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2022-12-31-accounts

Gloucester Diocesan Board of Finance Annual Report & Accounts 2022

Board of Trustees

The Rt Revd Rachel Treweek (President) Canon Karen Czapiewski (Chair) The Ven Phil Andrew The Revd Andrew Blyth Prof Patricia Broadfoot Mr George Collins The Revd Henry Curran The Ven Hilary Dawson The Revd James Faragher (from 1st February 2022) Mr Chris Hill Mr Martin Kingston Mr Robert McNeill-Wilson Mrs Carol O’Donnell

The Revd Dr Sunkanmi Osunsanmi (resigned 6 March 2023) The Revd Jo Pestell The Revd Ed Sauven The Revd Canon Katrina Scott The Rt Revd Robert Springett The Revd Canon John Swanton Mr Alastair Taylor Mrs Emma Taylor (resigned 29 March 2023) Mr Kevan Taylor Mr Andy Wilson

Contents

Board of Trustees and Principal Officers……………...1 Summary results……………………………………….2 Trustees’ report………………………………….....3-14 Independent Auditors’ Report……………………15-18 Consolidated statement of financial activities………. 19 Summary income & expenditure account…………... 20 Consolidated balance sheet…………………………..21 Parent balance sheet………………………………….22 Consolidated cash flow statement………………...…23 Accounting policies……………………………….24-27 Notes to the financial statements………………...28-60

Principal Officers

Benjamin Preece Smith – Diocesan Secretary Lucy Taylor – Director of Communications & Engagement Jo Hunter – Interim Director of Education Lisa Gardner – Director of Finance, Property & Giving Sandra Millar – Director of Mission and Ministry Judith Knight – Director of People and Safeguarding

Solicitor

Jos Moule; Diocesan Registrar Veale Wasborough Vizards LLP Orchard Court, Orchard Lane Bristol BS1 5WS

Bankers

Barclays Bank plc 288 Britannia Warehouse The Docks Gloucester GL1 2Y

Registered office Church House College Green Gloucester GL1 2LY

Auditors

Haysmacintyre LLP 10 Queen Street Place London EC4R 1AG

Investment managers

CCLA Investment Management Ltd 80 Cheapside London EC2V 6DZ

Company limited by guarantee Registered number 162165 Registered charity number 251234

1

How have we done – some hi hli hts g g

number of stipendiary clergy funded by the DBF

2022: 2021: change: - 126 126

Stipendiary vacancies at 31st December 2022 were 11 (2021:11)

parish share contributions

2022: 2021: change: + 3.2% £6.3m £6.5m

extra parish share needed to fund parish ministry:[1]

2022: 2021: change: +13% £1.8m £1.61.6m

----- Start of picture text -----
£1.61.6m
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balance sheet value (net assets)[2]

£95m

1 See ‘Ongoing Activities” section on page 9. 2 Including £3m of unrealised losses per the SoFA.

2

Trustees’ report

for the year ended 31 December 2022

Foreword

The preceding ‘highlights’ page has been included for many years to provide a simple summary of the Board’s financial performance, aimed at the reader who has a general interest but may not wish to read this report in full.

This year we believe that an additional commentary would be helpful to such a reader to outline significant changes shown on the Balance Sheet that are not captured by this summary. These changes are as follows:

Further information on these matters can be found in the report and accounts that follow. These changes are for the general good of the financial health of the Board in enabling it to continue in its objective to support a flourishing Anglican ministry in the Diocese of Gloucester.

3

Trustees’ report

for the year ended 31 December 2022

Structure, Governance and Management

The Gloucester Diocesan Board of Finance (DBF) is a company limited by guarantee and a registered charity. Its governing instrument is the Articles of Association. These were revised and updated in 2019 and formally adopted by members on 9 March 2019. Printed copies of the revised Articles of Association are available from the Secretary on request. The DBF’s membership comprises:

Elections and co-options take place every three years. The current triennium started in November 2021. The DBF, which meets three times each year, is the principal policy making body. It takes advice from its Board of Trustees, constituted as the Bishop’s Council, which examines issues in detail and makes recommendations. The Council also takes executive action in certain matters and deals with day-to-day issues. Members of the Bishop’s Council serve as both directors under the Companies Act and trustees under the Charities Act. Membership is as follows:

Ex-officio members:

Members elected by the DBF – House of Clergy

Members elected by the DBF – House of Laity

4

Trustees’ report

for the year ended 31 December 2022

Structure, Governance and Management cont.

Co-opted members and nominations

Trustees are recruited, as indicated above, through a mixture of ex-officio positions, elections and nominations. The Diocesan Secretary oversees membership elections.

An induction pack for trustees is available for new trustees which includes key documents, minutes and strategic discussions. This is supplemented by an invitation to meet with the Secretary to discuss any matters arising or explore further induction.

The DBF was assisted in its work during the year by the following of committees:

Emoluments of higher paid employees are determined by the Resources Committee. The terms of reference for this group were established by the Bishop’s Council and includes regular appraisals, remuneration and salary benchmarking and consequent recommendation of changes.

Trustees’ liability insurance (for trustees in their capacity as directors) has been maintained throughout the year for the benefit of the charitable company and its trustees.

The DBF is the financial custodian for the Diocese of Gloucester, which is an administrative and pastoral area within the Church of England. The DBF therefore has important relationships with the national institutions of the Church of England, specifically:

5

Trustees’ report

for the year ended 31 December 2022

Structure, Governance and Management cont.

Public Benefit

Locally, the DBF works with Parochial Church Councils (PCCs) which are legally independent bodies that pay contributions, based on an apportionment system, to the DBF to fund its activities. The DBF is a tenant of the Dean and Chapter of Gloucester Cathedral, from whom it rents office accommodation. The DBF manages various charities on behalf of their respective trustees, for which management charges are paid, namely the Voluntary Schools Fund (VSF) and the Charity of Ann Edwards (AEC).

The GDBF is a public benefit entity, and the Trustees are aware of the Charity Commission’s guidance on public benefit and the supplementary guidance for charities whose aims include advancing religion and have regard to that guidance in their administration of the charity.

Strategic Aims

The objects of the DBF, as set out in its Articles of Association, are:

In pursuing these objects, the DBF acts as the financial executive of and employer for the Gloucester Diocesan Synod. As such it undertakes three principal activities:

In pursuing its objectives and undertaking these activities the DBF is informed by the diocesan vision, LIFE Together. For more information see: https://www.gloucester.anglican.org/about-us/our-vision/

Strategic Report

Vision: LIFE Together

The LIFE Vision developed during 2022 into “LIFE together” which brings more focus to relationships and gathering as communities, especially worshipping communities.

There are five commitments in LIFE Together:

6

Trustees’ report

for the year ended 31 December 2022

Strategic Report cont.

Substantial resourcing has been made available to specific projects working to this vision, notably Deanery Strategic Planning, Sportily and Church Army Centres of Mission.

Deanery Strategic Planning

The process of identifying a deliverable strategic plan for each deanery has been significantly interrupted by Covid. Initial plans which had originally been expected in 2022 were received in May 2022 and further work was undertaken for the rest of 2022 and early 2023 to seek common themes and issues across the Diocese.

Four emerging issues have been established which are currently under discussion for strategic support from the Board.

These are currently being digested by Bishop’s Staff Team and the Board to develop strategic responses, including remodelling the use of reserves and the structure of staff teams employed by the Board.

Sportily

Sportily is a wholly owned subsidiary of the DBF aimed at working with young people to explore life, community and faith with a strong focus on sport as a place of engagement and connexion. It works on a theory of community based on the “seven sacred spaces” model observed in ancient monastic communities.

Sportily was launched in 2021 with a multi-year commitment of financial support from the Diocese to work across the Diocese with local churches and communities as well as regional charitable, commercial and civic partners. It is currently working in nine hubs spread across the Diocese as well as running diocesan wide events.

Church Army Centres of Mission

This is a local expression of a national lay evangelism programme led by Church Army. The two initial locations in the Diocese identified as Centres for Mission were Matson and Coleford.

7

Trustees’ report

for the year ended 31 December 2022

Strategic Report cont.

The Centre in Matson has partnered with the Grace Network and others to develop a social enterprise hub and mission centre in the community. This has proved successful in connecting with and developing discipleship in a community that has lost much of its connexion with the Church. Work is being planned to make this work more resilient and independent over the next few years. The Centre at Coleford struggled to thrive due to the pandemic and has now been closed. An alternative location in Gloucester City has been identified and will begin during 2023.

Grace Network

Grace Network is a Christian-led social enterprise co-operative based in Brimscombe which builds community and from that new monastic community. Their main engagement and funding come from ethical businesses sharing resources and space in a different iteration of the “seven sacred spaces” model.

In 2022 the Board awarded grant funding of £1.5m to enable this model to expand into two new locations, planned to be Cirencester and Gloucester. New premises for the first of these will be secured in 2023 with a planned opening in late 2023 or early 2024.

