THE CHURCH OF ENGLAND Diocese of Southwell & Nottingham SOUTHWELLAND NOThINGHAM DIOCESAN BOARD OF FINANCE ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2020 SOUTHWELL & NOThINGHAM DIOCESAN BOARD OF FINANCE TABLE OF CONTENTS For the ear ended 31 December 2020 Page Number Administrative Details Chairman's Foreword Legal Objects Trustees, Responsibilities Strategic Report-. Strategic aims Activities and achievements in the year Future plans Financial performance Principal risks and uncertainties 14 Independent Auditor s Report 17 Consolidated Statement of Financial Activitie5 21 Consolidated Income and Expenditure Account 22 Company Balance Sheet 23 Consolidated 8alance Sheet 25 Consolidated Cash Flowstatement 27 Notès to the Financial Statements 28 Growing Disciples Wider Younger Deeper SOUTHWELL & NOftlNGHAM DIOCESAN BOARD OF FINANCE ADMINISTRATIVE DETAILS For the ear ended 31 December 2020 Trustees In accordance with the Companies Act 2006, The Statement of Recommended Practice 2019 ISORP 20191 and Financial Reporting Standard 102 IFRS 1021, the Trustees Ifor the purposes of charity lawl and Directors (for the purposes of company lawl durin8 the year and as at the date of signing follow.. PRESIDENT The Bishop of Southwell and Nottingham, Right Revd Paul Williams BISHOP'S COUNCIL AND STANDING CONMIThEE OF THE DIOCESAN SYNOD (BEING THE FINANCIAL EXECUTIVE OF THE DIOCESAN SYNOD AND THE BOARD OF DIRECTORS OF THE BOARD OF FINANCE) EX-OFFICIO The Rt Revd The Bishop ofsouthwell & Nottingham The Rt Revd Th@ Bishop of ShepNood Thevery RevdThe Dean ofsouthwell The VenerableThe Archde3con of Newark lallbl (resigned IS January 2020. currently vacantl The VenerableThe Archdeacon OF Nottingham lal The Chairof the Houseofclergy ofthe Diocesan Synod Revd Canon M Adamslto30 November 20201. Revd S Hustwayte (appointed 10 February 20211 lal The Chair of the House of Laity of the Diocesan Synod Imr M Wilson) lal Ibl The Chair of the Finance Committee (Canon M Arlington) lal Co-opted The Revd Pshaw ELECTED BY THE SOUTHWELL & NOTtINGHAM DIOCESAN SYNOD CLERGY1S1 NewarkArchdeaconry121 Revd A Fletcher Revd Canon M Fshouler LAITY191 Newarli Archdeaconry141 Mr P Stanley (resigned 29 September 20201 lal Mr R Brand Mr C Perrett Professor P Harris Nottingham Archdeaconry131 Revd Canon S Silvester Revd C Bourne Revd S HustrNayte lal Nottingham Archdeaconry151 Mr C Slater lal Mrs S Dunster Miss S Waterston Mrs J Gray Mrcm Bolton lal MemberoF the Finance Committee Ibl Memberofthe Board ofEducation PRINCIPALOFFICERSANDADVISERS Diocesan Chief Executive &CompanySecretary Diocesan Registrar. Bishop's Legal Secretary & Legal Adviser to the Board of Finance Mrm Lcooper BAIHonsl FCAATII MrsAJ Redgate LLB Growing Disciples Wider Younger Deeper Page I SOUTHWELL & NOftlNGHAM DIOCESAN BOARD OF FINANCE ADMINISTRATIVE DETAILS For the ear ended 31 Decembor 2020 HEADS OF DEPARTMENTS Director of Discipleship & Ministry Director OF Partnerships & Mission Director of Education & Mission Director of Communications Director of Parish Support Director of Finance Revd Canon Dr R kellett 8Th{HO￿l, BSclHonsl. MA. PhD Revd D Mccoulough BAIHonslMA Mr N Frith BA MA NPQH lar¥K)inted2March20201 Mr R Ellis (resigned 31 May 20201 MrFMcNish Mrs R Al Bowes FCCA BANHERS INVESTMENT MANAGERS Lloyds Bank Nottingham CCLA Central Board of Finance of thechurch of En8land Cazenovecapitalmanagement Ltd Mayfair Capital Investment Management Ltd Ruffer LLP SOLICITORS CHARTERED SURVEYORS Rotheras. Nottingham Jas. Martin &Co, Lincoln Tanners, Nottingham Geo Hallam & Sons. Nottingham MINING. MINERALS. ENGINEERING & ENVIRONMENTALCONSULTANTS INSURERS Eccle5i3stical Insurance Group Mineral Surveying Associates AUDITOR BHPLLP 2 Rutland Parl< Sheffield S102PD REGISTEREDADDRESS Jiibilee House Westgate Nottingham NG25 OJH Growing Disciple5 Wider Vounger Deeper Page 2 SOUTHWELL & NOftlNGHAM DIOCESAN BOARD OF FINANCE CHAIRM/KN'S FOREWORD For the ear onded 31 December 2020 The past year represented a time of exiraordinary challenge that has affected the lives of everyone living in Lhe diocese and all those who share in the mission of the Church acr055 our parishes. 5choD15 ar)d diverse communitie5. 