and are therefore not available for current expenditure. In the short term at least, this makes the income from those investments more important than their current capital value. This has limited the effect of the fluctuations in capital value on day-to-day operations. However, the DBF is conscious that continuing adverse economic conditions may have an impact on parochial contributions, parochial fees, rates of return on cash, and the ability to buy and sell parsonages and other property.

Going concern

The trustees consider that there is a reasonable expectation that the DBF has adequate resources to continue in operational existence for the foreseeable future, and as a result, the trustees continue to adopt the going concern basis in preparing the accounts. The trustees did not consider there to be any material uncertainty relating to events or conditions that individually or collectively may cast significant doubt on the DBF’s ability to continue as a going concern.

The basis of this approach includes budgets and forecasts for the following year together with keeping other potential sources of funds under review.

2024 and beyond

The purpose of Chester DBF is “to maintain and promote the spiritual teaching of the Church of England”, not least by continuing to facilitate the healthy functioning of the parishes of the diocese.

Challenges for the next few years include: -

moving to the strategy and implementation phase of the diocesan vision process
implementing changes to the provision of safeguarding in line with the National Church of England Safeguarding Standards
operating in the context of financial concerns and uncertainty

While the DBF faces challenges, it continues to be helped by many positives, not least including historically high parish share contribution rates, together with good relationships with parishes in the Diocese.

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

Risk Management

The Board reviews a register of risks on an ongoing basis, reviewing the combination of likelihood and likely impact of perceived risks.

The Board considers that its principal risks at present are: -

Safeguarding: - issues regarding current and historical cases that could result in reputational problems, legal action, financial impact, together with impact on staff and parishes. Mitigated by policies in place, safeguarding staff employed, clergy and lay appointees in parishes being trained.
The impact of ongoing societal, economic and political upheaval. The cost of living and other economic issues are sources of continuing uncertainty. While the evolving nature of the situation means it is not possible to accurately quantify the financial impact, the Charity is in a reasonable financial position to help manage this risk. Steps are being taken on an ongoing basis, to minimise the impact on activities and the effect this may have on the stakeholders. The key priority is to ensure, as far as possible, that the DBF’s services to parishes continue as effectively as possible.
Loss of relevance and failure to adapt to changes in society together with declining electoral rolls and ageing congregations in parishes. The Diocese has approved vision themes and priorities is seeking to clarify its vision for the future and is now working towards a strategy to bring that vision to fruition.
A number of challenging and complex issues where a very wide range of views are held with some risk of polarisation, possibly with financial impact.

There continues to be some risk relating to the DBF’s ability to continue to fund increasing stipends, housing, salary, and pensions costs if voluntary contributions from parishes fail to come in. The DBF’s largest source of funding is contributions of Parish Share made by parishes. Parish share collection rates declined a little during the year, perhaps not surprising in the current societal and economic circumstances.

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

The Finance and Scrutiny Committee, now merged with the Human Resources Committee to form the new Central Services Committee, keeps arrears of parish share under review. In addition, it keeps a watch on stipend costs, the cost of clergy housing repair, and staffing costs, these being the chief items of expenditure.

Other risks are in the areas of key staff, reputation, and exposure to the consequences of decisions undertaken by separate but related church entities.

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

Structure, governance, and management

The sections that follow describe the local and national structure of the Church of England and explain the role of Chester Diocesan Board of Finance in it.

Pastoral structure of the Church of England

The smallest pastoral area in the Church of England is the parish. Each parish usually has one parish church (although it may have more) and may also have one or more chapels of ease (often called daughter churches). A benefice is a parish or group of parishes served by an incumbent, and by carrying out the spiritual duties in the parishes of a benefice the incumbent is entitled to a stipend (like a salary) and parsonage house. A deanery is a group of parishes over which a rural dean has oversight, and an archdeaconry is a group of deaneries for which an archdeacon is responsible. A diocese is the main administrative and pastoral area of the Church of England and contains two or more archdeaconries under the leadership of the Diocesan Bishop. A province covers the area of several dioceses under the oversight of its Archbishop.

Parochial Church Councils

The parochial church council (PCC) is the governing body of a parish. It is made up of the incumbent (who is the chairman) plus any other clergy licensed to the Benefice, the churchwardens, and several elected members plus members of Deanery, Diocesan and General Synods. All parishes have Deanery Synod representatives, and a smaller number have Diocesan or General Synod representatives. PCCs are independent charities, though all but the largest are currently excepted from registration with the Charity Commission. Their accounts can be obtained by contacting the relevant PCC treasurer and do not form part of these accounts. The Charities Act 2022 requires that PCCs with income of over £100,000 register with the Charity Commission.

Deanery Synods

Deanery Synods have two houses: laity, mainly people elected by their parishes, and clergy, mainly the beneficed and licensed clergy of the deanery. The role of a Deanery Synod is to consider matters concerning the Church of England; to bring together the views of the parishes of the deanery; to effect

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

decisions made by the Diocesan Synod; to act as a channel of communication to express the views of the parish to Diocesan Synod; to respond to requests from General Synod; to raise with Diocesan Synod such matters as it considers appropriate; and to elect representatives of the deanery to the Diocesan Synod. Deanery Synods generally do not have significant financial transactions.

Diocesan Synod

The Diocesan Synod is the statutory governing body of a diocese. It is elected with representation from all parts of the Diocese and roughly equal numbers of clergy and lay people, who meet in Synod with the Bishops and Archdeacons. The role of Diocesan Synod is to consider matters concerning the Church of England and make provision for such matters in relation to its diocese; to act as a forum for discussion of Christian opinion on any matter of religious or public interest; to advise the Bishop on any matter on which he may consult it; to deal with matters referred by General Synod, and to refer matters to General Synod; and to make provision for the financing of the diocese, in its capacity as the Diocesan Board of Finance.

Chester Diocesan Synod met three times in 2023, in March, June and November. The usual business was completed at both meetings, including the receipt of the Annual Report and Financial Statements for the year ended 31 December 2022, approval of the 2024 budget, and receipt of General Synod reports.

The March Synod received a further update on “Living in Love and Faith”, a process of discernment and decision-making on questions of identity, sexuality, relationships, and marriage. Bishop Mark led discussion on this following a letter he had written to clergy. In addition, written questions were answered. It received reports from the Committee for Outreach, the Committee for Ministry, the Diocesan Board of Education, Foxhill House and Woodlands, the Diocesan Advisory Committee and Chester Cathedral. There were updates on safeguarding, and the diocesan vision process.

The June Synod considered the issue of digital exclusion that had been highlighted by experiences during the pandemic. Bishop Mark introduced a more extensive update and discussion on the diocesan vision process, which was followed by its agreement.

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

At the November Synod, Bishop Mark gave a presidential address focussing on the developing strategy process, and referring to the key question “ Does this make a difference to the 1.5 million lives?”. Questions relating to Living in Love and Faith were raised. A report of General Synod proceedings was received. The Annual Report and Financial Statements for 2022 were received, and the budget for 2024 was approved. A report on progress of the Route Map to Net Zero Carbon for Chester Diocese was received. An update on the developing strategy process was also received.

National Church institutions

The General Synod is the legislative and decision-making body of the Church of England at national level. It makes decisions on doctrinal formulae, services and relations with other Churches. It passes Measures which, if accepted by Parliament, have the force of Acts of Parliament. The Synod contains three groups, or houses, of members: - the Houses of Bishops, Clergy and Laity. The Houses of Bishops and Clergy together form the two Convocations of the Province of Canterbury and the Province of York. The Convocations are older than Parliament and before their powers were vested in the General Synod, they were responsible for making decisions on doctrine, services, and relations with other churches.

Archbishops’ Council is the Church of England’s policy discussion forum. It reports to General Synod.

Cooperating closely with Archbishops’ Council, the Church Commissioners manage the historic assets of the Church of England, spending a significant part of their income on pensions for the parochial clergy, and providing selective financial support to Dioceses.

The financial transactions of General Synod, the Church Commissioners, and Archbishops’ Council do not form part of these accounts.

Chester Cathedral

Chester Cathedral is a separate charity. Copies of its accounts can be obtained from Chester Cathedral Office, 9 Abbey Square, Chester, CH1 2HU.

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

Bishops

The costs of Episcopal administration (Diocesan and Suffragan Bishops) are met by the Church Commissioners.

The Diocese of Chester

The Diocese of Chester was created in 1541, following the dissolution of the Abbeys under Henry VIII, and assumed roughly its present dimensions in 1880. It covers an area of 1025 square miles, approximately the old Victorian County of Chester, including parts which subsequently became absorbed into Merseyside and Greater Manchester. The rivers Mersey and Tame approximately delineate the boundary with Liverpool and Manchester. There are areas of dense urban population, mainly in the north, stretching from Birkenhead to East Manchester. There are prosperous suburban regions of West and South Wirral, Chester and south of Manchester, with a mainly rural heartland, bounded by the Derbyshire Pennines and the Welsh Border. The overall population is approximately 1.6 million.

The Diocese is divided into two archdeaconries: Chester covering the western half and Macclesfield the eastern, each with nine deaneries. There are 264 parishes, about 100 of which can be described as rural. Compared with many dioceses, there are few teams, and few multi-parish benefices. There are approximately 225 stipendiary clergy. The ministry of Readers and Pastoral Workers is important, with over 240 licensed. The role of licensed selfsupporting ministers is substantial, with over 80 in post at present.

