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2020-12-31-accounts

Canterbury Diocesan Board of Finance

Trustees’ Report and Financial Statements

31 December 2020

Company Limited by Guarantee Registration Number 00145650 (England and Wales)

Charity Registration Number 249972

Contents

Reports
Reference and administrative information 1 - 2
Trustees' report (incorporating strategic report) 3 - 15
Independent auditor’s report 16 - 20
Financial statements
Consolidated statement of financial activities 21
Consolidated summary income and expenditure account 22
Balance sheets 23
Consolidated statement of cash flows 24
Principal accounting policies 25 - 30
Notes to the financial statements 31 - 50
Appendices
Comparative consolidated statement of financial activities 51
Comparative notes to the financial statements 52 - 55

Canterbury Diocesan Board of Finance

Reference and administrative information

Trustees

Ex-Officio Trustees The Archbishop of Canterbury, The Most Revd and Rt Hon Justin Welby The Bishop of Dover, The Rt Revd Rose Hudson-Wilkin Mr Nigel Mansley, Chair The Dean of Canterbury Cathedral, The Very Revd Dr Robert Willis The Venerable Stephen Taylor, MBE The Archdeacon of Ashford, The Venerable Darren Miller The Archdeacon of Canterbury, The Venerable Joanne Kelly-Moore The Archdeacon of Maidstone, The Revd Venerable Andrew Sewell Mrs Jane Ashton Dr John Moss Mr Philip Sibbald The Revd Carol Smith Elected Trustees Miss Aimée Babbs Mrs Miranda Ford The Revd Estella Last The Revd Canon Stephen Lillicrap (appointed 1 February 2021) Lt Col (Retd) John Morrison The Revd Shiela Porter The Revd Michael Resch (resigned 9 December 2020) Acting Diocesan Secretary The Venerable Stephen Taylor, MBE Registered address Diocesan House Lady Wootton’s Green Canterbury Kent CT1 1NQ Company Registration No. 00145650 (England and Wales) Charity Registration No. 249972 Auditor Buzzacott LLP 130 Wood Street London EC2V 6DL Bankers Lloyds Bank plc 49 High Street Canterbury Kent CT1 2SE

Canterbury Diocesan Board of Finance

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Reference and administrative information

Solicitors Mowll & Mowll LLP Trafalgar House Gordon Road Whitfield Dover Kent CT16 3PN

Canterbury Diocesan Board of Finance

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Trustees’ report (incorporating the strategic report) Year ended 31 December 2020

The Trustees present their annual report (incorporating the strategic report for Companies Act purposes) together with the audited financial statements for the year ended 31 December 2020.

The report has been prepared in accordance with Part 8 of the Charities Act 2011 and constitutes a directors’ report for the purposes of company legislation.

The financial statements have been prepared in accordance with the principal accounting policies set out on pages 25 to 30 of the attached financial statements and comply with the charitable company’s Memorandum and Articles of Association, applicable laws and Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).

SUMMARY INFORMATION ABOUT THE STRUCTURE OF THE CHURCH OF ENGLAND

The Church of England is organised as two provinces each led by an archbishop - Canterbury for the southern province and York for the northern. Each province comprises dioceses, of which there are 41 in England. Each diocese is divided into deaneries and each deanery into parishes; and each parish is overseen by a parish priest (usually called a vicar or rector). From ancient times through to today, they and their bishop are responsible for the “cure of souls” in their parish.

Her Majesty the Queen, who is the Supreme Governor of the Church of England, appoints archbishops, bishops and deans of cathedrals on the advice of the Prime Minister. The Lords Spiritual, consisting of the two archbishops and 24 of the senior bishops sit in the House of Lords.

The Church of England is episcopally-led; it is led by the Archbishops of Canterbury and York and there are a further 106 bishops including Diocesan Bishops and Suffragan Bishops. It is governed by General Synod as its legislative and deliberative body at national level, making decisions on matters of doctrine, the holding of church services and relations with other churches. General Synod passes measures which, if accepted by Parliament, have the effect of Acts of Parliament. Its members belong to one of three groups or houses: The House of Bishops, The House of Clergy and the House of Laity, and General Synod meets in London or York at least twice annually to consider matters for the broader good of the Church.

STRUCTURE, GOVERNANCE AND MANAGEMENT

Constitution

Canterbury Diocesan Board of Finance (CDBF, the charity or the Board) was incorporated as a company on 29 December 1916 to manage the financial affairs of the diocese and to hold its assets. Every member of Diocesan Synod is a member of CDBF for company law purposes, and similarly Archbishop’s Council comprises the Trustees. The Board is a company limited by guarantee and as such has no share capital. The Board is a registered charity and its Trustees are the same people who serve as the Board of Directors for company law purposes. The Board together with its subsidiary entities comprises the ‘group’.

The principal object of the charity and the group is to promote and assist the work of the Church of England for the advancement of the Christian faith in the Diocese of Canterbury.

Method of appointment or election of Trustees

The management of the charity and the group is the responsibility of the Trustees who are elected and coopted under the terms of the Articles of Association.

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Trustees’ report (incorporating the strategic report) Year ended 31 December 2020

STRUCTURE, GOVERNANCE AND MANAGEMENT (continued)

Policies adopted for the induction and training of Trustees

At the first meeting of the triennium, the current triennium being the period August 2018 to July 2021, time is set aside for the induction and training of new Trustees and further training is provided where necessary during the triennium to ensure that all Trustees are kept fully informed of their responsibilities. Diocesan officers are always on hand to advise Trustees on supplementary issues.

Trustees’ remuneration

The Trustees do not receive remuneration for their roles as trustees of the charity. The clergy members of the Board, as office holders within the diocese, receive housing and stipends as part of their clergy role.

Organisational structure and decision making

The Board, as Archbishop’s Council, is responsible for working with the Bishop of Dover to shape the diocesan strategy and to monitor the outworking of that strategy. It sets overall objectives and priorities. The outworking of those objectives and strategies for the Diocese of Canterbury is conducted through four overarching frameworks. The frameworks (see below under policies and objectives) meet frequently to plan their own priorities and make appropriate decisions in support of the overriding strategies and objectives of the Diocese of Canterbury. The principal officers manage the day-to-day administration in conjunction with Archbishop’s Council and respective frameworks as appropriate. The remaining staff assist in administration.

Related party relationships

CDBF makes contributions to the national Archbishops’ Council towards the running costs of the National Church. The stipends of all parish priests are paid initially by the Church Commissioners but these are then reimbursed by CDBF. The stipend of the Bishop of Dover together with the salaries of appropriate secretarial support are borne by the Church Commissioners and are not included in these statements. The Board considers that the following are subsidiary companies or connected charities:

Subsidiary Companies:

Connected Charities:

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Trustees’ report (incorporating the strategic report) Year ended 31 December 2020

STRUCTURE, GOVERNANCE AND MANAGEMENT (continued)

Risk management

The Trustees have assessed the major risks to which the charity and the group are exposed, in particular those related to the operations and finances of the charity and the group, and are satisfied that systems and procedures are in place to mitigate exposure to the major risks. The Trustees, through the Finance and Assets Committee, undertook a comprehensive review of the strategic, business and operational risks in 2020.

In addition to the key challenges facing the charity because of the Covid-19 pandemic (see later in this report), the key risks facing the Board of Finance are:

The Trustees continue to pay careful attention to the Parish Share Scheme which determines the allocation of contributions needed from each parish to maintain the general fund. The Trustees also monitor on a regular basis the collection rate of contributions received from individual parishes, with a view to identifying at an early stage those parishes which are likely to have difficulties in meeting their Parish Share. The impact of Coronavirus had a significant impact on income in 2020 with reduction in Parish Share collected of £1m. This impact will continue into 2021 and action is in place to mitigate the impact in 2021 to ensure the financial viability of the diocese.

CDBF takes extremely seriously the need for strong safeguarding procedures and controls. The Trustees are responsible ultimately for overseeing the implementation and review of policies and procedures for safeguarding children and vulnerable adults throughout the diocese; and for developing and maintaining good practice in relation to the safety and welfare of children, young people and vulnerable adults. All Church officers, Trustees, staff and volunteers are trained in diocesan safeguarding policy and best practice and the Diocesan Safeguarding Advisor is available to give advice.

There are procedures in place for reporting serious safeguarding situations. However, further to this, the Trustees would consult at that time and obtain independent advice should the need arise.

The Trustees are aware of the increasing use of, and demand upon, IT services and the increased threat posed by those with malicious intent. To strengthen our defences against attack, via malicious emails and phishing attacks, staff are trained to follow best practice and to be alert to malicious emails and other potential IT risks. The Trustees are aware also of the need to ensure the strongest possible defences against attack including the upgrading of software and hardware.

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Trustees’ report (incorporating the strategic report) Year ended 31 December 2020

STRUCTURE, GOVERNANCE AND MANAGEMENT (continued)

Risk management (continued)

Property maintenance is of key importance, ensuring that the buildings are maintained to a high standard and that preventative action is taken before matters become real problems. The charity has a highly skilled Property Team with many years of experience looking after residential, office and historic buildings. The timing of property transactions is planned carefully to ensure that they do not give rise to adverse cash flow issues.

The value of the charity’s listed investments is dependent on movements in the UK and world stock markets. The charity’s financial position, therefore, is exposed to the downside risk attached to such investments. To control against this risk, the charity’s investments are managed by reputable investment managers who adhere to a policy agreed by the Trustees. Representatives of the charity meet with the investment managers on a regular basis to monitor performance and to discuss the charity’s investment strategy generally to ensure it remains appropriate – both now and into the future.

OBJECTIVES AND ACTIVITIES

Policies and objectives

In planning the activities of the charity for the year, the Trustees have considered the guidance on public benefit issued by the Charity Commission. In common with the Church of England, the diocese strives to ensure that in every local community there is a worshipping, welcoming and serving congregation, working with Christians of other traditions and people of goodwill, witnessing to the transforming power of the love of God as seen in Jesus. The key strategic initiative of the diocese is called ‘Changed Lives→Changing Lives’ to better enable the diocese to achieve its overall objectives of:

There are 3 frameworks within the diocesan organisation which primarily serve the delivery of each of these key objectives respectively:

In addition, there is one other framework:

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Trustees’ report (incorporating the strategic report) Year ended 31 December 2020

OBJECTIVES AND ACTIVITIES (continued)

Strategies for achieving objectives

The six key strands of our ‘Changed Lives→Changing Lives’ strategy are:

In June 2018 Archbishop’s Council was successful in achieving funding of nearly £1 million over 4 years from the Church Commissioners’ Strategic Development Fund to support a model of mission amongst disadvantaged communities called Ignite. This led to the development of new Ignite worshipping communities in 7 locations across the diocese plus one in Guernsey (some functions of the Channel Islands were managed by Canterbury Diocese at the time of the bid; episcopal oversight now sits with Salisbury Diocese).