Church Housing Foundation

Building on the Archbishops’ Commission on Housing, Church and Community’s report “Coming Home” and the asset led financial and missional approach the Board has adopted over a number of years it has funded a small expert team led by the Secretary to develop plans for a national approach to a sustainable model for the Church to use Her network, assets and moral authority to help make a lasting impact on the housing crisis and providing ministry in deprived communities.

In enacting this strategy three new entities are being created;

This work is currently coming to the end of its development phase and significant additional funding is being sought currently to realise the next stage of this project. It is not anticipated that in this next stage the Board would retain the same level of leadership and that governance will instead be directed towards the Church’s national Church institutions rather than the Board.

8

Trustees’ report

for the year ended 31 December 2022

Strategic Report cont.

Diocesan Board of Education

On 1 September 2022 the Gloucester Diocesan Board of Education (GDBE) was incorporated as a distinct legal entity. As a result, the staff employed by the Board are no longer its employees but the employees of the GDBE. The funds of the Voluntary Schools Fund and Bishop’s Headlam Fund which are currently managed by independent charities will be transferred to the GDBE for its management.

The Board will offer significant administrative support to the GDBE at no cost under a Service Level Agreement to be signed in 2023. This will include Finance, IT, HR, accommodation and other functional areas.

Achievements and performance in the year

Ongoing Activities

The results for 2022 are consistent with 2021, and 2020.

This consistency reflects the resilience of the Church of England’s ministry and mission and the relative strength of the Board’s asset management approach.

This consistency, however, must not lead to complacency. Whilst appropriate management of funds can and should restore the general fund to surplus the ongoing deficits reflect a generational strain on our current pattern of funded ministry. Parish Share has not significantly increased over the past five years, whilst our cost of ministry has. The following table illustrates this dilemma:

Fig1: Parish Share Collected cf. Parish Ministry Costs

2018 2019 2020 2021 2022
£m £m £m £m £m
Parish Share 6.5 6.6 6.5 6.3 6.5
Resourcing Parish Ministry (Direct)3 (7.6) (7.6) (7.8) (8.1) (8.1)
Deficit (1.1) (1.0) (1.3) (1.8) (1.6)

3 See Note 9

9

Trustees’ report

for the year ended 31 December 2022

Ongoing Activities cont.

It is the active management of the Board’s legacy assets, notably glebe and the Diocesan Stipends Fund, that mean we can, for now continue with a consistent level of ministry. The weakness in Parish Share is related to two long competing trends in the Church:

From the turn of the century until c2018 the net effect of these two trends led to Parish Share increasing but at a trend of around 1% below cost inflation. There is concern that the dip since 2019 maybe a tipping point after which congregational decline now outpaces increased personal donations. With inflationary pressures higher in 2022 and 2023 than for decades that is a significant challenge for the sustainability of ministry. Significant efforts will be required in personal stewardship and giving in parishes and the development of additional income streams from assets and other sources in order to ensure the Board continues to ensure there is a Christian presence in every community in the Diocese.

Furthermore, whilst we have not seen the significant reduction in stipendiary clergy in this Diocese that some other dioceses have faced Gloucester is not impervious to national trends. The availability of stipendiary clergy for the next decade is a real concern. Developing high quality leadership is fundamental to the growth of the Church and is potentially the single most important focus for the next few years.

Plans for future periods

The Strategic Report (above) sets out the main approach of the Diocese to addressing its core challenges for the next few years. The Board is committed to using the Unapplied Total Return (UTR) built up over many years to cover the deficits necessary to maintain an appropriate deployment of parish ministry. Whilst change may be necessary to ensure the right pattern of ministry in future the Board seeks to ensure the matter of ministerial deployment is addressed as a missional question that is financially informed but not financially driven.

In the immediate term the Board will focus on its management of assets to ensure the new strategic work can be funded and buy the time for parish ministry to engage with the Deanery Strategic Plan process in meaningful ways that ensure authentic, long-term proposals are agreed for each part of the Diocese.

As we look further out the next strategic question is; if the plans currently invested in work how do they integrate in terms of mission and ministry to form a coherent landscape (or ecology) of “the Church” in one place? That concept of an interconnected multi-faceted ministry is at the heart of the LIFE Together vision and how we believe the Gospel needs to be shared in these generations.

Church Housing Foundation

The Board’s support for the development of the Church Housing Foundation, Church Housing Association and Church Development Agency is expected to continue throughout 2023. This

10

Trustees’ report

for the year ended 31 December 2022

Church Housing Foundation cont.

includes the part-time “secondment” of the Diocesan Secretary and the use of the designated funds included in the accounts. By the end of 2023 it is planned that the work will be put into a long-term framework which is governed outside the direct control of the Board.

This will require significant funding from other parties which will be sought during 2023. From 2024 the Board will look to engage with these new entities as significant mission partners in serving the Diocese both in developing new patterns of mission and ministry and in the management of property assets.

Carbon Net Zero

The Board takes seriously the Synodical motion at both General and Diocesan Synod to reach “NetZero” carbon by 2030. This is not a new issue for the Board but a part of our ongoing stewardship since the turn of the century.

Since the early 2000s it has sought to ensure all parsonages are either double or secondary glazed and to ensure lofts and walls are adequately insulated. The Board installed PV panels on all vicarages that were able to accept them for planning purposes in 2012.

The Board also has a policy of converting all empty parsonages to a green energy supplier when in vacancy to ensure all clergy inherit a green energy supply. The main challenge on parsonage stock is heating. This will take time for the market to produce suitable replacement non-carbon-based heating. In the meantime, there is a focus on ensuring the heating system is future proofed.

The Board is also focused on how it can assist the Church School network in reducing its carbonfootprint. In 2022 repayable finance of £3.5m to church owned schools to enable them to decarbonise was agreed by the Board. The nature and terms of these are subject to agreement by the Department for Education which is currently working with the Board to construct this offer in a manner that will be acceptable to HM Treasury. Funding for this proposal would come from the DBF reserves using the investments held within the DSF, underwritten by the General fund.

Principal risks and uncertainties

The Trustees are responsible for the identification, mitigation and management of risk. To achieve this, a register of all the risks identified is maintained and, alongside it, a management and mitigation strategy formed. This is reviewed by the Audit Committee on an annual basis with the responsibility for delivery of the mitigation strategies identified delegated to the Diocesan Secretary.

The risk register identifies eight areas where the risk of either failure to act or the impact of the events is considered ‘high’. These areas and the associated mitigation strategies are:

Governance and Management:

11

Trustees’ report

for the year ended 31 December 2022

Principal risks and uncertainties cont.

Operational Risks

Financial Risks

External Risks

Going Concern

The trustees have reviewed the Board’s financial position, particularly following on from the impact of the Covid-19 pandemic. While it is expected that the DBF may continue to experience a reduction in the level of income received, especially Parish Share received from parishes, review of the Board’s cash flows and forecasts, particularly with regard to property transactions, show that it is expected that the DBF will have sufficient cash levels to operate successfully for the foreseeable future.

Taking account of the satisfactory levels of aggregate reserves (see Reserves Policy note below) and cash, and our systems of financial and risk management, it is the trustees’ opinion that the charity is well placed to manage operational and financial risks successfully. Accordingly, the trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future and do not believe that there are any material uncertainties as to the going concern of the charity. Therefore, the trustees are content that the charity continues to adopt the going concern basis of accounting in preparing the annual accounts.

Investment policy

The Board maintains a review of its investments through the Investment Group which also monitors performance against market benchmarks and considers the adequacy of its investment mix.

12

Trustees’ report

for the year ended 31 December 2022

Investment policy cont.

The Board also ensures it invests in line with the Church of England Ethical Investment Advisory Group Policy. To achieve this, it uses the investment management skills of a professional fund manager; CCLA.

The performance of the Board’s investments in 2022 reflects the impact of the war in Ukraine and the shortages caused by the impact of Covid on supply changes which together caused significant damage to the global economy. Despite the significant drop in value in 2022 the long-term performance remains above benchmark and recovery of asset value was seen in the first half of 2023 and the Board are very pleased with the performance of CCLA.

Reserves policy

The policy of the DBF is to hold between 4 and 8 months of parish share (i.e. between £2.2 and £4.3m) plus any deficit for the year on the general fund (i.e., for 2022 between £3.4m and £5.6m). This level is considered prudent to manage for the cash flow deficit experienced each year resulting from parish share contributions being remitted irregularly during the year, (whereas the DBF’s expenditure is fairly constant on a month-by-month basis), and also to allow for unexpected occurrences.

At 31 December 2022, the general fund balance is £8.0m with free reserves of £2.0m (2021: £nil). Although the free reserves are below the target level, funds are held in investments which can be liquidated to ensure the DBF holds sufficient funds to follow the requirements of the policy. Furthermore, the size of the Unapplied Total Return (UTR) relative to qualifying annual expenditure offers significant comfort that this does not present any operational difficulties.

The DBF holds designated reserves of £5.9m (2021: £14.5m), restricted reserves £4.1m (2021: £4.3m) and endowment funds of £77.2m (2021: £84.6m) at 31 December 2022.