The Archdeaconry of Macclesfield approximately covers the part of the diocese to the east of the M6, plus the area around Crewe and Nantwich. The Archdeaconry of Chester approximately covers the rest of the diocese to the west of the M6. Each archdeaconry has a broad mix of urban and rural parishes. The Archdeacon of Chester lives in Chester, and the Archdeacon of Macclesfield lives in Congleton.

The financial affairs of the Diocese are conducted through two registered charities:- Chester Diocesan Board of Finance (Registered charity number 248968), and Chester Diocesan Board of Education (Registered charity number 525790).

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

Chester Diocesan Board of Finance

Chester Diocesan Board of Finance (DBF), founded in 1873, is constituted in accordance with the provisions of the Diocesan Boards of Finance Measure 1925.

It is a charitable company limited by guarantee, registered in England and Wales, and governed by memorandum and articles of association.

Its principal activity is to maintain and promote the spiritual teaching of the Church of England in the Diocese of Chester. It acts as the financial executive of the Diocesan Synod and as custodian trustee for parochial trusts, and other related organisations. There have been no significant changes in activity during the year.

As a registered charity, the DBF is not liable to Corporation Tax on its charitable activities.

The DBF has the following statutory responsibilities: -

the management of glebe property and investments to generate income to support the cost of stipends arising from the Endowment and Glebe Measure 1976;
the repair of benefice houses as the Diocesan Parsonage Board under the Repair of Benefice Buildings Measure 1972;
the custodian of permanent endowment and real property assets relating to trusts held by Incumbents and Archdeacons and by Parochial Church Councils as Diocesan Authority under the Incumbents and Churchwardens (Trusts) Measure 1964 and the Parochial Church Councils (Powers) Measure 1956.

Charitable donations have been made as part of the normal expenditure of the DBF in the exercise of its objectives. No political donations have been made.

The DBF continues to undertake significant financial transactions with the Archbishops’ Council of the Church of England, the Church Commissioners, the Church of England Pensions Board and Parochial Church Councils (PCCs)

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

in the Diocese of Chester. None of these is a connected charity.

Bishop’s Council

Bishop’s Council has the following functions:

to plan the business of Diocesan Synod, to prepare the agenda for its sessions, and to circulate to members information about matters for discussion;
to initiate proposals for action by Diocesan Synod;
to advise Diocesan Synod on matters of policy;
to advise the President on any matters which he may refer to Bishop’s Council;
subject to the directions of Diocesan Synod, to transact the business of the Synod when it is not in session;
to appoint members of committees or nominate members for election to committees, subject to the directions of the Synod;
to carry out such other functions as Diocesan Synod may delegate to it.

In practice, Bishop’s Council undertakes actions in all the above areas, details of which are reported to Diocesan Synod on a regular basis.

The members of Bishop’s Council are also the trustees and the members of the Board of Directors of Chester Diocesan Board of Finance and are therefore responsible for ensuring that the activities of the DBF are conducted in accordance with Charity and Company Law. During the year, the Finance and Scrutiny and Human Resources Committees were merged into a single Central Services Committee. This committee deals with all the financial transactions of the DBF except for

approval of the annual report and financial statements;
approval of new policy and material changes in policy;
approval of significant non-budgeted expenditure;
major capital expenditure;
staff remuneration.

The Central Services Committee also oversees matters relating to clergy and lay conditions of service, staffing levels, and other matters.

Bishop’s Council receives detailed and regular reports on the activities of the various committees on the discharge of its responsibilities.

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

As employer of the staff responsible for the administrative work of the Diocese, the Board of the DBF records its sincere appreciation of the commitment and hard work of everyone concerned.

Subject to financial limits certain day-to-day decisions have been delegated to senior employees.

Bishop’s Council is appointed as follows: -

Ex-officio members: the Bishop of the Diocese; other members of the House of Bishops, the Dean; the chairs of the House of Clergy and Laity; the Archdeacons; and the Chair of the Diocesan Board of Finance who is elected by the members.

Appointed members: one member appointed by each of: the members of the DBF, the committee responsible for housing matters, and the Diocesan Advisory Committee for the Care of Churches.

Elected members: 5 clergy and 5 lay persons from each Archdeaconry elected by and from among the members of the appropriate House of that Archdeaconry.

Nominated members: not more than 2 persons nominated by the Bishop.

Co-opted members: not more than 2 persons co-opted by the Council.

A new Bishop’s Council is constituted every 3 years, most recently in December 2021. The first meeting of the new council is a full day meeting and includes a training session on the duties and responsibilities of trustees and company directors, together with a description of the main activities of the charity. In addition, new members were made aware of the Charity Governance Code.

Diocesan Mission and Pastoral Committee

Each diocese has a statutory Diocesan Mission and Pastoral Committee (DMPC) appointed under section 2 of the Mission and Pastoral Measure 2011. The functions of the DMPC are as set out in section 3 of the Measure. The DMPC is also consulted about proposals for making a Bishop’s Mission Order. DMPCs were originally appointed under the Dioceses, Pastoral and

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

Mission Measure 2007 to replace former diocesan pastoral committees and diocesan redundant churches uses committees.

In the Diocese of Chester, the Bishop’s Council is the DMPC. The day-to-day work of the DMPC is undertaken by two archidiaconal mission and pastoral committees to which the majority of the DMPC’s powers have been delegated. The membership of the archidiaconal committees consists of the Suffragan Bishop, Archdeacon, Rural Deans and Lay Chairs (or other deanery synod nominees) of each archdeaconry plus three members appointed by Bishop’s Council (of which one is an elected member of the Council).

The Archidiaconal Mission and Pastoral Committees conducted business relating to parish vacancies, appointments, and pastoral reorganisations.

In addition, the committees received reports on issues including the recovery in church attendance since the pandemic, the rollout of digital giving devices, the Church of England contact management system, progress of the initiative at Wirral Waters, the Diocesan Vision Process, and better use of church buildings.

Diocesan Closed Churches Uses Committee

The Diocesan Closed Churches Uses Committee (DCCUC) established in accordance with the Pastoral Measure 1983, has had as its sole duty the task of finding suitable alternative uses for redundant church buildings in the Diocese. The responsibilities of the DCCUC were subsumed within those of the Mission and Pastoral Committee, though the closed churches work has been undertaken by a sub-committee.

An offer was accepted for St Pauls Boughton, and work is continuing on planning consents and other matters. Major work is being undertaken to repair a wall at St John the Baptist Godley. An offer is in place for St Luke Dukinfield but is still subject to planning permission. Cheshire East Council are progressing plans to repair the tower and nave at Crewe Christ Church with a view to brining the areas back into safe community use. The closed church of All Saints Balterley was sold in the year. The sale of St John Altrincham continues to progress, albeit slowly; the current issue is moving the war memorial to St Margaret, Dunham Massey.

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

Custodian Trusteeship

The Board is Custodian Trustee for trust assets with a market value of approximately £5.4m at 31 December 2023 (£5.1m at 31 December 2022). Most of these trusts are held on behalf of Parishes whose charitable purposes in the advancement of religion are parallel to those of the DBF. The assets of the trusts are held separately from those of the Board. The DBF is responsible for their safe custody but has no right of access to such holdings for its own purposes. The funds are invested in accordance with the wishes of the managing trustees of the trusts and are mainly invested in charity deposits and investment funds.

The Board also acts as custodian trustee for land and property trusts for parishes; in the main these are PCC (Parochial Church Council) properties such as church halls and curates’ houses. Deeds for these are held and recorded to ensure segregation of the assets from those directly belonging to the DBF.

When founded in the 1830’s, the University of Chester had close ties with the Anglican Church and was situated on land donated by the Dean and Chapter of Chester Cathedral. Though the University’s aims have widened, it still provides training in theology and religious studies. The DBF remains custodian trustee for the University of Chester, holding property on its behalf.

Investment Policy

The Board’s investment policy is to hold investments of relatively low risk and in accordance with the Church of England’s ethical investment policy. Subject to this, funds are invested as follows:

Income funds are invested to achieve the highest possible total return whilst maintaining short term liquidity.
Endowment funds are invested to produce the highest possible reliable income, whilst maintaining capital growth of the endowment over the longer term.

In carrying out this policy the Board has decided primarily to invest in the funds of the Central Board of Finance of the Church of England.

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

Reserves Policy

Unrestricted funds:- For many years considerable attention has been given by Chester DBF to the preparation of long-term financial estimates though this has become harder in the current environment where levels of uncertainty are increased. To cushion the blow that would otherwise have fallen on parishes, the Board has on occasions used accumulated reserves. Free unrestricted reserves (excluding fixed assets) of £3.3m represent approximately 3 months expenditure. Taking account of the voluntary nature of the bulk of the Board’s income, the Board believes this level of reserves is adequate to maintain cash flow. The Board intends to keep under close review the level of reserves required for cash flow purposes, particularly if there is any change in the timing or amount of expected parochial contributions.