In March 2021 the diocese published a report “Towards a Flourishing and Sustainable Future” which further developed and communicated our thoughts on our ‘Changed Lives→Changing Lives’ strategy. This clarified our vision and is a commitment to a shared journey of discipleship and growth - learning, sharing and listening on the way. This will have consequences for the delivery of the strategy in 2021 onwards.

Grant making policies

The diocese has historically made grants to parishes and deaneries for the purposes of assisting in parochial mission and ministry from unrestricted income derived from occasional office fees and the Church Commissioners. These have been mainly to support strategic missional posts across the diocese and are agreed in conjunction with the deaneries and archdeacons. Currently the income available for grants from the Church Commissioners is restricted to lowest income communities (LInC) and the reduction in occasional office fees means this is no longer a reliable income stream. Until we are able to generate unrestricted income ourselves the Church Commissioners LInC funding will support the neediest parishes, either with Parish Share or towards a post.

Historically the charity acted as the agent of school governors in relation to school building works and the purchase of IT equipment for Schools. It acted as the agent of school governors in helping to arrange funding through the DfE and Local Authorities and in paying professional fees and building costs on behalf of school governors. The SCA (School Condition Allocation) system was introduced in April 2020 and superseded the LCVAP (Locally Coordinated Voluntary-Aided Programme). The change in funding gives the charity discretion over how these funds are used. Historically, the LCVAP was not reflected in the Statement of Financial Activities as the charity had no control over the funds and the transactions were those of the school governors rather than the charity which acted as agent. The SCA grant funding has now been recognised as income in the Statement of Financial Activities along with the related expenditure. The uncommitted balance of SCA funding at the end of the year of £187k (2019 - £nil) has to be committed to projects by 31 March 2022 or returned to the DfE.

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Trustees’ report (incorporating the strategic report) Year ended 31 December 2020

OBJECTIVES AND ACTIVITIES (continued)

Raising funds

The charity raises funds through Parish Share and on occasions receives other donations and voluntary income. It aims to achieve best practice in the way in which it communicates with parishes, donors and other supporters. It takes care with both the tone of its communications and the accuracy of its data to minimise the pressures on parishioners, parochial church councils, donors and supporters. It applies best practice to protect their data and never sells data, it never swaps data and ensures that communication preferences can be changed at any time. The charity manages its own activities in respect to raising funds and does not employ the services of professional fundraisers. The charity undertakes to react to and investigate any complaints regarding its activities for raising funds and to learn from them and improve its service. During the year, the charity received no formal complaints about its activities for raising funds.

ACHIEVEMENTS AND PERFORMANCE

Key financial performance indicators

Current year Parish Share receipts represent 86.8% of the total apportioned (2019 – 92.1%) or, when deferred receipts for previous years are included, 88.0% (2019 – 93.0%). This shortfall of 12% (2019 – 7%) represents £1.0m (2019 - £0.6m) in cash terms.

Our aspiration is always to collect 100% of Parish Share.

Review of activities

The diocese continues to strive to resource effective mission, ministry and growth throughout its parishes in East Kent. Working with Mission Action Planning, many parishes and deaneries are capturing the vision for new approaches and new forms of Church which is transforming growth and spiritual development. Wherever possible, archdeacons and diocesan officers (often acting as deanery accompaniers) work closely with deaneries to re-energise the mission and ministry of struggling parishes. There are many cases now where mission plans have been agreed and transitional finance provided which has transformed Christian communities in bringing about new hope, where seemingly all had been lost. However, there are still cases where parishes are struggling to resource an effective mission and ministry to their community.

We had an average of 128 paid clergy and 134 active voluntary Readers in 2020. Since Explore More , a way of listening to God’s voice about vocation, began in the diocese in 2015 many people have explored a vocation and many have gone on into theological training for Reader or ordained ministry or engaged with other lay ministry in the church and secular world.

We have provided timely and responsive safeguarding support and advice to clergy and their teams across the diocese, trained many people at various levels, and conducted over 750 DBS (Disclosure and Barring Service) checks, helping to keep our children and vulnerable people safe in our churches. In October 2020 responsibility for Safeguarding for the Channel Islands passed to the Salisbury Diocese. However, our Diocesan Safeguarding Advisors now cover the role of Cathedral Safeguarding Advisers for Canterbury Cathedral on a service level agreement basis for one day per week. A service level agreement for the provision of training has been in existence since 2019.

Our deepening discipleship courses have been transformational for many and our missional learning communities have brought together groups of enthusiastic ministers, emerging ministers and growing disciples.

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Trustees’ report (incorporating the strategic report) Year ended 31 December 2020

ACHIEVEMENTS AND PERFORMANCE (continued)

Review of activities (continued)

We continue to support our communities through a wide range of partnerships with other organisations such as the work being done by The Revd Chris Hodgkins in supporting the farming community where mental health can be a particular problem with farmers and rural workers.

Our Novena booklet has been very popular and is an invitation to explore, through art and prayer, the dual message of love and challenge as part of the global Thy Kingdom Come family.

The face of ministry is changing as ordained clergy help equip and enable the ministry of everyone to ensure the Church is a Monday to Saturday Church, as well as a Sunday Church and is sustainable into the future. The impact of Coronavirus (Covid-19) has provided further impetus to reimagine ministry.

Covid-19

Covid-19 (2019 Novel Coronavirus) has had a global impact in 2020 and 2021.

Covid-19 has significantly affected the operation of CDBF. Our offices have mainly been closed since March 2020 and around half our staff were on furlough for part of 2020 with the remainder mainly working from home. CDBF already had the IT capability to allow staff to work from home and some staff were already doing this from time to time. The impact of Covid-19 resulted in the acceleration of the planned strengthening of our IT platforms and an additional focus on home working. Many staff working from home or on furlough have had to deal with additional challenges. CDBF has continued to focus on meeting the expectations of those who use our services and has ensured that ministry and operational support continues for parishes in these challenging times. Key operational areas such as safeguarding, finance and communications have continued to operate. Operational and financial teams are very aware of the risk of fraud and cybercrime and additional safeguards have been developed to mitigate this risk. Despite the significant challenges arising from Covid-19, it has given us the opportunity to explore how we can further extend our Eco Diocese commitment through, perhaps, greater homeworking and a ‘paper-lite’ environment.

Covid-19 is likely to continue to have a significant impact on the finances of CDBF. Many parishes are finding it difficult to meet their Parish Share because of churches and parish halls being closed and the subsequent impact on their income. Although costs in many parishes have decreased, the loss of income has exceeded the cost savings made. Parish Share is the main source of income for the diocese and is essential to support our ministry and mission. Other sources of income are also under pressure. CDBF took steps to mitigate the loss of income by removing all but essential expenditure and taking advantage of the Coronavirus Job Retention Scheme by placing staff on furlough. In addition, increased generosity has been seen from several parishes.

In 2020 it was estimated that the shortfall in Parish Share could be up to £1.4m and that the shortfall in 2021 could be up to £2.0m. In the event, due to the significant generosity of many parishes in such challenging times, the shortfall in 2020 was £1.0m. Given the uncertainty around the shortfall in Parish Share, the diocese was awarded a grant of £665,000 from Archbishops’ Council. The diocese also received grant income from the Government funded Coronavirus Job Retention Scheme and significantly reduced its expenditure on property maintenance by only carrying out essential works. It maintained tight control on costs in all areas with significantly reduced expenditure in areas such as travel and venue hire due to the Coronavirus pandemic.

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Trustees’ report (incorporating the strategic report) Year ended 31 December 2020

ACHIEVEMENTS AND PERFORMANCE (continued)

Covid-19 (continued)

The trustees are grateful to the Church Commissioners for the support they have provided in 2020 – in addition to the £665,000 grant from Archbishops’ Council a stipend loan facility of £872,000 was made available to cover three months’ stipends payments. The stipend loan is reflected in cash and creditors and will be repaid in 2021 and was provided to ensure sufficient liquidity in general funds. The grant funding which supported the diocese in 2020 will continue to be of benefit in 2021.

The diocese predicts the shortfall in 2021 could still be up to £2.0m as many parishes have dipped into their reserves to meet Parish Share in 2020 and thus may be unable to meet their 2021 Parish Share in full.

The diocese has applied for and been awarded a £2.5m CBILS (Coronavirus Business Interruption Loan Scheme) loan to support its working capital due to the pressures of the Coronavirus pandemic. The loan is repayable over six years with the first year being interest free and the loan has a one year capital repayment holiday. The interest rate is 1.68% over Base Rate but the loan may be converted to a fixed rate after one year at a fixed rate margin of 1.72% over the prevailing cost of funds at that time.

Income generation

The diocese received 82% of its unrestricted income (excluding the £665,000 grant from Archbishops’ Council) from Parish Share, which is a voluntary payment from parishes. A review of Parish Share was completed in 2020 and recommended no change to the current methodology.

The Church Commissioners allocate lowest income community funding grants to the poorest dioceses and Canterbury received a grant of £791,000 in 2020 (2019 - £724,000).

The diocese received an allocation from Allchurches Trust of £125,000 in 2020 (2019 - £123,000) which supports our diocesan strategic projects.

Investment policy and performance

An improvement in investment markets in 2020 resulted in an increase in the value of investment of £253k compared with an increase of £708k in 2019. This has resulted in the value of our investments increasing by £1.0m in two years from £5.4m to £6.4m.

The investment policy for 2020 was:

The portfolios are reviewed with CCLA Investment Management Limited every year. Investments held by the Board have been acquired in accordance with powers available to the Trustees under the Memorandum and Articles of Association.

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Trustees’ report (incorporating the strategic report) Year ended 31 December 2020

FINANCIAL REVIEW

Introduction

Archbishop’s Council continues to work diligently to secure the financial position of the diocese whilst at the same time promoting effective mission, ministry and community throughout the area. The Church of England exists to promote the Gospel of Christ in every community and the diocese sees that the furtherance of that aspiration is the only way to secure the future of the Anglican Church in this diocese.

The Board's subsidiary company, Canterbury Diocesan Enterprises Limited (CDEL), is responsible for adopting a strategic approach to all property assets and maximising the value of any disposal proceeds. This company continues to work on several key projects and advises on property aspects of pastoral reorganisation and it continues to deliver vital resources to help the work of CDBF.

The total funds of the diocese include the value of all benefice parsonages within the parishes and these were valued at £67.6m in 2020 (2019 - £65.5m). CDBF is engaged on a rolling five-year process of revaluations of these properties. These properties are included in endowment funds recognising that they remain benefice property, although should they cease to be used as ministry houses then ownership is usually transferred to CDBF unrestricted funds.

Results for the year

Total income for the year amounted to £12.5m, an increase of £1.4m compared with 2019. The increase was driven primarily by a Covid-19 support grant of £0.7m from Archbishops’ Council, grants of £0.2m from the Coronavirus Job Retention Scheme and restricted education income of £0.8m, offset by a decrease in Parish Share of £0.3m. Full details of the restricted education income are provided in the grant making policies section within Objectives and Activities.