In 2022 the DBF decided to undesignate two significant funds which had been set aside for the purposes of holding housing stock for curates and other clergy. At the end of 2021 these funds had a combined value of £14.2m. These funds were released into General Funds. Of these funds some were designated to better reflect decisions made by the Board, including to the Development Fund, for the activities of Sportily, commitments made to support the National Church Housing project and the grant to Grace Network which has not yet been released.

The Board also agreed an asset swap between the DSF and General Funds, exchanging property (valued at historic cost) for CCLA investment fund units (held at market value).

Fundraising activities

The charity undertakes very limited fundraising activities directly with individuals. The majority of the DBF’s income comes from other charitable entities. The DBF does not use third party professional fundraisers and did not receive any complaints about its fundraising practices during 2022.

13

Trustees’ report

for the year ended 31 December 2022

Trustees’ responsibilities in respect of the financial statements

The Trustees are responsible for preparing the trustees’ report and 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, which give a true and fair view of the state of affairs of the DBF and of the income and expenditure for the period. In preparing those financial statements the

Trustees are required to:

The Trustees are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the DBF and which enable them to ensure that the financial statements comply with the Companies Act 2006. The Trustees are also responsible for safeguarding the assets of the DBF and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statements as to disclosure of information to auditors

Each of the Trustees confirms that to the best of their knowledge there is no information relevant to the audit of which the auditors are unaware. The Trustees also confirm that they have taken all the necessary steps to ensure that they themselves are aware of all relevant audit information and that this information has been communicated to the auditors.

The Trustees are responsible for the maintenance and integrity of the corporate and financial information included on the Board’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Trustees’ report, incorporating the Strategic Report, was approved by the Board of Trustees on 29 June 2023.

+Rachel Gloucester: Canon Karen Czapiewski

President, Gloucester DBF

Chair, Gloucester DBF

14

Independent Auditors’ Report

To the Members of Gloucester Diocesan Board of Finance

Opinion

We have audited the financial statements of the Gloucester Diocesan Board of Finance for the year ended 31 December 2022 which comprise the consolidated Statement of Financial Activities, the Income and Expenditure Account, the consolidated and parent Balance Sheets, the consolidated Cash Flow Statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

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 Auditors’ 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 group'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.

15

Independent Auditors’ Report cont. To the Members of Gloucester Diocesan Board of Finance

Other information

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

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

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

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

16

Independent Auditors’ Report cont. To the Members of Gloucester Diocesan Board of Finance

Responsibilities of trustees for the financial statements

As explained more fully in the trustees’ responsibilities statement set out on page 10, the trustees (who are also the Trustees of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

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

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

Based on our understanding of the group and parent charitable company and the environment in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to safeguarding vulnerable beneficiaries, health and safety, and employment (including taxation), and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, the Charities Act 2011 and Church of England Measures.

We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to fund accounting, including transfers between funds, and revenue recognition.

17

Independent Auditors’ Report cont. To the Members of Gloucester Diocesan Board of Finance

Audit procedures performed by the engagement team included:

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

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

Use of our report

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

Adam Halsey (Senior Statutory Auditor)

10 Queen Street Place

For and on behalf of Haysmacintyre LLP, Statutory Auditor London EC4R 1AG

Date: 29 September 2023

18

Consolidated statement of financial activities

for the year ended 31 December 2022

Income & endowments from Notes
 General
fund
£’000		 Designated
funds

£’000		 Restricted
funds

£’000		 Endowment
funds

£’000		 Total
2022		 Total
2021
£’000

£’000
Donations
parish share contributions 1 6,477 - - - 6,477 6,316
church commissioners 2 47 - - - 47 43
grants and other donations 3 197 274 736 - 1,207 1,943
Charitable activities: statutory fees
and licence to occupy income		 394 - 126 - 520 435
Other activities 4 146 8 - - 154 172
Investments 5 810 4 169 - 983 954
Other 6 15 995 10 980 2,000 2,274
Total 8,086 1,281 1,041 980 11,388 12,137
Expenditure on
Raising funds 7 165 - - - 165 93
Charitable activities 8 10,178 1,081 1,525 (97) 12,687 12,096
Total 9 10,343 1,081 1,525 (97) 12,852 12,189
Net (expenditure)/income before
investmentgains		 (2,257)
200		 (484) 1,077 (1,464)
(52)
Net (losses)/gains on investments20 - - (374) (2,595) (2,969)
10,140
Net(expenditure)/income (2,257)
200		 (858) (1,518) (4,433)
10,088
Total return transfer 1,000 - - (1,000) - -
Net (expenditure)/income after
total return transfer		 (1,257)
200		 (858) (2,518) (4,433) 10,088
Transfers between funds 20 - 23 13,043 (8,871)
711		 (4,883) - -
Other recognised gains 25 608 - - 87 695 256
Net movement in funds 12,394 (8,671)
(147)		 (7,314) (3,738) 10,344
Total funds brought forward (4,412) 14,535 4,297 84,551 98,971 88,627
Total funds carried forward 7,982 5,864 4,150 77,237 95,233 98,971

19

Consolidated summary income & expenditure account for the year ended 31 December 2022

2022 2021
£’000
£’000
Total income 10,408 11,319
Expenditure (12,949) (12,166)
Operating (deficit) for the year (2,541) (847)
Net (losses)/gains on investments (374) 373
Net (expenditure) for the year (2,915) (474)

Other comprehensive income:
Net assets transferred from endowments
Actuarial gains on defined benefit pension schemes		 940
264
5,883
608
Total comprehensive income/(expenditure) 3,576 730

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 income and expenditure is derived from continuing activities.

Full comparatives for the year to 31 December 2021 are shown in note 26.

The notes on pages 24 to 60 form part of these financial statements.

20

as at 31 December 2022

Consolidated balance sheet

Company number 162165
Notes 2022 2021
£’000
£’000
Tangible assets
15a		 48,602 47,172
Investments
16a		 40,029 51,416
Fixed Assets 88,631 98,588
Stock and work in progress
17		 23 20
Debtors:amounts falling due after one year
18a		 503 531
Debtors:amounts falling due within one year
18a		 608 496
Cash at bank and in hand 6,815 2,426
Current Assets 7,949 3,473
Creditors: amounts falling due within one year
19a		 (873) (2,018)
Net Current Assets(Current assets less creditors <1 year) 7,076 1,455
Total Assets less current liabilities (Fixed Assets plus NCA) 95,707 100,043
Creditors: amounts falling due after one year
Pension scheme liabilities
19a, 25
Other creditors
19a		 - (598)
(474)
(474)
Net Assets 95,233 98,971
Endowment funds
20,23		 77,237 84,551
Restricted funds
20,22		 4,150 4,297
Designated funds(unrestricted)
20,21		 5,864 14,535
General fund(unrestricted)
20		 7,982 (4,412)
Total funds 95,233 98,971

Approved by the Board of Trustees on 29 June 2023 and signed on its behalf by

Canon Karen Czapiewski, Chair

The notes on pages 24 to 60 form part of these financial statements.

21

Parent company balance sheet

as at 31 December 2022

Parent company balance sheet
s at 31 December 2022
Compa ny number 162165
Notes 2022 2021
£’000
£’000
Tangible assets
15b		 47,268 45,848
Investments
16b		 39,934 51,221
Fixed Assets 87,202 97,069
Debtors:amounts falling due after one year
18b		 503 531
Debtors:amounts falling due within one year
18b		 613 494
Cash at bank and in hand 4,817 810
Current Assets 5,933 1,835
Creditors: amounts falling due within one year
19b		 (792) (2,284)
Net Current Assets/(Liabilities)(Current assets less creditors <1 year) 5,141 (449)
Total Assets less current liabilities (Fixed Assets plus NCA) 92,343 96,620
Creditors: amounts falling due after one year
Pension scheme liabilities
19b, 25
Other creditors
19b		 - (598)
(474)
(474)
Net Assets 91,869 95,548
Endowment funds 76,396 83,610
Restricted funds 2,382 2,619
Designated funds(unrestricted) 5,864 13,724
General fund(unrestricted) 7,227 (4,405)
Reserves 91,869 95,548

Approved by the Board of Trustees on 29 June 2023 and signed on its behalf by

Canon Karen Czapiewski, Chair

The notes on pages 24 to 60 form part of these financial statements.