2020 siarted well with some clear progress in areas of our diocesan mission as we continued to fulfil rhe aspiration5 set out wiLhin our Growing Disciples srraie8y. At the centre of all our plannin8 and praying isacommitmeni toannounc@ theGood News oFGod's love inlesuschristand to invite all people to respond to hi5 saving gracÈ. At the beginning of the second decade of the 21" century we are convinced that there 15 nothing berter anyonecan dowirh their life than become a follower oflesus Christ. This realiiy is seer) in the stories of people of all backgrounds and ages comin8 ro faith in God. It a150 lies at the heart ofdecision makin8, managemeni ofresource5. creative devÈlopments,aswell as ¢h&st@ady and faithful 0rn8oin8 ministry of every parish. A5 a diocese we are a mission enrerpris@wh05e roots are woven in the fabric ofwhai ha5 made ar)d Shaped communiti@5 acr055 the region over many ceniuries. We are also a dynamic network of local churches whose common purpose is to live for Christ in our present age, mutually supportive of one another above all in seeking fresh ways to make Christ known, as well a5 demonsrraiing his tran5formlng love in ways that can bring hope and healing to all. Asignificant expressiori of our God-given ministry is ihrou8h our Church schcK)ls who have excelled in Iheir mission through Lhe past year, serving with immense courage and crearivity through every rwisi and turn created by thÈcoronaviru5 pandemic. Tr4arch 2020 brought about a dramatic change to &vEry or)e living in our nation. as the firsL restrictionswere put in place to suppr@55 the risin8 raios of coronavirus inFeciions. Within a few wÈeks the government announced a national'lockdown. which meant that all in-person 5ervice5 were suspended. Within a shorr time cler8y. lay min15tÈrs and con8re8ation5 across the diocese found new ways to 5UStain Lhe life of the church and Serve the most vulnerable In our communities. This included new on-line services and small groups to nurture faith in such difficuli Limes. as well as practical carÈ with churche5 supplying foodbanks offering care packa8es and joining with other stake holders to provide Support to rhose whowere self- isolating or livingalone. Ourchurch buildings may have been closed for a time but rhechurch wasvery much alive. Comin8 Out of Lhe first'lockdown,, while recogni5ing the challenges that were still ahead until vaccinations could found. many churches established patterns of ministry that ir)cluded on-line and in-person Services and groups. In the meantime. the Bishops Core Team began to develop a series ol worki Slreams that would support the accelorated change creaied by the circumstances ol coronavirus. The Bishop'5 Council, with slgnificant engagement from Area Deans,lubilee House staff and otherclergy and lay leaders. was able to hÈlp shape thi5 work w rhat it can be most effective while we discern how God is LVUiPPirn8 his Church for a new season of fruitful ministry. The key streams of worl< do nor create a new operaiional strategy but are intended to facilitate the accelerated chan8e that is already happenin8 Within our commitment to Growing Disciples. Seven strÈams ofwork Transformation Change Appointments Increasing the numbÈr of clergy apwintments that enable si8nificant change rhar can facilltate growth.. many of theso will be time-5pecific appointment5 that ensure we do not reduce the level of stipendiary ministry while maintaining flexibility in future deployment planning in the mpdium rerm. New modols of Local Mi55ional L@adership- Developing mor& quickly our planning in tralnin8 afbd commissioning people who are equipped and called to lead l(Kal mission. within new Initiativ￿ and existing parishes. Youth and Children Growing Disciplos Task Group- To build on the good hÈriiage ol children and youth ministry in the diocese. a5 well as rhe recent experience wirh the YoungLife learning communities, toaddress thesignificant neod 10 revitali5eour mission amon8 and wilh children and youth.. Includin8 the new Fx>55ibiliriesworkin8 in partnershipwiih our Church schools. A task group wès esrablishEd under the leadership of the 8ishop of Sherwood, re5ulring in an application for srrategic Development Fundin8 to help facilitatÈa and ambitions programme of mission. Growing Disciples Wider Younger Deeper Pase 3 SOUTHWELL & NOftlNGHAM DIOCESAN BOARD OF FINANCE CHAIRMAN'S FOREWORD Icontinuedl For the ear ended 31 December 2020 Communications Review- To review all aspeccs of our present communication strate8y in light of rhe newopportunities the past 12months has generatedwith social media plètforms. especially as we engageour'core consrituency as well a5 those prÈsontly beyond the life of the church Increasln8 Diversity- With renewed vision for a more diverse church. which includes addressing systemic issue5 that unintentionally limits our