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2020-12-31-accounts

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

Company registration number 236594 Registered charity number 249678

Walking Welcoming Growing

Cover image: The South London Food Bank Warehouse, housed in St Margaret the Queen, Streatham Hill. © Charlie Clift

Contents

Overview

Introduction by the Bishop of Southwark 5
Chair of the Diocesan Board of Finance 6
The Diocesan Secretary 7
Our Vision 8
Legal objects 10

Strategic report

Strategic report 13
Southwark Vision 2017-25 and Strategic Objectives 14
Progress made towards achieving 2020 objectives 16
Other activities and achievements in the year 18
Related parties 22
Future plans 23
Financial review 25
Principal risks and uncertainties 30

Governance

Structure and governance 33
Trustees’ responsibilities 37
Administrative details 38

Financial statements

Independent auditor’s report Independent auditor’s report Independent auditor’s report Independent auditor’s report 41
Statement of Financial Activities 44
Income and expenditure account 45
Balance sheet 46
47
48
49
Appendix 84

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

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Overview

Introduction by the Bishop of Southwark

As we began 2020 it would have been almost impossible for any of us to have envisaged the year that we would go on to experience. Since then, in the context of the global pandemic and the hardship and suffering which has ensued, we have been learning how best to reach out to our communities and how to be church in a different way sometimes working in mixed mode and sometimes simply online as the national restrictions have dictated.

I want to thank all those who have helped our churches to operate online, staffed our food banks, and supported our communities in so many ways, seeking to show God’s love to our neighbours and many who have experienced unprecedented isolation. I also want to express deep appreciation to our hospital chaplains for the work that they have done with patients and all working on the front line in many different capacities.

As soon as the Government announced a Coronavirus Task Group, meeting frequently to ensure that we had a co-ordinated approach to transmitting advice and information concerning the pandemic to our parishes. I am grateful to my CTG colleagues (The Diocesan Secretary, The Director of Communications, The Dean of Southwark and the Archdeacon of Lewisham & Greenwich) for their work and was glad to award Lancelot Andrewes Medals to them for their endeavours. I have also awarded the Lancelot Andrewes Medal to others across the Diocese for special acts of caring and service during the pandemic, which has taken a toll on so many.

As we begin our recovery, clergy wellbeing needs to be a priority and I have asked The Venerable John Kiddle to take the lead on this.

I want to acknowledge the contribution to the Diocese of three people who retired in 2020. The Venerable Chris Skilton retired in February following his time as Archdeacon of Croydon. He had previously served as Archdeacon of Lambeth and Rector of Sanderstead. He is greatly missed but I am grateful to The Venerable Moira Astin, Archdeacon of Reigate, who looked after the Croydon Area until The Venerable Rosemarie Mallett took up the role. The Revd Canon Stephen Roberts retired in August following a distinguished ministry in Southwark as parish priest, Diocesan Director of Ordinands, Archdeacon of as Deputy Diocesan Secretary. Colin Powell (Lay Canon), the Director of Education, retired in December, having worked an extra term due to the pandemic. We want to thank them all for their inspirational service.

I am delighted that we have been able to embed the work of the Lay Council, developing lay ministries in line with our Southwark Vision for partnerships in the Gospel which enable lay and ordained callings. The Readers Board and the SPA Council have now been fully integrated into the Lay Council and I express thanks to Gerie Knight for her zeal as Diocesan SPA over the years. Our new Diocesan SPA, Wendy Stephens, is the hold my licence.

The Black Lives Matter campaign resonated strongly in the Diocese and

Bishop Christopher

has further focused our attention to issues related to the lives of UKME members of our Diocese and working to ensure equality, dignity and due recognition for all.

I especially want to thank our parishes the Parish Support Fund in 2020 which is continuing into 2021. This has helped which of course is instrumental in our commitment to equip and resource mission and ministry across the Diocese.

Let us be of good courage and put our trust in the Lord.

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

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Chair of the Diocesan Board of Finance

We are now moving slowly back to normal life again but inevitably the pandemic has had a major impact on our parishes and our Diocesan explains on page 7, we still face of our Diocese going forward.

I am pleased to report that we weathered the storm better than we initially expected, avoiding the heavy it not been for the fall in the value of our investments, the Diocese would have reported a surplus in its overall I can, however, report that, for those areas under our direct control, we returned a small surplus, although the around £1.4m by the inclusion of gains on the sale of some investments and by the accounting requirement to include a surplus of almost £1m on the movement in pension fund liabilities.

We were helped in our response to the challenges by a generous sustainability grant of £600,000 from the Church important savings, and by the timely sale of surplus property no longer needed for ministry housing. Above all, determination of our parishes to commit to sustaining ministry by maintaining the delivery of the Parish Support Fund (PSF) at remarkably high levels.

We have been one of the Dioceses from whom the National Church has sought advice regarding our giving strategy in order to assist others. Ours is of course

founded on the transparency with through our Archdeacons and supported thanking our parishes and our staff, I do want also to thank the Archdeacons who work tirelessly with our parishes and staff to deliver the PSF which last year achieved 96.7% of initial pledges, an extraordinary and excellent result.

The problems of 2020 have not undermined the long-term resilience of the Diocese thanks to the partnership with our parishes. We were also helped from the Church Commissioners, a sum that has been fully repaid by April 2021.

The Diocese does not have substantial reserves compared to some older Dioceses so we have to manage our That means ensuring that our free reserves and our investment portfolio cash reserves policy and our investment policy in 2019.

The latter review has been led by the chair of the Investment sub-Committee, Andrew McMurtrie, who steps down after many years of service with our thanks and best wishes. In 2020 before the pandemic struck, we had already started to diversify away from being principally invested in UK equities towards global equities, although that could not prevent a fall in the value of our investments.

As the Diocesan Secretary explains, change is necessary to continue to implement the Southwark Vision, sustain our parishes and maintain our ministry across deprived as well as wealthier

Alan Saunders

parishes. Although uncertainties partnership with the parishes, we will maintain resilience for the future. We

subsequent two years but hope that, as with last year, the outturn will be better than we forecast and that the PSF will hold up well again.

Finally, I would like to pay tribute to all the hard work of our central team, led years. They all rose to the task. I would like to thank especially Anthony Demby, our retiring Finance Director, for the excellent contribution he has made over the years and the invaluable support he has given Ruth and myself. It is appropriate, too, to thank Haysmacintre LLP, our departing auditors who have served the Diocese for many years, and to welcome Buzzacott LLP as our new auditors.

6 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

The Diocesan Secretary

We will all remember 2020 as an extraordinary and troubling year for our nation, our dioceses, our churches and with the food bank at the church of St Margaret, Streatham Hill on our front cover, and within the report itself other events and outcomes that attest to and

Whilst our strategic objectives to grow our Diocese in discipleship and numbers remain on course as the Southwark Vision, our church buildings were closed for much of the year and new, innovative ways of reaching people came to the fore, both in person through the great pastoral work across the Diocese and through digital work. We brought forward the design of our new website (launched February 2021), established a digital communications group, and the Bishop established the Coronavirus Task Group to guide our clergy and lay leaders as the turbulent year unfolded.

performance of our investment funds, the reduction in property rental income and the challenges we faced trying to ease tenants from our properties in time for incoming clergy to take up post. We recognise that parishes were using reserves, increasing borrowing, seeking grants and making appeals in order to maintain their giving to the Diocese though the Parish Support Fund. We have been so grateful that the delivery of the pledge was maintained within 96% of the budget during 2020.

The Diocese borrowed £2.3m from the Church Commissioners to support our clergy stipends during the year (money

now repaid as I write), successfully sought sustainability grant support from the National Church, participated in the Coronavirus Job Retention “furlough” about managing expenditure and by making nine posts, including six staff, redundant.

A number of parishes were exceptionally generous, including, for example, the PCC of Holy Trinity, assistance as we housed the priest and young family at St Peter, Vauxhall, and the PCC of St Mary, Battersea, which was willing to offer generous loan support to circumstances, and I am delighted that, for those items under direct management control, we yielded a small

with us for the next few years. Despite this, we are intentionally seeking to move forward with resourcing the Southwark Vision which we continued to implement during the year, not least though the sustaining of our Fresh Expressions work, innovation in reaching young people and families, and through the development of Southwark as an Eco-Diocese.

During the year we established the Strategic Ministry Deployment Vision and Policy. This seeks to support the ministry and diversity in ordained and lay ministry, as well as the enhancement of lay ministry, retaining the strength of stipendiary clergy numbers and also more curates.

Ruth Martin

The Diocese is committed to long-term and ministry, and pioneer ministry, both lay and ordained, will play an important part in this. Key to success in this will be a renewed focus on growing the PSF and supporting parishes’ recovery as the cornerstone of our giving strategy.

In thanking parishes, clergy and lay leaders I also thank all my colleagues, and director, with whom I have had the privilege of working these last six years and who now can enjoy his retirement.

Thank you for the privilege of serving the Diocese.

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 7

Our Vision: a fruitful future

We share a vision for the future in which we will see:

Our Vision is founded on mutual commitment from all who make up the Diocesan family to walk together in the pilgrimage of faith, supporting, encouraging and resourcing each other in our common task.

The Diocese of Southwark serves...

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2.9 million people
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in the 16 local authorities
of South London &
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East Surrey
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through 356 places of
worship — a Church of
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England presence in
every community
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and 106 church schools
educating more than
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37,000 young people
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8 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

Clockwise from top: Lambeth and Dulwich Deaneries’ Black Lives Matter event © Eleanor Bentall ; Bishop Christopher celebrating Remembrance Day alongside reservists from the Braganza Street Army Reserve Centre, the regimental headquarters of the 256 Field Hospital, in front of a statue of pioneering British-Jamaican nurse Mary Seacole; a moment captured during the Diocese’s pilgrimage to Jerusalem in February 2020.

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

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Legal objects

The Trustees, who are also Directors for the purposes of company law, present their Annual Report, together with the ended 31 December 2020.

The Directors/Trustees are one and the same, and in signing as Trustees they are also signing the Strategic Report sections in their capacity as Directors.

requirements for:

Legal objects

The objects of the South London Church Fund & Southwark Diocesan Board of Finance (SDBF) are “for the further the religious and other charitable work (including but not limited to the educational work) of the South London Church Fund & Southwark Diocesan Board of Finance within the Diocese, and any other Diocese which shall at any time be formed, wholly or in part out of the Diocese, either with or without the addition of any part or parts of other Dioceses.”

Its function is to serve as the corporate governance body of the Church of England in the Diocese, responsible Diocese through performing, working and transacting business in connection with the Church and Diocese. It may act as the Parsonages Board for the Diocese within the meaning of the Repair of

The Diocese of Southwark covers most of Greater London south of the Thames and part of East Surrey. Within the Diocesan boundaries are the Royal Borough of Greenwich, the London Boroughs of Croydon, Lambeth, Lewisham, Merton, Southwark, Sutton and Wandsworth, plus parts of the London Boroughs of Richmond upon Thames, Bromley and Bexley and the Royal Borough of Kingston upon Thames. In Surrey, it also includes parts of the Borough of Reigate and Banstead, Tandridge District Council and Mole Valley District Council.

The SDBF has the following responsibilities:

houses on behalf of the Diocesan Parsonage Board under the Repair

iii. to act as custodian of permanent endowment and real property assets relating to trusts held by Incumbents and Archdeacons and by Parochial Church Councils (PCCs) as Diocesan Authority under the Incumbents and Churchwardens (Trusts) Measure 1964 and the Parochial Church Councils (Powers) Measure 1956.

The SDBF is empowered to act as a committee of the Diocesan Synod, responsible for the corporate governance of the Diocese and also for raising and disbursing money and employing staff. Its members are both Directors and Trustees.

Trustees (Bishop’s Council). Its members are also the members of the SDBF, the Diocesan Mission and Pastoral Committee (DMPC) and the Diocesan Parsonages Board. Each of these four bodies has coterminous membership.

The strategic priorities of the Diocese are established by the Diocesan Synod, and its standing committee the Diocesan Council of Trustees (DCT), in consultation with Deanery Synods, PCCs and the Bishop of Southwark (in respect of his responsibility for the provision of the cure of souls).

The DCT (acting as Bishop’s Council, the Diocesan Board of Finance (DBF), the DMPC and the Diocesan Parsonages framework, together with the DCT committees and advisory groups of the effort is committed to communication between and with these bodies, as well as with the Church nationally; matters relating to the priorities for the forthcoming year, taking into account the commitments arising from the Diocesan Budget.

The standing committee of the Diocesan Synod is the Diocesan Council of

10 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

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Strategic report

Strategic report

The main role of the Southwark Diocesan Board of Finance (SDBF) is to identify and manage resources within aspects of the provision of ministry. This is so as to lead, enable and serve the Diocesan Synod, deaneries, parishes, schools and communities of the Diocese in furthering mission and ministry and whilst also ensuring full compliance with statutory responsibilities.

The purposes are:

Top, from left: the Revd Joshua Rey, Bishop Christopher, the Revd Vanessa Elston, Fleur Anderson, MP for Putney, Bishop Jonathan and Bishop Richard join a Christian Aid prayer vigil outside the Houses of Parliament on 11 March, calling for action on climate change. Bottom: Bishop Christopher licenses new priests

support for, and board membership of, Together Southwark, which is aimed at alleviating poverty through development projects and which, until the end of 2020,

Church Urban Fund; from 2021, the Diocese will become sole corporate trustee.

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 13

Southwark Vision 2017-25 and strategic objectives

Southwark Vision

From the Archbishop of Canterbury’s Charge given to Bishop Christopher in 2011, the Diocese of Southwark has been on a journey of discernment towards a shared vision, Southwark Vision, which has been brought together from the themes and agreed outcomes described in the Strategy for Ministry report adopted by Synod in November 2015, and Hearts on Fire Vision for Mission , with its commitment to documents together explain the detailed thinking behind the summary of our Diocesan Vision. In all we do we aim to be Christ-centred and outward-focused.