The diocese remains concerned that the financial pressures many parishes are experiencing will impact upon the 2021 Parish Share collection rate.

Other sources of income consist of other grant income, investment income, property rental income, parochial fees for weddings and funerals and the income for work done for third parties by the charity’s subsidiary companies. Such income remains very important and is an essential contributor in keeping Parish Share requirements lower than they might otherwise be.

Expenditure for the year totalled £11.3m compared to £11.4m in 2019. Unrestricted expenditure fell by £0.8m, mainly due to a £0.6m reduction in property costs as only essential works were done and significant reductions were made in areas such as travel and venue hire due to the Coronavirus pandemic. Restricted expenditure increased by £0.6m, of which £0.5m was due to expenditure in respect of Schools Conditional Allocation as explained in the preceding paragraph.

Net income before revaluations and investment asset disposals was £1,243k compared to net expenditure in 2019 of £321k for the reasons explained above. After revaluations and investment gains, the net movement in funds for the year was an increase of £4,690k being a £2,381k increase in endowment funds, a £606k increase in restricted funds and a £1,703k increase in unrestricted funds, which included a transfer from endowment funds of £950k in respect of properties transferred from benefice property funds following Pastoral Schemes made by the Church Commissioners.

Under FRS 102 the Board is required to account for any deficit in the clergy and laity pension fund schemes. These provisions are £0.46m (2019 - £0.79m) for the diocese’s proportion of the national clergy scheme and £0.53m (2019 - £0.58m) for our proportion of the staff scheme.

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Trustees’ report (incorporating the strategic report) Year ended 31 December 2020

FINANCIAL REVIEW (continued)

Financial position

The consolidated balance sheet showed total funds at 31 December 2020 of £92.0m (2019 - £87.3m) comprising:

2020
£		 2019
£
General funds (including non-charitable trading funds)
Designated funds
Restricted funds
Endowment funds		 852
14,519
1,756
74,863		 104
13,564
1,150
72,482
91,990 87,300

The above figures include endowment funds of £74.9m (2019 – £72.5m), the principal part of this being the benefice properties amounting to £67.6m (2019 – £65.5m). Where income arises from these funds, it may be used for general purposes of the charity and therefore is credited to unrestricted funds. The endowment fund balances must normally be held as ‘capital’ but, where permitted, may be applied towards meeting certain charitable aims.

Also included in total funds are restricted funds totalling £1.8m (2019 – £1.2m). These monies have either been raised for, and their use restricted to, specific purposes or they comprise donations subject to donorimposed conditions. Further details of these restricted funds can be found in note 20 to the financial statements together with an analysis of movements in the year.

Funds totalling £14.5m (2019 – £13.6m) have been designated, or set aside, by the Trustees for specific purposes. These purposes and an analysis of the movements on the funds are set out in note 20 to the financial statements. The Trustees are aware that most of the designated funds are represented by ministry housing and they are currently reviewing their policy on the sale of empty property to improve the level of working capital.

General funds (including non-charitable trading funds of £73k) total £852k (2019 - £104k). Excluding gains on disposal, revaluation of investments and fund transfers, general funds increased by £429k for the year (2019 – decrease of £772k).

Reserves policy

The Board’s policy is to hold working capital (net current assets) of between 15% and 20% of its annual budgeted expenditure. In 2020 this would require working capital of between £1.6m and £2.2m. This amount is regarded as the minimum necessary to enable the Board to withstand cash flow fluctuations in the course of its normal business. At the end of 2020 the Board’s working capital was £1.7m (2019 - £1.1m).

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Trustees’ report (incorporating the strategic report) Year ended 31 December 2020

FINANCIAL REVIEW (continued)

Going concern

The Trustees have assessed whether the use of the going concern assumption is appropriate in preparing these financial statements. The Trustees have made this assessment in respect to a period of at least one year from the date of approval of these financial statements.

The Trustees, mindful of Covid-19, have concluded that there are no material uncertainties related to events or conditions that may cast significant doubt on the ability of the charity to continue as a going concern. The Trustees are of the opinion that the charity will have sufficient resources to meet its liabilities as they fall due. This is because the charity has sufficient investments which can be realised in the short term to meet liabilities should a shortfall in income arise. In addition, the charity has designated reserves of £14.5m, including £13.2m designated for ministry housing. If necessary, some properties could be undesignated and sold to meet any cash flow shortfall should this be necessary in the medium term. As noted above, the diocese has applied for and been awarded a £2.5m CBILS (Coronavirus Business Interruption Loan Scheme) loan to support its working capital due to the pressures of the Coronavirus pandemic. The loan is repayable over six years with the first year being interest free and the loan has a one year capital repayment holiday. The interest rate is 1.68% over Base Rate but the loan may be converted to a fixed rate after one year at a fixed rate margin of 1.72% over the prevailing cost of funds at that time. For these reasons the Trustees continue to adopt the going concern basis in preparing the financial statements.

Pay policy for senior staff

Senior Clergy are paid according to stipend scales set by the national church. The stipends for the Bishop of Dover and the Archdeacon of Maidstone (in lieu of the unused Bishop of Maidstone post) are borne by the Church Commissioners. The stipend of the Archdeacon of Canterbury is borne principally by Canterbury Cathedral. The stipend of the Archdeacon of Ashford is borne by CDBF.

CDBF uses a system of job evaluation to grade staff appropriately and each is then assigned a particular pay point on that grade. This system operates for all key diocesan staff but each is then compared to the averages across all dioceses in the southern province. The HR Committee then formally agrees the appropriate salary in the light of these variables.

Key management personnel are defined as the Trustees together with those employees listed in note 13 to the attached financial statements.

PLANS FOR THE FUTURE

Future developments

The Archbishop’s Council will continue to pursue the strategy ‘Changed Lives→Changing Lives’ still further in line with Bishop Rose’s episcopal leadership. The Council will look to obtain funds for the different project strands both from the Church Commissioners and other charities as well as re-allocating diocesan resources. We have a Strategic Programme Board that oversees progress on each strand. Below that we have programme boards (in some cases “frameworks”) that focus on particular strands. We are aware that the level of future retirements of clergy and, consequently, our ‘Enriching leadership’ strand is particularly important for us to develop a mixed economy of leadership in our churches and parishes. We will also work to implement the vision and ideas in our recent report “Towards a Flourishing and Sustainable Future“.

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Trustees’ report (incorporating the strategic report) Year ended 31 December 2020

PLANS FOR THE FUTURE

Future developments (continued)

As part of the resourcing of this strategy, the Trustees will continue to look for ways to develop the current Diocesan House to better enable modern team based collegial working and changes have already been made to accomplish this.

FUNDS HELD AS CUSTODIAN TRUSTEE ON BEHALF OF OTHERS

The Board acts as Custodian Trustee in respect of trusts administered on behalf of managing trustees, which includes incumbents, churchwardens, Parochial Church Councils and other organisations of the diocese. The assets held in the capacity of Custodian Trustee include freehold property and investments.

The Board also administers funds, on behalf of Parochial Church Councils, on an agency basis for investment and obtains income tax repayments, relating to Gift Aid, on behalf of parishes and other diocesan organisations. The tax recoverable during 2020 was £1.5m (2019 - £1.20m).

In 2000 the Board arranged for the Central Board of Finance to take over the administration of investments held on behalf of parishes, except for Endowment Funds. The Board is still administering investments with a book value of £3.1m (2019 - £2.9m). The assets of these funds are held separately from those of the Board.

In 2014 an agreement was made with Winchester Diocese whereby the Board was to act as an agent for a number of services for the Channel Islands including the collection and disbursement of parish share from the deaneries of Guernsey and Jersey. The diocese received a fee for providing these services which ended on 1 October 2020 when the Channel Islands moved to being under the episcopal oversight of the Diocese of Salisbury.

TRUSTEES' RESPONSIBILITIES STATEMENT

The Trustees (who are also directors of Canterbury Diocesan Board of Finance for the purposes of company law) are responsible for preparing the Trustees' report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the Trustees to prepare financial statements for each financial year. Under company law the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charity and the group and of the income and expenditure of the group for that period. In preparing these financial statements, the Trustees are required to:

Canterbury Diocesan Board of Finance

Page 14

Trustees’ report (incorporating the strategic report) Year ended 31 December 2020

TRUSTEES’ RESPONSIBILITIES STATEMENT (continued)

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charity and the group's transactions and disclose with reasonable accuracy at any time the financial position of the charity and group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charity and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

DISCLOSURE OF INFORMATION TO AUDITOR

Each of the persons who are Trustees at the time when this Trustees' report is approved has confirmed that:

AUDITOR

Buzzacott LLP was reappointed as statutory auditor on 1 October 2020 and has indicated its willingness to continue in office and a resolution proposing its reappointment will be put to the Annual General Meeting.

This report, incorporating the Strategic Report, was approved by the Trustees on 12 June 2021 and signed on their behalf by:

Nigel Mansley

Trustee

Canterbury Diocesan Board of Finance

Page 15

Independent auditor’s report Year ended 31 December 2020

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

Opinion

We have audited the financial statements of Canterbury Diocesan Board of Finance (the ‘charitable parent company’) and of Canterbury Diocesan Board of Finance and its subsidiaries (the ‘group’) for the year ended 31 December 2020 which comprise the consolidated statement of financial activities, the consolidated summary income and expenditure account, the consolidated and charitable parent company balance sheets, the consolidated statement of cash flows, the principal accounting policies, the notes to the financial statements and the appendices. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Canterbury Diocesan Board of Finance

Page 16

Independent auditor’s report Year ended 31 December 2020

Other information

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

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

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the charitable parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees’ report.