Restricted funds:- The DBF’s restricted funds totalling £9.8m (2022 £9.0m) are shown in note 20, together with an explanation of the purpose of those funds. The Board uses the pastoral account mainly to reinvest funds from the sale of surplus parsonage houses for the improvement of other parsonage houses. Where not required for this purpose, it can be used to meet the DBF’s wider objects.

Endowment funds:- The DBF’s endowment funds totalling £150.4m (2022 £131.1m) are shown in note 19 together with an explanation of the purpose of those funds. The majority of this balance (£134.1m (2022 £117.2m)) is benefice property included on the balance sheet as an expendable endowment fund. The gain in the year is due to improved valuation of benefice property (onsite at the same time as quinquennial inspection rather than desktop review) together with some investment gains. In addition to benefice property, the major endowment funds generate income for stipends, and to make grants to retired clergy, widows/widowers and dependants.

Grant making policy

The charity makes a variety of grants to clergy, their dependants, parishes and organisations as need arises and in furtherance of its charitable objects.

Applications are invited from those eligible under the terms of the various grant making funds. Applications are considered on their merits by the trustees. Further details of the funds can be found later in these accounts. Details of the amounts and number of grants are given in note 7.

Chester Diocesan Board of Finance Year ended 31 December 2023

Trustees’ Report

Related party

Chester Diocesan Board of Education acts as the education authority for the Church of England in the Diocese of Chester, and as such has objects that are closely aligned with those of the charity. Staff working for Chester Diocesan Board of Education are employed on joint contracts of employment and are processed through the DBF’s payroll, with costs recharged.

Key Management Personnel

The trustees have delegated much of the day to day running of the DBF to several key management personnel. As with all staff employed by the DBF, their remuneration is set by reference to the Croner Job Evaluation Scheme for the Church of England.

Charity Governance Code

The DBF takes account of the Charity Governance Code in its approach to governance and effectiveness as follows: -

Organisational purpose – Bishop’s Council – the board of trustees - is clear about the DBF’s purpose – “to maintain and promote the spiritual teaching of the Church of England in the Diocese of Chester” and that in practical terms this means assisting parishes to function effectively.

Leadership – the Bishops and Archdeacons of the diocese – who are all trustees - provide direction that the wider board of trustees can unite around.

Integrity – The board of trustees is particularly aware of the need for the parishes and clergy of the diocese to have confidence in the charity and works to that end. It is also aware of the need for the wider public to have confidence in the charity and the sector.

Decision making, risk and control – the board of trustees understands that its role is to set medium term direction, and delegates much day-to-day decision making within that direction to senior employees. The board retains responsibility for, and oversight of, those decisions.

Board effectiveness – because of the requirement of adequate representation of the various parts of the diocese, the board of trustees is

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

somewhat larger than the size recommended by the code. Where specific issues arise, these are often considered by ad hoc subgroups of trustees, reporting back to full trustee meetings.

Diversity – as with other religious charities, the trustees are drawn from a specific group in society – in this case Anglican Christians with experience and time availability to take part in the management of the charity. Within this, the board aims to be as diverse as it can and is assisted by the requirement that the various parts of the Diocese are represented.

Openness and accountability – the trustees and senior staff seek to foster open relationships, particularly with the parishes and clergy of the diocese.

Auditors

In respect of each director at the date the directors’ report is signed:

So far as they are aware, there is no information needed by the charity’s auditors in connection with preparing their report (relevant audit information) of which they are unaware, and
The directors of the charity have taken all the steps that ought to have been taken in order to make themselves aware of any relevant audit information and to establish that the company’s auditors are aware of that information.

Trustees’ Responsibilities

The Trustees are responsible for preparing the Trustees’ Report, incorporating the strategic report and the financial statements in accordance with applicable law and regulations.

Company law requires the Trustees to prepare financial statements for each financial year 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 affairs of the charity and of the incoming resources and application of resources, including the income and expenditure, of the charity for that period.

Chester Diocesan Board of Finance Year ended 31 December 2023 Trustees’ Report

In preparing these financial statements the Trustees are required to:

select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in business.

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charity’s transactions and disclose with reasonable accuracy at any time the financial position of the charity 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 charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The trustees’ report, incorporating the strategic report, was approved by the Board on 11 July 2024 and signed by order of the Board.

J.Proudfoot

Ven J E Proudfoot Archdeacon of Macclesfield

Chester Diocesan Board of Finance Year ended 31 December 2023 Independent Auditor’s Report

Independent Auditor’s Report to the Members of the Chester Diocesan Board of Finance

Opinion

We have audited the financial statements of the Chester Diocesan Board of Finance for the year ended 31 December 2023 which comprise the Statement of Financial Activities, Balance Sheet, 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

give a true and fair view of the state of the charitable company’s affairs as at 31 December 2023 and of the charitable company’s net movement in funds, including the income and expenditure, for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

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

Conclusions relating to going concern

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

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

Chester Diocesan Board of Finance Year ended 31 December 2023 Independent Auditor’s Report

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

Other information

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

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

the information given in the Trustees’ Report (which includes the strategic report and the directors’ report prepared for the purposes of company law) for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report included within the Trustees’ Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees’ Report (which incorporates the strategic report and the directors’ report).

Chester Diocesan Board of Finance Year ended 31 December 2023 Independent Auditor’s Report

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

adequate accounting records have not been kept by the charitable company; or
the charitable company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of trustees’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.

Responsibilities of trustees for the financial statements

As explained more fully in the trustees’ responsibilities statement set out on page 29, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.

Based on our understanding of the charitable company and the environment in which it operates, we identified that the principal risks of non-compliance with

Chester Diocesan Board of Finance Year ended 31 December 2023 Independent Auditor’s Report

laws and regulations related to safeguarding vulnerable beneficiaries, health and safety, and employment (including taxation), 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, the Charities Act 2011 and Church of England Measures.

We evaluated 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 fund accounting, including transfers between funds, and revenue recognition. Audit procedures performed by the engagement team included:

Discussions with management including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;
Evaluating management’s controls designed to prevent and detect irregularities;
Identifying and testing journals;
Challenging assumptions and judgements made by management in their critical accounting estimates;
Testing transfers between funds; and
Cut-off testing in respect of revenue.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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.

Chester Diocesan Board of Finance Year ended 31 December 2023 Independent Auditor’s Report

Use of our report

This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members those matters we are required to state to them in an Auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Lee Stokes (Senior Statutory Auditor) For and on behalf of Haysmacintyre LLP, Statutory Auditor 10 Queen Street Place London

26 September 2024

Chester Diocesan Board of Finance

Statement of Financial Activities for the year ended 31 December 2023

Income and Expenditure

Note Income and endowments from Parochial contributions Grants and other donations 3 Investment income 4 Rental income Income from charitable activities Statutory clergy fees Retreat and Conference Centre Other income from operating activities Total Expenditure on raising funds Generating voluntary income Investment and Rental costs Charitable Activities National church responsibility Parochial clergy and archdeacons Parsonage improvements Support to clergy and parishes Retreat and Conference Centre Other expenditure on operating activities CEFPS deficit recovery plan 24 Total 6 Net income/(expenditure) before investment gains/(losses) Net (losses)/gains on investments 14 Net income/(expenditure) Transfers between funds 22 Other recognised gains/(losses) Gains on revaluation of fixed assets 13 Net movement in funds Reconciliation of funds: Total funds brought forward Total funds carried forward	Unrestricted Funds £'000 11,021 181 175 237 - 215 38 11,867 20 11 377 9,615 - 1,918 422 22 - 12,385 (518) (13) (531) 67 (75) (539) 11,152 10,613	Restricted Funds £'000 - 846 344 104 671 - 243 2,208 - 87 - 1,289 561 857 - - - 2,794 (586) 344 (242) 1,138 (94) 802 9,000 9,802	Endowment Funds £'000 - - - - - - 1,069 1,069 - - - - - - - 283 - 283 786 701 1,487 (1,205) 19,044 19,326 131,106 150,432	Total 2023 £'000 11,021 1,027 519 341 671 215 1,350 15,144 20 98 377 10,904 561 2,775 422 305 - 15,462 (318) 1,032 714 - 18,875 19,589 151,258 170,847	Total 2022 £'000 11,290 1,511 424 363 679 198 103
					14,568
					20 79 363 10,641 524 2,969 428 - (123)
					14,901

					(333) (1,455)
					(1,788) - 6,943
					5,155
					146,103
					151,258

The notes on pages 39 to 59 form part of these financial statements. All activities are continuing.

Chester Diocesan Board of Finance Balance sheet as at 31 December 2023

Note Fixed assets Tangible assets 13 Investments 14 Current assets Debtors 15 Cash at bank on deposit and in hand 16 Creditors: amounts falling due within one year 17 Net current assets Total assets less current liabilities Creditors: amounts falling due after more than one year 18 Total net assets Endowment funds 19 Restricted income funds 20 Unrestricted funds Total charity funds	2023 £'000 149,027 12,729 161,756 1,939 7,997 9,936 (762) 9,174 170,930 (83) 170,847 150,432 9,802 10,613 170,847	2022 £'000 132,611 11,671
		144,282
		1,525 7,321
		8,846 (1,787)
		7,059 151,341 (83)
		151,258
		131,106 9,000 11,152
		151,258

The notes on pages 39 to 59 form part of these financial statements.