Objective One

To grow average weekly attendance by 5% by 2025, partly through having each church develop a high-quality Mission Action Plan (MAP) which includes a course for evangelism and discipleship.

The traditional measures of church attendance in the Church of England, such as usual Sunday attendance (uSa), continue to be collected and overall show an ongoing decline. However, the Diocese of Southwark is showing positive signs of starting to halt this decline. An increase in the Worshipping Community measure (those who consider themselves to be a full part of a church community) is particularly encouraging.

2015 (CofE comparison is a decline of 12%). On average, 6,548 children and 1,598 adults a week attended services for schools in Southwark churches, increases of 36% and 55% respectively (CofE comparison is increases of 8% and 4%).

Objective Two

By 2025, to increase the number of worshipping communities with a primary focus on areas of population growth through investment in Fresh Expressions of Church (fxC) in the areas where the data suggests the existing congregations are increasingly unrepresentative of the resident community and therefore unlikely to be successful in reaching them without intentional intervention.

In 2019 we were encouraged to report that we had 78 new fxCs attended by some 2,890 people (1,240 children and 1,650 adults). These were found across the full range of Church traditions and, while many were Messy Churches, twothirds were other types of fxCs.

As COVID-19 has had such an impact on these communities in particular, we are currently undertaking a full review on whether, and how, these fxCs are likely to continue and it is encouraging that anecdotal evidence is suggesting that many are paused rather than stopped completely.

Objective Three

that allows investment in growth for the future. Key measurables include: months’ operating costs by 2020 turnover annually dedicated to 2% by 2020.

2020’s results were better than expected, helped by the resilient performance of the Parish Support Fund and parochial fees. We also received a £600,000 sustainability grant from the

14 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

from the boom in the London property market at the end of the year with one good sale. Cuts were made to while still keeping mission and ministry needs uppermost and a tight rein on expenditure. Property costs were lower due to the complete lockdown at parts of the year.

resources, the effect of the pandemic meant that the Diocese did not achieve its free reserves target in 2020 (target £5.9m, achieved £5.1m). The Diocese has £45.2m (2019: £45.8m) in designated funds and £138.0m (2019: £140.7m) in expendable endowments. Free reserves investments in improving and maintaining properties.

Objective Four

To grow the number of ordained and lay vocations by 50% by 2020 by enabling and discerning ordained for licensed and commissioned lay other forms of lay ministry (for example, worship leaders, family and youth leaders, and spiritual

of support and celebration which and our commitment to evangelism

fully integrated and pioneering church growth and Fresh Expressions of Church.

The Venerable Dr Rosemarie Mallett being installed as Archdeacon of Croydon.

Objective Five

By 2025, to grow leadership and especially focusing where the data suggests groups are currently underrepresented: through ethnicity, age opportunities, material well-being, or tradition.

A huge amount of work is being undertaken to ensure that our ministers ethnic background of clergy in senior pipeline roles is changing slowly but has (United Kingdom Minority Ethnic) Area Bishop and a UKME Archdeacon.

We are also seeking pathways to new licensed ministries such as licensed pioneer and suitably Auxiliaries (SPAs).

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 15

Progress made towards achieving 2020 objectives

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2020 objectives Progress made
To achieve a balanced budget within 1% of annual turnover. Achieved with support of the Church Commissioners.
To maintain investment in Southwark Vision and Synodical Achieved.
initiatives.
To control costs on a baseline budget of 1% increase in the Achieved controlled costs beyond expectations
Parish Support Fund (PSF). in an exceptional year.
To continue to build reserves in line with reserves policy. The long term plan remains but not possible given COVID-19.
To join the Parish Giving Scheme (PGS). Achieved. Delayed by COVID-19 but successful pilots
took place in summer 2020 and launched by year end.
To serve parishes well by providing opportunities to increase Achieved. Good practice encouraged, contactless devices
giving, including contactless giving, PGS, dedicated resources,
and engagement with national initiatives. new Generous Giving Advisor funded by National Church.
To encourage renewed energy for the PSF. Achieved. Extremely successful in pandemic year.
parishes where needed during pandemic.
To encourage deaneries to share good practice and Full roll-out of DLTs and deanery development
develop Deanery Leadership Teams (DLTs). delayed by COVID-19 but a number of
successful deanery initiatives took place
during the year.
To provide for direct giving for Southwark Vision, including the A variety of gifts were received in 2020 but collection of
Fairer Shares “arrears” policy. Fairer Shares arrears was impacted by COVID-19.
from the Strategic Development Fund (SDF) and complete Diocese not submitting for a further six.
submission for a further six.
Achieved. Embedding successfully with
lay ministry opportunities, and to reinvigorate existing, and new lay ministries emerging.
develop new, commissioned and licensed ministries.
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16 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

Progress made towards achieving 2020 objectives

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2020 objectives Progress made
To implement Diocesan action plan for Turning up the Volume. In progress.
To establish and launch a clear strategy for pioneer ministry. Achieved.
To deliver mandatory Past Cases Review 2. Started in September 2020.
Timeline impacted by COVID-19 lockdown.
To maintain focus on the prevention of harm to vulnerable Achieved, and always ongoing.
groups in our worshipping communities.
To implement the move to cloud-based IT systems Achieved.
following review.
To discontinue proposed Blue Box installation following Achieved.
review and develop in-house property management system.
To continue move to online recording of parish information. In progress. Parish Information Review implemented.
Online PSF pledge system in place.
To launch communications strategy to meet needs of Linked to lay leadership and lay ministry initiatives.
our diverse Diocese.
To design and launch new website. Completed just after year end (February 2021).
To review and relaunch Diocesan newspaper The Bridge . Achieved.
Impacted by COVID-19; to be completed in 2021.
and 10-year maintenance plan and plan reintroduction of
quinquennial inspections for parsonages.
To progress measure to combat knife crime collaboratively Work in progress;
with other Dioceses and partners. partnership with Synergy Network achieved.
To agree priorities for Eco Diocese. In progress.
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The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 17

Other activities and achievements in the year

The activities of the SDBF come in the context of Southwark Vision which developed from earlier Strategy for Ministry and Hearts on Fire reports and the strategic objectives provide additional context for the annual objectives, many of which are operational.

The Christian presence

In the year of the pandemic the Diocese raised £16.0m through voluntary contributions to the Parish Support Fund (PSF) to fund mission and ministry across the Diocese.

Ministry and discipleship

Southwark Diocesan Board of Readers and Southwark Pastoral Auxiliary (SPA) Council were brought to a close. SPAs are a highly valued commissioned ministry, but in 2020 we began plans to also offer the Bishop’s licence to particular individuals. Wendy Stephens was Bishop Christopher in this way.

particular were developed, together with plans for commissioning children’s and family workers and extending training pathways for commissioned lay pioneers. 18 deacons were ordained to serve in parishes across the communities of the Diocese.

Mission and evangelism

In 2020, the two departments with responsibility for The Five Marks of Mission (Mission and Evangelism, and Justice, Peace and Integrity of Creation) were reorganised into one, creating a framework for a holistic missional approach.

18 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

The activities of the two departments in the year included:

Safeguarding

decline in safeguarding concerns from parishes.

Dioceses as the Church consults on changes to safeguarding policies. In addition, the DBF (DCT):

Safeguarding training courses were initially suspended during lockdown but later in the year, either in person or remotely, 931 people attended. These safeguarding training courses were delivered in line with the evolving national safeguarding learning and development framework. There was a 15% decrease in new matters referred to the Diocesan Safeguarding Team during 2020, down to 441 in 2020 from 516 the previous year.

1,425 online Disclosure and Barring Service (DBS) applications were made in 2020.

The Diocese successfully started the past cases review (PCR2), a national requirement to review historical safeguarding cases. 2020 also saw the publication of the IICSA report into the Church of England which has recommendations which will impact

Other activities Grants and funding

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

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Other activities and achievements (continued)

in light of the pandemic.

Personnel

Buildings and pastoral

continuing to offer some in-person site visits where possible. The DAC worked with parishes seeking speedy advice and permissions in response to COVID-19, for

streaming cameras and audio-visual equipment in church buildings or entrances to enable safe use through one-way systems. Responding to General Synod’s February 2020 environment motion to work towards Net Zero Carbon by 2030, the DAC has been giving guidance on churches’ proposals and lighting. There are now 55 churches who are registered

members of the 100% green electricity Energy Basket provided by the Parish Buying service. Staff also assisted parishes in applying for grant funding, including from the Government’s Culture Recovery Fund (where six churches obtained a total of £348,445), and from Marshall’s Charity (three churches received £37,000 between them).

Despite the lockdown we completed three new units of accommodation in Southwark and Lewisham & Greenwich Archdeaconries, creating more accommodation, particularly for curates.

Communications

20 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

Top left: volunteers at Christ Church, Gipsy Hill prepare to deliver care packages Above left: cloth laid out ready for cutting as part of St Mary, Putney’s initiative to sew scrubs for NHS workers. Top right: deacons at their 2020 ordinations in Kingston Episcopal Area. Centre right: Croydon ordinations. Below right: Woolwich ordinations.

Volunteers

Volunteering, particularly at food banks during 2020. The service provided to a community through church on people’s relationships with the

Church, particularly at times of crisis. show that some 88% of churches in the Diocese were involved in some form of social action in 2019 (the most

recent year for which data is available), During the same time frame, 67% of Southwark churches ran at least one 51% nationally.

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Related parties

These include:

Academies. The SDBE supports the provision, effectiveness and development of education in all Church of England schools within develop the Christian ethos and distinctiveness of Church schools; to promote religious education and collective worship; and to advise School Governors and Trustees and support the maintenance and improvement of school buildings and facilities. The SDBE also supports

Pupils from Archbishop Tenison’s School in Croydon volunteer during lockdown.

the provision of chaplaincy in higher and further education institutions. The SDBF makes a grant to the initiatives. The Bishop of Southwark is President of the SDBE, whilst the Rt Revd Jonathan Clark, Bishop of Croydon, and the Venerable Dr Jane Steen, Archdeacon of Southwark, are trustees

Southwark Diocesan Welcare (Welcare), a separate registered charity (No 1107859) to which the SDBF makes a grant. Welcare is a Christian charity working in South London and East Surrey with disadvantaged children and

families, irrespective of faith, culture, abilities or life choices. By offering family support, mentoring services and group work with parents and children, Welcare empowers families to rebuild their lives and family ties, helping parents to give their children Mrs Anne Coates and the Diocesan Secretary Ruth Martin were Diocesan-nominated trustees in 2020, and in addition the Venerable Moira Astin, Archdeacon of Reigate, is an independent trustee Southwark Cathedral, a charity exempt from registration with the Charity Commission to which the SDBF makes a grant. It is the seat of the Bishop of Southwark, and services and special events are held at the Cathedral that are paid for by the SDBF

Together Southwark (Charity No 1153362), elected to promote the alleviation of poverty and relief of young people and vulnerable families, which is partly funded by the SDBF. The Rt Revd Karowei Dorgu, Bishop of Woolwich, the Venerable Dr Rosemarie Mallett, Archdeacon of Croydon and Chair of the House of Clergy, and Adrian Greenwood, Chair of the House of Laity, are trustees.

Transactions with related parties

Where materiality of the transactions merits more detailed disclosure, this statements (see page 81).

22 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

Future plans

It is planned that there will be a the end of 2022 and the potential for a balanced budget by the end of 2023. It is essential to make further progress towards stronger cash reserves. The Diocese will continue to review its investments in funds closely, particularly in considering further movement from UK equities towards global equities.

2020 was a very unexpected year. Although the Diocese has had to review its future plans in light of the COVID-19 pandemic, it is still committed to focusing on growth through Southwark Vision, and on seeking to work towards its strategic objectives: that, by 2025, there will be growth in numbers and in discipleship as we journey along together. The continuing investment in the projects around the Diocese that are part-funded by the Church Commissioners’ Strategic Development Fund will be sources of replication and learning.

Going forward, as churches develop recovery plans post-pandemic, the long term may see deeper structural change in the Church nationally. However, the Diocese remains committed to maintaining the maximum possible number of stipendiary clergy and supporting parish structures, whilst also innovating with new forms of ministry including lay and ordained pioneer ministry and authorised lay ministry such as children’s and family workers.

This is part of our strategic deployment we also continue to strive for two-thirds third, rather than the other way round as

Clockwise from above: a team from St Mary, Lewisham help build the church’s therapeutic garden; the Revd Andy Dovey, Lead Chaplain for Croydon Health Services, holds an Angels of the Nation statue. This was an award given to relatives of those who died in the pandemic; Readers are licensed in Southwark Cathedral.

at present. The Diocesan giving strategy will continue to be key.

training initiatives, including lay and ordained colleagues together. Plans also include a focus on curates with a review in the medium term of their training, placements and provision, taking into account developments in a national review of provision.

The Diocese is also continuing its focus on diversity, seeking to ensure that the we serve, especially any unrepresented groups. We are also seeking to build on working in pastoral ministry in communities served by our parishes.

Developing our integrated databases, and innovating with new forms of communication and “mixed mode” events, will continue to be a priority.

During 2020, two reports from the National Church on lay leadership and lay ministry, A Vision for Lay Ministries and Kingdom Calling: the Vocation, Ministry and Discipleship of the Whole People of God , will contribute to the developing work of the Lay Council in the years to come. In addition, our restructured departmental organisation will provide opportunities for new learning and

COVID-19 has had a major impact on our Diocesan schools, and the Southwark Diocesan Board of Education (SDBE), which receives its core funding from the Diocese, will continue to be an important focus for our work with families and schools including the Growing Faith initiative.