mi55ion and undermines the gospel. This is particularly in response to the issues raised by the death of George Floyd and the challenge it created for the Church. Well-being and Resilience Under the direction of the Principal for Well-being and Minisrry Development the diocese is developing new r&source5 ènd increasing awareness in addro55ing Relational, Physical. Mental and Spiritual Health. Prayer strream - Prayer is the engine of the Church in mission and in the cont&xt of increased challenge and change in society. we are 5eeklng 10 foster an inC￿a51n8 Èngagement with patterns of prayer rhat can 5UStain and inspire radical discipleship. Supporting the presenr and future shape of ministry in the diocese. weare grateFul that God has continued to call people Into new sph8re5 of service. as incumbents. curates, head teach@rs. into other forms of l&ader5hip in local churches and across chaplaincies. We have also been pleased iowelcome a new Diocesan Chief Executive. Director of Education. Senior Safeguarding Lead, as well as celebratin¥ tho consecration of a new 8ishop of Sherwood. All of these people bring new insights and gilts to the LIFÈ of the diocese at this time and we are deeply Ihankful lor the contribution they have made even viirh the limitations placed on bein8 able to meot in-person with con8re8ation5 and collea8ues. Ens(Jrin8 that we embed good Safeguarding practice5 into every part of the life of the diocese is esseniial to our mission. Our new Senior and A55lStant Diocesan Safeguarding Advisors have brought new skills and experience to this work in 2020. while we have a150 underiaken the first phase of the importani Past Ca5e5 Review 2. As the Church that bear5 the name of our Saviour,lesus Christ. we can be a community abounding in hope in a climaro that Is ea5ilyoverwhelmed by5adness and uncertainty. It iswhy,as theologianlurgen Moltmann puts It. Christian5 are'endLJringly capable of Furur&'. l am confidÈnt that for this reason we are well placed to respond to the unknown challenges that are facing our society in the months ahead, as well as the opportunities rhat God pre5enrs for his Church to brin8 eternal hope to our world. The extraordinary gener051ty across many of our churches in meeting Parish Share throLJgh such a difFicult year in 2020 hès been particularly hearioning. Of course some have struggled and rhe year to come will rernain challenging for all as we seek ro resource the rninistry we believe is needed. I pray thar our financial givin8 ever more reflects our hopÈ-filled vision OF a Church that has Good News for people overywhere, as we play our part in bringing Iosus-shaped change to our world, starlin8 alway5 in the nei8hbourhcth where we live, work and worship. With ever blessing The Rt Revd Paul Williams 8ishop of Southwell & Nottingham Growing Disciples Wider Younger Deeper Page 4 SOUTHWELL & NOftlNGHAM DIOCESAN BOARD OF FINANCE TRUSTEES, REPORT For the ear ended 31 December 2020 The Trustees. who are also Directors for the purposes of company law, present their report and the audired financial statements of the charity for the year ended 31 December 2020. The trustees h3veadopted the provisions of the Statement of Fiecommended Practice ISORPI "Accounting and Reporting by Charities IFRS 1021 in preparing the annual report and financial statements of the charity. The financial statements have been prepared accordance with the accounting policies set out in notes to the accounts and comply with the chèrity's governing document, the Charities Act 2011 and 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 published in October 2019. The Board 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 rvleasure 1972., the management of investments and the custodian of assets relating to church schools under the Diocesan Board of Education Measure 1991., the custodian of permanent endowment and real property assets relating to trusrs held by Incumbents. Archdeacons and Parochial Church Councils Diocesan Authority under the Incumbents and Churchwardens (Trusts) Measure 1964 and the Parochial Church Councils (Power51 Measure 1956. The Directors￿rustees are one and the same and in signing as Trustees they are also signing the strategic report section5 in their capacity as Directors. as This combined report satisfies the legal requirements for.. a Directors, Report of a charitable company, a Strategic Report under the CompaniesAct 2006 and a Trust&s' Annual Report Ljnder the Charities Act 2011 The strategic priorities of the Board