22

Consolidated cash flow statement

for the year ended 31 December 2022


Notes		 2022 2021
£’000
£’000
Net cashused in operating activities (4,741) (2,498)
Cash flows from investing activities
Dividends and interest received
5		 983 954
Proceeds from sale of tangible fixed assets 3,031 4,375
Purchase of tangible fixed assets for use by GDBF
15a		 (2,571) (1,155)
Purchase of fixed asset investments
16a		 (294) (1,712)
Sale and reclassification of fixed asset investments
16a		 8,698 34
Net cash provided by investing activities 9,847 2,496
Cash flows from financing activities 30
(130)
Loan repaid to GDBF 33
Loans repaid by GDBF (750)
Net cash provided by financing activities (717) (100)
Change in cash and cash equivalents during year 4,389 (102)
2,528
Cash & cash equivalents at 1 January 2,426
Cash & cash equivalents at 31 December 6,815 2,426
Reconciliation net movement in funds to net cash flow from operating activities:
Net expenditure for the year (1,464) (52)
Adjustments for:
Depreciation and amortisation charges 95 95
Dividends, interest & rent from investments (983) (954)
Profit on sale of functional assets (1,689) (1,906)
Profit on sale of investments (282) -
(Increase) in stock and work in progress (3) (11)
(Increase)/decrease in debtors (117) 561
(Decrease)/increase in creditors (14) 144
FRS102 – pension adjustment (deficit
contributionand interest charge)		 (284) (375)
Net cash used in operating activities (4,741) (2,498)
Analysis of cash and cash equivalents
Cash in bank & in hand 6,815 2,426
Total cash and cash equivalents 6,815 2,426

23

Accounting policies

for the year ended 31 December 2022

The principal accounting policies adopted are as follows:

Basis of Accounting

The accounts 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 (FRS 102) (2nd edition, effective 1 January 2019) - (Charities SORP FRS 102), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

These financial statements consolidate the results of the charitable company and its wholly owned subsidiaries on a line-by-line basis. The subsidiaries are Jumping Fish Limited, The Good and Faithful Servant Limited, Sportily Limited and the Ann Edwards Charity. A separate statement of financial activities, or income and expenditure account, for the charitable company itself is not presented because the charitable company has taken advantage of the exemptions afforded by section 408 of the Companies Act 2006. The deficit of the parent charity for the year was £514k (2021: deficit of £471k).

Gloucester DBF meets the FRS102 definition of a Public Benefit Entity.

The principle accounting policies and estimation techniques are as follows.

Income

All income is included in the Statement of Financial Activities (SoFA) when the GDBF is legally entitled to them as income or capital respectively, ultimate receipt is probable and the amount to be recognised can be quantified with reasonable accuracy.

Parish Share contributions by parishes are included in the financial statements when there is certainty of receipt. Donations are recognised when received. Legacies are recognised when there is reasonable certainty as to both entitlement and amount. Grants are generally included in the financial statements when received, to ensure that there is reasonable certainty as to both entitlement and amount. However, in cases where the grant relates to a specific project, it is recognised when the project expenditure takes place. Interest and dividends are included in the financial statements when received. Rental income is recognised in the period to which the rent relates.

Investment income arising upon the Diocesan Stipends Fund is credited to the unapplied total return in the year in which the distribution is due.

Expenditure

Expenditure is included on the accruals basis and has been classified under headings that aggregate all costs related to the Statement of Financial Activity category.

24

Accounting policies

for the year ended 31 December 2022

Expenditure cont.

Going concern

The Trustees consider there are no material uncertainties about the charity’s ability to continue as a going concern. The review of our financial position, levels of reserves and future plans give the Trustees confidence the charity remains a going concern for a period in excess of 12 months from the date of approval of these accounts. This review has included an assessment of cash flow forecasts.

Depreciation

Depreciation on equipment is calculated on a straight line basis at annual rates estimated to write off the assets over their respective expected useful lives, as follows:

Leasehold property improvements 5% Assets under construction 0% Assets under construction 0%
Office equipment 20% Office furniture 12½%
Telephone equipment 20% Computer equipment 25%
Solar PV panels 25 years

No depreciation is provided on clergy houses. As the remaining useful life of these assets exceeds 50 years and a programme of planned maintenance ensures that the residual value does not fall below the carrying value, any depreciation would be immaterial. An annual impairment review is carried out in accordance with FRS102.

Tangible fixed assets

Clergy houses owned by the Board as corporate property are included in the financial statements at historical cost.

Clergy houses owned by benefices are included in the financial statements at a carrying value established by the Trustees and based on a professional valuation in December 2000. Houses acquired since that date are included at cost, and any major improvements are capitalised to the extent that the carrying value does not exceed the estimated net realisable value. Although the Board does not own these houses, it has the responsibility for maintaining them and receives any sale proceeds on disposal if the house becomes surplus under a pastoral scheme. Under FRS102 the Board considers that it has access to the benefits of these houses and also the associated risks and therefore needs to recognise them as assets in the financial statements. Solar PV panels installed on clergy houses are included within the asset value of the house and depreciated on a straight line basis over 25 years.

25

Accounting policies

for the year ended 31 December 2022

Intangible fixed assets

Goodwill represents the excess of the cost of acquisition of an entity over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Good will is considered to have a finite useful life and is amortised on a systematic basis over its expected life.

Fixed asset investments

Listed investments are stated at open market value at the balance sheet date with the gain or loss arising on the investment funds representing the Diocesan Stipends Fund, taken directly to the unapplied total return and others to the Statement of Financial Activities. For units held in managed funds of the Central Board of Finance this is the published bid price. Investment properties, which comprise the glebe portfolio, are stated at Trustees’ valuation. The valuation is arrived at after taking appropriate professional advice and is reviewed each year. Certain short-term cash deposits, which are held for long term investment purposes, are included in fixed asset investments.

Financial Instruments

The charitable company only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently carried at either amortised cost or fair value as noted below.

Stock and Work in progress

Stock and work in progress are valued at the lower of cost and net realisable value. Cost includes all direct expenditure and an appropriate proportion of fixed and variable overheads.

Debtors

Trade and other debtors are recognised at the settlement amount due after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due. At the end of each reporting period debtors are assessed for evidence of impairment. If an asset is impaired an impairment loss is recognised in the Statement of Financial Activities.

Cash

Cash at bank and cash in hand includes cash and short term highly liquid investments with a short term maturity.

Creditors

Basic financial liabilities, including trade and other payables and bank loans, are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are recognised at transaction price.

26

Accounting policies

for the year ended 31 December 2022

Fund accounting

The resources of the Board are classified according to restrictions imposed on their use by donors or by legislation, and in accordance with the SORP, as follows:

During 2019, Bishops Council approved a total return approach to investment for the investments held as one of the GDBF’s permanent endowments – the Diocesan Stipends Fund (DSF). This change in policy took effect from 1[st] January 2019 and since then GDBF has operated a total return approach to the management of the investment portfolio attributable to the DSF. Using this approach, GDBF is required to analyse the fund between the amount held for investment (non-distributable funds) and the unapplied total return. GDBF is permitted to allocate from the unapplied total return element, such sums as the Board see appropriate, provided that the Board exercise their statutory duty to be even handed as between present and future beneficiaries and that they maintain the unapplied total return at such a level as to ensure it remains positive, after having due regard to the volatility of the investment markets. GDBF’s objective is also to maintain the value of non-distributable funds in real terms.

Operating leases

Rental payments under operating leases are charged to the Statement of Financial Activities on a straight-line basis over the term of the lease.

Judgements and estimates

In the application of the accounting policies, the Trustees are required to make judgements, estimates, and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are continually evaluated. Revisions to accounting estimates are recognised in the period in which the estimate is revised.

Significant judgements:

Valuation of investment properties - Investment properties are stated at trustees’ valuation after taking appropriate professional advice.

Depreciation of clergy houses - The Trustees consider that residual value of freehold properties is equivalent to the carrying value and depreciation would not be material.

Sources of estimation uncertainty:

In the view of the Trustees there are no sources of estimation uncertainty affecting assets or liabilities at the balance sheet date that are likely to result in a material adjustment to their carrying amounts in the next financial year.

27

Notes to the financial statements

for the year ended 31 December 2022

Note 1
Parish Share		 Deanery
Confirmed
Allocations for
2022
£’000		 Received in 2022
re 2022
£’000		 Received in 2022
re prior years
£’000		 2022 2021
£’000
£’000
Gloucester City 565 569 - 569 523
Severn Vale 601 602 - 602 585
Forest South 376 381 - 381 377
Wotton 608 614 - 614 594
Stroud 612 609 - 609 627
Cheltenham 1,356 1,319 - 1,319 1,329
North Cotswold Deanery 893 886 - 886 852
Cirencester 915 914 - 914 888
Tewkesbury & Winchcombe 584 576 - 576 535
Other - 7 - 7 6
Parish Share contributions 6,510
6,477
-
6,477		 6,316
Note 2
Income from the Church Commissioners		 2022 2021
£’000
£’000
Grant re Bishop’s share of registrar’s retainer 47 43
Church Commissioner grants received 47
43

28

Notes to the financial statements

for the year ended 31 December 2022

Note 3
Grants and other donations		 Total
2022		 Total
2021
£’000
£’000
Ecclesiastical Insurance Group grant 96 100
Voluntary Schools Fund grants 240 377
Other grants 54 71
Bishop Monk’s Horfield restricted
grant		 - 910
Other restricted grants/donations 436 305
Sportily grants 103 106
Energy grants 197 -
Other donations 81 74
Grants and donations 1,207 1,943
Note 4
Other activities		 Unrestricted
£’000		 Designated
£’000		 Restricted
£’000		 Endowment
£’000		 Total
2022
£’000
Total
2021
£’000
Rental of vacant housing 118 - - - 118 145
Property development: G&FS* - - - - - -
Educational services: JF Ltd* 18 - - - 18 12
Other income 10 8 - - 18 15
Total 146 8 - - 154 172

In 2021, £166k of other activities income was unrestricted, and £6k was designated.