Continued on page 24

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 23

Future plans (continued)

• create training pathways to develop effective ministry in urban estates, expected to include new training approaches for lay pioneers • continue to focus on the delivery of Southwark Vision which includes cultural changes to encourage diversity and innovation within the parish and deanery structures • review parishes whose pledge to the Parish Support Fund is not covering their ministry costs, in order to move towards twothirds of parishes supporting

People in the Diocese enjoying online

• develop initial plans to consider long term the challenge of “carbon net zero”, the launch of the Diocesan Environment Policy and continued work towards achieving Eco Diocese bronze status • implement safeguarding reviews, including any actions from the Past Cases Review 2 (PCR2) and the Independent Inquiry into Child Sexual Abuse (IICSA) report • launch the new Diocesan website, with renewed digital and social media communication whilst also

not possible. This will link closely with our renewed giving strategy, especially the building up of the Parish Giving Scheme and the communication of the principles of informed generosity in our “new normal” post-pandemic context • develop plans for a “quinquennial” conference in 2022 which for the

hard copy and live communication and presentations as the Diocese journeys together, speaking well of each other through difference and diversity.

In addition, there will be a focus on growth and developing fruitful churches, including the implementation of the Strategic Ministry Deployment Vision with:

continued investment from SDF funding providing opportunities for replication plants, for example St Matthew’s at the Elephant an ongoing commitment to supporting our deprived communities, including 25 new worshipping communities on estates such as Thamesmead a review of parishes with usual Sunday attendance (uSa) of fewer than 50 adults to identify potential ministry and mission initiatives, including the use of pioneer ministry

the implementation of our policy on “hub” and “resourcing” churches which will use innovative, sustain and support local ministry, particularly as we aim for more pioneering ministers (both lay and ordained)

development of new authorised ministries at commissioned level, particularly for those who work with children and families, and the local level in our communities, particularly in pastoral ministry.

24 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

Financial review

Financial performance

A surplus of £1.4m (2019: £3.9m) inclusive of gains on the disposal of investment funds and £1m on the reduction in pension liabilities was generated before revaluation, investment gains or losses. The result far exceeded the forecast made at the depth of the Coronavirus pandemic in April 2020 and is due to several factors: a redundancy programme in June 2020 resulted in the loss of six posts and a further three of costs resulted in actual expenditure for the year coming in lower than budget; a £0.6m Sustainability Grant from the Archbishops’ Council for COVID-19; the sale of three properties, the 2020 capital budget, all of which sold well; and from the reduction in pension liabilities of the Church of England Funded Pension Scheme of £1.0m (2019: £4.2m).

The increase in the value of Board and Diocesan Stipendiary Fund property of to offset the reduction in value of the investment portfolio of £4.6m (2019: £2.8m increase).

The donations made by parishes through the Parish Support Fund (PSF), which is the name of our parish share scheme, are our principal source of income. The generosity of our parishes has been 2020 was £16.0m (2019: £16.4m). The collection rate for 2020 fell to 96.7% from 99% in 2019. The result is even more striking when set in the context of the mandatory closure of churches to June 2020 and, from March 2020 income for parishes with halls. Grants from the Archbishops’ Council increased due to the Sustainability Grant

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

25

Financial review (continued)

awarded in recognition of the steps taken by the Diocese to mitigate the effects of COVID-19 and to its very low level of historical assets. Other donations increased to £1.8m (2019: £1.6m), owing to an increase in the grant from the Trust for London and to a number of donations from parishes in excess of their agreed PSF pledge.

Income from charitable activities fell to £1.1m (2019: £1.4m), due principally the Diocesan Retreat House because of the pandemic. Investment income fell to £1.9m (2019: £2.4m) due to the pandemic. UK equity income funds were particularly badly affected, and Government-imposed changes to

protect tenants during the pandemic negatively affected both the number of properties available for rent and the rent achieved.

In addition to gains from the disposal of properties of £2.0m (2019: £1.6m), which are the result of the ongoing programme of disposing of properties not suitable for missional needs, gains of £0.3m (2019: £nil) were realised on the sale of investments. However, these proceeds were reinvested in other funds.

The receipts from property sales are used to purchase more suitable properties, build more suitable accommodation, or substantially refurbish parsonage houses when they

fall vacant. During the year, work was completed on the conversion of a very large parsonage into three properties: a more manageably sized parsonage and two three- bedroom apartments for missional use or commercial let.

The reduction in costs is a result of proactive steps taken during the middle of the year to reduce staff numbers, a continuous examination of all areas Church of England Funded Pensions Scheme for clergy.

lockdown in particular, resulted in vacancy works not proceeding at the pace or in the quantity of previous years

26 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

Financial review (continued)

and this had a positive impact on costs in the year.

The amount spent on administration as a proportion of the total gross expenditure of the SDBF amounted to 8.2% (2019: 7.5%). This expenditure continues to be monitored rigorously. It is comparable to other Dioceses and other charities of a similar size and complexity.

The value of investments fell by £4.6m (2019: £2.8m increase) with UK equity income funds being especially badly affected. Net sales of investments during the year were £0.2m (2019: £nil). During the year £4.5m (2019: £nil) of funds were sold and the proceeds Further detail on the investments and their performance can be found in the investment policy section on page 28.

This year we have separately disclosed impairment write-downs for greater transparency. Previously they have been included in the gains on revaluation of is taken at a point in time. Properties are held for the long term and our experience has been that the sale price exceeds the carrying value of the asset.

The capital value of properties rose by £1.8m (2019: £2.6m). The overall expected London property market. Following the decision taken by the Trustees in 2016 whereby properties (20%) of the portfolio was revalued during the year by the SDBF’s appointed

----- Start of picture text -----
2020 2020 2019 2019
Number £’000 Number £’000
Purchases:
Parsonage - - 1 828
Board - - 2 1,070
Total - - 3 1,898
Property development and
improvement:
Parsonage 12 602 28 3,309
Diocesan Stipendiary Fund 3 100 4 363
Board 2 232 3 92
Total 17 934 31 3,764
Completed development projects:
Parsonage - - 1 1,407
Diocesan Stipendiary Fund 3 844 - -
Total 3 844 1 1,407
Sales at book value:
Parsonage 1 409 4 1,980
Diocesan Stipendiary Fund 1 909 - -
Board 1 511 4 3,488
Total 3 1,829 8 5,468
----- End of picture text -----

that took place during the year is shown in the table, right. Expenditure on property development and improvements continue to take place, both to increase the number of units available for curates and other church workers and to ensure that parsonage with our property strategy endorsed by Diocesan Synod and to support Southwark Vision.

average change in the value of the properties revalued was applied to the remainder of the portfolio.

Overall, funds on the balance sheet fell by £2. m (2019: £8.4m increase).

A summary of property transactions

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

27

Financial review (continued)

During the year work was completed on the sub-division of two parsonages to create three additional units of accommodation.

Our policy continues to be:

Under the Mission and Pastoral Measure 2011, the Diocesan Pastoral Account is available for the purchase and/or extent that any remaining funds are not required, or are not likely to be required, for these purposes then the Account may be applied to any general purpose of the SDBF. The policy of the SDBF is to use the Account for exceptional property expenditure and for property staff costs where they are principally engaged in the purchase, sale and maintenance of the property portfolio but not to use it for routine property administration and maintenance.

Balance sheet position

During 2020 the SDBF borrowed £2.3m from the Church Commissioners. The loan has been repaid in full after the balance sheet date. The borrowing from HSBC at Streatham Hill Saint Margaret obtaining planning permission. Once

permission has been granted the site will be sold and the loan repaid.

The Trustees consider that the balance sheet, together with details in Note 21 (see pages 74-75), show broadly that the restricted and endowment funds are held in an appropriate mix of investment and current assets given the purposes for which the funds are held. The net assets at the balance sheet date totalled £289.1m (2019: £292.0m). Included in this total are properties, mostly in use for ministry, whose value amounted to £268.9m (2019: £269.0m).

Reserves policy Free reserves

Free reserves are the total of the unrestricted General Fund. Having requirement and the timing of cash reviewed and amended the policy in 2019. The Trustees’ policy was gradually General Fund such that it was equivalent to three months’ budgeted unrestricted expenditure by the end of 2020, with an aspiration to achieve six months’ budgeted unrestricted expenditure by the end of 2025.

At 31 December 2020, the amount required under this policy totalled £5.9m (2019: £6.1m). Actual free reserves as at 31 December 2020 totalled £5.1m (2019: £6.8m).

The General Fund comprises net assets amounting to £5.1m (2019: £6.8m), of

which £2.9m (2019: £3.3m) is invested in and leasehold property, and a further £2.5m (2019: £3.5m) is held in pooled fund investments.

The Trustees may designate additional unrestricted reserves to be retained for an agreed purpose where this is prudent. Such designated reserves are reviewed on an annual basis and returned to the General Fund if the purpose of their designation is no longer for their retention.

A description of each reserve, together with the intended use of the reserve, is set out in Note 22 (see page 76). At 31 December 2020, total designated reserves were £45.2m (2019: £45.8m). The policy of the Trustees is to gradually return as many of these funds as possible to the General Fund.

Restricted and endowment funds

As set out in Note 21 (see pages 7475), the SDBF holds and administers a number of restricted and endowment funds. As at 31 December 2020, restricted funds totalled £2.9m (2019: £3.5m) and endowment funds totalled £235.8m (2019: £235.9m). Neither are available for the general purposes of the SDBF.

Grant-making policy

The Articles of Association of the SDBF allow for the making of grants in pursuance of its objects. The grants made in the current and previous year

28 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

Financial review (continued)

are disclosed in Note 12 (see pages 62-63). All grants are made from budgets subject to authorisation policies and criteria.

Investment policy

The SDBF is permitted by its Articles of Association to make investments. Note 21 (see pages 74-75) provides details of the assets of each fund, together with the related purposes. Note 16 (see page 69) summarises the movements in investments during the year. The investment principles were reviewed towards the end of 2018.

With most of its capital assets in residential housing, the focus of the Trustees is on the selection and review of investment funds to provide additional income to the Diocese whilst value of capital. The investment policy and principles in this align with the property strategy and Southwark Vision 2017-25.

The Trustees’ investment policy is:

----- Start of picture text -----
Funds Proportion Income Total
at 31 of portfolio yield return
December in year in year
2020
£’000 % % %
Managed funds:
M&G Equity Investment Fund 7,678 31.8 4.9 (12.5)
for Charities
Cazenove Charity Equity 3,746 15.5 4.8 (11.7)
Income Fund
JO Hambro UK Equity Income Fund 2,337 9.6 3.7 (15.4)
CBF Investment Fund 147 0.1 2.8 9.7
Savills Charities Property Fund 2,985 12.3 3.9 1.3
Mayfair Capital PITCH Fund 3,082 12.7 4.6 (1.3)
Sarasin Global Higher Dividend Fund 4,346 18.0 1.8 3.2
Total 24,321 100.0
----- End of picture text -----

The investment objectives are:

results were marginally lower than the benchmark FTSE All Share Total Return Index, generating a decrease of 11.2% compared with a decrease of 10.9% in the benchmark.

The SDBF does not adopt a total return policy for its investments but looks to identify investment managers who can produce income growth whilst preserving capital subject to agreed risk tolerances. Income generated in the year fell to £1.1m (2019: £1.5m).

During the year investments in UK equity funds were sold and the proceeds invested in global equity funds for by the Trustees in 2019.

The investments held and their return during the year are set out in the table above.

Whilst the portfolio recovered some of the losses suffered during the year 16% lower than it started. The

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 29

Principal risks and uncertainties

The Senior Management Team considers, evaluates and records the major areas of risk to which the SDBF is exposed, assessing both the likelihood and impact of those risks being realised, together with the measures in place to manage and mitigate such risks.

wavers. Mitigants include: close, transparent working relationships with all parishes and high quality communications delivered by a professional team.

risks approved by Trustees for 2020 which were revised in light of the economy and indeed society as a whole being impacted by the COVID-19 pandemic.

2. COVID-19

This was a new risk area added in light of the pandemic and, whilst it impacts on and features in other risk areas, Trustees agreed it separate principal risk. COVID-19 has had a major impact on the patterns of worship, and on much of what we call church, particularly on opportunities for fellowship, visiting those in need, and worship in our churches. It is driving considerable change, transforming the social and economic context of our life together, and our churches have • had to adapt to how they interact with their congregations and local communities. There is a risk that the necessary focus on the short • term will distract from longer-term strategic objectives, and there is a risk of reduced pledge payments as • parishes see a fall in their income. There is also a risk that remote working by staff impacts the practical outworking of the values of the Diocesan leadership and staff team, particularly of collaborative team working, and prolonged periods of remote working can • impact the support offered to parishes as well as the well-being of staff. Mitigants include: • developing communications strategies in a more digital environment

3. Data and data protection (GDPR)

and the measures for mitigation are reviewed at least annually by the Audit and Risk Committee, with at least one area of principal risk reviewed in detail at each meeting. Responsibility for delivery delegated to the Diocesan Secretary. The risk register is presented to, discussed by, and amended as Trustees determine and formally agreed by Trustees annually. As an organic document, it is available for inspection by all Trustees.

The COVID-19 pandemic brought renewed urgency to our plans for integrated databases. The collection, integrity and interpretation of data are key for good strategic decisions. The principal risks are that incomplete, inaccurate or misinterpreted data leads to poor decisions, wasted resource and has a negative impact on reputation. Mitigants include:

ensuring that IT systems (including the National Church Institution’s systems) are capable of collection and reporting the data needed that close contact with parish

The risk register for the year ended the risk of either failure to act or the impact of the events was considered “high”. These areas and the associated mitigation strategies were as follows:

1. Communication

The Diocese and all parishes must comply with GDPR or risk legal and reputational consequences. Mitigants include:

30 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

4. Diocesan growth

the launch of the Parish Giving Scheme.