The financial statements were authorised, issued and approved by the Board of Directors on 11 July 2024 and signed on its behalf by

J.Proudfoot I N Scott-Dunn Ven J E Proudfoot Chairman Archdeacon of Macclesfield

Chester Diocesan Board of Finance is a company limited by guarantee registered in England and Wales (no. 00007826)

Chester Diocesan Board of Finance

Statement of Cash Flows for the year ended 31 December 2023

Reconciliation of net income/(expenditure) to net cash flow from operating activities

Note 2023 £'000 Net income/(expenditure) for the reporting period (as per the Statement of Financial Activities) 714 (Gains)/Losses on investments 14 (1,032) Dividends, interest and royalties from investments (519) (Profit)/loss on the disposal of fixed assets (764) (Increase) in debtors (414) (Decrease)/Increase in creditors (1,025) Net cash (used in) operating activities (3,040) Statement of Cash Flows 2023 £'000 Net cash (used in) operating activities (3,040) Cashflows from investing activities Dividends, interest and royalties from investments 518 Payments to acquire fixed assets (1,744) Payments to acquire investments (25) Receipts from disposal of tangible fixed assets 4,967 3,716 Increase in cash in the year 676 Reconciliation of net cash flow to movement in cash and cash equivalents 2023 £'000 Increase in cash in the year 676 Cash and cash equivalents at the beginning of the reporting period 7,321 Cash and cash equivalents at the end of the reporting period 7,997	2022 £'000 (1,788) 1,455 (424) - (372) 833
	(296) 2022 £'000 (296) 424 (1,633) (25) 2,299
	1,065
	769
	2022 £'000 769
	6,552
	7,321

Chester Diocesan Board of Finance

Notes to the accounts for the year ended 31 December 2023

1. Accounting policies and format of accounts

Basis of Preparation

The financial statements have been prepared on the basis of historical cost with the exception that tangible fixed assets are included at fair value and investments at market value.

The financial statements have been prepared in accordance with the Charities SORP (FRS 102) Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), the Companies Act 2006 and the Charities Act 2011.

Income

All income is included in the Statement of Financial Activities (SoFA) when the charity is has entitlement to the income, it is probable that the income will be received, and the amount of income receivable can be measured reliably. In respect of contributions from parishes there is no legal entitlement to income, but there is a high commitment from parishes to pay. They are therefore included on the same basis as above, where there is a reasonable prospect of receipt.

Parochial contributions - parishes contribute based on number of incumbent status clergy and a socioeconomic assessment of ability to pay using information derived from the 2011 census. Parish share is accounted for in the period to which it relates. Provisons are made against any amounts of parish share not considered to be collectable.

Grants and other donations - the DBF receives a number of unrestricted and restricted grants, together with recharges where staff are employed on joint contracts.

Investment income - dividends and interest, mainly arising from endowment funds. About half of the income is specifically restricted to funding the payment of stipends; the majority of the remainder is restricted for a range of other purposes.

Rental income - mainly on parsonages where the parish is in vacancy, together with glebe property.

Statutory clergy fees - almost all clergy now assign the legal right to fees for weddings, funerals and sessions of visiting to the DBF.

Diocesan Retreat and Conference Centre - fees from parishes and individuals attending events at the centre.

Other income from operating activities - including fees for training courses, together with income resulting from the winding up of trusts where the proceeds are payable to the DBF. Also other ad-hoc items of income that do not fall into the other income categories.

Expenditure

Expenditure is included on the accrual basis and has been classified under headings that aggregate all of the costs related to the category. Where costs cannot be directly attributed to a particular heading they have been allocated to activities on a basis consistent with the use of the resources.

Going concern

The trustees make an assessment of the Charity’s ability to continue as a going concern for a period of at least twelve months from the date on which the financial statements were signed. Having performed the assessment, the Trustees conclude that the Charity is able to continue to operate as a going concern and that it is appropriate to prepare the financial statements on a going concern basis. Chester DBF is heavily supported by Parish Share contributions, and collection rates are under some pressure in the current economic environment. In extreme conditions, the DBF has reasonable reserves, could apply the Capital Reserve Stipends Fund to the payment of stipends, and a number of properties could potentially be mortgaged.

In making the assessment, the Trustees did not consider there to be any material uncertainty relating to events or conditions that individually or collectively may cast significant doubt on Charity’s ability to continue as a going concern. In addition, the trustees consider that the Board has sufficient reserves to continue operations.

Chester Diocesan Board of Finance

Notes to the accounts for the year ended 31 December 2023

Allocation of support costs

Support costs are allocated by reference to the activities generating those costs. This inevitably involves estimates, for example a number staff at the diocesan office are involved in more than one area of activity, so an estimate has to be made of the proportion of time devoted to each. Some items, namely legal fees, are allocated directly to the appropriate sphere of activity. The allocation of support costs is shown in note 5.

Grant making policy

The DBF makes a variety of grants to clergy, their dependants, parishes and organisations as need arises and in furtherance of its charitable objects.

Funds

The Statement of Financial Activities shows funds as follows:-

Unrestricted Funds

These are funds available for the general purposes of the Board. Part of the Board's unrestricted funds are designated, that is, set aside for specific purposes.

Restricted Funds

Where there is a specific restriction on the use of a fund, typically imposed by the donor, it is known as restricted. Restricted income is added to the relevant restricted fund, and not to unrestricted, general funds. The Board's restricted funds are shown in note 20.

Endowment Funds

Some of these funds are investments held to produce income, and are sometimes called capital funds. The income from endowment funds is added to the relevant restricted fund. In addition, benefice property, that is, vicarages used to house parish clergy, are also included at fair value in endowment funds. The Board's endowment funds are shown in note 19.

Fixed Assets

Freehold land and buildings held for the board's charitable purposes, are included at fair value as at the balance sheet date using valuations obtained from a qualified valuer. Fixed assets are valued on a rolling five year basis.

Glebe property

Diocesan Glebe property is vested in the DBF under the Endowments and Glebe Measure 1976. It comprises a small number of houses the majority of which are occupied by clergy, together with a range of agricultural and other holdings. These are mainly historical in nature, for example a field adjacent to a vicarage. Any income generated by Glebe property is restricted for the payment of stipends.

Parsonages

Parsonages for the housing of parish clergy are included in fixed assets at fair value. Under s.8 of the Church Property Measure 2018, the DBF may, subject to approval by the Church Commissioners, make a determination that a parsonage house and/or parsonage land which is no longer required for the incumbent’s official residence should be transferred to the DBF. Under s.13 of the Church Property Measure 2018, the proceeds of sale of a parsonage house are paid to the Parsonages Board for the diocese, which will then apply the monies to a variety of purposes with the ultimate application of monies being to credit the diocesan Pastoral Account, to the extent that these are not required for the purchase or improvement of parsonage houses. The directors therefore conclude that the DBF controls the parsonage houses, by virtue of its ability to make determinations under s.8, and that it is probable that economic benefit associated with the parsonage houses will flow to the DBF, because the ultimate application of the sale proceeds is to credit one or more of the funds of the DBF. The assets are held on trust, so they form part of the DBF’s restricted funds and, being capital in nature, the directors have recognised the assets as an expendable endowment fund.

Parsonage building funds, which typically arise on the sale of a benefice house in advance of its replacement, are also included in the same expendable endowment fund.

Chester Diocesan Board of Finance

Notes to the accounts for the year ended 31 December 2023

Depreciation

Depreciation is not provided on buildings as any provision would not be material due to the long expected remaining useful economic lives, and because expected residual values are not materially less than carrying value. The DBF has a policy of regular inspection, repair and maintenance, which in the case of residential properties is in accordance with the Repair of Benefices Measure 1972. Disposals of properties tend to occur well before the end of their economic lives, and disposal proceeds are usually not less than carrying value. Impairment reviews are undertaken to ensure that the carrying value is not more than the recoverable amount.

Investment property

Property is held by the DBF for long term charitable use, or to protect another charitable asset. As such, the DBF does not hold any investment property.

Fixtures and Fittings

The cost of replacing fixtures, fittings, computers and other office equipment is generally immaterial. As a result, such items are not capitalised and are written off in the year of purchase.

Investments

Investments are stated at fair value as at the balance sheet date.

Unrealised gains or losses arising on the revaluation of investments are, together with the realised gains and losses arising on the sale of investments, shown in the SoFA as net gains/(losses) on investments.

Cash and Cash Equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

Taxation

No provision is made for taxation as the company is a charity entitled to the various exemptions afforded by the Corporation Taxes Act 2010.

Financial Instruments

Financial assets and financial liabilities are recognised when the company becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are initially measured at transaction price (including transaction costs).

The company only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value.

Trade and other debtors are recognised at the settlement amount due after any trade discount offered.

Creditors and provisions are recognised where the company has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due.

Pension schemes

The Board of Finance contributes to the Church Workers Pension Fund (for lay staff) and the Church of England Funded Pension Scheme (for clergy). Both of these schemes are defined benefit multi-employer pension schemes and it is not possible to identify the assets and liabilities of the schemes which are attributable to the Board.

In accordance with FRS 102, payments to the schemes are accounted for as for defined contribution schemes. Contributions payable in respect of the accounting period are included in Expenditure in the Statement of Financial Activities.