are established by the Diocesan Synod in communication with Deanery Synods, Parochial Church Councils IPCCSI. and the Bishop of Southwell & Nottingham lin respect of his responsibility for the provision of the cure of souls). To this end, significant time and èffort is committed to communication between and with these bodies. aswell as with the church nationally," including an annual series of consultations on Specific matters relating to the priorities for the forthcoming year, including the Diocesan Budget. LEGAL OBJECts The principal object of The Southwell & Nottingham Diocesan Board of Finance I'the Board") is to promote. assist and advance the work of the Church of England in the Diocese of Southwèll & Nottingham by acting as the financial executive OF the 5outhwell ènd Nottingham Diocesan Synod. Growing Disciples Wider Younger Deeper Page S SOUTHWELL & NOThINGHAM DIOCESAN BOARD OF FINANCE TRUSTEES, REPORT Icontinuedl Forthe ear ended 31 December2020 PUBLIC BENEFIT The Trustees are aware of the Charity Commission's guidance on public benefit in The Advancement of Religion for the Public Benefit and have had regard to it in their administration of the Board. The Trustees believe that. by promoting the work of the Church of England in the Diocese ,of Southwell & Nottingham, it helps to promote the whole mission of the Church (pastoral, evangelistic. social and ecumenicall more effectively, both in the diocese as a whole and in its individual parishes, and that in doing so it provides a benefit to the public by.. providing facilities for public worship. pagtoral care and spiritual, moral and intèllèctual development, both for its members and for anyone who wishes to b8nefit from what the Church offers., and S8lect suitable accounting policies and apply them consistently Observe methods and principles in the Charities SORP 2019 IFRS1021", Make judgemenrs and estimates that are reasonable and prudent.. State whether applicable accounting Standards have been followed. subject to any material departures disclosed and explained the financial statements., Prepare the financial statements on the going concern basis unless it is inappropriate to assume that the company will continue in operation The Trustees are r@5ponsible for P We supported 5 members of the clergy with their retirement plhns and asslsted with moving 18 clergy families in housing in the Diocese. Average return investments rate 2.7590 3.3 on FUTURE PLANS In 2021, the focus on our response to climate change will continue. aiming to cut our carbon footprint and promote eco church nd to encourage further our understanding of caring for creation as central to whole life discipleship. The Diocesan Advisory Group will also instigate a strategy for our church building5 across the Dioc8se and aim to improve our church building carbon footprint and increase awarèness and use of environmental products and services. Both of the KPIS above have been impacted by the effect of Covid 19. but we appèar to have weathered the storm. as increased economic activity is on the horizon. As required. Board reviewed the investment returns with the investment managers in November 2020, and the Board decided to change one of the investment managers nd leave the targeted return on the investments unchan8ed. The investments in renewable energy are continuing to show a return. There will be continued need to work with cross agency partners to tackle homelessnegs and modern slavèry, and to support local church responses to the needs of rough sleepers refuge￿ and a5yIu seekers, in the city and county. FINANCIAL PERFORMANCE The main income to the Board is from parishes giving Parish Share, which has decreased by £226.000 this year. The Trustees are immensely grateful to all the parishes who. during the Covid 19 pandemic continued to contribute to parish share, and supported Ministry in the Diocese. We cannot achieve thi5 Wlthout their support. We will a150 support the ministry of chaplains and sector ministries by holding a chaplaincy gathering with the Bishop of Sherwood in the Summer and aim to appoint a chaplain in Hucknall to complete our network of chaplains, and we are exploring ways supporting the partnership betw*n churches and schools. We will also encourage parishes to consider local models of town centre or high street chaplaincy such as those in Beeston and Sherwood. 2020 £000 5.438 2.149 2019 £000 5,664 1,871 1 INCOME 0/0 of Total 50.2 19.8 Parish Share Archbishops, Council Allchurches Trust Fees Investment income 140 136 278 315 1,089 ' 1.278 KEY PERFORMANCE INDICATORS The Board regards its key performance indicators ag follows.. 