6. Governance

Given the increasing and evolving compliance and regulatory framework for large charities, the risk is a lack of accountability and lack of transparency in decisionmaking. Mitigants include: • ensuring that the scheme of delegation is followed and matters are dealt with at the correct level of governance with all terms of reference of the constituent bodies • being rigorously followed that meetings between the Diocesan Secretary and Chair • and Vice-Chair of the DBF occur at least monthly reviewing there is a formal presentation of annual objectives and progress on objectives to Trustees and Diocesan Synod. •

5. Financial risks

The economic downturn and closure of churches because of COVID-19 has resulted in loss of

7. IT

There is a risk that the loss of access to electronic data, including e-mails, affects the ability responsibilities. Mitigants include: ongoing investment in IT, especially in light of more remote working, • as the outcome of the external IT Review is implemented with a move to the cloud

frequent backups, with a robust disaster recovery plan. The sudden • move to remote working in March 2020 was a good test of the migration to the cloud and of our • IT systems development.

8.

Safeguarding

As a result of the national Independent Inquiry into Child Sexual Abuse (IICSA), and new requirements for the way in which

serious incidents are recorded, resourcing was expanded during 2020. Where there might be one or more occurrences of abuse by someone working for or on behalf of the Church, with consequences for those affected, there is also a reputational risk in the event of poor safeguarding practices. Mitigants include:

ensuring that transparent accountability is robust and secure, and that the Safeguarding Team is fully resourced and line-managed by the Diocesan Secretary legal advice being sought where necessary, particularly with regard to information-sharing that parishes are required to use the online arrangements for Disclosure and Barring Service checks as part of the safe recruitment of those who work with children, young people and adults who may be at risk of harm that the comprehensive training programme is developed and delivered by the Safeguarding Team to all relevant staff and volunteers, with compulsory attendance for those in key roles and delivered online during COVID-19. The risk of a backlog developing can be mitigated by online programme rigorous recording of data and production of statistics to allow full and ongoing reviews of Diocesan safeguarding processes as well as input into IICSA

all safeguarding work being supported by a proactive and sensitive PR and media strategy the formal reporting of safeguarding activity and key risks for annual scrutiny by the Diocesan Audit and Risk Committee and the whole Trustee body at the DCT is a further important mitigant of risk.

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

31

Governance

Structure and governance

Summary information about the structure of the Church of England

The Church of England is the established Church and HM The Queen is the Supreme Governor. It is organised into two provinces (Canterbury and York) and 42 Dioceses. Each Diocese is a See under the care of a Bishop who is charged with the cure of souls of all the people within that geographical area. This charge is shared with priests separate charitable entities but also part of sub-divisions of the Diocese, served by the Diocese and accountable to the Diocese.

The National Church has a General representatives from each Diocese, and it agrees and lays before Parliament Measures for the governance of the Church’s affairs which, if enacted by Parliament, have the force of statute law. In addition to the General Synod, the Archbishops’ Council has a co-ordinating role for work authorised by the Synod; the Church Commissioners manage the historic assets of the Church of England; and the Church of England Pensions Board administers the pension schemes for clergy and lay workers.

Within each Diocese, overall leadership lies with the Diocesan Bishop. The Diocese of Southwark is itself divided into 25 deaneries, each with its own Synod, and within each parish there is a Parochial Church Council (PCC). The PCC shares responsibility with the parish priest for the mission of the church in that place, in a similar

  1. The Company Secretary is the Diocesan Secretary.

way to that in which the Bishop shares responsibilities with the Diocesan Synod. Whilst each Diocese is a separate legal entity, with a clear responsibility for a of the Church of England requires and enables each Diocese to seek support from and work in partnership with other Dioceses.

The governance and policy of the SDBF is the responsibility of the Trustees, who are also members and directors of the company and trustees for the purposes of charity law. Since November 2015, the Diocesan Council of Trustees (DCT, see diagram, above) has been the standing committee of the Diocesan Synod, and its members are members of the Diocesan Board of Finance (DBF), the Bishop’s Council, Diocesan Mission and Pastoral Committee (DMPC) and Parsonages Board (i.e. coterminous membership). Under the revised governance, the DCT comprises the Diocesan Bishop (President of

Organisational structure

The South London Church Fund & Southwark Diocesan Board of Finance (SDBF) is a company limited by guarantee (No 236594) and a registered charity (No 249678) governed by its Articles of Association. It was incorporated in 1929. The Articles were updated and modernised during

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 33

Structure and governance (continued)

the Diocesan Synod), Chair and Vice Chair of the Board of Finance (both laity), Area Bishops, Archdeacons, Chair of the Houses of Clergy and Laity of the Diocesan Synod, six clergy (two from each episcopal Area), 12 members of the laity elected by the House of Laity of the Diocesan Synod (including three from each Area) and up to six further or other relevant expertise formally elected by the House of Laity of the Diocesan Synod. The implementation of this revised governance structure was reviewed by an external consultant during 2018 and was found to be successful and robust. Recommendations for further training of Trustees and development of the more strategic elements of the DMPC were accepted.

The Diocesan Synod, the statutory governing body of the Diocese, is an elected body drawn from across the Diocese with responsibility for setting the vision and strategy of the Diocese. The Synod membership is elected every three years, the last elections having been in 2018. The Synod elects from its members 12 of the lay Trustees of the SDBF and six of the clergy members. The SDBF is subject to the direction of the Synod in all its activities, unless such direction is not in accordance with the governing documents or statutory regulations. Since the DBF developed coterminous membership with the Bishop’s Council, DMPC and Parsonages Board, membership, trusteeship and directorship of the SDBF also includes membership of those other bodies, all part of the DCT. The Diocesan Secretary is Secretary to

each of these, except that the Deputy Diocesan Secretary is Secretary to the DMPC.

Decision-making structure

Corporate priorities and the overall

its primary object to promote, assist and advance the work of the Church of England within the Diocese of Southwark, are set by the Diocesan Synod and the SDBF. The responsibility for ensuring that these priorities and strategies are delivered is delegated to the Diocesan Secretary who reports to the Bishop of Southwark and is also accountable to Trustees through the Chair of the SDBF. The Policy and Finance Committee, which is the standing committee of the Council of Trustees, holds the work of the Diocesan Secretary to account. The company meets once a year in a General Meeting to receive and approve the Annual Report and Financial Statements, appoint the auditors and elect the Chair and Vice Chair, nominated by the Bishop of Southwark.

Each year the Diocesan Synod receives and agrees the annual budget, prepared and approved by the Board. The Diocesan Council of Trustees (DBF) one all-day meeting to consider the annual budget and objectives. Trustees formulate and coordinate policies on

of decisions to its Policy and Finance Committee, Audit and Risk Committee and Investment Committee

The Trustees are assisted in their work by two committees.

The Policy and Finance Committee (PFC) is the standing committee of the DCT and monitors management accounts and budget, the use of assets and investment policies, and exercises the authority delegated to it by the Trustees in areas such as grants and loans. It also undertakes the Board’s responsibilities under the Parsonages Measures 1938 and 1947; the Repair of Parochial Church Councils (Powers) Measure 1956, as amended, and the Incumbents and Churchwardens (Trusts) Measure 1964 (with respect to parochial property); the Endowment and Glebe Measure 1976 (with regard to property assets); and the Mission and Pastoral Measure 2011 (with regard to redundant churches). In addition, this

34 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

committee considers and initiates areas of strategic policy where proposals are at an early stage of development prior to submission to the Board. It meets meeting which particularly examines the forthcoming budget, work plans and annual objectives. It holds the work of the Diocesan Secretary to account and, through her, the work of the executive team.

The Audit and Risk Committee scrutinises performance, oversees issues external audit, prepares the response to the external auditor’s management letter, scrutinises the effectiveness of governance and reviews the risk register and major areas of risk. It meets four times a year. Following a 2018 review of the implementation of the governance changes in 2015, the committee changed its name in 2019. It was previously known as Audit and Governance.

In addition, the Board is advised by its Investment Sub-Committee , which provides advice to the PFC and to the Diocesan Secretary on the SDBF’s investments and funds available for investment. This meets meetings. The board is also advised by its Remuneration Committee, which normally meets annually.

Trustee recruitment, selection and induction

Board Trustees (DBF) are also members of the Bishop’s Council, DMPC and Diocesan Parsonages Board and are selected as set out above. Potential

Trustees complete skills audits, there is a role description and Trustees are given induction at the outset of the triennium and at other times as appropriate, such as when Trustees are elected or appointed during the triennium. They are also informed, before seeking membership and at all other relevant times, of the role and function of each committee and constituent element of the DCT. Some staff hold the title of ‘Director’ but this relates to their function within the organisation and has no legal meaning within the terminology associated with the Companies Act. All Trustees are required to sign the Diocesan Declaration of Eligibility, statement forms. A Handbook of Governance is given to each Trustee.

Remuneration of key management personnel

Remuneration of the Diocesan

Secretary is determined annually by the Remuneration Committee, which also receives the Diocesan Secretary’s remuneration recommendations for members of the Senior Management Team, which the Remuneration Committee then considers for approval. The committee is a sub-committee of the PFC, formally reporting through it to the Board. It is chaired by the Bishop of Southwark and includes the Chair and Vice-Chair of the SDBF and any external consultants as they determine. The committee in 2020 included the Chair of the PFC.

Delegation of

day-to-day delivery

The Trustees and the committees which responsibilities delegate management to the Diocesan Secretary who, with her Senior Management Team, delivers the activities of the company in accordance with the policies of the Trustees. The general delegated authority to deliver the business of the Board.

Funds held as

Diocesan Authority

The Board acts as Diocesan Authority or Custodian Trustee of assets held on permanent trust by virtue of the Parochial Church Councils (Powers) Measure 1956, as amended, and the Incumbents and Churchwardens (Trusts) Measure 1964 where the Managing Trustees are PCCs and others. These statements as the SDBF does not control them, and they are segregated from the SDBF’s own assets by means of a separate bank account, separately separate accounting system. Further market value amounted to £16.6m at 31 December 2020 (2019: £16.5m), are available from the SDBF on request, and are summarised in Note 29 (see page 83). Where properties are held as Diocesan Authority, the in safe custody by the SDBF’s solicitor, Winckworth Sherwood LLP.

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 35

Structure and governance (continued)

Section 172 statement

This section serves as our Section 172 statement and should be read in conjunction with the Strategic Report on pages 12-31. Section 172 of the Companies Act 2006 requires Directors to take into consideration the interests of stakeholders in their decisionmaking. The Directors continue to have regard to the interests of the Company’s employees and other stakeholders, including the impact of its activities on the community, the environment and the Company’s reputation, when making decisions.

The majority of Directors are elected from the parishes and communities served by the Diocese, ensuring coverage geographically across the Diocese through elections from the Diocesan Synod. The presentations by the Chair of the Board to Diocesan Synod, covering budgets, objectives and the Annual Report, are examples of this.

Acting in good faith and fairly between members, the Directors consider what is most likely to promote the success of the Company in the context of being a DBF among some 40 others across the Church of England, and also in being a charity with charitable objectives focused on mission and ministry. Whilst the importance of giving due consideration to our stakeholders is not new, we are explaining in more detail this year how the Board engages with our stakeholders, to comply with the requirement to include a statement setting out how our Directors have discharged this duty.

the success of the Company in accordance with Section 172 of the Companies Act 2006.

The Board regularly reviews how we engage with the parishes and Deaneries across the Diocese which comprise the electing body of Synod. In effect, the Directors through the DBF are the standing committee of Synod, and the Chairs of both the House of Laity and the House of Clergy are on the • Board, as are representatives of both parish clergy and lay people in parishes.

The stakeholder voice is brought into the boardroom throughout the annual cycle through information provided by management and also by direct engagement with • stakeholders themselves. In our Strategic Report (pages 12-31) we set out some of our other principal stakeholders, how and why we engage, and detail engagement outcomes. The relevance of each stakeholder group may increase or decrease depending on the matter or issue in question, so the Board seeks to consider the needs and priorities of each stakeholder group • during its discussions and as part of its decision-making.

The SDBF has good relationships with its suppliers, parishes and others. Committees of the DBF include members who hold roles in parishes; and engagement with parishes, including with volunteer annual meetings across the Diocese, organised on an Archdeaconry and Deanery basis.

effectively the Chief Executive the Board through regular meetings at least monthly with the Chair and Vice Chair, and through the Policy and Finance Committee where a range of employees attend, and through the Board meetings, any of which can be attended by employees from the Senior Management Team. Directors of the Board include the six Archdeacons and four Bishops and they have regular and open contact with employees at all levels of the organisation. All heads of departments have team meetings and individual meetings with staff and there are also all-staff meetings. The Senior Management Team has been designated as “senior management” for the purposes of the 2018 Code but not for the purposes of section 414C(8) of the Companies Act 2006. It comprises the senior functional management roles and together is made up of those with responsibility for interacting with the Company’s principal stakeholders. The Board has had in place since 2015 measures to ensure that stakeholder interests are always taken into account. Where external legal advice is required, the Directors can consult with the Diocesan Registrar or ask senior staff such as the Diocesan Secretary or Deputy Diocesan Secretary to do so on their behalf.

36 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

Trustees’ responsibilities

The Trustees are responsible for preparing the Annual Report, which incorporates the Strategic Report, and with applicable law and regulations.