The Board entered in to a deficit contribution plan concerning the Church of England Funded Pension Scheme. Future additional contributions were discounted and resulted in a liability being reflected in the balance sheet. The interest cost of the debt was reflected in the Statement of Financial Activities with the payments (less interest) being offset against the liability. No further deficit contribution payments are required beyond 31 December 2022, so the liability at the balance sheet date is nil.

Further detail is provided in notes 24 and 25.

Chester Diocesan Board of Finance

Notes to the accounts for the year ended 31 December 2023

Judgements in applying accounting policies and key sources of estimation uncertainty

In preparing these financial statements, the trustees have made the following judgements:

Valuation of freehold property – freehold property is held at fair value. In order to determine fair value, advice is taken from independent qualified valuers. In this context, judgement is exercised in a number of areas, including local market conditions and investor demand.
Actuarial assumptions in respect of defined benefit pension schemes - The application of actuarial assumptions, relating to the defined benefit pension schemes that staff are members of, is incorporated in the financial statements in accordance with FRS 102. In applying FRS 102, advice is taken from independent qualified actuaries. In this context, significant judgement is exercised in a number of areas, including future changes in salaries and inflation, mortality rates and the selection of appropriate discount rates.

Other key sources of estimation uncertainty include:

Provision for bad debts (parish share arrears) – provision required against parish share arrears is arrived at in consultation with those who have awarenessof the financial position of the parishes being; finance staff, Archdeacons and parish treasurers.
Other – there is estimation uncertainty in other areas, such as outstanding clergy fees and accruals of building works complete. The uncertainty in these areas is considered to be significantly lower.

2. Auditors remuneration

The auditors remuneration (inclusive of VAT at 20%) for the year was as follows:-

Statutory audit Additional costs relating to 2021 audit 3. Grants and other donations Donations to Foxhill Conference Centre Grant from Benefact Trust Ministry Hardship granst Archbishops Council Energy support grants Archbishops Council SMMIB grants Grant to Clergy Sustentation Fund Archbishops Council Grant towards the cost of Past Cases Review 2 Archbishops Council Grant towards the cost of Wirral Waters project Archbishops Council Grant - Net Zero 2030 Birkenhead legacy Donations to Outreach department Church Commissioners Resourcing Ministerial Education block grant Diocesan Stipends Fund (housing allowances and Emmanuel theological College) Chester Diocesan Board of Education recharge 4. Investment Income Investment and fixed interest funds CBF deposits and bank interest Other income including interest on loans to parishes	2023 £'000 35 - 35 2023 £'000 2 150 - - 91 11 6 45 15 28 1 217 86 375 1,027 2023 £'000 358 154 7 519	2022 £'000 33 7
		40 2022 £'000 2 172 87 299 49 - 30 - - - 26 295 184 367
		1,511
		2022 £'000 365 52 7
		424

Chester Diocesan Board of Finance

Notes to the accounts for the year ended 31 December 2023

5. Allocation of Central services and support costs

The Diocesan Board of Finance allocates its support costs according to the percentages below, apart from some legal fees allocated to the area to which they relate.

Church House Central services Central staff Legal, financial Governance Prior year comparative Church house Central services Central staff Legal, financial Governance	Generating Parochial clergy Support to Retreat and Total voluntary and clergy and Conference 2023 income Archdeacons parishes Centre 2% 20% 75% 3.0% 100% £'000 £'000 £'000 £'000 £'000 3 28 104 4 139 3 28 103 4 138 12 121 454 18 605 1 13 62 2 78 1 14 51 2 68
	20 204 774 30 1,028
	Generating Parochial clergy Support to Retreat and Total voluntary and clergy and Conference 2022 income Archdeacons parishes Centre 2% 20% 75% 3.0% 100% £'000 £'000 £'000 £'000 £'000 1 15 55 2 73 3 27 102 4 136 13 120 448 18 599 2 24 104 4 134 1 14 53 2 70
	20 200 762 30 1,012

Chester Diocesan Board of Finance

Notes to the accounts for the year ended 31 December 2023

6. Expenditure Note Generating voluntary income Central Services & support costs Investment and rental costs Rental costs Value linked loan interest paid Charitable Activities National church responsibility Parochial clergy and archdeacons Parochial Clergy and Archdeacons stipends Maintenance of clergy housing National ministry training and ordinands grants Central Services & support costs Parsonage improvements Support to clergy and parishes Ministry Bishops' and Archdeacons' support, DAC, Chaplains & Ecumenical Education Outreach Safeguarding Vision & strategy Discretionary and one off items (EIG) Clergy/Lay conferences Grants to parishes, clergy and others 7 Change in value of Harrison Legacy receivable Central Services & support costs Retreat and Conference Centre Diocesan Retreat and Conference Centre Central Services & support costs Other expenditure on operating activities Loss on property disposals Change in Church of England Funded Pension Scheme (CEFPS) agreed deficit recovery plan 26	Total 2023 £'000 20 91 7 98 377 8,082 1,678 940 204 10,904 561 345 224 375 348 231 90 12 1 349 26 774 2,775 392 30 422 305 305 - 15,462	Total 2022 £'000 20 73 6
		79 363 8,016 1,429 996 200
		10,641 524 347 244 367 310 301 49 4 99 462 24 762
		2,969 398 30
		428 -
		- (123)
		14,901

Chester Diocesan Board of Finance

Notes to the accounts for the year ended 31 December 2023

7. Grants to parishes, clergy and others Grants to parishes Bp Birkenhead legacy Pastoral account grants to parishes Marton - E J Massey trust Birkenhead Priory - clerical or lay assistance Thornton Hough - Fryer Legacy income Twemlow trust - Balterley Energy grants Grants to Individuals and others No. of grants Foxhill grants 19 Clergy Sustentation grants 2 Retired Clergy, Widows and Dependents Fund grants 13 Ministry Hardship grants 2 Total grants 8. Staff and Office holder costs and numbers Staff costs Wages & salaries Social security costs Pension costs Average staff numbers based on full time equivalents Cost of generating voluntary income Funding of parochial clergy and archdeacons Support to clergy and parishes Diocesan Retreat and Conference Centre Diocesan administration and central support The number of staff whose salary excluding pension contributions amounted to more than £60,000 were as follows:- £60,001 - £70,000 £70,001 - £80,000 £80,001 - £90,000 These employees accrued benefits in the Church of England Defined Benefits Pension Scheme	2023 £'000 - 265 4 5 4 3 24 305 4 2 34 4 44 349 2023 £'000 1,777 173 279 2,229 2023 Number 0.5 4.5 19.2 8.5 10.6 43.3 2023 1 - 1 (note 23).	2022 £'000 14 55 4 5 4 2 265
		349 13 1 30 69
		113
		462 2022 £'000 1,769 174 287
		2,230
		2022 Number 0.5 5.1 18.5 8.6 9.6
		42.3 2022 - 1 -

In addition to the above, the charity had the equivalent of 6.7 (2022 7.1) full time employees under joint contracts with Chester Diocesan Board of Education. Their employment costs are borne by the charity and recharged to Chester Diocesan Board of Education (note 12).

Average head count for the year was 55.5 (2022 56.2) while the head count of employees under joint contracts with Chester Diocesan Board of Education was 7.4 (2022 8).

Chester Diocesan Board of Finance

Notes to the accounts for the year ended 31 December 2023

Office holders costs and numbers

In addition to those paid as employees of the DBF there are a large number of office holders. In the main these are clergy in parishes, but also include Archdeacons and a small number of diocesan sector posts. There was an average of 191 (2022 196) full time equivalent office holders during the year.

Clergy Stipends Clergy National Insurance Clergy Pension Contributions Other clergy payments	2023 £'000 5,640 462 1,420 365 7,887	2022 £'000 5,450 465 1,808 310
		8,033

9. Termination payments

Termination payments totalling £42,620 (2022 98,222) were made or accrued in the year.

10. Trustee remuneration and benefits

Bishops' Council, the charity trustee body, and the board of directors of the charitable company, have the same membership. So every trustee is a director, and vice versa.

Trustee remuneration

No remuneration was paid to any of the directors (charity trustees) in their capacity as directors of the company.

The following trustees were in receipt of a stipend and provided with housing for some or all of the year, funded by the DBF:-

Ven Dr Michael R Gilbertson, Archdeacon of Chester	Revd Andrew Q Greenhough
Ven Ian G Bishop, Archdeacon of Macclesfield until 29 Sep 2023	Revd Gary Kennaugh
Revd Joshua C Askwith	Revd Dr Robert S Munro
Revd Canon Elaine Chegwin Hall	Revd Richard L Pennystan
Revd George T Crowder	Revd Michael L Ridley
Revd Leslie S Currie	Revd Michael I A Smith
Revd Simon Drew, Chair, House of Clergy, Diocesan Synod	Revd Christina P Upton
Revd Simon R Gales	Revd David A Vestergaard

The Rt Revd Julie A Conalty, Bishop of Birkenhead, was in receipt of a stipend and housing allowance, the stipend funded by the Church Commissioners and the housing allowance funded by the DBF.

The Rt Revd Samuel J C Corley, Bishop of Stockport, was in receipt of a stipend and provided with housing, the stipend funded by the Church Commissioners and the housing provided by the DBF.