*The principal activity of Good & Faithful Servant (G&FS) is the development of property, whilst Jumping Fish’s (JF Ltd) is the publication of educational materials and professional services, for advertisement of the Christian religion.

29

Notes to the financial statements

for the year ended 31 December 2022

Note 5
Investments		 2022 2021
£’000
£’000
Income from fixed asset investments 949 918
Other interest receivable and similar income 4 5
Rent receivable 30 31
Investments 983 954
Note 6
Other		 2022 2021
£’000
£’000
Gain on disposal of tangible fixed assets* 1,971 1,906
Amortisation of negative goodwill on acquisition of Sportily Limited# - 320
Miscellaneous income 29 48
Other 2,000 2,274

The negative goodwill on the acquisition of Sportily has been fully amortised in the year of acquisition (see note 16).

Note 7
Raising funds		 2022 2021
£’000
£’000
Tenancy costs associated with the letting of vacant properties 111 46
Property development – G & FS Limited 41 35
Educational services – Jumping Fish Limited 13 12
Raising funds 165
93

30

Notes to the financial statements er 2022 for the year ended 31 Decemb


Note 8
Charitable activities
Contributions to Archbishops’
Council:		 Unrestricted
Designated
Restricted
Endowment
£’000
£’000
£’000
£’000		 Unrestricted
Designated
Restricted
Endowment
£’000
£’000
£’000
£’000		 Unrestricted
Designated
Restricted
Endowment
£’000
£’000
£’000
£’000		 Unrestricted
Designated
Restricted
Endowment
£’000
£’000
£’000
£’000		 2022 2021
£’000 £’000
National Church responsibilities 213 - - - 213 240
Training for Ministry 308 - - - 308 309
Training of Ordinands – support
grants		 227 - - - 227 159
Pooling of Ordinand support
costs		 16 - - - 16 35
Mission agencies pension
contributions		 13 - - - 13 14
Retired clergy housing costs
(CHARM)		 115 - - - 115 112
892 - - - 892 869
Resourcing Ministry & Mission:
Parish Ministry
Stipends, employed Clergy and
National insurance		 3,404 - - - 3,404 3,392
Clergy pension contributions
1,209		 - - - 1,209 1,294
FRS102 adjustment – clergy
pension		 (158) - - (126) (284) (375)
Housing costs including removal
and resettlementgrants		 1,635 - - - 1,635 1,937
6,090 - - (126) 5,964 6,248
Support costs 3,196 - 591 29 3,816 3,456
9,286 - 591 (97) 9,780 9,704
Expenditure on Education - 351 - - 490
Support for church schools 351
Other expenditure
Grants awarded (note 11) - 730 159 - 889 449
Charitable activities of Ann
Edwards charity		 - - 73 - 73 66
Charitable activities of Sportily - - 702 - 702 518
10,178
1,081
1,525
(97)		 12,687
12,096

31

Notes to the financial statements

for the year ended 31 December 2022

Note 8 cont.
Comparative analysis for 2021
Charitable activities
Contributions to Archbishops’ Council:		 Unrestricted
Designated
Restricted
Endowment
2021
2021
2021
2021
£’000
£’000
£’000
£’000		 Unrestricted
Designated
Restricted
Endowment
2021
2021
2021
2021
£’000
£’000
£’000
£’000		 Unrestricted
Designated
Restricted
Endowment
2021
2021
2021
2021
£’000
£’000
£’000
£’000		 Unrestricted
Designated
Restricted
Endowment
2021
2021
2021
2021
£’000
£’000
£’000
£’000		 Total
2021
£’000
National Church responsibilities 240 - - - 240
Training for Ministry 309 - - - 309
Training of Ordinands – support grants 159 - - - 159
Pooling of Ordinand support costs 35 - - - 35
Mission agencies pension contributions 14 - - - 14
Retired clergy housing costs (CHARM) 112 - - - 112
869 - - - 869
Resourcing Ministry & Mission:
Parish Ministry
Stipends, employed Clergy and National
insurance		 3,392 - - - 3,392
Clergy pension contributions 1,294 - - - 1,294
FRS102 adjustment – clergy pension (162) - - (213) (375)
Housing costs including removal and
resettlement grants		 1,937 - - - 1,937
6,461 - - (213) 6,248
Support for parish ministry 2,955 - 473 28 3,456
9,416 - 473 (185) 9,704
Expenditure on Education - 490 - - 490
Support for church schools
Other expenditure
Grants awarded (note 11) - 156 85 208 449
Charitable activities of Ann Edwards
charity		 - - 66 - 66
Charitable activities of Sportily - - 518 - 518
10,285
646
1,142
23		 12,096

32

Notes to the financial statements

for the year ended 31 December 2022

Note 9

Analysis of expenditure including the allocation of support costs

Activities
undertaken
directly		 Grant
funding of
activities		 Support
costs		 Total costs
2022
£’000		 2022
£’000		 2022
£’000		 2022
£’000
Raising funds 165 - - 165
Charitable activities:
Contributions to Archbishop’s Council - 892 - 892
Resourcing parish ministry 8,084 - 1,696 9,780
Education 240 - 111 351
Other expenditure 623 889 152 1,664
Total 9,112 1,781 1,959 12,852
Comparative analysis for 2021 Activities
undertaken
directly		 Grant
funding of
activities		 Support
costs		 Total costs
2021
£’000		 2021
£’000		 2021
£’000		 2021
£’000
Raising funds 93 - - 93
Charitable activities:
Contributions to Archbishop’s Council - 869 - 869
Resourcing parish ministry 8,138 - 1,566 9,704
Education 329 - 161 490
Other expenditure 490 449 94 1,033
Total 9,050 1,318 1,821 12,189

Notes 10 to 14 provide further details on expenditure for 2022.

33

Notes to the financial statements

for the year ended 31 December 2022

Unrestricted funds
General Designated		 Unrestricted funds
General Designated		 Restricted
Funds		 Endowment
Funds		 Total
funds
2021
Total
funds
2022
£’000 £’000 £’000 £’000 £’000 £’000
1,730 - 138 29 1,897 1,773
32 - 14 - 46 32
13 - - - 13 12
3 - - - 3 4
1,778
-
152
29		 1,959
1,821

In 2021, £1,663k of central administration costs was unrestricted, £94k was restricted and £28k was endowed. Of the remaining expenditure of £36k was unrestricted and £12k was restricted.

Note 11
Summary of grants made:		 2022
number		 2021
number		 2022 2021
£’000
£’000
Church repairs 1 1 10 19
COVID19 Grants - 48 - 208
DBE Grant 1 - 36 -
Development Grants 21 19 159 137
Energy Grants 252 - 149 -
Grace Network 1 - 250 -
Housing Initiative 1 - 285 -
Oasis - 1 - 85
Grants made in the year 277
69
889		 449

34

Notes to the financial statements

for the year ended 31 December 2022

Note 12
Net movement in funds is stated after charging:		 2022 2021
£’000
£’000
Depreciation 95 95
Auditors’ remuneration - audit 46 32
Interest on Church Commissioners’ loans:
Loan for Solar Panel installations 13 3
Value Linked Loans on parsonage houses 27 27
Operating leases: Land and buildings (note 24) 64 64
Operating leases: Other (note 24) 19 19
Note 13
Interest on long term loans		 2022 2021
£’000
£’000
Interest on loans wholly or partly repayable beyond 5 years 27 27

All interest relates to value linked loans, being equity share loans made to the DBF by the Church Commissioners in respect of Parsonage Housing.

35

Notes to the financial statements

for the year ended 31 December 2022

Notes to the financial statements
or the year ended 31 December 2022
Note 14 Staff costs
Costs of employees and officer holders		 2022 2021
£’000
£’000
salaries and stipends 2,144 1,961
redundancy and termination payments 51 -
social security costs 227 192
other pension costs 599 718
Employees, including clergy in DBF employment: 3,021
2,871
Stipends 2,994 3,038
social security costs 275 268
pension costs 1,034 980
Parochial clergy funded by the DBF: 4,303
4,286
Number of employees including clergy in DBF employment 2022 2021
Number Number
Full time equivalent

The employer's pension contribution for staff earning over £60,000 was £75,508 (2021: £50,660).

Remuneration of key management personnel

Key management personnel are deemed to be those having authority and responsibility, delegated to them by the trustees, for planning, directing and controlling the activities of the Diocese. During 2022 they were:

Diocesan Secretary and Company Secretary Canon Benjamin Preece Smith Director of Education Canon Rachel Howie (resigned 31 August 2022) Interim Director of Education J Hunter (appointed 1 September 2022) Director of Mission and Ministry Canon Dr A Braddock (seconded 1 April 2022) Director of Mission and Ministry S Millar (appointed 3 May 2022) Head of Communications Canon Lucy Taylor Director of People, Pastoral and Safeguarding Canon Judith Knight Head of Finance Julie Ridgway (resigned 10 June 2022) Director of Finance, Property and Giving Lisa Gardner (appointed 17 October 2022) Remuneration and pensions for these nine (2021: six) employees amounted to £532k (2021: £460k).