Company law requires the Trustees that law the Trustees have elected 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 view of the state of the affairs of the charitable company and of the surplus statements the Trustees are required to:

The Trustees are responsible for keeping adequate accounting records the charitable company’s transactions and disclose, with reasonable

St Stephen, Dulwich; the picture, by St Stephen’s Director of Visual Communications, Sarah Bucknall, won Ecclesiastical Insurance’s regional photography prize early in 2020.

position of the charitable company 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 charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Trustees are responsible for the maintenance and integrity of the included in the Diocesan website.

Statement of disclosure to the auditor

So far as the Trustees are aware:

Appointment of auditor

The appointment of new auditors, Buzzacott LLP, will be proposed at the Annual General Meeting.

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 37

Administrative details

Trustees

  1. The following Trustees were in post during the period statements.

Mrs Lotwina Farodoye

Vice Chair of the Board of Finance (to 19 September 2020, then the Bishop’s nominee as the Revd Lotwina Farodoye from 28 October 2020)

Sir David Beamish Vice Chair of the Board of Finance (from 14 November 2020)

President

The Right Revd Christopher Chessun, The Bishop of Southwark

The Right Revd Jonathan Clark, The Bishop of Croydon The Right Revd Dr Richard Cheetham, The Bishop of Kingston The Right Revd Dr Karowei Dorgu, The Bishop of Woolwich The Venerable Christopher Skilton (to 29 February 2020), The Archdeacon of Croydon The Venerable Dr Rosemarie Mallett (installed as Archdeacon from 15 March 2020), The Archdeacon of Croydon

The Venerable Simon Gates, The Archdeacon of Lambeth The Venerable Alastair Cutting, The Archdeacon of Lewisham & Greenwich The Venerable Moira Astin, The Archdeacon of Reigate The Venerable Dr Jane Steen, The Archdeacon of Southwark The Venerable John Kiddle, The Archdeacon of Wandsworth

Elected by Synod (House of Clergy)

The Revd Canon Peter Farley-Moore (to 21 December 2020) The Revd Jonathan Macy The Revd Gregory Prior The Revd Katie Thomas The Revd Alison Way (to 22 January 2020) The Revd Canon Leslie Wells

Elected by Synod (House of Laity)

Mr Bill Bishop Sir David Beamish (to 14 November 2020) Mrs Rebecca Chapman Mrs Jacqueline Dean Mr John Dewhurst Ms Despina Francois Ms Vasanthini Gnanadoss Mr Joseph Goswell Mr Alex Helliwell Dr David Keiller Ms Solabomi Ogun Mr Colin Plant

Lay persons elected as specialists

Dr Nicholas Burt Mr Philip Fletcher Mr Michael Hartley Mr Andrew McMurtrie Mr Nicholas Stansbury (from 4 March 2020)

Chair of the House of Clergy

Senior staff

The Venerable Dr Rosemarie Mallett

Chair of the House of Laity

Mr Adrian Greenwood

Appointed by the Bishop of Southwark

Mr Alan Saunders, Chair of the Board of Finance

Ms Ruth Martin (Lay Canon), Diocesan Secretary The Revd Canon Stephen Roberts Deputy Diocesan Secretary (to 31 July 2020) Mr Anthony Demby, Director of Finance and Financial Assets Mr Colin Bushell, Diocesan Surveyor Mr David Loft, Director of Human Resources

38 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

Mr Mark Charlton,

Director of Information Technology The Revd Canon Wendy Robins, Director of Press and Communications (to 2 November 2020, then Director of Discipleship, Lay Ministry and Continuing Ministerial Education)

Ms Sophia Jones, Director of Communications (from 2 November 2020)

Mrs Jacqueline Pontin Director of Strategic and Operational Projects (to 31 July 2020, then Deputy Diocesan Secretary)

Solicitors

Winckworth Sherwood LLP Minerva House, 5 Montague Close, London SE1 9BB

Investment Fund Managers

Cazenove Capital Management Ltd 1 London Wall Place, London EC2Y 5AU

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

JO Hambro Capital Management Ltd 1 St James’s Market, London SW1Y 4AH

Trinity House, 4 Chapel Court, Borough High Street, London SE1 1HW

Advisers Bankers

National Westminster Bank plc 91 Westminster Bridge Road, London SE1 7HW

HSBC UK Bank plc 10 York Road, London SE1 7ND

HSBC Private Bank (UK) Limited 8 Cork Street, London W1S 3LJ

Independent Auditor

Haysmacintyre LLP 10 Queen Street Place, London EC4R 1AG

M&G Securities Ltd 10 Fenchurch Avenue, London EC3M 5AG

Mayfair Capital Investment Management Ltd 2 Cavendish Square, London W1G 0PU

Sarasin & Partners LLP Juxon House, 100 St Paul’s Churchyard, London EC4M 8BU

Savills Investment Management (UK) Ltd 33 Margaret Street, London W1G 0JD

Insurers

Ecclesiastical Insurance Group plc Beaufort House, Brunswick Road, Gloucester GL1 1JZ

In approving this Trustees’ Report, the Trustees are also approving the Strategic Report included on pages 12-31 in their capacity as Company Directors.

By order of the Trustees

Alan Saunders Chair of the Board of Finance 20 May 2021

Ruth Martin (Lay Canon)

Secretary 20 May 2021

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 39

Financial statements

Independent auditor’s report

Opinion

of The South London Church Fund & Southwark Diocesan Board of Finance for the year ended 31 December 2020, which comprise the Statement of Financial Activities, the Summary Income and Expenditure Account, the Balance Sheet, the Statement of Cash Flows and the Notes to the Financial Statements, including a summary of 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).

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 our report. We are independent of the charitable company in accordance with the ethical requirements that are statements in the UK, including the FRC’s Ethical Standard, and we have in accordance with these requirements. We believe that the audit evidence appropriate to provide a basis for our opinion.

Conclusions relating to going concern

have concluded that the Trustees’ use of the going concern basis of accounting statements is appropriate.

Based on the work we have performed, uncertainties relating to events or conditions that, individually or on the charitable company’s ability

to continue as a going concern for a period of at least 12 months from when for issue.

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

Other information

The Trustees are responsible for the other information. The other information comprises the information included in the Trustees’ Annual Report. 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 is to read the other information and, in doing so, consider whether the other information is materially inconsistent 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

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

41

Independent auditor’s report (continued)

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

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

Matters on which we are required

to report by exception

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

Responsibilities of Trustees for the

As explained more fully in the Trustees’ Responsibilities statement, the Trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the true and fair view, and for such internal control as the Trustees determine is necessary to enable the preparation of material misstatement, whether owing to fraud or error.

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

Our objectives are to obtain reasonable statements as a whole are free from material misstatement, whether owing 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 of users taken on the basis of these

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

42 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

Based on our understanding of the charitable company and the environment the principal risks of non-compliance with laws and regulations related to charity law, and we considered the extent to which non-compliance might statements. We also considered those laws and regulations that have a direct impact on the preparation of Companies Act 2006, the Charities Act 2011, payroll tax and sales tax.

We evaluated management’s incentives and opportunities for fraudulent (including the risk of override of controls), and determined that the principal risks were related to the posting of inappropriate journal entries and management bias in accounting estimates and judgements. Audit procedures performed by the engagement team included:

or suspected instances of noncompliance with laws and regulation and fraud;

evaluating management’s controls designed to prevent and detect irregularities;

identifying and testing journals, in particular journal entries posted with unusual account combinations, postings by unusual users or with unusual descriptions; and challenging assumptions and judgements made by management in their critical accounting estimates.

A further description of our responsibilities for the audit of the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our 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.

David Sewell

Senior Statutory Auditor

For and on behalf of Haysmacintyre LLP, Statutory Auditor 10 Queen Street Place, London EC4R 1AG

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

43

Statement of Financial Activities for the year ended 31 December 2020

----- Start of picture text -----
Unrestricted funds Restricted Endowment Total funds Total funds
funds funds 2020 2019
General Designated
Note £’000 £’000 £’000 £’000 £’000 £’000
Income and endowments from:
Donations 3
Parish contributions 15,980 - - - 15,980 16,413
Archbishops’ Council 876 - 1,150 - 2,026 1,123
Other donations 1,714 38 - - 1,752 1,631
Charitable activities 4 1,096 - - - 1,096 1,360
Other activities 5 61 - - - 61 148
Investments 6 1,798 - 97 - 1,895 2,358
Other 7 274 1,341 - 853 2,468 1,568
Total 21,799 1,379 1,247 853 25,278 24,601
Expenditure on:
Raising funds 8 7 - - 17 24 24
Charitable activities 9 22,813 - 1,061 6 23,880 20,687
Total 22,820 - 1,061 23 23,904 20,711
Net income/(expenditure)
before investment gains (1,021) 1,379 186 830 1,374 3,890
Net (losses)/gains on investments 16 (553) - (495) (3,593) (4,641) 2,839
Impairment write-downs 15 - - - (1,400) (1,400) (950)
Net (expenditure)/income (1,574) 1,379 (309) (4,163) (4,667) 5,779
Transfers between funds 14 (103) (2,399) (246) 2,748 - -
Other recognised gains:
Gains on revaluation
15 - 445 - 1,364 1,809 2,636
Net movement in funds (1,677) (575) (555) (51) (2,858) 8,415
Total funds brought forward 6,813 45,784 3,498 235,897 291,992 283,577
Total funds carried forward 20 5,136 45,209 2,943 235,846 289,134 291,992
----- End of picture text -----

of the prior year Statement of Financial Activities (SoFA) is included at Note 28 (see page 82).

44 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

Income and expenditure account for the year ended 31 December 2020

----- Start of picture text -----
2020 2019
£’000 £’000
Total income 24,42 24,601
Total expenditure (23,881) (20,695)
Operating surplus for the year 544 3,906
Net (losses)/gains on investments (1,048) 672
Net (expenditure)/income for the year (504) 4,578
Other comprehensive income:
445 772
Net assets transferred to endowments (2,748) (4,328)
Total comprehensive (expenditure)/income (2,807) 1,022
----- End of picture text -----

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

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 45

Balance sheet as at 31 December 2020

----- Start of picture text -----
Company Number 236594 2020 2019
Note £’000 £’000 £’000 £’000
Fixed assets:
Tangible assets 15 269,280 269,379
Investments 16 24,321 29,169
Total 293,601 298,548
Current assets:
Debtors 17 1,897 1,17
Cash on deposit 1,895 669
Cash at bank and in hand 1,202 803
Total 4,994 2,642
Creditors: amounts falling due
within one year 18 (5,195) (2,25 )
Net current (liabilities)/assets (201) 391
Total assets less current liabilities 293,400 298,939
Creditors: amounts falling due
after more than one year:
Pension scheme liabilities 19 (185) (1,154)
Other creditors 19 (4,081) (5,794)
Net assets 289,134 291,992
Funds:
Endowment funds 235,846 235,897
Restricted income funds 2,943 3,498
Unrestricted income funds:
General Fund 5,136 6,813
Designated funds 45,209 45,784
Total funds 21 289,134 291,992
----- End of picture text -----

20 May 2021 and signed on behalf of the Board by:

Alan Saunders

Chair of the Board of Finance

46 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

for the year ended 31 December 2020

----- Start of picture text -----
2020 2019
£’000 £’000 £’000 £’000
(4,763) (3,784)
Dividends, interest and rent from investments 1,894 2,358
Proceeds from the sale of:
4,536 6,790
Investments 4,465 -
Purchase of:
(1,845) (5,741)
Fixed asset investments (4,259) -
Net cash provided by investing activities 4,791 3,407
Repayment of borrowing (713) (767)
2,311 1,000
1,598 233
Change in cash and cash equivalents in the reporting period 1,626 (144)
Cash and cash equivalents at 1 January 1,471 1,616
Cash and cash equivalents at 31 December 3,097 1,472
----- End of picture text -----

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 47

for the year ended 31 December 2020

----- Start of picture text -----
2020 2019
from operating activities £’000 £’000
Net income before investment gains for the year 1,374 3,890
Adjustments for:
Depreciation charges 109 109
Dividends, interest and rent from investments (1,894) (2,358)
(969) (4,164)
Decrease in value of Value-Linked Loans 15 -
(2,306) (1,568)
(Increase)/decrease in debtors (726) 821
Decrease in creditors (366) (514)
Net cash used in operating activities (4,763) (3,784)
Analysis of cash and cash equivalents 2020 2019
£’000 £’000
Cash in hand 1,202 803
Notice deposits (less than three months) 1,895 669
Total 3,097 1,472
Analysis of changes in net debt At 1 Cash Other At 31
January non-cash December
2020 changes 2020
£’000 £’000 £’000 £’000
Cash 1,472 1,625 - 3,097
Loans falling due within one year (300) (1,598) (1,713) (3,611)
Loans falling due after one year (5,794) - 1,713 (4,081)
Total (4,622) 27 - (4,595)
----- End of picture text -----

48 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

Notes to the

1. Accounting policies

The South London Church Fund & Southwark Diocesan Board of Finance (SDBF) is a charitable company limited by guarantee, incorporated in England and Wales and registered with the Charity Commission. In the event of the charitable company being wound up the liability in respect of the guarantee is limited to £1. The SDBF meets the

b. Accounting convention and basis of preparation

historical cost basis with the exception of freehold properties, which are included at their Fair Value as determined under the applicable valuation method as included at their Fair Value at the balance sheet date.

In light of the COVID-19 epidemic, the Directors/ Trustees have reviewed forecasts for the 12 months statements and consider that there are no material uncertainties regarding the SDBF’s ability to continue as a going concern.

d. Income

All income is included in the Statement of Financial Activities (SoFA) when the SDBF is legally entitled to it as income or capital respectively, ultimate receipt is probable and the amount to be recognised can be

e.

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

donor which have not been met at the year-end are not recognised in the SoFA and are included in creditors.