10.0 The Trustees acknowledge with th3nks the annual distribution from Allchurches Trust. The other grants received from Archbishops Council dLJrin8 2020 are £601.000 Strategic Development Fund monies. which 15 matched funded by the Board and £1.266.000 Lowest Income Growing Disciples Wider Younger Deeper Page 9 SOUTHWELL & NorfiNGHAM DIOCESAN BOARD OF FINANCE TRUSTEIS. REPORT Icontinuedl Forthe ear ended 31 December 2020 Communities Fundin8 to support mission in our poorest parishes. We also received a Covid 19 Sustainability grant from Church Commissioners of £250,000 to contribute towards our exceptional 10sses this year. and we are in receipt of Strotegic Ministry funding for additional curates of £23.000. Board. whose value amounted to £34.5 million 12019.. £37.5 millionl. Much of the remainder of the assets shown in the balance sheet are held in restricted funds and cannot necessarily be used for the general purposes of the Board. Restricted and endowment funds As set OUL in note 23 the Board holds and administers a large number of restricted and endowment funds. ￿ at 31 December 2020 restricted funds totalled £8.8m12019'. £8.4ml and endowment fund5 totalled £58.8m 12018". £56.4ml. Net out80ing resources in the education restricted fund. before investment gains, amounted to £31.000 12019- £33.0001 and resources were mainly used to finance the salaries of those Education Department staff with responsibility for church schools and academie5. Ouè to the Covid 19 pandemic, and the massive changes in operations due to remote working, many things were done differently in 2020, and the effect on the budgeted expenditure and income was huge. The Board took advantage of the Governments job retention scheme. which covered £95.000 of salary costs. and all our staff moved to remote working. We invested in online meeting platforms and internet based telephone systems and the support for Ministry in the Diocese continued. The Board managed net gain before investment gains and losses of £333,000 in the general fund 12019." loss £210.0001, largely due to the Covid Sustainability Funding we received from Church Commissioners. Designated funds The Trustees may designate additional unrestricted reserves to be retained for an agreed purpose where this is considered to be prudent. Such designated reserve5 are reviewed on an annual basis and returned to the general fund in the event that the purpose of their designation is no longer required. A description of each rÉ%erve together with the intended use of the reserve is set out in note 23. At 31 December 2020totaldesignated reserveswere£lO.6m 12019.. £10.3ml. There is a balance of £1.9m set aside in a designated Fund to finance the funding shortfall on the closed lay staff defined benefit pension scheme to eliminate the deficit by March 2025. The capital values of investment5 have had a better year than last. and the year end position of £42.531.000 is an overall increase of £1.334.000. The investments have rallied aFter the valuation drop during March 2020, but there has been an impact on investment income in 2020. The capital values of agricultural land has remained the same. The unrealised gain on investments at the year end was £2,S36.000 The Board received £1.448,463 during the year relatin8 to the sale of glebe assets. REVIEW OFTHE BALANCE SHEET The Trustee5 consider that the bèl3nce sheet. together with detai15 in notè 22. show that the restrictèd and endowment funds are held in an appropriate mix of investment and current assets given the purposes for which the funds are held. While the net 3sset5 at the balance sheet date totalled £80.626.00012019'. £77.886.0001 it must be remembered that included in this total are a considerable number of properties, mostly in use for the ministry and mission of the Free reserves The Board of Finance has considerable responsibilities includins the remuneration of over 120 stipendiary clergy. the employment of 65 full or part time staff and the upk55ibiliriesworkin8 in partnershipwiih our Church schools. A task group wès esrablishEd under the leadership of the 8ishop of Sherwood, re5ulring in an application for srrategic Development Fundin8 to help facilitatÈa and ambitions programme of mission. Growing Disciples Wider Younger Deeper Pase 3 SOUTHWELL & NOftlNGHAM DIOCESAN BOARD OF FINANCE CHAIRMAN'S FOREWORD Icontinuedl For the ear ended 31 December 2020 