The Very Revd Timothy R Stratford, Dean of Chester, was in receipt of a stipend funded by the Church Commissioners and housing funded by Chester Cathedral.

Chester Diocesan Board of Finance

Notes to the accounts for the year ended 31 December 2023

The stipends of the Diocesan Bishop and Suffragan Bishops are funded by the Church Commissioners and are in the range £39,477 - £48,389 (2022 £37,955 - £46,525). The stipend, funded by the DBF, paid to Archdeacons was £38,593 (2022 £37,106). The stipend paid to the Dean of Chester was £39,477 (2022 £37,955). Other clergy who were Trustees were paid stipends in the range £28,585 - £30,575 (2022 £27,090 – £28,975).

Trustee expenses

A total of £12,792 (2022 £13,365) was reimbursed to 12 (2022 12) directors during the year. Nearly all expenses reimbursed to directors are in respect of their charitable work for the Diocese. Amounts in respect of their duties as charity trustees are small.

11. Remuneration of key management personnel

The trustees have delegated much of the day to day running of the DBF to a number of key management personnel. The remuneration of these personnel, including employers national insurance, totalled £492,793 (2022 £460,555 restated), together with pension contributions of £90,211 (2022 £93,752 restated). Of these, the highest paid was George Colville, who received £84,064 (2022 £79,663) excluding employers national insurance, together with pension contributions of £25,042 (2022 £27,322). The key management personnel are listed on page 3 of the Annual Report.

12. Related party transactions

Chester Diocesan Board of Education acts as the education authority for the Church of England in the Diocese of Chester, and as such has objects that are closely aligned with those of the charity.

Chester Diocesan Board of Education funding of joint employment contracts 13. Tangible Fixed Assets Freehold Land and Buildings Board Glebe Parsonages £'000 £'000 £'000 Cost or Valuation Balance at 1 January 9,533 5,855 117,223 Additions 302 - 1,442 Disposals (678) - (4,289) Profit/loss on disposals (22) - 786 Revaluations (169) 116 18,928 Balance at 31 December 8,966 5,971 134,090	2023 £'000 375 Total 2023 £'000 132,611 1,744 (4,967) 764 18,875 149,027	2022 £'000 367
		Total 2022 £'000 126,334 1,633 (2,299) - 6,943
		132,611

The Board's property comprises the office at Daresbury Park, the conference centre at Foxhill together with associated buildings, a small number of closed churches, together with a small number of residential properties, some of which are used to house diocesan appointees. Glebe property comprises a small number of residential properties together with a range of mainly agricultural holdings. Any income arising from Glebe property is restricted to the funding of stipends.

In addition, parsonages for the housing of parish clergy are included in fixed assets at fair value.

All land and buildings are held at valuation. A full desk top valuation was performed by Fisher German LLP as at 31 December 2021, together with site visits where appropriate. From 31 December 2022 and for following years this, property is being revalued on at least a rolling five year basis with many valuations taking place at the same time as quinquennial inspections. Where valuations have taken place early in the calendar year, they have been indexed to the end of the year using the nationwide house price indices for the north west. For each class of property, the average percentage change in the value of revalued properties has been applied to the remaining properties of that class not individually valued that year.

The surplus on revaluation has been credited to the Statement of Financial Activities for the year.

In part due to the length of time that many of the buildings have been held, full historic cost information is not available.

Chester Diocesan Board of Finance

Notes to the accounts for the year ended 31 December 2023

14. Investments Market Value at 1 January Acquisitions at cost Net (losses)/gains on revaluation Market Value at 31 December Investments at 31 December comprise No of shares CBF Church of England Investment Fund 534,462 CBF Church of England Fixed Interest Fund 30,414 CBF Church of England Property Fund 409,765 Churches' Mutual Credit Union Deferred £1 10,000 15. Debtors Amounts falling due within one year Loan to Liverpool DBF Other debtors Prepayments and accrued income Other loans Amounts falling due after more than one year (presentation???) Loans to parishes Loan to Liverpool DBF Value linked loans to parishes (note 18) Total debtors	2023 Market Value £'000 12,173 44 502 10 12,729	2023 £'000 11,671 26 1,032 12,729 No of shares 534,462 30,414 389,805 10,000 2023 £'000 13 206 1,569 10 1,798 11 47 83 141 1,939	2022 £'000 13,101 25 (1,455)
			11,671
			2022 Market Value £'000 11,118 42 501 10
			11,671
			2022 £'000 13 359 989 10
			1,371 11 60 83
			154
			1,525

Debtors are valued at the undiscounted amount receivable.

The loan to Liverpool DBF was arranged as £100,000 repayable over 15 years interest free. The loan was made to assist Liverpool DBF with constructing premises for the use of St Mellitus, a training institution with similar objectives to the DBF, and that provided training for the DBF. This activity is now carried out by Emmanuel Theological College.

Value linked loans to parishes have no fixed repayment date and are repayable to the Church Commissioners only on the disposal of the property against which security is held. As a result, the majority of these balances are likely to be repayable after more than one year.

16. Cash at bank, on deposit and in hand

Balances held by Church Commissioners Cash in hand, at bank and on bank deposit Charity Bank Deposit CBF Church of England Deposit Fund	2023 £'000 (3) 3,936 3 4,061 7,997	2022 £'000 (5) 3,834 3 3,489
		7,321

Chester Diocesan Board of Finance Notes to the accounts for the year ended 31 December 2023

17. Creditors: amounts falling due within one year

17. Creditors: amounts falling due within one year
Trade creditors Accruals Other creditors Creditors are valued at the undiscounted amount payable. 18. Creditors: amounts falling due after more than one year Value linked loans for parishes (note 15) Creditors are valued at the undiscounted amount payable.	2023 £'000 290 454 18 762 2023 £'000 83 83	2022 £'000 338 503 946
		1,787
		2022 £'000 83
		83

Value Linked Loans from the Church Commissioners are loaned on to parishes on the same terms that they are borrowed. The outstanding loans are for the purpose of assisting the provision of housing for assistant clergy. The loans become repayable on disposal of the property or by agreement between the parish, the DBF, and the Church Commissioners. Value linked loan interest is charged at interest rates of 6.4-7.5% pa, the same rate at which the funds are borrowed from the Church Commissioners. Interest payable is included in note 6.

Chester Diocesan Board of Finance

Notes to the accounts for the year ended 31 December 2023

19. Endowment Funds

The endowment funds comprise capital funds, the income of which is credited to the relevant unrestricted or restricted fund:-

Diocesan Conference Centre Steel & William Fletcher Rogers Fund Retired Clergy, Widows and Dependants Fund Clergy Sustentation Fund Birkenhead Curacy Fund E J Massey Twemlow trust Glebe Land & Buildings Diocesan Stipends Fund Capital Account Benefice property Prior year comparatives:- Diocesan Conference Centre Steel & William Fletcher Rogers Fund Retired Clergy, Widows and Dependants Fund Clergy Sustentation Fund Birkenhead Curacy Fund E J Massey Twemlow trust Glebe Land & Buildings Diocesan Stipends Fund Capital Account Benefice property	1 January 2023 £'000 137 84 2,799 177 169 137 84 5,855 4,027 117,637 131,106 1 January 2022 £'000 155 95 3,171 201 191 155 - 5,562 4,533 111,750 125,813	(Expenditure) gains/(losses) 31 December Income and transfers 2023 £'000 £'000 - 13 150 - 7 91 - 266 3,065 - 17 194 - 16 185 - 13 150 7 91 - 116 5,971 - 362 4,389 - 18,509 136,146 - 19,326 150,432 (Expenditure) gains/(losses) 31 December Income and transfers 2022 £'000 £'000 - (18) 137 - (11) 84 - (372) 2,799 - (24) 177 - (22) 169 - (18) 137 84 84 - 293 5,855 - (506) 4,027 - 5,887 117,637 - 5,293 131,106	(Expenditure) gains/(losses) 31 December Income and transfers 2023 £'000 £'000 - 13 150 - 7 91 - 266 3,065 - 17 194 - 16 185 - 13 150 7 91 - 116 5,971 - 362 4,389 - 18,509 136,146 - 19,326 150,432 (Expenditure) gains/(losses) 31 December Income and transfers 2022 £'000 £'000 - (18) 137 - (11) 84 - (372) 2,799 - (24) 177 - (22) 169 - (18) 137 84 84 - 293 5,855 - (506) 4,027 - 5,887 117,637 - 5,293 131,106
			131,106

Permanent Endowment

Diocesan Conference Centre Held to produce income for the Foxhill Conference Centre Steel & William Fletcher Rogers Fund Making of grants for women and girls in need on the Wirral Retired Clergy, Widows and Dependants F Making of grants for relief in need of retired clergy, widows, spouses of the clergy, and in certain circumstances meeting the cost of clergy pension contributions Clergy Sustentation Fund Making of grants to members of the clergy in need of assistance. Birkenhead Curacy Fund Fund for clerical or lay assistance at Birkenhead Priory Parish E J Massey For the maintenance and upkeep of church and churchyard at Marton Twemlow trust The trust arose to pay grants to Honorary Canons of Chester Cathedral with a wish that they preach at Balterley Memorial Chapel.