Expenditure

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

49

Notes to the

1.Accounting policies (continued)

its freehold and leasehold properties on a rolling basis are extrapolated across the remaining portfolio to ensure that the carrying value of freehold properties approximates Fair Value. The revaluation gains or losses are reported within other recognised gains and losses in the SoFA.

Assets under construction

Assets under construction are recorded at cost during construction. On completion they are transferred to either the Board Property Fund or Diocesan Stipendiary Fund where the properties are measured at Fair Value or the Parsonage Fund where the property is carried at the cost of construction.

Properties subject to value-linked loans

the SDBF participates is accrued at current value in creditors distinguished between contributions falling due within one year and after more than one year.

Properties that have been bought with the assistance of value-linked loans from the Church as loan creditors. The properties are stated at Fair Value and are revalued at each reporting date. On disposal the agreed share of the net sale proceeds will be remitted to the Church Commissioners and the related loan liability extinguished.

represent the SDBF’s contributions payable in respect of the accounting period, in accordance with FRS 102.

SDBF staff joining after July 2013 are members of the Pension Builder section of the CWPF. Contributions to this scheme paid by the SDBF are charged to the SoFA as resources expended on the accruals basis.

f. Freehold and leasehold properties

of chartered surveyors to undertake a full valuation of

The SDBF has followed the requirements of FRS (parsonages). FRS 102 requires the accounting treatment to follow the substance of arrangements rather than their strict legal form. The SDBF is formally responsible for the maintenance and repair of such properties and has some jurisdiction over their future use or potential sale if not required as incumbent. The Trustees consider the most suitable accounting policy is to capitalise such properties as expendable endowment assets and to carry them at SDBF has adopted the estimated reinstatement cost purchased or built after 1 January 2015 are included from the Diocesan Stipendiary Fund are included at the carrying value at the date of transfer.

50 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

1.Accounting policies (continued)

i. Financial instruments: assets and liabilities Concessionary loans

Depreciation is not charged on buildings as the Trustees consider that any provision (annual or cumulative) would not be material owing to the very long expected remaining useful economic life in each case, and that their expected residual value is not materially less than their carrying value. The SDBF has a policy of regular structural inspection, repair and maintenance, which in the case of residential properties is in accordance with the Repair of are therefore unlikely to deteriorate or suffer from obsolescence. In addition, disposals of properties occur well before the end of their economic lives and disposal proceeds are usually not less than their carrying value.

Leasehold improvements

Improvements made to leasehold properties are amortised in the SoFA over the term of the lease or the break clause where there is an expectation that this will be exercised.

The SDBF makes loans to further its charitable purposes, typically being loans to parishes, at nil interest or at rates below prevailing market rates. It is also in receipt of loans that are interest-free or at rates below prevailing market rates from the Church Commissioners for England and the Central Board loans and accounted for in accordance with Section 34 of FRS 102 whereby the loans are initially recognised and measured at the amount paid or received and accrued interest and any subsequent impairment.

Debtors are recognised at the settlement amount due.

Cash and cash equivalents

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

g.

Other tangible assets are recognised at cost less accumulated depreciation and any accumulated impairment losses.

Depreciation is charged to the SoFA over the expected useful economic life of the asset at the following rates:

h. Other accounting policies

Creditors and provisions

Creditors and provisions are recognised where the SDBF 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.

Value-linked loans

The SDBF value-linked loans for which the settlement proceeds are based on the value of the related instrument under FRS 102, these loans are recognised at Fair Value and are revalued at each reporting date to match the value of the related property.

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 51

Notes to the

1.Accounting policies (continued)

2. Critical accounting estimates and judgements

made judgements, estimates and assumptions that affect the application of the SDBF’s accounting policies and the reported assets, liabilities, income and expenditure and the disclosures continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The key area of estimation is the measurement of the SDBF’s property assets at Fair Value. The Charity SORP requires entities that have adopted a policy of revaluation to undertake valuations on a regular basis to ensure that the carrying amount of the revalued assets does not differ materially from Fair Value at the end of the reporting period.

that the carrying value of the freehold properties excluding the proportion of the properties valued in the year are extrapolated across the remainder of the property portfolio

Those properties selected for valuation are taken across the SDBF’s diverse property portfolio and the trustees consider this to be a reasonable basis for estimating the Fair Value of the SDBF’s freehold properties at the balance sheet date. Any variances from actual Fair Value and the estimated Fair Value reported on the balance sheet, and other gains and losses reported in the SoFA. Income and expenditure is not impacted freehold property held at estimated Fair Value.

52 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

3. Donations

Parish contributions

Donations are made by the parishes of the Diocese using an informed generosity system.

----- Start of picture text -----
2020 2019
£’000 £’000
Unrestricted General Fund:
Current year receipts from parishes 15,939 16,357
Previous year receipts from parishes 41 56
Total income 15,980 16,413
----- End of picture text -----

Church Commissioners and Archbishops’ Council

----- Start of picture text -----
2020 Unrestricted Restricted Total funds
General Fund funds 2020
£’000 £’000 £’000
Sustainability grant 600 - 600
Strategic Development grant - 529 529
Ordinand training grant - 621 621
Area Bishops grant 276 - 276
Total 876 1,150 2,026
2019 Unrestricted Restricted Total funds
General Fund funds 2019
£’000 £’000 £’000
Strategic Development grant - 257 257
Ordinand training grant - 583 583
Area Bishops grant 283 - 283
Total 283 840 1,123
----- End of picture text -----

Two unrestricted grants were received: from the Church Commissioners, an Area Bishops grant to fund the Area Bishops’ administrative costs; and, from the Archbishops’ Council, a Sustainability grant to address the impact of COVID-19.

Three restricted grants were received: from the Church Commissioners, a Strategic Development grant towards the cost of resourcing mission in the Vauxhall, Nine Elms and Battersea area and through Fresh Expressions across the Diocese; from the Archbishops’ Council, a block grant for Ordinand training; and a further Strategic Development grant.

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

53

Notes to the

3. Donations (continued)

Other donations

----- Start of picture text -----
2020 Unrestricted funds
General Designated Total funds
2020
£’000 £’000 £’000
Unrestricted General Fund:
All Churches Trust grant 258 - 258
Trust for London grant 1,369 - 1,369
Legacy income - 38 38
Other grants and donations 87 - 87
Total 1,714 38 1,752
2019 Unrestricted funds
General Designated Total funds
2019
£’000 £’000 £’000
Unrestricted General Fund:
All Churches Trust grant 258 - 258
Trust for London grant 1,147 - 1,147
Legacy income - 76 76
Other grants and donations 150 - 150
Total 1,555 76 1,631
----- End of picture text -----

54 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

4. Charitable activities

----- Start of picture text -----
2020 2019
£’000 £’000
Unrestricted General Fund:
Statutory fees 361 421
Reimbursement of stipends 619 499
Other income 70 150
Diocesan Retreat House 46 169
Total 1,096 1,360
----- End of picture text -----

5. Other trading activities

----- Start of picture text -----
2020 2019
£’000 £’000
Unrestricted General Fund:
Room hire and recharges 61 148
Total 61 148
----- End of picture text -----

6. Investment income

----- Start of picture text -----
2020 Unrestricted Restricted Total funds
General Fund funds 20
£’000 £’000 £’000
Dividends receivable 965 97 1,062
Interest receivable 12 - 12
Rents receivable 821 - 821
Total 1,798 97 1,895
2019 Unrestricted Restricted Total funds
General Fund funds 201
£’000 £’000 £’000
Dividends receivable 1,328 145 1,473
Interest receivable 29 - 29
Rents receivable 856 - 856
Total 2,213 145 2,358
----- End of picture text -----

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 55

Notes to the

7. Other income

----- Start of picture text -----
2020 Unrestricted funds
General Designated Restricted Endowment Total funds
funds funds 2020
£’000 £’000 £’000 £’000 £’000
Coronavirus Job Retention Scheme claim 161 - - - 161
Gain/(loss) on sale of investments (20) - - 318 298
Gain on disposal of other properties 133 - - 535 668
- 1,341 - - 1,341
Total 274 1,341 - 853 2,468
2019 Unrestricted funds
General Designated Restricted Endowment Total funds
funds funds 2019
£’000 £’000 £’000 £’000 £’000
Gain on disposal of other properties 195 - - - 195
- 1,373 - - 1,373
Total 195 1,373 - - 1,568
----- End of picture text -----

56 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

8. Fundraising costs

----- Start of picture text -----
2020 Unrestricted funds
General Designated Restricted Endowment Total funds
funds funds 2020
£’000 £’000 £’000 £’000 £’000
Property rental costs 7 - - 17 24
Total 7 - - 17 24
2019 Unrestricted funds
General Designated Restricted Endowment Total funds
funds funds 2019
£’000 £’000 £’000 £’000 £’000
Property rental costs 9 - - 15 24
Total 9 - - 15 24
----- End of picture text -----

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 57

Notes to the

9. Charitable activities

----- Start of picture text -----
2020 Unrestricted funds
General Designated Restricted Endowment Total funds
funds funds 2020
£’000 £’000 £’000 £’000 £’000
Contributions to Archbishops’ Council:
Training for Ministry 668 - - - 668
National Church responsibilities 651 - - - 651
Retired clergy housing costs 267 - - - 267
1,586 - - - 1,586
Resourcing mission and ministry:
Parish Ministry:
Stipends and National Insurance 9,796 - - - 9,796
Pension contributions 3,129 - - - 3,129
- - -
(969) (969)
Housing costs 3,520 - - - 3,520
Removal and resettlement grants 557 - - - 557
Other expenses 3,277 - - 6 3,283
19,310 - - 6 19,316
Support for parish ministry 1,686 - 1,061 - 2,747
Diocesan Retreat House 231 - - - 231
21,227 - 1,061 6 22,294
Total 22,813 - 1,061 6 23,880
----- End of picture text -----

58 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

9. Charitable activities (continued)

----- Start of picture text -----
2019 Unrestricted funds
General Designated Restricted Endowment Total funds
funds funds 2019
£’000 £’000 £’000 £’000 £’000
Contributions to Archbishops’ Council:
Training for Ministry 675 - - - 675
National Church responsibilities 663 - - - 663
Retired clergy housing costs 255 - - - 255
1,593 - - - 1,593
Resourcing mission and ministry:
Parish Ministry:
Stipends and National Insurance 9,644 - 7 - 9,651
Pension contributions 3,139 - 2 - 3,141
- - -
(4,164) (4,164)
Housing costs 3,644 - - - 3,644
Removal and resettlement grants 900 - - - 900
Other expenses 3,126 - - 1 3,127
16,289 - 9 1 16,299
Support for parish ministry 1,951 (40) 575 - 2,486
Diocesan Retreat House 309 - - - 309
18,549 (40) 584 1 19,094
Total 20,142 (40) 584 1 20,687
----- End of picture text -----

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 59

Notes to the

10.Analysis of expenditure including allocation of support costs

----- Start of picture text -----
2020 Activities Grant Support Total costs
undertaken funding of costs 2020
directly activities
£’000 £’000 £’000 £’000
Charitable activities:
Contributions to Archbishops’ Council - 1,586 - 1,586
Resourcing parish ministry 18,663 880 1,961 21,504
Education and social responsibility - 559 - 559
Diocesan Retreat House 231 - - 231
Total 18,894 3,025 1,961 23,880
2019 Activities Grant Support Total costs
undertaken funding of costs 2019
directly activities
£’000 £’000 £’000 £’000
Charitable activities:
Contributions to Archbishops’ Council - 1,593 - 1,593
Resourcing parish ministry 15,265 1,116 1,824 18,205
Education and social responsibility - 580 - 580
Diocesan Retreat House 309 - - 309
Total 15,574 3,289 1,824 20,687
----- End of picture text -----

60 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

11.Analysis of support costs

----- Start of picture text -----
2020 Unrestricted Endowment Total funds
General Fund funds 2020
£’000 £’000 £’000
Central administration 1,860 6 1,866
Governance:
External audit 34 - 34
Registrar and Chancellor 60 - 60
Synodical costs 1 - 1
Total 1,955 6 1,961
2019 Unrestricted Endowment Total funds
General Fund funds 2019
£’000 £’000 £’000
Central administration 1,726 1 1,727
Governance:
External audit 35 - 35
Registrar and Chancellor 55 - 55
Synodical costs 6 - 6
Total 1,823 1 1,824
----- End of picture text -----

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 61

Notes to the

12.Analysis of grants made

----- Start of picture text -----
2020 Number Individuals Institutions 2020 total
£’000 £’000 £’000
From unrestricted funds for National
Church responsibilities:
Contributions to Archbishops’ Council 1 - 1,586 1,586
1 - 1,586 1,586
From unrestricted funds:
Southwark Diocesan Board of Education 1 - 351 351
Southwark Diocesan Welcare 1 - 208 208
Southwark Cathedral 1 - 18 18
Parishes for mission 138 - 181 181
Other institutions for mission 36 - 33 33
Individuals for mission 7 1 - 1
58 209 - 209
Clergy for study/sabbatical 20 12 - 12
Ordinands in training 17 230 - 230
279 452 791 1,243
From restricted funds for various purposes
within resourcing parish ministry:
Mission and growth (Strategic Development Fund) 1 - 143 143
Education and development of women clergy (Gilmore Fund) 22 9 - 9
Clergy and lay training (Dartmouth House Fund) 12 44 - 44
35 53 143 196
Total 315 505 2,520 3,025
----- End of picture text -----

62 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

12.Analysis of grants made (continued)