Communications Review- To review all aspeccs of our present communication strate8y in light of rhe newopportunities the past 12months has generatedwith social media plètforms. especially as we engageour'core consrituency as well a5 those prÈsontly beyond the life of the church Increasln8 Diversity- With renewed vision for a more diverse church. which includes addressing systemic issue5 that unintentionally limits our mi55ion and undermines the gospel. This is particularly in response to the issues raised by the death of George Floyd and the challenge it created for the Church. Well-being and Resilience Under the direction of the Principal for Well-being and Minisrry Development the diocese is developing new r&source5 ènd increasing awareness in addro55ing Relational, Physical. Mental and Spiritual Health. Prayer strream - Prayer is the engine of the Church in mission and in the cont&xt of increased challenge and change in society. we are 5eeklng 10 foster an inC￿a51n8 Èngagement with patterns of prayer rhat can 5UStain and inspire radical discipleship. Supporting the presenr and future shape of ministry in the diocese. weare grateFul that God has continued to call people Into new sph8re5 of service. as incumbents. curates, head teach@rs. into other forms of l&ader5hip in local churches and across chaplaincies. We have also been pleased iowelcome a new Diocesan Chief Executive. Director of Education. Senior Safeguarding Lead, as well as celebratin¥ tho consecration of a new 8ishop of Sherwood. All of these people bring new insights and gilts to the LIFÈ of the diocese at this time and we are deeply Ihankful lor the contribution they have made even viirh the limitations placed on bein8 able to meot in-person with con8re8ation5 and collea8ues. Ens(Jrin8 that we embed good Safeguarding practice5 into every part of the life of the diocese is esseniial to our mission. Our new Senior and A55lStant Diocesan Safeguarding Advisors have brought new skills and experience to this work in 2020. while we have a150 underiaken the first phase of the importani Past Ca5e5 Review 2. As the Church that bear5 the name of our Saviour,lesus Christ. we can be a community abounding in hope in a climaro that Is ea5ilyoverwhelmed by5adness and uncertainty. It iswhy,as theologianlurgen Moltmann puts It. Christian5 are'endLJringly capable of Furur&'. l am confidÈnt that for this reason we are well placed to respond to the unknown challenges that are facing our society in the months ahead, as well as the opportunities rhat God pre5enrs for his Church to brin8 eternal hope to our world. The extraordinary gener051ty across many of our churches in meeting Parish Share throLJgh such a difFicult year in 2020 hès been particularly hearioning. Of course some have struggled and rhe year to come will rernain challenging for all as we seek ro resource the rninistry we believe is needed. I pray thar our financial givin8 ever more reflects our hopÈ-filled vision OF a Church that has Good News for people overywhere, as we play our part in bringing Iosus-shaped change to our world, starlin8 alway5 in the nei8hbourhcth where we live, work and worship. With ever blessing The Rt Revd Paul Williams 8ishop of Southwell & Nottingham Growing Disciples Wider Younger Deeper Page 4 SOUTHWELL & NOftlNGHAM DIOCESAN BOARD OF FINANCE TRUSTEES, REPORT For the ear ended 31 December 2020 The Trustees. who are also Directors for the purposes of company law, present their report and the audired financial statements of the charity for the year ended 31 December 2020. The trustees h3veadopted the provisions of the Statement of Fiecommended Practice ISORPI "Accounting and Reporting by Charities IFRS 1021 in preparing the annual report and financial statements of the charity. The financial statements have been prepared accordance with the accounting policies set out in notes to the accounts and comply with the chèrity's governing document, the Charities Act 2011 and 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 published in October 2019. The Board 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 rvleasure 1972., the management of investments and the custodian of assets relating to church schools under the Diocesan Board of Education Measure 1991., the custodian of permanent endowment and real property assets relating to trusrs held by Incumbents. Archdeacons and Parochial Church Councils Diocesan Authority under the Incumbents and Churchwardens (Trusts) Measure 1964 and the Parochial Church Councils (Power51 