Expendable endowment

Glebe Land & Buildings Diocesan Stipends Fund Capital Account

Benefice property

Glebe property, the rental income from which is used for funding stipends The accounts are governed by the Diocesan Stipends Measure 1953 as amended by the Glebe Measure 1976, the National Institutions Measure 1998, and the Miscellaneous Provisions Measure. The main function of the fund is to provide income for stipends; it can also be used for other purposes permitted by the Measures.

Benefice houses - vicarages/parsonages, together with any parsonage building funds held for specific benefices.

Chester Diocesan Board of Finance

Notes to the accounts for the year ended 31 December 2023

20. Restricted Funds

The income funds of the Board of Finance include restricted funds comprising the following unexpended balances of donations and grants held on trust to be applied for specific purposes:-

Capital Reserve Stipends Clergy Sustentation UPA Projects Canon White Trust Jane Hannah Graham Trust Retired Clergy Widows and Dependants Steel & William Fletcher Rogers Fund Twemlow trust Parish Mission and Ministry Diocesan Pastoral Account Birkenhead Curacy Fund Foxhill Retreat Fund RME block grant Ministry hardship Parish energy grants Harrison legacy Net Zero Wirral Waters Restricted Committee income Prior year comparatives:- Capital Reserve Stipends Clergy Sustentation UPA Projects Canon White Trust Jane Hannah Graham Trust Retired Clergy Widows and Dependants Steel & William Fletcher Rogers Fund Twemlow trust Parish Mission and Ministry Diocesan Pastoral Account Birkenhead Curacy Fund Foxhill Retreat Fund RME block grant Ministry hardship Parish energy grants Harrison legacy Restricted Committee income	1 January 2023 £'000 3,558 42 14 2 339 658 39 - 27 3,267 - 162 188 18 34 652 - - - 9,000 1 January 2022 £'000 4,030 30 14 2 336 573 36 - 27 3,308 7 182 142 - - 676 - 9,363	Income (Expenditure), Gains, (Losses) & Transfers £'000 £'000 - 337 17 (1) 1 - - - 3 - 103 (40) 4 - 2 (2) - - 194 223 5 (5) - 2 217 (215) - (4) - (24) - (26) 15 (4) 45 (45) 1,601 (1,601) 2,207 (1,405) Income (Expenditure), Gains, (Losses) & Transfers £'000 £'000 - (472) 13 (1) - - - - 3 - 96 (11) 3 - 2 (2) - - 67 (108) 5 (12) 5 (25) 295 (249) 87 (69) 299 (265) - (24) 1,664 (1,664) 2,539 (2,902)	31 December 2023 £'000 3,895 58 15 2 342 721 43 - 27 3,684 - 164 190 14 10 626 11 - -
			9,802
			31 December 2022 £'000 3,558 42 14 2 339 658 39 - 27 3,267 - 162 188 18 34 652 -
			9,000

*In all cases Committee expenditure exceeds restricted income, the balance being funded from unrestricted funds.

Chester Diocesan Board of Finance Notes to the accounts for the year ended 31 December 2023

Details of the Restricted funds are as follows:	Details of the Restricted funds are as follows:
Capital Reserve Stipends	Fund for payment of stipends
Clergy Sustentation	The charity is endowed (see note 20) The income is for the making of grants to members
	of the clergy in need of assistance.
UPA Projects	Raised for projects in Urban Priority Areas.
Canon White Trust	Repair and restoration of churches in the Diocese.
Jane Hannah Graham Trust	The making of grants and loans for the provision, restoration and repair of churches and
	parsonage houses.
Retired Clergy Widow and Dependants	The charity is endowed (see note 20) Making of grants for relief in need of retired clergy,
	widows, and spouses of the clergy. In certain circumstances meeting clergy pension
	contributions.
Steel and William Fletcher Rogers Fund	The charity is endowed (see note 20) Making of grants for women and girls in need on
	the Wirral.
Twemlow trust	The charity is endowed (see note 20). The trust arose to pay grants to Honorary Canons
	of Chester Cathedral with a wish that they preach at Balterley Memorial Chapel.
Parish Mission and Ministry	Funding from Archbishops Council. Can be spent on parish mission and ministry
	activities, or stipends.
Diocesan Stipends Income Fund	Applied towards the payment of stipends
Birkenhead Curacy Fund	Fund for clerical or lay assistance at Birkenhead Priory Parish
Foxhill Retreat Fund	The fund arose from a donation from the former Chester Retreat House and is to be
	used to fund Retreats.
Diocesan Pastoral Account	The account is governed by the section 78 of the Pastoral Measure 1983. It must initially
	be used in meeting the costs incurred for the purposes of the measure, or in meeting
	the costs of disposing of or maintaining houses or churches vested in the DBF or Church
	Commissioners. If the DBF is satisfied the fund is not required or likely to be required
	for the above, it may be applied to other purposes of the diocese or any benefice or
	parish in the diocese.
RME Block grant	Archbishops Council grant funding for the training of ordinands.
Harrison legacy	The DBF is due to receive a legacy for the support of children, young people and
	families in the Diocese of Chester.
Ministry hardship	Funding from Archbishops Council. Used to make cost of living assistance grants to
	clergy
Parish energy grants	Funding from Archbishops Council. Used to make grants to parishes to assist with the
	cost of energy.

Chester Diocesan Board of Finance Notes to the accounts for the year ended 31 December 2023

21. Analysis of net assets between funds

Tangible Fixed Assets £'000 Unrestricted Funds General Funds 4,323 Designated Office refurbishment - EIG Reserve - Lay Training - Fryer Trust - Bishop of Birkehead house - Bishop of Birkenhead Fund - Diocesan Conference Centre 2,928 Total Unrestricted Funds 7,251 Restricted Funds Capital Reserve Stipends - Clergy Sustentation - RME block grant - UPA Projects - Canon White Trust - Jane Hannah Graham Trust - Retired Clergy Widows and Dependants 258 Pastoral Account 1,457 Parish Mission and Ministry - Net Zero - Foxhill Retreat Fund - Steel & William Fletcher Rogers - Ministry Hardship Fund - Parish Energy grants - Harrison Legacy - Total Restricted Funds 1,715 Endowment Funds Diocesan Conference Centre - Steel & William Fletcher Rogers - E J Massey - Twemlow trust - Retired Clergy Widows and Dependants - Clergy Sustentation Fund - Glebe Land & Buildings 5,971 Birkenhead Curacy Fund - Diocesan Stipends Fund Capital - Benefice property 134,090 Total Endowment Funds 140,061 Total Funds 149,027	Investments £'000 10 502 - - 143 - - - 655 3,895 - - - - - - - - - 83 - - - - 3,978 150 91 150 91 3,065 194 - 185 4,170 - 8,096 12,729	Net Current Assets £'000 1,933 - 133 18 - 678 28 - 2,790 - 58 190 15 2 342 463 2,227 27 11 81 43 14 10 626 4,109 - - - - - - - - 219 2,056 2,275 9,174	Long term Liabilities £'000 (83) - - - - - - - (83) - - - - - - - - - - - - - - - - - - - - - - - - - - - (83)	2023 Total Net Assets £'000 6,183 502 133 18 143 678 28 2,928 10,613 3,895 58 190 15 2 342 721 3,684 27 11 164 43 14 10 626 9,802 150 91 150 91 3,065 194 5,971 185 4,389 136,146 150,432 170,847	2022 Total Net Assets £'000 7,068 501 145 18 130 - - 3,290
					11,152
					3,558 42 188 14 2 339 658 3,267 27 - 162 39 18 34 652
					9,000
					137 83 137 84 2,800 177 5,855 169 4,027 117,637
					131,106
					151,258

Chester Diocesan Board of Finance Notes to the accounts for the year ended 31 December 2023

Prior year comparatives:-

Tangible Fixed Assets £'000 Unrestricted Funds General Funds 4,436 Designated CEFPS deficit recovery plan - Office refurbishment - EIG Reserve - Lay Training - Fryer Trust - Bishop of Birkenhead Fund - Diocesan Conference Centre 3,290 Total Unrestricted Funds 7,726 Restricted Funds Capital Reserve Stipends - Clergy Sustentation - RME block grant - UPA Projects - Canon White Trust - Jane Hannah Graham Trust - Retired Clergy Widows and Dependants 264 Pastoral Account 1,543 Parish Mission and Ministry - Foxhill Retreat Fund - Steel & William Fletcher Rogers - Ministry Hardship Fund - Parish Energy grants - Harrison Legacy - Total Restricted Funds 1,807 Endowment Funds Diocesan Conference Centre - Steel & William Fletcher Rogers - E J Massey - Twemlow trust - Retired Clergy Widows and Dependants - Clergy Sustentation Fund - Glebe Land & Buildings 5,855 Birkenhead Curacy Fund - Diocesan Stipends Fund Capital - Benefice property 117,223 Total Endowment Funds 123,078 Total Funds 132,611	Investments £'000 10 - 501 - - 130 - - 641 3,558 - - - - - - - - 77 - - - - 3,635 137 83 137 84 2,800 177 - 169 3,808 - 7,395 11,671	Net Current Assets £'000 2,705 - - 145 18 - - - 2,868 - 42 188 14 2 339 394 1,724 27 85 39 18 34 652 3,558 - - - - - - - - 219 414 633 7,059	Long term Liabilities £'000 (83) - - - - - - - (83) - - - - - - - - - - - - - - - - - - - - - - - - - - (83)	2022 Total Net Assets £'000 7,068 - 501 145 18 130 - 3,290
				11,152
				3,558 42 188 14 2 339 658 3,267 27 162 39 18 34 652
				9,000
				137 83 137 84 2,800 177 5,855 169 4,027 117,637
				131,106
				151,258