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

Canterbury Diocesan Board of Finance

Page 17

Independent auditor’s report Year ended 31 December 2020

Responsibilities of Trustees

As explained more fully in the Trustees’ responsibilities statement in the Trustees’ report, the Trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Trustees are responsible for assessing the group’s and the charitable parent 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 group or the charitable parent company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

Canterbury Diocesan Board of Finance

Page 18

Independent auditor’s report Year ended 31 December 2020

Auditor’s responsibilities for the audit of the financial statements (continued)

We assessed the susceptibility of the charitable company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

To address the risk of fraud through management bias and override of controls, we:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of noncompliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of Trustees and management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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

Canterbury Diocesan Board of Finance

Page 19

Independent auditor’s report Year ended 31 December 2020

Use of our report

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

Amanda Francis (Senior Statutory Auditor) For and on behalf of Buzzacott LLP, Statutory Auditor 130 Wood Street London EC2V 6DL

25 June 2021

Canterbury Diocesan Board of Finance

Page 20

Consolidated statement of financial activities Year to 31 December 2020

Notes Unrestricted
funds
£'000


Restricted
funds
£'000		 Endowment
funds
£'000		 Total
funds
2020
£'000
Total
funds
2019
£'000
Income and endowments from:
Donations and grants:
Archbishops’ Council
1
Other donations and grants
1
Charitable activities
2
Other trading activities
3
Investments and interest
4
Other sources
5
Total income and endowments
Expenditure on:
Raising funds
6
Charitable activities
8
Total expenditure
10
Net income (expenditure) before investment
gains
Net gains on investments
16
Net income before transfers
Transfers between funds
20
Net income (expenditure) for the year
11
Other recognised gains and losses:
(Losses) gains on revaluation of pension fund
liabilities
22
Gains on revaluations of tangible fixed assets
15
Net movement in funds
Reconciliation of funds
Total funds brought forward
Total funds carried forward		 665
7,664
297
770
210
267
—

1,778

667

—

—

178		 —
—
—
—
13
8		 665
9,442
964
770
223
453		 —
9,300
368
806
247
398
9,873
2,623		 21 12,517 11,119
330
8,847
—

2,062		 —
35		 330
10,944		 325
11,115
9,177
2,062		 35 11,274 11,440
696
85
561

45		 (14)
293		 1,243
423		 (321)
708
781
950
606

—		 279
(950)		 1,666
—		 387
—
1,731
(28)
—
606

—

—		 (671)
(24)
3,076		 1,666
(52)
3,076		 387
1,229
2,715
1,703
13,668
606

1,150		 2,381
72,482		 4,690
87,300		 4,331
82,969
15,371
1,756		 74,863 91,990 87,300

All activities relate to continuing operations in both the above financial years.

The unrestricted fund column above comprises both general funds and designated funds. Details of the analysis between these funds can be found in note 20 to these financial statements. At 31 December 2020, general funds were £779k (2019 - £29k) whilst designated funds (many of which represent ministry housing) amounted to £14.5m (2019 - £13.6m).

Canterbury Diocesan Board of Finance

Page 21

Consolidated summary income and expenditure account Year to 31 December 2020

DRAFT

Note 2020
£’000		 2019
£’000
Income
Less: Expenditure
Net income (expenditure) for the year before transfers and investment
gains and losses
Net gains on investments
20
Transfers from endowment funds
20
Net income for financial year		 12,496
(11,239)		 10,944
(11,427)
1,257
130
950		 (483)
330
1,060
2,337 907

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

Canterbury Diocesan Board of Finance

Page 22

Balance Sheets 31 December 2020

Note
Group
2020
£’000		 Group
2019
£’000		 Charity
2020
£’000		 Charity
2019
£’000
Fixed assets
Tangible fixed assets
15
Investments
16
Current assets
Debtors
17
Cash at bank and in hand
Creditors:amounts falling due within one year
18
Net current assets
Total assets less current liabilities
Creditors:amounts falling due after more than one
year
19
Net assets
Funds
Endowment funds
20
Restricted funds
20
Unrestricted funds
. Designated funds
20
. General funds
20
. Non-charitable trading funds
20
Total funds
83,469

8,150		 80,224
7,727		 83,469
8,151		 80,224
7,728
91,619 87,951 91,620 87,952

1,558
4,508		 1,322
3,127		 1,562
4,382		 1,335
2,988
6,066

(4,360)		 4,449
(3,378)		 5,944
(4,312)		 4,323
(3,328)
1,706 1,071 1,632 995
93,325

(1,335)		 89,022
(1,722)		 93,252
(1,335)		 88,947
(1,722)
91,990 87,300 91,917 87,225

74,863

1,756

14,519

779

73		 72,482
1,150
13,564
29
75		 74,863
1,756
14,519
779
—		 72,482
1,150
13,564
29
—
91,990 87,300 91,917 87,225

The financial statements were approved by the Trustees on 12 June 2021 and signed on their behalf by:

Nigel Mansley

Trustee

Canterbury Diocesan Board of Finance

Page 23

Consolidated statement of cash flows Year to 31 December 2020

Note
Cash flows from operating activities
Net cash used in operating activities
A
Cash flows from investing activities
Investment income and interest received
Rental income received
Proceeds from the sale of tangible fixed assets
Purchase of tangible fixed assets
Net cash provided by investment activities
Cash flows from financing activities
Repayments of borrowings
Cash inflows from new borrowing
Net cash provided by (used in) financing activities
Change in cash and cash equivalents in the year
Cash and cash equivalents brought forward
Cash and cash equivalents carried forward
B		 2020
£’000		 2019
£’000
(251) (1,297)
223
470
267
(200)		 247
428
1,061
(489)
760 1,247
—
872		 (275)
—
872 (275)
1,381
3,127		 (325)
3,452
4,508 3,127

A. Reconciliation of net income (expenditure) for the year to net cash used in operating activities

2020
£’000		 2019
£’000
387
25
(708)
(247)
(428)
(232)
(424)
(210)
540
(1,297)
Net income (expenditure) for the year (as per the statement of financial activities)
Adjustment for:
Depreciation charges
Gains on investments
Investment income and interest receivable
Rental income receivable
Gains on property disposals
Pension adjustment
Increase in debtors
Increase in creditors excluding loans
Net cash used in operating activities		 1,666
31
(423)
(223)
(470)
(267)
(432)
(236)
103
(251)

B. Analysis of cash and cash equivalents

2020
£’000		 2019
£’000
3,127
Cash at bank and in hand 4,508

Canterbury Diocesan Board of Finance

Page 24

Principal accounting policies Year ended 31 December 2020

Basis of accounting

The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the financial statements are laid out below.

Basis of preparation

These financial statements have been prepared for the year to 31 December 2020 with comparative information provided for the year to 31 December 2019.

The financial statements have been prepared under the historical cost convention with items recognised at cost or transaction value unless otherwise stated in the relevant accounting policies below or the notes to these financial statements.

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

The financial statements have been drawn up in accordance with the requirements of the Companies Act 2006 except where the special nature of the Canterbury Diocesan Board of Finance’s operations has required adaptation of the formats as allowed by section 396(5).

The charity constitutes a public benefit entity as defined by FRS 102.

The financial statements are presented in sterling and are rounded to the nearest thousand pounds.

Basis of consolidation

The financial statements consolidate the accounts of Canterbury Diocesan Board of Finance and all its subsidiary undertakings ('subsidiaries').

The charity has taken advantage of the exemption contained within section 408 of the Companies Act 2006 not to present its own income and expenditure account. Gross income of the charity of £12,436k (2019 - £10,979k) and surplus of £1,667k (2019 - £387k) has been dealt with in the accounts of the charity.

Company status

The charity is a company limited by guarantee, Company Registration Number 00145650 (England and Wales). Every member of Diocesan Synod is a member of CDBF for company law purposes. In the event of the charity being wound up the liability in respect of the guarantee is limited to £1 per member of the charity. The company's address and other reference information is shown on page 1.

Fund structure

The unrestricted funds comprise those monies which may be used towards meeting the charitable objectives of the charity and may be applied at the discretion of the Trustees. Certain unrestricted funds have been set aside and designated for specific purposes by the Trustees.

The restricted funds are monies raised for, and their use restricted to, a specific purpose, or donations subject to donor-imposed conditions.

Canterbury Diocesan Board of Finance

Page 25

Principal accounting policies Year ended 31 December 2020

Fund structure (continued)

The endowment funds comprise assets which normally must be held as capital but, where permitted, may be applied towards meeting certain charitable aims. The income therefrom may be used either in accordance with the donors’ wishes, if stipulated, or for general purposes.

The non-charitable trading funds represent the accumulated gains and losses arising on the charity’s trading subsidiaries.

Critical accounting estimates and areas of judgement

Preparation of the financial statements requires the Trustees and management to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include:

The Trustees consider valuation of benefice properties and pensions liabilities to be the areas of judgement and estimation that have a significant effect on the financial statements. Further details of these judgements are given in notes 15 and 22 respectively.

Going concern

The Trustees have assessed whether the use of the going concern assumption is appropriate in preparing these financial statements. The Trustees have made this assessment in respect to a period of at least one year from the date of approval of these financial statements.

Many parishes are finding it difficult to meet their Parish Share because of churches and parish halls being closed due to Covid-19 and the subsequent impact on their income. Although costs in many parishes have decreased the loss of income has exceeded the cost savings made. Parish Share is the main income source for the charity and is essential to support its ministry and mission. Parochial fees have also suffered due to Covid-19. The charity has taken steps to mitigate the loss of income by removing all but essential expenditure and taking advantage of the Coronavirus Job Retention Scheme by placing staff on furlough. In addition, increased generosity has been seen from several parishes and a grant of £665,000 was received from Archbishops’ Council in 2020.

Canterbury Diocesan Board of Finance

Page 26

Principal accounting policies Year ended 31 December 2020

Going concern (continued)

The Trustees are of the opinion that the charity will have sufficient resources to meet its liabilities as they fall due. This is because the charity has sufficient investments which can be readily realised to meet liabilities should a shortfall in income arise. In addition, the charity has designated reserves of £14.5m, including £13.2m designated for ministry housing. Some properties could be undesignated and sold to meet any cash flow shortfall should this be necessary. The diocese has applied for and been awarded a £2.5m CBILS (Coronavirus Business Interruption Loan Scheme) loan to support its working capital due to the pressures of the Coronavirus pandemic. The loan is repayable over six years with the first year being interest free and the loan has a one year capital repayment holiday. The interest rate is 1.68% over Base Rate but the loan may be converted to a fixed rate after one year at a fixed rate margin of 1.72% over the prevailing cost of funds at that time.

For these reasons the Trustees continue to adopt the going concern basis in preparing the financial statements and have concluded that there are no material uncertainties related to events or conditions that may cast significant doubt on the ability of the charity to continue as a going concern.

Income

Income is recognised in the period in which the charity is entitled to receipt, the amount can be measured reliably and it is probable that the funds will be received.

Income comprises donations, including Parish Share income, income from listed investments, interest receivable, income directly related to charitable activities (including grants), income from trading activities, the surplus on disposal of tangible fixed assets, rental and miscellaneous income.

Donations are recognised when the charity has confirmation of both the amount and settlement date. In the event of donations pledged but not received, the amount is accrued for where the receipt is considered probable. If a donation is subject to conditions that require a level of performance before the charity is entitled to the funds, the income is deferred and not recognised until either those conditions are fully met, or the fulfilment of those conditions is wholly within the control of the charity and it is probable that those conditions will be fulfilled in the reporting period.

In accordance with the Charities FRS 102 SORP 2015 volunteer time is not recognised.

Grants from government and other agencies have been included as income from activities in furtherance of the charity’s objectives where these amount to a contract for services, but as donations where the money is given in response to an appeal or with greater freedom of use, for example monies for core funding.

Monies receivable from the Government’s Coronavirus Job Retention Scheme are recognised when the charity has entitlement to the income and the amount due to the charity can be measured.