Measure 1956. The Directors￿rustees are one and the same and in signing as Trustees they are also signing the strategic report section5 in their capacity as Directors. as This combined report satisfies the legal requirements for.. a Directors, Report of a charitable company, a Strategic Report under the CompaniesAct 2006 and a Trust&s' Annual Report Ljnder the Charities Act 2011 The strategic priorities of the Board are established by the Diocesan Synod in communication with Deanery Synods, Parochial Church Councils IPCCSI. and the Bishop of Southwell & Nottingham lin respect of his responsibility for the provision of the cure of souls). To this end, significant time and èffort is committed to communication between and with these bodies. aswell as with the church nationally," including an annual series of consultations on Specific matters relating to the priorities for the forthcoming year, including the Diocesan Budget. LEGAL OBJECts The principal object of The Southwell & Nottingham Diocesan Board of Finance I'the Board") is to promote. assist and advance the work of the Church of England in the Diocese of Southwèll & Nottingham by acting as the financial executive OF the 5outhwell ènd Nottingham Diocesan Synod. Growing Disciples Wider Younger Deeper Page S SOUTHWELL & NOThINGHAM DIOCESAN BOARD OF FINANCE TRUSTEES, REPORT Icontinuedl Forthe ear ended 31 December2020 PUBLIC BENEFIT The Trustees are aware of the Charity Commission's guidance on public benefit in The Advancement of Religion for the Public Benefit and have had regard to it in their administration of the Board. The Trustees believe that. by promoting the work of the Church of England in the Diocese ,of Southwell & Nottingham, it helps to promote the whole mission of the Church (pastoral, evangelistic. social and ecumenicall more effectively, both in the diocese as a whole and in its individual parishes, and that in doing so it provides a benefit to the public by.. providing facilities for public worship. pagtoral care and spiritual, moral and intèllèctual development, both for its members and for anyone who wishes to b8nefit from what the Church offers., and S8lect suitable accounting policies and apply them consistently Observe methods and principles in the Charities SORP 2019 IFRS1021", Make judgemenrs and estimates that are reasonable and prudent.. State whether applicable accounting Standards have been followed. subject to any material departures disclosed and explained the financial statements., Prepare the financial statements on the going concern basis unless it is inappropriate to assume that the company will continue in operation The Trustees are r@5ponsible for P We supported 5 members of the clergy with their retirement plhns and asslsted with moving 18 clergy families in housing in the Diocese. Average return investments rate 2.7590 3.3 on FUTURE PLANS In 2021, the focus on our response to climate change will continue. aiming to cut our carbon footprint and promote eco church nd to encourage further our understanding of caring for creation as central to whole life discipleship. The Diocesan Advisory Group will also instigate a strategy for our church building5 across the Dioc8se and aim to improve our church building carbon footprint and increase awarèness and use of environmental products and services. Both of the KPIS above have been impacted by the effect of Covid 19. but we appèar to have weathered the storm. as increased economic activity is on the horizon. As required. Board reviewed the investment returns with the investment managers in November 2020, and the Board decided to change one of the investment managers nd leave the targeted return on the investments unchan8ed. The investments in renewable energy are continuing to show a return. There will be continued need to work with cross agency partners to tackle homelessnegs and modern slavèry, and to support local church responses to the needs of rough sleepers refuge￿ and a5yIu seekers, in the city and county. FINANCIAL PERFORMANCE The main income to the Board is from parishes giving Parish Share, which has decreased by £226.000 this year. The Trustees are immensely grateful to all the parishes who. during the Covid 19 pandemic continued to contribute to parish share, and supported Ministry in the Diocese. We cannot achieve thi5 Wlthout their support. We will a150 support the ministry of chaplains and sector ministries by holding a chaplaincy gathering with the Bishop of Sherwood in the Summer and aim to appoint a chaplain in Hucknall to complete our network of chaplains, and we are exploring ways supporting the partnership betw*n churches and schools. We will also encourage parishes to consider local models of town centre or high street chaplaincy such as those in Beeston and Sherwood. 