36

Notes to the financial statements

for the year ended 31 December 2022

Note 14 Staff costs cont.

Trustees’/Trustees’ emoluments

No Director/Trustee received any remuneration for services as a Director/Trustee. The Directors/Trustees received travelling and out of pocket expenses, totalling £7k (2021 - £4k) in respect of General Synod duties, duties as Archdeacon or Area Dean, and other duties as Directors/Trustees.

Certain trustees of the Board who are also clergy received benefits during the year from the Board as part of its normal charitable activity of providing a stipend and housing for clergy in the Diocese.

The following table gives details of the Directors/Trustees who were in receipt of a stipend and or housing provided by the GDBF during the year:

Stipend Housing
The Archdeacon of Cheltenham Yes Yes
The Archdeacon of Gloucester Yes Yes

The GDBF is responsible for funding via the Church Commissioners the stipends of licensed stipendiary clergy in the Diocese, other than bishops and cathedral staff. The GDBF is also responsible for the provision of housing for stipendiary clergy in the Diocese including the Suffragan Bishop but excluding Diocesan Bishop and cathedral staff.

The stipends of the two Bishops were paid and funded by the Church Commissioners.

The stipends of the Diocesan Bishop and Suffragan Bishops are funded by the Church Commissioners and are in the range £38.050 - £46,640 (2021 range £37,930 - £46,180). The annual rate of stipend, funded by the GDBF, paid to Archdeacons in 2022 was £37,385 (2021 £36,832).

37

Notes to the financial statements

for the year ended 31 December 2022

Note 15a Group
Tangible Fixed
Assets
Cost or valuation:		 Assets under
construction
£’000		 Leasehold
property
improvements
£’000		 Freehold
Property
£’000		 Office
Equipment
£’000		 Total
£’000
At 1 January 2022 25 235 47,204 435 47,899
Additions - - 2,538 33 2,571
Disposals - - (1,342) - (1,342)
Reclassifications - 4 292 - 296
At 31 December 2022 25
239		 48,692 468 49,424
Depreciation:
At 1 January 2022 - 95 292 340 727
Charge for year - 12 29 54 95
Disposals - - - - -
At 31 December 2022 -
107		 321 394 822
Net book value:
At 1 January 2022 25 140 46,912 95 47,172
At 31 December
2022		 25
132		 48,371 74 48,602

The Board has vested in it two redundant churches. One is leased to the Methodist Church on a long lease at a peppercorn rent. The other is held pending disposal. No value is attributed to these properties.

The freehold property disposals made in 2022 relate to the sales of five (2021: nine) surplus clergy houses.

38

Notes to the financial statements

for the year ended 31 December 2022

Note 15b Parent
Tangible Fixed
Assets
Cost or valuation:		 Assets under
construction
£’000		 Assets under
construction
£’000		 Leasehold
property
improvements
£’000		 Leasehold
property
improvements
£’000		 Freehold
Property
£’000		 Office
Equipment
£’000		 Office
Equipment
£’000		 Total
£’000
At 1 January 2022 25 235 45,889 418 46,567
Additions - - 2,538 14 2,552
Disposals - - (1,342) - (1,342)
Reclassification - 4 292 - 296
At 31 December 2022 25 239 47,377 432 48,073
Depreciation:
At 1 January 2022 - 95 286 338 719
Charge for year - 12 29 45 86
Disposals - - - - -
At 31 December 2022 - 107 315 383 805
Net book value:
At 1 January 2022 25 140 45,603 80 45,848
At 31 December 2022 25 132 47,062 49 47,268

Total
£’000
-
-
-
-
Note 15c
Intangible Fixed Assets
Cost or valuation:		 Group Parent
Negative
Goodwill
£’000		 Total Negative
Goodwill
£’000		 Total
£’000 £’000
At 1 January 2022 and 31 December 2022 320 320 - -
Amortisation:
At 1 January 2022 and 31 December 2022 (320) (320) - -
Net book value:
At 1 January 2022 - - - -
At 31 December 2022 - - -

39

for the year ended 31 December 2022

Notes to the financial statements

Note 15c

Intangible Fixed Assets cont.

On 28 January 2021 Gloucester Diocesan Board of Finance acquired Sportily Limited by becoming sole member of the charitable company limited by guarantee. No consideration was paid. The negative goodwill calculation in respect of the acquisition is detailed in note 16.

Note 16a Group
Fixed Asset Investments		 Properties
£’000		 Assets
under
construction
£’000		 Investments
£’000		 Total
2022		 2021
£’000
£’000
Market value at 1 Jan 2022 17,081 153 34,182 51,416 39,598
Additions 287 7 - 294 1,712
Disposal proceeds (5,348) - (3,350) (8,698) (34)
Realised investment gains(losses) 578 - (296) 282 -
Unrealised investment gains(losses) 648 - (3,617) (2,969) 10,140
Reclassification (296) - - (296) -
Market Value at 31 Dec 2022 12,950
160
26,919		 40,029 51,416
Historic cost at 31 Dec 2022 17,319 18,894
Gains on investment assets
Unrealised (losses)gains(as above) - - (3,617) (3,617) 4,225
Realised gain on Glebe disposal 578 - (296) 282 -
Glebe revaluation 648 - - 648 5,915
Total investment gains 1,226
-
(3,913)
 (2,687) 10,140

In 2021, the Board revalued three Glebe sites by £5.9m on advice from RICS members of the Committee. Messrs. Of this some £4.8m related to a single site which was realised in September 2022 for £5.3m.

In 2022, Bruton Knowles undertook a desktop valuation of most of the Glebe sites with the Glebe Committee RICS members reviewing the remainder. This resulted in an increase in valuation of £648k.

40

Notes to the financial statements

for the year ended 31 December 2022

Note 16b Parent
Fixed Asset Investments		 Properties
£’000		 Assets
under
construction
£’000		 Investments
£’000		 Total
2022		 2021
£’000
£’000
Market value at 1 Jan 2022 17,081 153 33,987 51,221 39,509
Additions 287 7 - 294 1,712
Disposals (4,770) - (3,646) (8,416) (34)
Unrealised investment (losses)gains 648 - (3,517) (2,869) 10,034
Reclassification (296) - - (296) -
Market Value at 31 Dec 2022 12,950
160
26,824		 39,934 51,221
Historic cost at 31 Dec 2022 17,623 19,198
Gains on investment assets
Unrealised (losses)gains(as above) - - (3,517) (3,517) 4,119
Realised gains - Glebe - - - - -
Glebe revaluation 648 - - 648 5,915
Total investment (losses)gains 648
-
(3,517)		 (2,869) 10,034

Bruton Knowles undertook a desktop valuation of most of the Glebe sites with the Glebe Committee RICS members reviewing the remainder. This resulted in an increase in valuation of £648k.

Investments comprise: Note 16a
Group		 Note 16b
Parent
2022 2021
£’000		 2022 2021
£’000
£’000 £’000
(i)
Listed investments (equities)
UK Investments 2,746 3,473 2,746 3,473
Non-UK investments 15,217 21,690 15,217 21,690
Listed Investments total 17,963
25,163
17,963
25,163
(ii)
Unlisted investments
Property & other 6,647 6,252 5,902 5,407
Cash 2,309 2,767 2,309 2,767
(iii)
Good and Faithful Servant Ltd		 - - 650 650
Investments total 26,919 34,182 26,824 33,987

41

Notes to the financial statements for the year ended 31 December 2022

Note 16b Fixed Asset Investments cont.


The Diocese has four wholly owned subsidiaries: The Diocese has four wholly owned subsidiaries: The Diocese has four wholly owned subsidiaries: The Diocese has four wholly owned subsidiaries: The Diocese has four wholly owned subsidiaries: The Diocese has four wholly owned subsidiaries: The Diocese has four wholly owned subsidiaries:
Subsidiary name Company
number		 Charity
number		 Share Capital
The Good & Faithful Servant
Limited(GFS)		 06258385 n/a £650,100
JumpingFish Limited(JF) 06672775 n/a £1
Sportily Limited 0550991 1111077 Limited by guarantee GDBF sole
member
The Charityof Ann Edwards (AEC) n/a 263956 GDBF sole trustee of Charity
The transactions and balances for these wholly owned subsidiaries were as follows:-
Income
£		 Expenditure
£		 Assets
£		 Liabilities
£		 Net assets
£
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
GFS 6k 1k 41k 40k 660k 695k (3k) (3k) 657k 692k
JF 18k 12k 18k 12k 27k 19k (27k) (19k) - -
AEC 91k 87k 91k 84k 2,588k 2,681k (14k) (7k) 2,574k 2,674k
Sportily 783k 965k 709k 554k 866k 746k (83k) (37k) 783k 709k

On 28 January 2021 Gloucester Diocesan Board of Finance acquired Sportily Limited by becoming sole member of the charitable company limited by guarantee. No consideration was paid. The negative goodwill calculation in respect of the acquisition is shown in the table below:-