Chester Diocesan Board of Finance

Notes to the accounts for the year ended 31 December 2023

22. Transfers between funds

22. Transfers between funds
Transfers were made to unrestricted funds as follows:- To/(from) Restricted funds In respect of housing allowances (1) In respect of vicarage construction costs (2) Pastoral scheme releasing parsonage building fund (3) In respect of vicarage purchases/sales (4) Other transfers To/(from) Endowment funds In respect of vicarage construction costs (2) Pastoral scheme releasing parsonage building fund (3) In respect of vicarage purchases/sales (4) Total transfers to unrestricted funds	2023 £'000 (70) - - 1,205 3 1,138 - - (1,205) (1,205) 67	2022 £'000 (70) (300) 234 550 (6)
		408 300 (234) (551)
		(485)
		77

(1) A number of housing allowances are paid to clergy living in their own accomodation. These are funded from the pastoral account on the basis that there is no corresponding vicarage to buy and/or maintain.

(2) In 2022 this related to a payment to a developer. The existing vicarage at Prestbury was demolished and the developer constructed a new vicarage on part of the site. This was funded by payment of £300,000 together with transfer of part of the site to the developer.

(3) The parsonage building fund relating to the sale of the former vicarage at Liscard St Thomas was released to the Diocesan Pastoral Account by pastoral scheme in 2022.

(4) In 2023 surpluses on the replacements of Daresbury and Bebington vicarages were transfreed to the pastoral account, together with an additional receipts relating development at Prestbury and Poynton. Funds were also transferred from the Pastoral Account to fund the purchase of the replacement vicarage at Runcorn Weston. In 2022, the sale proceeds of the former vicarage at Wybunbury were transferred to the Diocesan Pastoral Account as the replacement had already been purchased. Also, the surplus on the replacement of the vicarage at Burton was transferred to the Diocesan Pastoral Account.

23. Staff Pensions Schemes

Chester DBF participates in the Church Workers Pension Fund for lay staff. The Scheme is administered by the Church of England Pensions Board, which holds the assets of the scheme separately from those of the Employer and the other participating employers.

The Church Workers Pension Fund has two sections, and Chester DBF participates in both:

the Defined Benefits Scheme
the Pension Builder scheme, which has two subsections; a. a deferred annuity section known as Pension Builder Classic, and, b. a cash balance section known as Pension Builder 2014.

Defined Benefits Scheme

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

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

The division of the DBS into sub-pools is notional and is for the purpose of calculating ongoing contributions. This does 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 (2023: £109,509, 2022: £107,262), 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 £109,509 for 2023 (2022: £107,262).

Chester Diocesan Board of Finance Notes to the accounts for the year ended 31 December 2023

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

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

The next actuarial valuation is due at 31 December 2022. The calculations for this are underway.

Following the 2019 valuation, the Employer has entered into an agreement with the Church Workers Pension Fund to pay a contribution rate of 35.4% of pensionable salary per year.

The movement in the provision is set out below:

Balance sheet liability at 1 January Deficit contribution paid Interest cost (recognised in SoFA) Remaining change to the balance sheet liability*(recognised in SoFA) Balance sheet liability at 31 December	2023 £'000 - - - - -	2022 £'000 - - - -
		-

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

Where relevant 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	December	December
	2023	2022	2021
Discount rate	n/a	0.00%	0.00%

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

Pension Builder Scheme

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

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

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

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

The scheme is considered to be a multi-employer scheme as described in Section 28 of FRS 102. This is because it is not possible to attribute the Pension Builder Scheme's assets and liabilities to specific employers and means that contributions are accounted for as if the Scheme were a defined contribution scheme. The pensions costs charged to the SoFA in the year are the contributions payable (2023: £165,129, 2022: £164,875).

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

For the Pension Builder Classic section, the valuation revealed a deficit of £4.8m on the ongoing assumptions used. At the most recent annual review effective 1 January 2024, the Board chose to grant a discretionary bonus of 6.7% to both pensions not yet in payment and pensions in payment in respect of service prior to April 1997; and a bonus on pensions in payment in respect of post April 2006 service so that the pension increase was 5% (where usually it would be calculated based on inflation up to 2.5%). This followed improvements in the funding position over 2023. There is no requirement for deficit payments at the current time.

For the Pension Builder 2014 section, the 2019 valuation revealed a surplus of £5.5m on the ongoing assumptions used. There is no requirement for deficit payments at the current time.

Chester Diocesan Board of Finance Notes to the accounts for the year ended 31 December 2023

The next valuation is due as at 31 December 2022. Calculations for this are currently under way.

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

24. Church of England Funded Pensions Scheme

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

Each participating Responsible Body in the Church of England Funded Pensions Scheme pays contributions at a common contribution rate applied to pensionable stipends.

The scheme is considered to be a multi-employer scheme as described in Section 28 of FRS 102. It is not possible to attribute the Scheme’s assets and liabilities to each specific Responsible Body, and this means contributions are accounted for as if the Scheme were a defined contribution scheme. The pensions costs charged to the SoFA in the year are contributions payable towards benefits and expenses accrued in that year, which were £1,413,076 in 2023 (2022: £1,606,271), plus any figures arising from contributions in respect of the Scheme's deficit (see below). The 2021 valuation showed the Scheme to be fully funded and as such in 2023, following the valuation results being agreed, the deficit contributions paid were £nil (2022: £202,000).

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

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

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

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

Increase in pensionable stipends in line with CPIH;

• Mortality in accordance with 90% of the S3NA tables, with allowance for improvements in mortality rates from 2013 in line with the CMI 2020 extended model with a long term annual rate of improvement of 1.5%, a smoothing parameter of 7, an initial addition to mortality improvements of 0.5% p.a. and an allowance for 2020 data of 0% (i.e. w2020 = 0%).

Following finanlisation of the 31 December 2021 valuation, deficit contributions ceased with effect from 1 January 2023, since the Scheme was fully funded.

The deficit recovery contributions under the recovery plan in force at each 31 December were as follows:

% of pensionable stipends 31 December 2021 7.1% payable from January 2021 to December 2022 31 December 2022 Nil 31 December 2023 Nil

An interim reduction to deficit contributions to 3.2% of pensionable stipends was made with effect from April 2022, and remained in place until December 2022.

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

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

Chester Diocesan Board of Finance Notes to the accounts for the year ended 31 December 2023

Balance sheet liability at 1 January Deficit contribution paid Interest cost (recognised in SoFA) Remaining change to the balance sheet liability* (recognised in SoFA) Balance sheet liability at 31 December	2023 £'000 - - - - -	2022 £'000 325 (202) - (123)
		-

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

This liability represents the present value of the deficit contributions agreed as at the accounting date and has been valued using the following assumptions. No assumptions are needed for December 2023 as there are no agreed deficit recovery payments going forward. No price inflation assumption was needed for December 2021 since pensionable stipends for the remainder of the recovery plan were already known.

	December	December	December
	2023	2022	2021
Discount rate	n/a	n/a	0.0% pa
Price inflation	n/a	n/a	n/a
Increase to total pensionable payroll	n/a	n/a	-1.5% pa

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

Chester Diocesan Board of Finance Notes to the accounts for the year ended 31 December 2023

25. Prior year comparative Statement of Financial Activities

Unrestricted Funds £'000 Income and endowments from Parochial contributions 11,290 Grants and other donations 175 Investment income 79 Rental income 237 Income from charitable activities Statutory clergy fees - Diocesan Retreat and Conference Centre 198 Other income from operating activities 50 Total Income 12,029 Expenditure on raising funds Cost of generating voluntary income 20 Investment and Rental costs 26 Charitable Activities National church responsibility 363 Funding of parochial clergy and archdeacons 9,273 Parsonage improvements - Support to clergy and parishes 2,013 Diocesan Retreat and Conference Centre 428 Change in CEFPS deficit recovery plan (123) Total Expenditure 12,000 Net income/(expenditure) before investment gains/(losses 29 Net gains/(losses) on investments (85) Net income (56) Transfers between funds 77 Other recognised gains/(losses) Gains/(losses) on revaluation of fixed assets 204 Net movement in funds 225 Reconciliation of funds: Total funds brought forward 10,927 Total funds carried forward 11,152	Restricted Funds £'000 - 1,336 345 126 679 - 53 2,539 - 53 - 1,368 524 956 - - 2,901 (362) (483) (845) 408 74 (363) 9,363 9,000	Endowment Funds £'000 - - - - - - - - - - - - - - - - - - (887) (887) (485) 6,665 5,293 125,813 131,106	Total 2022 £'000 11,290 1,511 424 363 679 198 103
			14,568
			20 79 363 10,641 524 2,969 428 (123)
			14,901

			(333) (1,455)
			(1,788) - 6,943
			5,155
			146,103
			151,258