----- Start of picture text -----
2019 Number Individuals Institutions 2019 total
£’000 £’000 £’000
From unrestricted funds for National
Church responsibilities:
Contributions to Archbishops’ Council 1 - 1,593 1,593
1 - 1,593 1,593
From unrestricted funds:
Southwark Diocesan Board of Education 1 - 334 334
Southwark Diocesan Welcare 1 - 206 206
Southwark Cathedral 1 - 18 18
Parishes for mission 145 - 222 222
Other institutions for mission 47 - 93 93
Individuals for mission 10 13 - 13
68 229 - 229
Clergy for study/sabbatical 30 30 - 30
Ordinands in training 61 525 - 525
365 797 873 1,670
From restricted funds for various purposes
within resourcing parish ministry:
Mission and growth (Strategic Development Fund) 1 - 3 3
Education and development of women clergy (Gilmore Fund) 29 10 - 10
Clergy and lay training (Dartmouth House Fund) 16 13 - 13
46 23 3 26
Total 412 820 2,469 3,289
----- End of picture text -----

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 63

Notes to the

13. Staff costs

----- Start of picture text -----
2020 2019
£’000 £’000
Employee costs during the year were as follows:
Wages and salaries 2,445 2,435
National Insurance contributions 266 259
Pension costs 464 490
Termination payments 77 -
3,252 3,184
The average number of persons employed 2020 2019
during the year, including temporary staff: Number Number
20 22
Property 11 11
Vocations, ministry, safeguarding and Diocesan Retreat House 23 28
Mission and public policy 20 26
74 87
The average number of persons employed during the year based on full-time equivalents: 2020 2019
Number Number
19.9 17.6
Property 10.6 9.6
Vocations, ministry, safeguarding and Diocesan Retreat House 13.9 17.3
Mission and public policy 16.9 20.6
61.3 65.1
----- End of picture text -----

£60,000 were as follows:

----- Start of picture text -----
2020 2019
Number Number
£60,001-£70,000 3 5
£70,001-£80,000 1 1
£90,001-£100,000 1 1
Total 5 7
----- End of picture text -----

64 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

13. Staff costs (continued)

Remuneration of key management personnel

Key management personnel are deemed to be those having authority and responsibility, delegated to them by the Trustees, for planning, directing and controlling the activities of the Diocese. During 2020 they were: Diocesan Secretary and Company Secretary Ms Ruth Martin (Lay Canon) Deputy Diocesan Secretary The Revd Canon Stephen Roberts (to 31 July 2020) Director of Finance and Financial Assets Mr Anthony Demby Diocesan Surveyor Mr Colin Bushell Director of Human Resources Mr David Loft Director of Information Technology Mr Mark Charlton Director of Press and Communications The Revd Canon Wendy Robins (to 2 November 2020, then Director of Discipleship, Lay Ministry and Continuing Ministerial Education) Director of Communications Ms Sophia Jones (from 2 November 2020) Director of Strategic and Operational Projects Mrs Jacqueline Pontin (to 31 July 2020, then Deputy Diocesan Secretary)

Remuneration, employer’s National Insurance and pensions for these nine employees (2019: eight) was £707,000 (2019: £710,000).

Trustees’ emoluments

No Trustee received any remuneration for services as Trustee. The Trustees received travelling and out-of-pocket expenses totalling £1,000 (2019: £6,000) in respect of General and Diocesan Synod duties and other duties as Trustees. The following table gives details of the Trustees who were in receipt of a stipend and/or housing provided by the SDBF during the year.

----- Start of picture text -----
Stipend Housing
The Right Revd Christopher Chessun No No
The Right Revd Dr Richard Cheetham No Yes
The Right Revd Jonathan Clark No Yes
The Right Revd Dr Karowei Dorgu No Yes
The Venerable Moira Astin Yes Yes
The Venerable Alastair Cutting Yes Yes
The Venerable Simon Gates Yes Yes
The Venerable John Kiddle Yes Yes
The Venerable Dr Rosemarie Mallett Yes Yes
The Venerable Christopher Skilton Yes Yes
The Venerable Dr Jane Steen Yes Yes
The Revd Canon Peter Farley-Moore Yes Yes
The Revd Jonathan Macy Yes Yes
The Revd Gregory Prior Yes Yes
The Revd Alison Way Yes Yes
The Revd Canon Leslie Wells Yes Yes
----- End of picture text -----

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 65

Notes to the

13. Staff costs (continued)

The SDBF is responsible for funding, via the Church Commissioners, the stipends of licensed stipendiary clergy in the Diocese, other than Bishops and Cathedral staff. The SDBF is also responsible for the provision of housing for stipendiary clergy in the Diocese excluding the Diocesan Bishop and Cathedral staff.

the Diocese, and the costs were as follows:

----- Start of picture text -----
2020 2019
£’000 £’000
Stipends 8,995 8,899
National Insurance contributions 707 713
Apprenticeship levy 40 39
Pension costs — current year 3,128 3,141
Total 12,870 12,792
----- End of picture text -----

The stipends of the Diocesan Bishop and Area Bishops are paid and funded by the Church Commissioners and are in the range £37,670-£46,180 (2019 range: £36,930-£45,270). The annual rate of stipend, funded by the SDBF, paid to Archdeacons in 2020 was in the range £36,635-£38,050 (2019 range: £36,272-£37,673) and other clergy who were Trustees were paid in the range £25,630-£27,342 (2019 range: £25,376-£27,071). The Archbishops’ Council has estimated the value to the occupant, gross of income tax and National Insurance, of Church-provided housing in the Diocese in 2020 at £25,993 (2019: £26,940).

66 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

14.Analysis of transfers between funds

----- Start of picture text -----
2020 Unrestricted funds
General Designated Restricted Endowment
funds funds
£’000 £’000 £’000 £’000
From General Fund to Diocesan Stipendiary Fund for reduction
(969) - - 969
From Strategic Development Fund to General Fund for project costs 246 - (246) -
From Parsonage Capital Fund to Diocesan Pastoral Account
- 409 - (409)
From Diocesan Pastoral Account to Parsonage Capital Fund for
- (147) - 147
From Diocesan Pastoral Account to Diocesan Stipendiary Fund for
property additions - (2,041) - 2,041
From Board Property Fund to General Fund for sale of property 511 (511) - -
From Southwark Vision Development Fund to General Fund for project costs 109 (109) - -
Total (103) (2,399) (246) 2,748
2019 Unrestricted funds
General Designated Restricted Endowment
funds funds
£’000 £’000 £’000 £’000
From General Fund to Diocesan Stipendiary Fund for reduction
(4,164) - - 4,164
From Strategic Development Fund to General Fund for project costs 200 - (200) -
From Parsonage Capital Fund to Diocesan Pastoral Account
- 1,980 - (1,980)
From Diocesan Pastoral Account to Parsonage Capital Fund for
- (2,144) - 2,144
From Diocesan Pastoral Account to General Fund for exceptional
property costs 42 (42) - -
From Board Property Fund to General Fund for sale of property 1,863 (1,863) - -
From Southwark Vision Development Fund to General Fund for project costs 254 (254) - -
From Multi-Academy Trust Fund to General Fund for closure of fund 840 (840) - -
Total (965) (3,163) (200) 4,328
----- End of picture text -----

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 67

Notes to the

----- Start of picture text -----
Freehold & Leasehold Furniture & Total
leasehold improvements equipment
properties
£’000 £’000 £’000 £’000
Cost or valuation:
At 1 January 2020 268,969 355 453 269,777
Additions 1,778 - 67 1,845
- -
Disposals (2,229) (2,229)
Revaluation/impairment 394 - - 394
At 31 December 2020 268,912 355 520 269,787
Depreciation:
At 1 January 2019 - 115 283 398
Charge for the year - 30 79 109
At 31 December 2020 - 145 362 507
Net book value at 31 December 2020 268,912 210 158 269,280
Net book value at 31 December 2019 268,969 239 171 269,379
----- End of picture text -----

(2019: £143,609,000).

revaluation was carried out by Rapleys LLP in accordance with Royal Institute of Chartered Surveyors’ professional standards and valuation practice statements and resulted in an increase in the value of these properties, excluding impairments, of £226,000 (2019: £590,000). An impairment review was carried out on certain parsonage and Diocesan Stipendiary Fund (DSF) houses resulting in a write down in value of £616,000 (2019: £950,000) against parsonages and £784,000 (2019: £nil) against DSF houses.

results of this valuation have been extrapolated across those assets not revalued at the balance sheet date. This has resulted in an additional revaluation gain in the year of £1,583,000 (2019: £2,047,000).

68 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

The carrying value of leasehold properties included within freehold and leasehold properties amounts to £1,809,000 (2019: £1,613,000).

The carrying value of assets under construction included within freehold and leasehold properties amounts to £44,000 (2019: £1,240,000).

Certain properties have been purchased with the help of value-linked loans from the Church Commissioners. The properties are revalued to fair value annually. On disposal the agreed share of the net sale proceeds will be remitted to the Church Commissioners and the related loan liability extinguished. During the year, one property (2019: one) with a carrying value of £400,000 (2019: £250,000) was disposed of. The value of these properties included within freehold and leasehold properties amounts to £2,490,000 (2019: £2,905,000). The revaluation loss on these properties amounts to £15,000 (2019: £nil) and has been netted off against the matching movement in the linked liability.

16. Fixed assets investments

----- Start of picture text -----
At 1 Additions Disposals Transfers Change At 31
January in market December
2020 value 2020
£’000 £’000 £’000 £’000 £’000 £’000
Unrestricted funds:
Unit trusts and similar funds 3,481 391 (84 ) - (55 ) 2,479
Restricted funds:
Unit trusts and similar funds 2,805 - - - (495) 2,310
Endowment funds:
Unit trusts and similar funds 22,883 3,867 (3,625) - (3,593) 19,532
Total 29,169 4,258 (4,46 ) - (4,64 ) 24,321
----- End of picture text -----

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 69

Notes to the

17. Debtors

----- Start of picture text -----
2020 2019
£’000 £’000
Due within one year:
Concessionary loans to parishes 102 113
Loans to others 6 25
Other debtors and prepayments 1,242 57
1,350 71
Due after more than one year:
Concessionary loans to parishes 546 453
Other debtors 1 6
547 459
Total debtors 1,897 1,17
----- End of picture text -----

18. Creditors: amounts falling due within one year

----- Start of picture text -----
2020 2019
£’000 £’000
Bank loan repayment instalments due in one year 1,300 300
Church Commissioners’ non value-linked loan 2,311 -
Other taxes and social security 73 73
Other creditors and accruals 511 878
Church of England Funded Pension Scheme 1,000 1,000
Total creditors: amounts falling due within one year 5,195 2,251
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70 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

19. Creditors: amounts falling due after more than one year

----- Start of picture text -----
2020 2019
£’000 £’000
Loans repayable in instalments due after more than one year:
Commercial loans 591 1,889
CBF loan 1,000 1,000
Church Commissioners’ value-linked loans 2,490 2,905
4,081 5,794
Pension scheme liabilities:
Church of England Funded Pension Scheme 185 1,154
185 1,154
Total creditors: amounts falling due after more than one year 4,266 6,948
2020 2019
£’000 £’000
The maturity of the above loans may be analysed as follows:
1,591 2,889
2,490 2,905
4,081 5,794
----- End of picture text -----

against Board freehold property with a carrying value of £9.9m. Interest is charged at 1.5% above base rate.

The CBF loan is a 10-year loan repayable at the end of the term under the Diocesan Loan Scheme. Interest is charged at 0.55% per annum above the CBF Church of England Deposit Fund Rate.

Value-linked loans from the Church Commissioners are repayable on the sale of the property to which they relate. Interest is charged at 4% per annum. On disposal the agreed share of the net sale proceeds will be remitted to the Church Commissioners and the related loan liability extinguished.

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 71

Notes to the

20. Summary of fund movements

----- Start of picture text -----
2020 Balances Income Expenditure Transfers Gains and Balances
at 1 losses at 31
January December
2020 2020
£’000 £’000 £’000 £’000 £’000 £’000
Unrestricted funds:
General 6,813 21,799 (22,820) (103) (553) 5,136
6,813 21,799 (22,820) (103) (553) 5,136
Designated funds:
Diocesan Pastoral Account 2,773 1,341 - (1,779) - 2,335
Board Property Fund 42,572 - - (511) 445 42,506
Southwark Vision Development Fund 439 38 - (109) - 368
45,784 1,379 - (2,399) 445 45,209
Restricted funds:
Strategic Development Fund - 529 (283) (246) - -
Ordinand Training Fund 130 621 (725) - - 26
Gilmore Fund 378 15 (9) - (61) 323
Dartmouth House Fund 2,990 82 (44) - (434) 2,594
3,498 1,247 (1,061) (246) (495) 2,943
Endowment funds:
Ministry Fund 4,241 (10) - - (591) 3,640
Diocesan Stipendiary Fund 90,933 863 (23) 4,874 (2,422) 94,225
Parsonage Capital Fund 140,723 - - (2,126) (616) 137,981
235,897 853 (23) 2,748 (3,629) 235,846
Total funds 291,992 25,278 (23,904) - (4,232) 289,134
----- End of picture text -----

72 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

20. Summary of fund movements (continued)

----- Start of picture text -----
2019 Balances Income Expenditure Transfers Gains and Balances
at 1 losses at 31
January December
2019 2019
£’000 £’000 £’000 £’000 £’000 £’000
Unrestricted funds:
General 5,457 22,167 (20,151) (965) 305 6,813
5,457 22,167 (20,151) (965) 305 6,813
Designated funds:
Diocesan Pastoral Account 1,606 1,373 - (206) - 2,773
Board Property Fund 43,663 - - (1,863) 772 42,572
Multi-Academy Trust Fund 800 - 40 (840) - -
Southwark Vision Development Fund 617 76 - (254) - 439
46,686 1,449 40 (3,163) 772 45,784
Restricted funds:
Strategic Development Fund - 257 (57) (200) - -
Ordinand Training Fund 50 583 (503) - - 130
Gilmore Fund 323 17 (11) - 49 378
Dartmouth House Fund 2,557 128 (13) - 318 2,990
2,930 985 (584) (200) 367 3,498
Endowment funds:
Ministry Fund 3,787 - - - 454 4,241
Diocesan Stipendiary Fund 85,073 - (16) 4,164 1,712 90,933
Parsonage Capital Fund 139,644 - - 164 915 140,723
228,504 - (16) 4,328 3,081 235,897
Total funds 283,577 24,601 (20,711) - 4,525 291,991
----- End of picture text -----