Debtors
Cashat bank
Creditors		 Book Value
£’000		 Fair Value
£’000
5 5
340 340
(25) (25)
Total assets acquired 320 320
Negative goodwill (320) (320)
Total Consideration - -

42

Notes to the financial statements

for the year ended 31 December 2022

Note 16c

Application of the power of total return to the Diocesan Stipends Fund

Trust for
investment
£’000		 Unapplied
Total
Return
£’000		 Total
endowment
£’000
As at 1st January 2022:
Base value of the permanent endowment 10,662 - 10,662
Unapplied total return - 17,594 17,594
Total 10,662
17,594		 28,256
Movements in the year:
Investment returns – income received - 728 728
Unrealised (losses)gains for year - (3,109) (3,109)
Realised gains for the year - 7,955 7,955
Unapplied total return allocated to
income in the year		 - (1,728) (1,728)
Add indexation to base level of the
endowment		 1,430 (1,430) -
Net movements in the year 1,430
2,416		 3,846
As at 31st December 2022:
Base value of the permanent endowment 12,092 - 12,092
Unapplied total return - 20,010 20,010
Valuation at 31st December 2022 12,092
20,010		 32,102

The investment power of total return permits Gloucester DBF to invest the permanently endowed Diocesan Stipends Fund (DSF) to maximise total return and apply an appropriate portion of the unapplied total return each year. Until the power is exercised to transfer a portion of unapplied total return to income, the unapplied total return remains part of the permanent endowment. During 2022, the portion of unapplied total return allocated to income amounted to £1,728k. (2021: £1,647k)

An Unapplied Total Return Fund (UTR) of £10,800k was created on 1[st] January 2019, all of which related to the DSF permanent endowment.

The Unapplied Total Return Fund comprises that part of the total return on the DSF which has not yet been allocated by the Board to either the General Fund or the Permanent Endowment Fund. It can be carried forward if not needed or allocated to be spent as income or reinvested in the DSF Permanent Endowment Fund in a particular year.

For the year ended 31[st] December 2022, the Board took the decision to transfer £1,728k (2021: £1,647k) from the Unapplied Total Return Fund to the General Fund.

43

for the year ended 31 December 2022

Notes to the financial statements

Note 17

Stock and Work In Progress

This comprises work in progress amounting to £12k (2021: £9k) in relation to property developments being undertaken by the Good & Faithful Servant Ltd and £11k (2021: £11k) of education materials held by Jumping Fish Limited.

Note 18a
Consolidated group debtors		 Due within one year Due within one year Due after one year
2022 2021
£’000		 2022 2021
£’000
£’000 £’000
Prepayments and sundry debtors 517 401 - -
Staff car loans 4 8 2 14
Loans to parishes, Cathedral and other DBF 52 52 501 517
Parish Giving Scheme 35 35 - -
Debtors 608
496
503		 531

Debtors include £39k (2021: £55k) due from related charities. These charities are administered by staff of the Board, but the trustees are separate from the trustees of the Board.

Note 18b
Parent company debtors		 Due within one year Due within one year Due after one year Due after one year
2022 2021
£’000		 2022 2021
£’000
£’000 £’000
Prepayments and sundry debtors 493 382 - -
Staff car loans 4 8 2 14
Loans to parishes, Cathedral and other DBF 52 52 501 517
The Charity of Ann Edwards 7 2 - -
Jumping Fish Ltd 22 15 - -
Parish Giving Scheme 35 35 - -
Debtors 613
494
503
531

44

Notes to the financial statements

for the year ended 31 December 2022

Note 19a
Consolidated group creditors		 Due within one year Due within one year Due after one year
2022 2021
£’000		 2022 2021
£’000
£’000 £’000
Accruals and sundry creditors 812 830 - -
Taxation and social security 61 57 - -
CBF Loan (Solar Panels) - 750 125 125
Value Linked Loans (Church Commissioners) - - 349 349
Pension scheme liabilities (note 25)
- Lay defined benefit scheme		 - 168 - 598
- Clergy Pension Scheme - 213 - -
Creditors 873
2,018
474		 1,072

Value linked loans from the Church Commissioners are repayable on sale of the property to which they relate. Any capital profit or loss arising on sale of the property accrues to the Church Commissioners and the Board in proportion to the equity invested.

45

Notes to the financial statements

for the year ended 31 December 2022

or the year ended 31 December 2022
Note 19b
Parent company creditors		 Due within one year Due after one year
2022 2021
£’000		 2022 2021
£’000
£’000 £’000
Accruals and sundry creditors 722 790 - -
Taxation and social security 53 48 - -
CBF Loan (Solar Panels) - 750 125 125
Value Linked Loans (Church Commissioners) - - 349 349
Good & Faithful Servant Limited 17 195 - -
Sportily Limited - 120 - -
Pension scheme liabilities (note 25)
- Lay defined benefit scheme		 - 168 - 598
- Clergy Pension Scheme - 213 - -
Creditors 792
2,284
474		 1,072

Included in 'Accruals and sundry creditors' is a total of £51k (2021 - £33k) due to related charities which are administered by staff of the Board and whose trustees are separate from the trustees of the Board.

Value linked loans from the Church Commissioners are repayable on sale of the property to which they relate. Any capital profit or loss arising on sale of the property accrues to the Church Commissioners and the Board in proportion to the equity invested.

46

Notes to the financial statements

for the year ended 31 December 2022

Note 20
Analysis of net assets by
fund:
Summary
Funds at 31 Dec 2022 are
represented by:		 Note 20
Analysis of net assets by
fund:
Summary
Funds at 31 Dec 2022 are
represented by:		 General
Fund
£’000		 Designated
Funds
£’000		 Restricted
Funds
£’000		 Endowment
Funds
£’000		 Total
£’000
Tangible fixed assets 181 170 1,264 46,987 48,602
Fixed asset investments 5,796 1,477 2,033 30,723 40,029
Current assets 2,788 4,217 943 1 7,949
Creditors (783) - (90) (474) (1,347)
Inter-fund indebtedness - - - - -
Total Funds at 31 Dec 2022 7,982 5,864 4,150 77,237 95,233
Funds include the following unrealised gains on
investments:
Unrealised gains at 1 Jan 2022 - 296 1,644 30,427 32,367
Net losses on revaluation in year - - (374) (2,595) (2,969)
Reclassification - (296) - - (296)
Gains on disposals - - (44) (6,348) (6,392)
Unrealised gains at 31 Dec 2022
-
-
1,226
21,484		 22,710

In 2022 the DBF decided to undesignate two significant funds which had been set aside for the purposes of holding housing stock for curates and other clergy. At the end of 2021 these funds had a combined value of £14.2m. These funds were released into General Funds. Of these funds some were designated to better reflect decisions made by the Board, including to the Development Fund, for the activities of Sportily, commitments made to support the national Church Housing project and the grant to Grace Network which has not yet been released. By doing this, the inter-fund indebtedness in 2021 has been eliminated in 2022.

The Board also agreed an asset swap between the DSF and General Funds, exchanging property (valued at historic cost) for CCLA investment fund units (held at market value).

47

for the year ended 31 December 2022

Notes to the financial statements

Note 20 cont.

Comparative analysis of net assets by
fund:
Summary
Funds at 31 Dec 2021 are represented by:		 General
Fund
£’000		 Designated
Funds
£’000		 Restricted
Funds
£’000		 Endowment
Funds
£’000		 Total
£’000
Tangible fixed assets 224 13,720 1,254 31,974 47,172
Fixed asset investments - 296 3,215 47,905 51,416
Current assets 1,708 105 1,659 1 3,473
Creditors (1,057) (781) (44) (1,208) (3,090)
Inter-fund indebtedness (5,287) 1,195 (1,787) 5,879 -
Total Funds at 31 Dec 2021 (4,412) 14,535 4,297 84,551 98,971
Funds include the following unrealised gains on investments:
Summary General
Fund		 Designated
Funds		 Restricted
Funds		 Endowment
Funds		 Total
Unrealised gains at 1Jan 2021 - 296 1,275 20,660 22,231
Net gains on revaluation in year - - 373 9,767 10,140
Losses on disposals - - (4) - (4)
Unrealised gains at 31 Dec 2021 -
296
1,644		 30,427 32,367

48

Notes to the financial statements

for the year ended 31 December 2022

Note 21
Designated funds		 Balance at
1 Jan 2022
£’000		 Income
£’000		 Expenditure
£’000		 Net
gains/(losses)
on assets
£’000		 Transfers*
£’000		 Balance at
31 Dec 22
£’000
Development Fund (325) - (159) - 1,795 1,311
Albright Bequest 472 4 - - (476) -
Houses Capital 6,495 - - - (6,495) -
Curates Housing Reserve 7,723 995 - - (8,718) -
Education - 282 (387) - 105 -
Grace Network - - (250) - 1,500 1,250
Group Activities - - - - 2,861 2,861
Housing Initiative - - (285) 557 272
Viney Hill Development 170 - - - - 170
Total Funds at 31 Dec
2022		 14,535 1,281 (1,081) - (8,871) 5,864

The Development fund has been designated to finance Mission initiatives.