Income is deferred only when the charity must fulfil performance related conditions before becoming entitled to it or where the donor or funder has specified that the income is to be expended in a future accounting period.

Investment income is recognised once the dividend or similar income has been declared and notification has been received of the amount due.

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity; this is normally upon notification of the interest paid or payable by the bank.

Canterbury Diocesan Board of Finance

Page 27

Principal accounting policies Year ended 31 December 2020

Income (continued)

Income from charitable activities comprises parochial fees received for occasional offices including baptisms, weddings and funerals.

Income from other trading activities includes the income received from third parties by the charity’s trading subsidiaries. Such income is measured at the fair value of the consideration received or receivable, excluding discounts and rebates.

Gains or losses on the disposal of property assets are calculated as the difference between the sale proceeds net of sale costs and the net book value of the asset immediately prior to disposal. They are accounted for once legal completion of the disposal has taken place.

Expenditure

Expenditure is included in the statement of financial activities when incurred and includes any attributable VAT which cannot be recovered. Expenditure comprises the following:

Support costs are those costs which enable charitable activities to be carried out. These costs include the expenses relating to finance, human resources, communications and information technology. Where expenditure incurred relates to more than one activity it is apportioned using the most appropriate basis.

Grants payable are included in the statement of financial activities when approved and when committed. Commitment will usually arise when the intended recipient has either received the funds or been informed of the decision to make the donation.

Property, plant and equipment

All assets costing more than £1,000 and with an expected useful life exceeding one year are capitalised. Laptop and desktop computers costing under £1,000 are also capitalised.

Benefice property being buildings designed as, and used wholly or mainly for, private residential accommodation are not depreciated. Their value and conditions are reviewed annually by the Trustees, who are satisfied that their residual value is not materially less than their book value. Other freehold buildings which are used either as private residential properties or as Diocesan offices are not depreciated. The value and condition of the properties is reviewed annually to ensure that their residual value is not materially less than their book value.

Office equipment is written off over a period of three to five years, based on cost, in order to write the cost of each asset off over its estimated useful life.

Canterbury Diocesan Board of Finance

Page 28

Principal accounting policies Year ended 31 December 2020

Benefice property

CDBF has followed the requirements of FRS 102 in its accounting treatment for benefice houses. FRS 102 requires the accounting treatment to follow the substance of arrangements rather than their strict legal form. CDBF is formally responsible for the maintenance and repair of benefice houses and has some jurisdiction over their future use or potential sale if not required as a benefice house, but in the meantime legal title and the right to beneficial occupation is vested in the incumbent. Therefore, the Trustees consider the most suitable accounting policy to be to capitalise such properties as expendable endowment assets and to carry them at their estimated current value. Benefice houses are revalued on a five-year cycle by professional valuers or a member of the charity’s property team with a Chartered Surveyor qualification with approximately one-fifth of the properties being visited for valuation purposes each year. Those properties not revalued in the year are however revalued by reference to appropriate property indices.

Investments

Listed investments are a form of basic financial instrument and are initially recognised at their transaction value and subsequently measured at their fair value as at the balance sheet date using the closing quoted bid price.

Glebe property mainly consists of agricultural land and is included in the financial statements at a valuation based on income yield with provision being made for any impairment deemed necessary. The valuation is determined by the Trustees after consultation with the Board’s property director. Some glebe properties have development potential but due to the uncertainties in the planning process these are not revalued unless planning permission has been granted and a willing purchaser exists.

Realised gains (or losses) on investment assets are calculated as the difference between disposal proceeds and their opening carrying value or their purchase value if acquired after the first day of the financial year. Unrealised gains and losses are calculated as the difference between the fair value at the year end and their carrying value at that date. Realised and unrealised investment gains (or losses) are combined in the statement of financial activities and are credited (or debited) in the year in which they arise.

Operating leases

Rentals under operating leases are charged to the statement of financial activities on a straight-line basis over the lease term.

Debtors

Debtors are recognised at their settlement amount, less any provision for non-recoverability. Prepayments are valued at the amount prepaid.

Cash at bank and in hand

Cash at bank and in hand represents such accounts and instruments that are available on demand or have a maturity of less than three months from the date of acquisition.

Creditors and provisions

Creditors and provisions are recognised when there is an obligation at the balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably. Creditors and provisions are recognised at the amount the charity anticipates it will pay to settle the debt. They have been discounted to the present value of the future cash payment where such discounting is material.

Canterbury Diocesan Board of Finance

Page 29

Principal accounting policies Year ended 31 December 2020

Financial instruments

The charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Apart from fixed asset investments held at fair value, basic financial instruments are initially recognised at transaction value and subsequently measured at amortised cost using the effective interest method.

Pensions

The charity operates four pension schemes as more fully described in note 22:

The pension costs charged as expenditure represent CDBF's contributions payable in respect of the accounting period, in accordance with FRS 102. Deficit funding for the pension schemes to which CDBF participates is accrued at current value in creditors distinguished between contributions falling due within one year and after more than one year.

Custodian funds

Funds held by the charity on behalf of parishes, church schools and other entities and over which the charity has no power to make management decisions are classified as custodian funds and are not included in the financial statements. Instead, the funds held are disclosed by way of a note to the financial statements.

School major repair and capital projects

The charity assists voluntary aided schools with school building projects and the provision of IT equipment. The SCA (School Condition Allocation) system was introduced in April 2020 and superseded the LCVAP (Locally Coordinated Voluntary-Aided Programme). Until April 2020, the Charity acted as the agent of school governors in helping to arrange funding through the DfE and Local Authorities and in paying professional fees and building costs on behalf of school governors. The LCVAP income and expenditure was not reflected in the Statement of Financial Activities as the Charity had no control over the funds and the transactions were those of the school governors rather than the Charity which acted as agent. The change in funding from April 2020 gives the Charity discretion over how these funds are used. Therefore, the SCA grant funding received is recognised in the SOFA along with the related expenditure.

Canterbury Diocesan Board of Finance

Page 30

Notes to the financial statements Year to 31 December 2020

1. Income from: Donations and grants

Unrestricted
funds
£’000
Restricted
funds
£’000
2020
£’000		 2019
£’000
Archbishops’ Council 665 — 665 —

The one-off grant was given in order to provide support to the diocese during the Coronavirus pandemic.

Unrestricted
funds
£’000
Restricted
funds
£’000
2020
£’000		 2019
£’000
Parish Share
Archbishops’ Council
Allchurches Trust
Other donations and grants
Total funds		 7,529
—
—
135		 —
1,379
125
274		 7,529
1,379
125
409		 7,802
1,329
123
46
7,664 1,778 9,442 9,300

2. Income from: Charitable activities

Unrestricted
funds
£’000
Restricted
funds
£’000
2020
£’000		 2019
£’000
Parochial fees for occasional offices (see (a) below)
Department for Education capital grants (see (b) below)
Total funds		 297
—		 —
667		 297
667		 368
—
297 667 964 368

(a) Occasional offices include weddings and funerals.

Canterbury Diocesan Board of Finance

Page 31

Notes to the financial statements Year to 31 December 2020

3. Income from: Other trading activities

Income from: Other trading activities
Unrestricted funds
2020
£’000		 2019
£’000
Income from subsidiary trading companies
Rental income
Other trading income
Total funds		 144
470
156		 140
428
238
770 806

Income from subsidiary trading companies represents work done by Canterbury Diocesan Enterprises Limited and Ethos School Improvement Limited for third parties outside of the group. Work done by Canterbury Diocesan Enterprises Limited for CDBF of £258k (2019 - £235k), work done by Ethos School Improvement Limited for Canterbury Diocesan Enterprises Limited of £4k (2019 - £6k) and work done by Canterbury Diocesan Board of Finance for Ethos School Improvement Limited of £26k (2019 - £32k) has been eliminated on consolidation.

4. Income from: Investments and interest

Income from: Investments and interest
Unrestricted
funds
£’000		 Endowment
funds
£’000
13
—
13		 2020
£’000		 2019
£’000
Investment income
Bank and other interest receivable
Total funds		 200
10		 213
10		 221
26
210 223 247

5. Income from: Other sources

Unrestricted
funds
£’000		 Restricted
funds
£’000
—
178
178
Endowment
funds
£’000		 Total
funds
2020
£’000		 Total
funds
2019
£’000
Gains on property disposals (see note)
Proceeds from sale of closed schools
Total funds		 267
—
—

8		 267
186		 232
166
267
8		 453 398

The gains on property disposals relate to the disposal of land attached to benefice properties which was deemed surplus to requirements.

Canterbury Diocesan Board of Finance

Page 32

Notes to the financial statements Year to 31 December 2020

6. Expenditure on: Raising funds

Expenditure on: Raising funds
Unrestricted funds
2020
£’000		 2019
£’000
Wages and salaries
Social security costs
Pension costs
Other overheads		 148
14
5
163		 145
13
5
162
330 325

Expenditure on raising funds comprises the expenditure of subsidiary trading companies.

7. Analysis of grant funding activities

Included within expenditure on charitable activities (note 8) are the following grants:

Number 2020
£’000		 Number 2019
£’000
From unrestricted funds for National Church responsibilities
Contributions to Archbishops’ Council
From restricted funds
Education grants for school building projects
From unrestricted and restricted funds
Parochial fee grants
Ministry grants
Children and young people
Parish administration
Parish support
Deanery grants		 —
5
—
31
—
—
—
11		 550

480
—
791
—
—
—
22		 —

—
97
17
6
3
3
15		 541

—
32
432
78
203
15
28
1,843 1,329

The development of diocesan grants using the Church Commissioner funding allocation continues to see the diocese giving financial assistance to parishes to leverage their mission. In 2020, £791k (2019 - £728k) was spent in targeting parishes which can most benefit from grant funding for mission and ministry.

In 2019 grants were used for purposes other than direct ministry and parish administration grants included commitments in respect of future years for which funding had been received.

Canterbury Diocesan Board of Finance

Page 33

Notes to the financial statements Year to 31 December 2020

8. Expenditure on: Charitable activities

Expenditure on: Charitable activities
Unrestricted
funds
£’000		 Restricted
funds
£’000		 Endowment
funds
£’000		 Total
funds
2020
£’000
Total
funds
2019
£’000
Contributions to Archbishops’ Council:
Training for ministry
National church responsibilities
Grants and provisions
Mission agency pension costs
Retired clergy housing costs
Pooling of ordinands’ maintenance grants
Resourcing Ministry and Mission:
Parish Ministry
Stipends
National Insurance
Pension contributions
Housing costs
Apprenticeship levy
Removal and resettlement costs
Other expenses
Lay and ordinand training
Parochial fee grants
Mission development grants
Senior Clergy
Stipends, NI and Pensions
Housing cost allocation
Strategic Investment Projects(see below)
Support costs (note 9)
Total expenditure on resourcing Ministry
and Mission
Expenditure on education:
Support for church schools and young
people
School building grants (see note 2)
Total funds		 235
177
20
9
85
24		 —
—
—
—
—
—		 —
—
—
—
—
—		 235
177
20
9
85
24		 236
187
20
2
81
15
550 — — 550 541
3,046
242
784
1,151
14
204
124
138
—
22		 —
—
—
—
—
—
18
209
—
791		 —
—
—
—
—
—
35
—
—
—		 3,046
242
784
1,151
14
204
177
347
—
813		 3,001
237
712
1,708
14
111
187
322
32
680
5,725 1,018 35 6,778 7,004
57
29		 —
—		 —
—		 57
29		 56
28
86 — — 86 84
36 564 — 600 525
2,110 — — 2,110 2,298
7,957 1,582 35 9,574 9,911
340
—		 —

480		 —

—		 340

480		 663

—
8,847 2,062 35 10,944 11,115

The 2019 expenditure is analysed by fund in the appendix.