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 73

Notes to the

21. Summary of assets by fund

----- Start of picture text -----
2020 Fixed assets Investments Current Creditors Net
tangible assets assets
£’000 £’000 £’000 £’000 £’000
Unrestricted funds:
General 2,857 2,479 8,076 (8,276) 5,136
2,857 2,479 8,076 (8,276) 5,136
Designated funds:
Diocesan Pastoral Account - - 2,335 - 2,335
Board Property Fund 46,675 - (4,169) - 42,506
Southwark Vision Development Fund - - 368 - 368
46,675 - (1,466) - 45,209
Restricted funds:
- - - - -
Strategic Development Fund
Ordinand Training Fund - - 26 - 26
Gilmore Fund - 301 2 - 322
Dartmouth House Fund - 2,008 586 - 2,594
- 2,309 634 - 2,943
Endowment funds:
Ministry Fund - 2,850 790 - 3,640
Diocesan Stipendiary Fund 76,562 16,683 2,165 (1,185) 94,225
Parsonage Capital Fund 143,186 - (5,205) - 137,981
219,748 19,533 (2,250) (1,185) 235,846
Total funds 269,280 24,321 4,994 (9,461) 289,134
----- End of picture text -----

74 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

21. Summary of assets by fund (continued)

----- Start of picture text -----
2019 Fixed assets Investments Current Creditors Net
tangible assets assets
£’000 £’000 £’000 £’000 £’000
Unrestricted funds:
General 3,315 3,481 7,061 (7,044) 6,813
3,315 3,481 7,061 (7,044) 6,813
Designated funds:
Diocesan Pastoral Account - - 2,774 - 2,774
Board Property Fund 45,997 - (3,426) - 42,571
- - - - -
Multi Academy Trust Fund
Southwark Vision Development Fund - - 439 - 439
45,997 - (213) - 45,784
Restricted funds:
- - - - -
Strategic Development Fund
Ordinand Training Fund - - 130 - 130
Gilmore Fund - 363 15 - 378
Dartmouth House Fund - 2,442 548 - 2,990
- 2,805 693 - 3,498
Endowment funds:
Ministry Fund - 3,451 790 - 4,241
Diocesan Stipendiary Fund 76,458 19,432 (2,803) (2,154) 90,933
Parsonage Capital Fund 143,609 - (2,886) - 140,723
220,067 22,883 (4,899) (2,154) 235,897
Total funds 269,379 29,169 2,642 (9,198) 291,992
----- End of picture text -----

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 75

Notes to the

22. Description of funds

----- Start of picture text -----
General Fund The fund represents the unrestricted undesignated fund available for any of the SDBF’s purposes.
Diocesan Pastoral Account
churches. To the extent that any remaining funds are not required, or are not likely to be required, for
these purposes then the funds may be applied to any general purpose of the SDBF.
Board Property Fund This fund is a designated fund. It represents the fair value of properties held by the SDBF at the year end.
Southwark Vision This is a designated fund to support Southwark Vision 2017-25 across the Diocese.
Development Fund
Strategic Development Fund This is a restricted fund. It represents grants received from the Church Commissioners and Archbishops’
Ordinand Training Fund This is a restricted fund. It represents the block grant received from the Archbishops’ Council to fund
Ordinand training.
Gilmore Fund The Isabella Gilmore Fund is a restricted fund for the purpose of the education and development of
licensed, commissioned or ordained women.
Dartmouth House Fund This is a restricted fund for the purpose of facilitating clergy and lay training, retreats or conferences
to assist and promote the work of the Church of England in the Diocese of Southwark and to use the
monies to acquire any buildings which may be necessary to forward such purposes, subject always to
the consent in writing of the Bishop of Southwark.
Ministry Fund This is a permanent endowment fund held under the Endowments and Glebe Measure 1976 from which
of supporting clergy stipends within the Diocese. Investment income from the fund is credited to the
General Fund where it is used only to fund clergy stipend payments.
Diocesan Stipendiary Fund
Pastoral Measure 2011. Investment income from the fund is credited to the General Fund where
it is used only to fund clergy stipend payments.
Parsonage Capital Fund
Diocese. Under the Mission and Pastoral Measure 2011, capital receipts released following the sale of
applied to any general purpose of the SDBF.
----- End of picture text -----

76 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

23. Capital commitments

At 31 December 2020, the SDBF had capital expenditure commitments authorised but not contracted for of £nil (2019: £nil), and contracted for but not yet due of £63,000 (2019: £234,000).

24. Operating leases

Total commitments under non-cancellable operating leases are as follows:

----- Start of picture text -----
2020 2019
£’000 £’000
Minimum lease payments payable:
Within one year of the balance sheet date 264 257
107 33
1 -
Total 372 290
----- End of picture text -----

Total lease rental payments expensed in the year are £474,000 (2019: £471,000).

----- Start of picture text -----
2020 2019
£’000 £’000
Minimum lease payments receivable:
Within one year of the balance sheet date 438 536
280 267
724 789
Total 1,442 1,592
----- End of picture text -----

25. Post balance sheet events and contingent liabilities

There were no contingent liabilities at the balance sheet date.

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

77

Notes to the

26. Pensions

The SDBF participates in two pension schemes administered by the Church of England Pensions Board: the Church of England Funded Pensions Scheme (CEFPS) for stipendiary clergy and the Church Workers’ Pension Fund (CWPF) for lay staff.

Church of England Funded Pensions Scheme

Church of England Pensions Board, which holds the assets of the schemes separately from those of the Responsible Bodies.

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

The scheme is considered to be a multi-employer scheme as described in Section 28 of FRS 102. This means it is not possible opposite as being recognised in the SoFA, giving a total charge of £3,128,000 for 2020 (2019: £3,141,000).

A valuation of the scheme is carried out once every three years. The most recent scheme valuation completed was carried £1,868m, assessed using the following assumptions:

contributions payable (as a percentage of pensionable stipends) are as set out in the table below.

Percentage of pensionable stipends: Percentage of pensionable stipends:

January
2018 to
December
2020
January
2021 to
December
2022
11.9%
7.1%

under the recovery plan in force were as set out in the table above.

78 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

26. Pensions (continued)

Church of England Funded Pensions Scheme (continued)

provision is set out in the table below.

----- Start of picture text -----
2020 2019
£’000 £’000
Balance sheet liability as at 1 January 2,154 6,318
Contributions paid (960) (957)
Interest cost (recognised in the SoFA) 18 123
Remaining change to the balance sheet liability (recognised in the SoFA) (27) (3,330)
Balance sheet liability as at 31 December 1,185 2,154
----- End of picture text -----*

----- Start of picture text -----
December December December
2020 2019 2018
Discount rate 0.2% 1.1% pa 2.1% pa
3.1% 2.8% pa 3.1% pa
Increase to total pensionable payroll 1.6% 1.3% pa 1.6% pa
----- End of picture text -----

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

Church Workers’ Pension Fund

The scheme is administered by the Church of England Pensions Board, which holds the assets of the schemes separately from those of the Employer and the other participating employers.

The CWPF has a section known as the DBS, a deferred annuity section known as Pension Builder Classic and a cash balance section known as Pension Builder 2014. The SDBF closed the DBS section to new entrants from July 2013, and will close the section to existing members on 31 December 2022.

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020 79

Notes to the

26. Pensions (continued)

Church Workers’ Pension Fund (continued)

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. They do not alter 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 current and former employees of other entities participating in the DBS. This means that contributions are accounted for as

from the Life Risk Pool to the employers’ sub-pools, or vice versa. The amounts to be transferred (and their allocation between the sub-pools) will be settled by the Church of England Pensions Board on the advice of the Actuary.

A valuation of the DBS is carried out once every three years, the most recent having been carried out as at 31 December employers’ sub-pools to the Life Risk Pool. This increased the Employer contributions that would otherwise have been payable.

A valuation as at 31 December 2019 was underway as at 31 December 2020. The contributions agreed at that valuation will be

Following the valuation, the Employer has entered into an agreement with the CWPF to pay a contribution rate of 39.2% of pensionable salary and expenses of £12,000 per year.

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

Pension Builder Scheme

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

80 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

26. Pensions (continued)

Church Workers’ Pension Fund (continued)

Pension Builder Scheme (continued)

and a cash balance section known as Pension Builder 2014.

The Pension Builder Scheme of the CWPF is made up of two sections, Pension Builder Classic and Pension Builder 2014, both of

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

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

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

The scheme is considered to be a multi-employer scheme as described in Section 28 of FRS 102. This is because it is not possible (2020: £251,000, 2019: £239,000).

A valuation of the scheme is carried out once every three years, the most recent having been carried out as at 31 December 2016. A valuation as at 31 December 2019 was under way as at 31 December 2020.

most recent review, the Pensions Board chose not to grant a discretionary bonus, which will have acted to improve the funding

For the Pension Builder 2014 section, the valuation revealed a surplus of £1.8m on the ongoing assumptions used. There is no

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

27. Related party transactions

The SDBF has related party relationships with connected organisations as detailed on page 22 of this annual report. Grants made in the current and previous year to these related parties are disclosed in Note 12 (see pages 62-63) to these accounts.

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Notes to the

28. Prior year Statement of Financial Activities

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2019 Unrestricted funds Restricted Endowment Total funds
funds funds 2019
General Designated
£’000 £’000 £’000 £’000 £’000
Income and endowments from:
Donations
Parish contributions 16,413 - - - 16,413
Archbishops’ Council 283 - 840 - 1,123
Other donations 1,555 76 - - 1,631
Charitable activities 1,360 - - - 1,360
Other activities 148 - - - 148
Investments 2,213 - 145 - 2,358
Other 195 1,373 - - 1,568
Total 22,167 1,449 985 - 24,601
Expenditure on:
Raising funds 9 - - 15 24
Charitable activities 20,142 (40) 584 1 20,687
Total 20,151 (40) 584 16 20,711
Net income/(expenditure)
before investment gains 2,016 1,489 401 (16) 3,890
Net gains on investments 305 - 367 2,167 2,839
- - -
Impairment write downs (950) (950)
Net income 2,321 1,489 768 1,201 5,779
Transfers between funds (965) (3,163) (200) 4,328 -
Other recognised gains:
Gains on revaluation
- 772 - 1,864 2,636
Net movement in funds 1,356 (902) 568 7,393 8,415
Total funds brought forward 5,457 46,686 2,930 228,504 283,577
Total funds carried forward 6,813 45,784 3,498 235,897 291,992
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82 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

29. Funds held as Diocesan Authority

The SDBF acts as Diocesan Authority or Custodian Trustee for many trust funds by virtue of the Parochial Church Councils (Powers) Measure 1956, as amended, and the Incumbents and Churchwardens (Trusts) Measure 1964 where the managing trustees are PCCs and others. Assets held as Diocesan Authority are not controlled by the SDBF and are not included in these

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2020 2019
£’000 £’000
CBF Church of England Investment Fund 10,397 9,511
M&G Equities Investment Fund for Charities 1,578 1,992
CBF Church of England Global Equity Income Fund 858 714
Other CBF Church of England funds 498 463
Other Common Investment and OEIC holdings 1,288 1,294
Direct holdings in UK equities 122 334
CBF Church of England Deposit Fund 1,806 2,225
Cash 14 -
Total assets held as Diocesan Authority 16,561 16,533
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30. Subsidiary undertaking

is registered in England and supplies property and administrative services to the SDBF. The company did not trade during the current or prior year and had no assets or liabilities at the Balance Sheet date (2019: £nil).

The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

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Appendix

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Acronym Meaning
AVA Average Weekly Attendance
BAP National Bishops’ Advisory Panel
CBF Central Board of Finance
CEFPS Church of England Funded Pensions Scheme
CWPF Church Workers’ Pension Fund
CYP Children and young people
DAC Diocesan Advisory Committee
DBF Diocesan Board of Finance
DBS Disclosure and Barring Service
DCT Diocesan Council of Trustees
DMPC Diocesan Mission and Pastoral Committee
FRC Financial Reporting Council
FRS Financial Reporting Standard
fxC Fresh Expression of Church
GDPR General Data Protection Regulation
HR Human resources
IICSA Independent Inquiry into Child Sexual Abuse
ISAs (UK) International Standards on Auditing (UK)
LL&LMAG Lay Leadership & Lay Ministry Group
MAP Mission Action Plan
MAT Multi Academy Trust
PCC Parochial Church Council
PFC Policy and Finance Committee
PSF Parish Support Fund
SDBE Southwark Diocesan Board of Education
SDBF South London Church Fund & Southwark Diocesan Board of Finance
SDF Strategic Development Funding
SIR Serious Incident Reporting
SMT Senior Management Team
SoFA Statement of Financial Activities
SORP Statement of Recommended Practice for Charities
SPA Southwark Pastoral Auxiliary
SVDF Southwark Vision Development Fund
UKME United Kingdom Minority Ethnic
uSa Usual Sunday Attendance
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84 The South London Church Fund & Southwark Diocesan Board of Finance Annual Report 2020

Notes The South London Church Fund & S￿rthWIth Diocesan ￿rd of ￿nance l Annual ReFOrt 2020 85

Notes 86 The South London Church Fund & Southwark Diocesan Bthud of ￿rance l Re￿rt 2020

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