2020 £000 5.438 2.149 2019 £000 5,664 1,871 1 INCOME 0/0 of Total 50.2 19.8 Parish Share Archbishops, Council Allchurches Trust Fees Investment income 140 136 278 315 1,089 ' 1.278 KEY PERFORMANCE INDICATORS The Board regards its key performance indicators ag follows.. 10.0 The Trustees acknowledge with th3nks the annual distribution from Allchurches Trust. The other grants received from Archbishops Council dLJrin8 2020 are £601.000 Strategic Development Fund monies. which 15 matched funded by the Board and £1.266.000 Lowest Income Growing Disciples Wider Younger Deeper Page 9 SOUTHWELL & NorfiNGHAM DIOCESAN BOARD OF FINANCE TRUSTEIS. REPORT Icontinuedl Forthe ear ended 31 December 2020 Communities Fundin8 to support mission in our poorest parishes. We also received a Covid 19 Sustainability grant from Church Commissioners of £250,000 to contribute towards our exceptional 10sses this year. and we are in receipt of Strotegic Ministry funding for additional curates of £23.000. Board. whose value amounted to £34.5 million 12019.. £37.5 millionl. Much of the remainder of the assets shown in the balance sheet are held in restricted funds and cannot necessarily be used for the general purposes of the Board. Restricted and endowment funds As set OUL in note 23 the Board holds and administers a large number of restricted and endowment funds. ￿ at 31 December 2020 restricted funds totalled £8.8m12019'. £8.4ml and endowment fund5 totalled £58.8m 12018". £56.4ml. Net out80ing resources in the education restricted fund. before investment gains, amounted to £31.000 12019- £33.0001 and resources were mainly used to finance the salaries of those Education Department staff with responsibility for church schools and academie5. Ouè to the Covid 19 pandemic, and the massive changes in operations due to remote working, many things were done differently in 2020, and the effect on the budgeted expenditure and income was huge. The Board took advantage of the Governments job retention scheme. which covered £95.000 of salary costs. and all our staff moved to remote working. We invested in online meeting platforms and internet based telephone systems and the support for Ministry in the Diocese continued. The Board managed net gain before investment gains and losses of £333,000 in the general fund 12019." loss £210.0001, largely due to the Covid Sustainability Funding we received from Church Commissioners. Designated funds The Trustees may designate additional unrestricted reserves to be retained for an agreed purpose where this is considered to be prudent. Such designated reserve5 are reviewed on an annual basis and returned to the general fund in the event that the purpose of their designation is no longer required. A description of each rÉ%erve together with the intended use of the reserve is set out in note 23. At 31 December 2020totaldesignated reserveswere£lO.6m 12019.. £10.3ml. There is a balance of £1.9m set aside in a designated Fund to finance the funding shortfall on the closed lay staff defined benefit pension scheme to eliminate the deficit by March 2025. The capital values of investment5 have had a better year than last. and the year end position of £42.531.000 is an overall increase of £1.334.000. The investments have rallied aFter the valuation drop during March 2020, but there has been an impact on investment income in 2020. The capital values of agricultural land has remained the same. The unrealised gain on investments at the year end was £2,S36.000 The Board received £1.448,463 during the year relatin8 to the sale of glebe assets. REVIEW OFTHE BALANCE SHEET The Trustee5 consider that the bèl3nce sheet. together with detai15 in notè 22. show that the restrictèd and endowment funds are held in an appropriate mix of investment and current assets given the purposes for which the funds are held. While the net 3sset5 at the balance sheet date totalled £80.626.00012019'. £77.886.0001 it must be remembered that included in this total are a considerable number of properties, mostly in use for the ministry and mission of the Free reserves The Board of Finance has considerable responsibilities includins the remuneration of over 120 stipendiary clergy. the employment of 65 full or part time staff and the upk