Restricted expenditure on Strategic Investment Projects comprises expenditure on projects to enable the Diocesan Strategy of ‘Changed Lives→ Changing Lives’ of which £322k (2019 - £376k) is funded by the Church Commissioners £151k (2019 - £81k) by Allchurches Trust and £91k (2019 – nil) by grant income from the Coronavirus Job Retention Scheme.

Canterbury Diocesan Board of Finance

Page 34

Notes to the financial statements Year to 31 December 2020

9. Analysis of support costs

Unrestricted funds Unrestricted funds
2020
Total
funds
£’000


2019
Total
funds
£’000
Diocesan administration
Salaries
National Insurance
Pensions
Administration, office and other indirect costs
Governance
External audit
Diocesan Synod and Archbishop’s Council
National Synod
Registrar
Statutory accounts preparation
Strategic management
Total support costs		 1,260
122
218
389
31
6
2
57
10
15		 1,242
120
222
588
39
8
4
50
10
15
2,110 2,298

In both 2019 and 2020, support costs relate only to the resourcing of Ministry and Mission.

10. Analysis of total expenditure

Analysis of total expenditure
Activities
directly
undertaken
£’000		 Grant
funding of
activities
£’000		 Support
costs
£’000		 2020
Total
funds
£’000		 2019
Total
funds
£’000
Raising funds
Charitable activities
Contributions to Archbishops’ Council
Resourcing Ministry and Mission
Education		 330
—
6,651
340		 —
550
813
480		 —
—
2,110
—		 330
550
9,574
820		 325
541
9,911
663
7,321 1,843 2,110 11,274 11,440

The 2019 expenditure is analysed by activity in the appendix.

11. Net income (expenditure) for the year

This is stated after charging:

2020 2019
£’000 £’000
Depreciation of tangible fixed assets owned by the charitable group 31 25
Operatinglease rentals 23 22

Canterbury Diocesan Board of Finance

Page 35

Notes to the financial statements Year to 31 December 2020

12. Auditor’s remuneration

Auditor’s remuneration
Audit of the charity’s annual accounts and those of subsidiary trading companies:
Current year
Prior year
Taxation services to the group		 2020
£’000
2019
£’000
30
10
8		 39
12
7

13. Stipends and staff costs

Stipends and staff costs
2020
£’000		 2019
£’000
Wages, salaries and stipends
Social security costs
Other pension costs
Defined benefit scheme operating cost
Apprenticeship levy		 5,069
430
1,102		 5,032
426
1,044
6,601
6
14		 6,502
6
14
6,621 6,522

The average number of persons employed by the group during the year was as follows:

Clergy, Curates and Senior Staff
Diocesan House (including strategic projects)
Subsidiary trading companies		 2020
No.
128
69
5
202		 2019
No.
131
70
5
206

The number of employees with remuneration in excess of £60,000 (including taxable benefits but excluding employer pension and national insurance contributions) was:

2020
No.
2
1		 2019
No.
2
1
In the band £60,001 - £70,000
In the band £80,001 - £90,000

Employer pension scheme costs under employment contracts in respect of the above higher paid employees were £49,106 (2019 - £43,709).

Canterbury Diocesan Board of Finance

Page 36

Notes to the financial statements Year to 31 December 2020

13. Stipends and staff costs (continued)

Remuneration of key management personnel

Key management personnel are deemed to be the Trustees and those having authority and responsibility, delegated to them by the Trustees, for planning, directing and controlling the activities of the diocese. During 2020 and 2019 the key management personnel were the Trustees and the following: Diocesan Secretary and Company Secretary Director of Communications Director of Communities and Partnerships Director of Education Director of Finance Director of HR Director of Mission and Ministry Director of Ordinands Director of Property

Remuneration including taxable benefits and employer national insurance and pension contributions for these 9 positions amounted to £596,394 (2019 - £602,675).

14. Trustees’ remuneration

No Trustees received any remuneration in connection with their duties as trustees during the year (2019 – none). During the year several Trustees, who are also clergy within the diocese, received stipends from, and/or were provided with housing by, the charity in connection with their religious and pastoral duties within the diocese.

The following table gives details of the Trustees who were in receipt of a stipend (including pension), part stipend (including pension) and/or housing provided by CDBF during part or all of the year, either directly or via a spouse.

Stipend Housing
The Bishop of Dover
Mr Nigel Mansley
The Archdeacon of Ashford
The Archdeacon of Canterbury
The Archdeacon of Maidstone
The Venerable Stephen Taylor, MBE
The Revd Estella Last
The Revd Canon Stephen Lillicrap
The Revd Shiela Porter
The Revd Michael Resch
The Revd Carol Smith		 No
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes		 Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes

Trustees received reimbursement of expenses of £13,718 (2019 - £20,733) in respect of General Synod duties, duties as archdeacon and other duties as trustees.

Canterbury Diocesan Board of Finance

Page 37

Notes to the financial statements Year to 31 December 2020

15. Tangible fixed assets

Tangible fixed assets
Group and charity Freehold
property
£’000		 Office
equipment
£’000		 Benefice
property
£’000		 Total
£’000
Cost or valuation
At 1 January 2020
Additions
Transfers
Revaluation
At 31 December 2020
Depreciation
At 1 January 2020
Charge for the year
At 31 December 2020
Net book values
At 31 December 2020
At 31 December 2019		 15,670
148
950
—		 380
52
—
—		 65,458
—
(950)
3,076		 81,508
200
—
3,076
16,768 432 67,584 84,784
957
—		 327
31		 —
—		 1,284
31
957 358 — 1,315
15,811 74 67,584 83,469
14,713 53 65,458 80,224

Benefice properties are included in the financial statements at a valuation determined as part of a rolling programme designed to value all such properties over a five-year period. The valuation is based on market value for existing use of approximately one fifth of the property portfolio for each year and has been carried out by a member of the charity’s property team with a Chartered Surveyor qualification.

All other tangible fixed assets are included in the financial statements at cost.

16. Fixed asset investments

Fixed asset investments
Group Glebe
property
£’000		 Listed
investments
£’000		 Total
£’000
Market value
At 1 January 2020
Additions
Disposal proceeds
Revaluation
Net investment gains
At 31 December 2020
Historical cost		 1,623
—
—
170
—		 6,104
56
(56)
—
253		 7,727
56
(56)
170
253
1,793 6,357 8,150
- 3,850 3,850

Canterbury Diocesan Board of Finance

Page 38

Notes to the financial statements Year to 31 December 2020

16. Fixed asset investments (continued)

Fixed asset investments(continued)
Charity Glebe
property
£’000		 Investment
in
subsidiaries
£’000		 Listed
investments
£’000		 Total
£’000
Cost or valuation
At 1 January 2020
Additions
Disposals
Revaluation
Net investment gains
At 31 December 2020
Impairment
At 1 January 2020 and 31 December 2020
Net book values
At 31 December 2020
At 31 December 2019		 1,623
—
—
170
—		 127
—
—
—
—		 6,104
56
(56)
—
253		 7,854
56
(56)
170
253
1,793 127 6,357 8,277
— 126 — 126
1,793 1 6,357 8,151
1,623 1 6,104 7,728

All the fixed asset investments are held in the UK. The listed investments are held in Church of England Central Board of Finance funds managed by CCLA Investment Management Limited.

At 31 December 2020, the listed investments included the following holdings deemed material in the context of the entire portfolio of listed investments.

Holding Value
£’000		 % of
portfolio
21.1%
78.3%
Property fund
Investment fund		 1,343
4,979

17. Debtors

Group Group Charity Charity
2020
£’000
2019
£’000
2020
£’000
2019
£’000
Parish share due
Amounts owed by subsidiaries
Amounts owed by undertakings in which the company has
a participating interest
Other debtors:
. Secured loan
. Other debtors
Prepayments
Accrued income		 251
—
—
216
432
317
342		 209
—
4
214
429
196
270		 251
26
—
216
419
308
342		 209
32
4
214
420
186
270
1,558 1,322 1,562 1,335

Canterbury Diocesan Board of Finance

Page 39

Notes to the financial statements Year to 31 December 2020

17. Debtors (continued)

Parish Share (the group and the charity)

The parish share element within debtors above consists of:

Parish Share (the group and the charity)
The parish share element within debtors above consists of:
Total parish share due at 31 December
Provisions made in respect of:
. Current year
. Previous years
Total		 2020
£’000
2019
£’000
3,434
(1,135)
(2,048)		 2,489
(647)
(1,633)
251 209

18. Creditors: amounts falling due within one year

Creditors: amounts falling due within one year
Group Charity
2020
£’000		 2019
£’000		 2020
£’000		 2019
£’000
Bank loan
Church Commissioners’ loan
Other loans
Expense creditors
Other taxation and social security
Other creditors
Pension scheme liabilities
Amounts owed to subsidiaries
Accruals and deferred income		 423
872
145
303
48
1,928
432
—
209		 423

—
145
150
51
1,978
424
—
207		 423

872
145
308
48
1,924
432
—
160		 423

—
145
145
49
1,978
424
1
163
4,360 3,378 4,312 3,328

The bank loan which was extended in 2020 is repayable in June 2021 with interest charged at 1.99% above Bank Rate. It is secured over a freehold property.

The Church Commissioners’ loan relates to an advance to cover three month’s stipends for August, September and October 2020. It is interest free and expected to be repaid in 2021.

Other loans comprise Value Linked Loans of £145,000 (2019 - £145,000) for the purchase of special needs housing (purchased on behalf of the Church Commissioners). These loans are only repayable in the event of a sale of any of the properties and interest is charged on these loans at a variable rate.

Canterbury Diocesan Board of Finance

Page 40

Notes to the financial statements Year to 31 December 2020

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

Group
2020
2019
£’000
£’000
778
778
556
944
1,335
1,722		 Group
2020
2019
£’000
£’000
778
778
556
944
1,335
1,722		 Charity
2020
2019
£’000
£’000
778
778
556
944
1,335
1,722		 Charity
2020
2019
£’000
£’000
778
778
556
944
1,335
1,722
Other loans
Pension scheme liabilities		 778
556		 778
944		 778
556		 778
944
1,335 1,722 1,335 1,722

Creditors include amounts not wholly repayable within 5 years as follows:

Group Group Charity Charity
2020
£’000		 2019
£’000		 2020
£’000		 2019
£’000
Repayable other than byinstalments 1,335 1,722 1,335 1,722

The other loans consist of three (2019 - three) interest only mortgages which are secured on freehold properties. All the loans are repayable within 20 years. Interest on the loans is charged at 1.50% above base rate.

Canterbury Diocesan Board of Finance

Page 41

Notes to the financial statements Year to 31 December 2020

20. Statement of funds

Statement of funds
Year to 31-Dec-20 Brought
forward at 1
January
2020
£’000		 Income
£’000		 Expenditure
£’000		 Transfers in
(out)
£’000		 (Losses)
gains
£’000		 Carried
forward at 31
December
2020
£’000
Endowment funds
Ministry Trust Fund
Clergy Training Fund
Tait Mission Fund
Benefice Properties Fund
Board of Education General Fund
Stipends Capital Fund
Restricted funds
Clergy and Spouses Retirement Fund
Allchurches Trust
Lower Income Communities Fund
Resourcing Ministerial Education
Strategic Investment Projects
School Buildings Fund (see note 2)
Education Funds
Other Funds
Diocesan Pastoral Account Fund
Designated funds
Ministry Housing
Spirituality Fund
Witney Fund
Training Fund
General funds
General
Total unrestricted funds
Total Charity funds
Non-charitable trading funds
Total Group funds		 1,987
548
201
65,748
1,332
2,666		 —
—
—
—
21
—		 —
—
—
—
—
(35)		 —
—
—
(950)
—
—		 95
27
17
3,052
(3)
157		 2,082
575
218
67,850
1,350
2,788
72,482 21 (35) (950) 3,345 74,863
710
42
—
—
74
—
—
—
324		 —
125
791
209
379

667

178
274
—		 (5)
(151)
(791)
(209)
(413)

(480)

—
(5)
(8)		 —
—
—
—
—

—

—
—
—		 45
—
—
—
—

—

—
—
—		 750
16
—
—
40

187

178
269
316
1,150 2,623 (2,062) — 45 1,756
12,237
239
1,065
23		 —
6
29
—		 —
—
(83)
—		 950
—
—
—		 —
9
44
—		 13,187
254
1,055
23
13,564 35 (83) 950 53 14,519
29 9,694 (8,948) — 4 779
13,593 9,729 (9,031) 950 57 15,298
87,225
75		 12,373
144		 (11,129)
(146)		 —
—		 3,447
—		 91,917
73
87,300 12,517 (11,274) — 3,447 91,990

Canterbury Diocesan Board of Finance

Page 42

Notes to the financial statements Year to 31 December 2020

20. Statement of funds (continued)

Summary: Group funds 2020 Brought
forward at 1
January
2020
£’000
Income
£’000
Expenditure
£’000
Transfers in
(out)
£’000
Gains
£’000
Carried
forward at 31
December
2020
£’000
Designated funds
General funds (and non-charitable
trading funds)
Unrestricted funds
Endowment funds
Restricted funds
Total funds		 13,564
104		 35
9,838		 (83)
(9,094)		 950
—		 53
4		 14,519
852
13,668
72,482
1,150		 9,873
21
2,623		 (9,177)
(35)
(2,062)		 950
(950)
—		 57
3,345
45		 15,371
74,863
1,756
87,300 12,517 (11,274) — 3,447 91,990

Designated Funds

General Funds

General funds consist of the accumulated surpluses, less deficits, on unrestricted funds, excluding designated fund movements.

Non-charitable trading funds

These funds consist of the unrestricted funds of the trading subsidiaries.

Endowment Funds

Permanent Endowment Funds

The endowment funds, whereby the capital may not be expended and the income may be applied as specified are as follows:

Canterbury Diocesan Board of Finance

Page 43

Notes to the financial statements Year to 31 December 2020

20. Statement of funds (continued)

Expendable Endowment Funds

Benefice Properties Fund - The fund consists of resources restricted to provision of benefice houses which are vested for the time being in the incumbents of the benefices concerned. The CDBF is obliged to maintain them and to ensure that there are sufficient benefice houses for the pastoral structure of the diocese. Sale proceeds of benefice houses surplus to requirements may be transferred into the diocesan pastoral account fund or other funds following specific agreement of the Church Commissioners. During the year £950,000 (2019 - £1,060,000) was transferred from the Benefice Properties Fund to the Ministry Housing Fund following schemes approved by the Church Commissioners.

Restricted Funds

Restricted funds comprise of:

Canterbury Diocesan Board of Finance

Page 44

Notes to the financial statements Year to 31 December 2020

20. Statement of funds (continued)

Restricted Funds (continued)

The fund receives the sale proceeds of churches and parsonages, which have become redundant under pastoral reorganisation when it is specified that they should be paid into this fund. The fund includes monies set aside by the Pastoral Committee for mission and development in parishes.

The analysis of the movements in funds for 2019 is included in the appendix.

21. Analysis of net assets between funds

An analysis of the group net assets between funds at 31 December 2020 is given below:

Group 2020 General
funds
£’000		 Designated
funds
£’000		 Restricted
funds
£’000		 Endowment
funds
£’000		 Total
funds
2020
£’000
Tangible fixed assets
Fixed asset investments
Current assets
Creditors due within one year
Creditors due in more than one year
Total funds		 2,689
399
1,530
(2,431)
(1,335)		 13,196
1,435
924
(1,036)
—		 —
779
1,870
(893)
—		 67,584
5,537
1,742
—
—		 83,469
8,150
6,066
(4,360)
(1,335)
852 14,519 1,756 74,863 91,990

General funds include non-charitable trading funds of £73k (2019 – £75k). The 2019 analysis of net assets by fund is included in the appendix.

Canterbury Diocesan Board of Finance

Page 45

Notes to the financial statements Year to 31 December 2020

22. Pension commitments

Clergy

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

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

The scheme is considered to be a multi-employer scheme as described in Section 28 of FRS 102. This means it is not possible to attribute the scheme’s assets and liabilities to specific Responsible Body and this means that contributions are accounted for as if the scheme were a defined contribution scheme. The pensions costs charged to the statement of financial activities in the year are contributions payable towards benefits and expenses accrued in that year, plus any impact of deficit contributions (see below).

A valuation of the scheme is carried out once every three years. The most recent scheme valuation completed was carried out at as 31 December 2018. The 2018 valuation revealed a deficit of £50m, based on assets of £1,818m and a funding target of £1,868m, assessed using the following assumptions:

Following the 31 December 2018 valuation, a recovery plan was put in place until 31 December 2022 and the deficit contributions (as a percentage of pensionable stipends) are as set out in the table below.

% ofpensionable stipends January 2019 to
December 2020
January 2021 to
December 2022
Deficit contributions 11.9%
7.1%

As at 31 December 2020 the deficit recovery contributions under the recovery plan in force were as set out in the above table.

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

Canterbury Diocesan Board of Finance

Page 46

Notes to the financial statements Year to 31 December 2020

22. Pension commitments (continued)

Clergy (continued)

Section 28.11A of FRS 102 requires agreed deficit recovery payments to be recognised as a liability. The movement in the provision is set out in the table below.

movement in the provision is set out in the table below.
2020
£’000		 2019
£’000
Balance sheet liability at 1 January
Deficit recovery contributions paid
Interest cost (recognised in statement of financial activities)
Remaining change to the balance sheet liability (recognised in statement of financial
activities)
Balance sheet liability at 31 December*		 791
(357)
7
17		 2,406
(349)
47
(1,313)
458 791

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

2020
0.2%
3.1%
1.6%		 2019
1.1% pa
2.8% pa
1.3%pa
Discount rate
Price inflation
Increase to totalpensionablepayroll

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

Staff

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

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

Defined Benefits Scheme

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

For funding purposes, 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 the fact that the assets of the DBS are held as a single trust fund out of which all the benefits are to be provided. From time to time, a notional premium is transferred from employers’ sub-pools to the Life Risk Pool and all pensions and death benefits are paid from the Life Risk Pool.

Canterbury Diocesan Board of Finance

Page 47

Notes to the financial statements Year to 31 December 2020

22. Pension commitments (continued)

Staff (continued)

Defined Benefits Scheme (continued)

The scheme is a multi-employer scheme as described in Section 28 of FRS 102 and as such contributions are accounted for as if the DBS were a defined contribution scheme. It is not possible to attribute the scheme’s assets and liabilities to specific employers, since each employer, through the Life Risk Pool, is exposed to actuarial risks associated with the current and former employees of other entities participating in the DBS.

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

A valuation of the DBS is carried out once every three years. The most recent valuation was carried out as at 31 December 2016. In this valuation, the Life Risk Section was shown to be in deficit by £2.6m and £2.6m was notionally transferred from the employers’ sub-pools to the Life Risk Pool. This increased the Employer contributions that would otherwise have been payable. The overall deficit in the DBS was £26.2m.

Following the valuation, the Employer has entered into an agreement with the Church Workers Pension Fund to pay a contribution rate of 40.5% of pensionable salary and expenses of £6,100 per year. In addition, deficit payments of £74,552 per year have been agreed for 10 years from 1 April 2018 in respect of the shortfall in the Employer sub-pool. This obligation has been recognised as a liability within these financial statements.

Section 28.11A of FRS 102 requires agreed deficit recovery payments to be recognised as a liability.

The movement in the provision is set out below:

The movement in the provision is set out below:
2020
£’000		 2019
£’000
Balance sheet liability at 1 January
Deficit contribution paid
Interest cost (recognised in statement of financial activities)
Remaining change to the balance sheet liability (recognised in statement of financial
activities)
Balance sheet liability at 31 December*		 577
(75)
8
20		 615
(75)
13
24
530 577

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

recovery payments:
2020 2019
Discount rate 0.5%pa 1.4%pa

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

A valuation as at 31 December 2019 was underway as at 31 December 2020. The contributions agreed at that valuation date will be reflected in the figures disclosed in the 2021 accounts.

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Notes to the financial statements Year to 31 December 2020

23. Operating lease commitments

At 31 December 2020 the total of the group’s and charity’s future minimum lease payments under noncancellable operating leases was:

Group and Charity Land and
buildings
£’000		 Equipment
£’000		 2020
£’000		 Land and
buildings
£’000		 Equipment
£’000		 2019
£’000
Amounts payable:
Within 1 year
Between 2 and 5 years
Over 5 years
Total		 15
20
—		 7
28
3		 22
48
3		 15
34
—		 1
3
—		 16
37
—
35 38 73 49 4 53

24. Principal subsidiaries, joint ventures and connected charities

a. Principal subsidiaries

Details of the principal subsidiaries are provided below:

Registration Percentage
Company name number Country Shareholding Principal Activity
Diocesan Architectural 2790278 England & Wales 100% Architectural services
Services Limited Dormant from May 2018
Canterbury Diocesan 6673588 England & Wales 100% Property management
Enterprises Limited
Ethos School 7945168 England & Wales 100% Provision of services to
Improvement Limited schools

Financial information for each of the subsidiaries is as follows:

Financial information for each of the subsidiaries is as follows:
Diocesan Architectural Services Limited 2020
£’000		 2019
£’000
Assets and funds 1 1
Canterbury Diocesan Enterprises Limited 2020
£’000		 2019
£’000
Income
Expenditure
Loss
Assets
Liabilities
Funds		 326
(329)		 275
(285)
(3) (10)
49
(24)		 53
(25)
25 28
Ethos School Improvement Limited 2020
£’000		 2019
£’000
Income
Expenditure
Profit
Assets
Liabilities
Funds		 81
79		 88
(78)
2 10
119
(70)		 120
(73)
49 47

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Notes to the financial statements Year to 31 December 2020

24. Principal subsidiaries, joint ventures and connected charities (continued)

b. Principal joint ventures

Registration Percentage
Company name number Country Shareholding Principal Activity
Together Kent 8763875 England & Wales 50% Christian Charity
missionary work

With effect from 1 March 2021, Together Kent became a wholly owned subsidiary.

c. Connected entities

c. Connected entities
Registration
Company name number Country Principal Activity
The Diocese of Canterbury Academies 7793458 England & Wales Educational activities
Company Limited

25. Custodian Trustee

The charity acts as Custodian Trustee in respect of various funds. These assets are held separately from those of the charity and are not included in the balance sheets on page 23. The summary of the funds as at 31 December is as follows:

at 31 December is as follows:
2020
£’000		 2019
£’000
Trust funds
Represented by:
Fixed assets
. Listed investments (at cost)
Current assets
. Central Board of Finance Deposit Fund
. Cash at bank
Total
Market value of investments at 31 December
Listed investments		 1,782
1,321
3		 1,579
1,312
4
3,106 2,895
5,629 5,105

26. School building projects

The charity received government grants of £0.8m (2019 - £1.5m) as the agent of school governors in connection with major repair and capital projects at church schools in the Diocese. These monies, together with the contributions received from school governors are used to fund contractor payments also administered by the charity acting as managing agent for the schools. During the year the charity made payments to contractors of £1.1m (2019 - £1.4m).

27. Related party transactions

Other than the relationships and transactions disclosed in note 14, there are no other related party transactions requiring disclosure (2019: none).

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Appendix: Comparative consolidated statement of financial activities Year to 31 December 2019

Notes Unrestricted
funds
£’000		 Restricted
funds
£’000		 Endowment
funds
£’000		 Total funds
2019
£’000
Income and endowments from:
Donations and legacies
1
Charitable activities
2
Other trading activities
3
Investments and interest
4
Other sources
5
Total income and endowments
Expenditure on:
Raising funds
6
Charitable activities
8
Total expenditure
10
Net (expenditure) income before
investment gains (losses)
Net gains on investments
16
Net (expenditure) income before
transfers
Transfers between funds
20
Net income (expenditure) for the year
11
Other recognised gains and losses:
(Losses) gains on revaluation of pension
fund liabilities
22
Gains on revaluations of tangible fixed
assets
Net movement in funds
Reconciliation of funds
Total funds brought forward
Total funds carried forward
7,806

368

806

238

232		 1,494
—
—
—
—		 —
—
—
9
166		 9,300
368
806
247
398
9,450 1,494 175 11,119

325

9,665		 —
1,437		 —
13		 325
11,115

9,990		 1,437 13 11,440
(540)

223
57
107		 162
378		 (321)
708
(317)

1,060
164
—		 540
(1,060)		 387
—

743

(37)
—		 164

—
—		 (520)
1,266
2,715		 387
1,229
2,715
706
12,962		 164
986		 3,461
69,021		 4,331
82,969
13,668 1,150 72,482 87,300

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Appendix: Comparative notes to the financial statements Year to 31 December 2019

1. Income from: Donations and legacies

Income from: Donations and legacies
Unrestricted
funds
£’000		 Restricted
funds
£’000		 Total funds
2019
£’000
Parish Share
Archbishops’ Council
Allchurches Trust
Other donations and grants
Legacies
Total funds		 7,802
—
—
4
7,806		 —

1,329

123

42

1,494		 7,802
1,329
123
46
9,300
7,864
1,107		 8,971

2. Income from: Charitable activities

Total funds:Parochial fees for occasional offices Unrestricted
funds
2019
£’000
368

4. Income from: Investments and interest

Income from: Investments and interest
Unrestricted
funds
£’000		 Endowment
funds
£’000
2019
£’000
Investment income
Bank and other interest receivable
Total funds		 212
26
9

—		 221
26
238
9		 247

5. Income from: Other sources

Unrestricted
Funds
£’000		 Endowment
funds
£’000		 Total
funds
2019
£’000
Gains on property disposals
Proceeds from sale of closed schools
Total funds		 232
—		 —
166		 232
166
232 166 398

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Appendix: Comparative notes to the financial statements Year to 31 December 2019

8. Expenditure on: Charitable activities

Expenditure on: Charitable activities
Unrestricted
funds
£’000		 Restricted
funds
£’000		 Endowment
funds
£’000		 Total
funds
2019
£’000
Contributions to Archbishops’ Council:
Training for ministry
National Church Responsibilities
Grants and provisions
Mission agency pension costs
Retired clergy housing costs
Pooling of ordinands’ maintenance grants
Resourcing Ministry and Mission:
Parish Ministry
Stipends
National Insurance
Pension contributions
Housing costs
Apprenticeship levy
Removal and resettlement grants
Other expenses
Lay and ordinand training
Parochial fee grants
Mission development grants
Senior Clergy
Stipends, NI and Pensions
Housing cost allocation
Strategic Investment Projects(see below)
Support costs (note 9)
Total expenditure on resourcing Ministry and
Mission		 236
187
20
2
81
15		 —
—
—
—
—
—		 —
—
—
—
—
—		 236
187
20
2
81
15
541 — — 541
3,001
237
712
1,708
14
111
155
134
32
—		 —
—
—
—
—
—
19
188
—
680		 —
—
—
—
—
—
13
—
—
—		 3,001
237
712
1,708
14
111
187
322
32
680
6,104 887 13 7,004
56
28		 —
—		 —
—		 56
28
84 — — 84
53 472 — 525
2,298 — — 2,298
8,539
585
9,665		 1,359
78
1,437		 13 9,911
Expenditure on education:
Support for church schools and young people
Total funds 2019		 — 663
11,115
13

Expenditure on Strategic Investment Projects comprises expenditure on projects to enable the Diocesan Strategy of ‘Changed Lives→Changing Lives’ of which £104k is funded by the Church Commissioners.

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Appendix: Comparative notes to the financial statements Year to 31 December 2019

10. Analysis of total expenditure

Analysis of total expenditure
Activities
directly
undertaken
£’000		 Grant
funding of
activities
£’000		 Support
costs
£’000
—
—
2,298
—
2,298		 Total
funds
2019
£’000
Raising funds
Charitable activities
. Contributions to Archbishops’ Council
. Resourcing Parish Ministry
. Education		 325
—
6,903
585		 —
541
710
78		 325
541
9,911
663
7,813 1,329 11,440

20. Statement of funds

Year to 31 December
2019		 Brought
forward at
1 January
2019
£’000		 Income
£’000		 Expenditure
£’000		 Transfers in
(out)
£’000		 (Losses)
gains
£’000		 Carried forward
at
31 December
2019
£’000
Endowment funds
Ministry Trust Fund
Clergy Training Fund
Tait Mission Fund
Benefice Properties Fund
Board of Education
General Fund
Stipends Capital Fund
Restricted funds
Clergy and Spouses
Retirement Fund
Allchurches Trust
Lower Income
Communities Fund
Resourcing Ministerial
Education
Strategic Investment
Projects
Other Funds
Diocesan Pastoral
Account Fund
Designated funds
Ministry Housing
Spirituality Fund
Witney Fund
Training Fund
General funds
General
Total unrestricted
funds
Total Charity funds
Non-charitable trading
funds
Total Group funds		 1,738
477
172

62,828
1,160
2,646		 —
—
—
—
175
—		 —
—
—
—
—
(13)		 —
—
—
(1,060)
—
—		 248
71
29
3,981
(1)
31		 1,986
548
201
65,749
1,334
2,664
69,021 175 (13) (1,060) 4,359 72,482
613
—
—
—
40
—
333		 —
123
724
188
425
34
—		 (10)
(81)
(724)
(188)
(391)
(34)
(9)		 —
—
—
—
—
—
—		 107
—
—
—
—
—
—		 710
42
—
—
74
—
324
986 1,494 (1,437) — 107 1,150
11,579
218
935
23		 —
6
29
—		 —
(8)
(20)
—		 658
—
—
—		 —
23
121
—		 12,237
239
1,065
23
12,755 35 (28) 658 144 13,564
132 9,275 (9,822) 402 42 29
12,887 9,310 (9,850) 1,060 186 13,593
82,894
75		 10,979
140		 (11,300)
(140)		 —
—		 4,652
—		 87,225
75
82,969 11,119 (11,440) — 4,652 87,300

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Appendix: Comparative notes to the financial statements Year to 31 December 2019

20. Statement of funds (continued)

Summary: Group funds
2019		 Brought
forward at
1 January
2019
£’000		 Income
£’000		 Expenditure
£’000		 Transfers in
(out)
£’000		 Gains
£’000		 Carried
forward at
31 December
2019
£’000
Designated funds
General funds (and non-
charitable trading funds)
Unrestricted funds
Endowment funds
Restricted funds
Total funds		 12,755
207		 35
9,415		 (28)
(9,962)
658
402		 144
42		 13,564
104
12,962
69,021
986		 9,450
175
1,494		 (9,990)
(13)
(1,437)
1,060

(1,060)
—		 186
4,359
107		 13,668
72,482
1,150
82,969 11,119 (11,440) — 4,652 87,300

21. Analysis of net assets between funds

Group 2019 General
funds
£’000		 Designated
funds
£’000		 Restricted
funds
£’000		 Endowment
funds
£’000		 Total
funds
2019
£’000
Tangible fixed assets
Fixed asset investments
Current assets
Creditors due within one year
Creditors due in more than one year
Total funds		 2,528
345
285
(1,594)
(1,460)		 12,238
1,538
1,087

(1,037)
(262)		 —
782
1,115

(747)
—		 65,458
5,062
1,962
—
—		 80,224
7,727
4,449
(3,378)
(1,722)
104 13,564 1,150 72,482 87,300

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