The Albright Bequest represents monies bequeathed by Miss Albright. The funds came with a request, but not a formal restriction, that they be used for diocesan projects rather than ongoing ministry costs. The trustees have designated these funds to projects in the year.

The Houses Capital Fund represented the cost, less outstanding loans, of houses owned by the Board to provide accommodation for assistant curates and team vicars. During 2019, the Board decided to make a transfer from the Houses Capital Fund to a new Curates Housing Reserve as part of the work undertaken on agreeing a new policy for the provision of housing for curates. The efficient operation of this new policy required the creation of a suitable reserve to enable the Resources Committee to buy and sell curates housing in a timely and controlled manner without frequent referral to Bishop’s Council. During 2022, the Board decided to transfer the Houses Capital Fund and Curates Housing Reserve from the Designated funds to the Diocesan Stipend Endowment Fund.

The Education Fund brings together the Education work undertaken by GDBF with income specific to that activity, primarily from the Voluntary Schools Fund and St Matthias Trust. During the year it was agreed by the Board that the Diocesan Board of Education (DBE) would become a Charitable Incorporated Organisation from 1 September 2022. The deficit at 31 August 2022 was covered by a transfer from the general fund and is the portion of this work funded by the general fund. The Board agreed to award an annual grant to the DBE to assist with the costs of the Education Fund.

49

Notes to the financial statements

for the year ended 31 December 2022

Note 21 cont.

Designated funds

Grace Network is a Christian-led social Enterprise co-operative based in Brimscombe which builds community and from that new monastic community. Their main engagement and funding come from ethical businesses sharing resources and space in a different iteration of the “seven sacred” model. In 2022 the Board awarded funding of £1.5m to enable this model to expand into two new locations, planned to be Cirencester and Gloucester. New premises for the first of these will be secured in 2023 with a planned opening in late 2023, early 2024.

The designated fund for Group Activities relates to grants to Sportily (see note 22).

The Trustees designated funds for a Housing Initiative. This offers support to the wider Church in delivering better missional and financial results through asset management by supporting a part time Housing Executive team and making time available from the Bishop of Tewkesbury and the Diocesan Secretary.

The Viney Hill Development relates to a property owned by GDBF but used by Viney Hill Adventure Centre for charitable purposes consistent with those of the GDBF.

Comparative Designated
funds		 Balance at
1 Jan 2021
£’000		 Income
£’000		 Expenditure
£’000		 Net
gains/(losses)
on assets
£’000		 Transfers*
£’000		 Balance at
31 Dec 21
£’000
Development Fund 17 1 (135) - (208) (325)
Albright Bequest 469 3 - - - 472
Houses Capital 6,495 - - - 6,495
Curates Housing Reserve 6,654 1,090 (21) - 7,723
Education - 433 (490) - 57 -
Viney Hill Development 170 - - - - 170
Total Funds at 31 Dec
2021		 13,805 14,535
1,527 (646) - (151)

50

Notes to the financial statements

for the year ended 31 December 2022

Note 22
Restricted funds		 Balance at
1 Jan 2022
£’000		 Income
£’000		 Expenditure
£’000		 Net
gains/(losses)
on assets
£’000		 Transfers
£’000		 Balance at
31 Dec 22
£’000
Housing for elderly clergy 146 2 - (6) - 142
Ordination training 232 - (1) - (25) 206
Diocesan pastoral fund 1,153 68 (169) (220) (332) 500
Stratton Davis fund 327 6 (10) (29) (54) 240
Bishop’s Discretionary Mission fund 30 - - - - 30
Ann Edwards Charity 1,750 91 (73) - - 1,768
Sportily Limited (72) 181 (702) - 593 -
Ministerial Education Training 70 297 (244) - - 123
Life projects 91 - (95) - 79 75
Other (387) 174 (82) (5) 464 164
Energy Grants - 197 (149) - - 48
Bishop Monk’s Horfield Trust fund 957 25 - (114) (14) 854
Total Funds at 31 Dec 2022 4,297 1,041 (1,525) (374) 711 4,150

Restricted funds may only be used for the purposes for which the money was originally gifted or bequeathed to the Board. The Housing for Elderly Clergy Fund derives from various bequests and is used to give assistance to retired clergy of the Diocese in difficulty with their housing requirements. The Ordination Training Fund derives from various bequests, principally from the late Mrs. M Harries. The income is used to fund ordination training.

The Diocesan Pastoral Fund is derived principally from the proceeds of sale of surplus parsonage houses as a result of pastoral reorganisations under the Pastoral Measure 1983. Under the Measure, the Fund must be used firstly in connection with expenses relating to pastoral schemes and redundant churches. To the extent that it is considered that any remaining funds are not required, or are not likely to be required, for these purposes then the funds may be applied to any general purpose of the Board.

The Stratton Davis Fund arises from a bequest received in 2001 from the estate of the late Mr. David Stratton Davis. The terms of the settlement are that the fund may be used for the repair or restoration of churches and their fixtures and fittings in the Diocese. The Board has decided initially to use the income to make an annual grant to the Gloucestershire Historic Churches Trust.

The Bishop’s Discretionary Mission Fund derives from a donation received in 2013 and restricted to mission works of the Church of England at the Bishop of Gloucester’s discretion.

The Charity of Ann Edwards restricted funds comprise the Extraordinary Repair Fund (ERF) and the Cyclical Maintenance Fund (CMF). These funds were established in the governing instrument and are for future repairs and maintenance, with transfers being made each year.

51

Notes to the financial statements for the year ended 31 December 2022

Note 22 Restricted funds cont.

The Sportily funds may only be used for the objects of the charity which include promoting and assisting the work, objects and purposes of the Church of England for the advancement of Christian faith, in particular (but not exclusively) by the development of specialist ministries based principally on sports and wellbeing particularly with children, young people and their families in (but not limited to) the Diocese of Gloucester.

The Ministerial Education Training fund relates to Resourcing Ministerial Education introduced in 2017.

The Life Projects fund relates to those special projects funded by the Life Development Fund.

The Energy Grants were distributed to Dioceses to assist Parochial Church Councils cover the increased cost of lighting and heating of church buildings during the Winter.

The Bishop Monk Horfield Trust fund was gifted to the GDBF by a previously independent trust of that name which had managed the ancient legacy of Bishop Monk of Gloucester and Bristol. The funds received by GDBF are restricted to the funding of curates in training.

The Other Restricted funds include a negative fund balance of £nil (2021: £304k) for Glebe revenue at 31 December 2022. This related to glebe rental income less professional fees, repairs and maintenance against Glebe assets (the asset is held in the Glebe Property endowment fund – see note 23). The excess costs have been offset against the surplus arising on the sale of the endowment property at Bishops Cleeve.

Comparative Restricted funds Balance at
1 Jan 2021
£’000		 Income
£’000		 Expenditure
£’000		 Net
gains/(losses)
on assets
£’000		 Transfers
£’000		 Balance at
31 Dec 21
£’000
Housing for elderly clergy 136 2 - 8 - 146
Ordination training 258 - (1) - (25) 232
Diocesan pastoral fund 933 47 (60) 233 - 1,153
Stratton Davis fund 299 7 (10) 31 - 327
Bishop’s Discretionary Mission Fund 30 - - - - 30
Ann Edwards Charity 1,729 87 (66) - - 1,750
Sportily Limited - 446 (518) - - (72)
Ministerial Education Training 20 243 (202) 9 - 70
Life projects 88 - (100) - 103 91
Other (248) 98 (185) (52) (387)
Bishops Monk’s Horfield Trust - 910 - 92 (45) 957
Total Funds at 31 Dec 2021 3,245 1,840 (1,142) 373 (19) 4,297

52

Notes to the financial statements

for the year ended 31 December 2022

Note 23
Endowment funds		 Balance at
1 Jan 22
£’000		 Income
£’000		 Expenditure
£’000		 Net
gains/(losses)
on assets
£’000		 Transfers*
£’000		 Balance at
31 Dec 22
£’000
Pensions & assistance 399 - - (31) - 368
Benefice property 31,086 694 (29) - (4,472) 27,279
Diocesan stipends fund 30,736 - 126 (3,314) 4,553 32,101
Ann Edwards Charity 941 - - (100) - 841
Glebe property 21,389 578 - 645 (5,964) 16,648
Total funds at 31 Dec 2022 84,551 1,272 97 (2,800) (5,883) 77,237

Permanent endowment funds represent money that must be permanently held as capital and may not be spent as income. Expendable endowment funds represent money that must be held as capital but may be expended when certain conditions are satisfied.

The Pensions & Assistance Fund is permanent endowment represented by a house used to provide accommodation for retired clergy, and a cash balance arising from the sale of a second house.

The Benefice Property Fund represents the value of benefice houses. These houses are owned by benefices but are recognised as assets by the Board. The fund is classified as expendable endowment as under certain conditions the value of the houses may be realised and the proceeds used as income.

The Diocesan Stipends Fund (DSF) represents ancient endowments and other gifts and legacies. The Fund is governed principally by the Diocesan Stipends Funds Measure 1953 and the Endowment and Glebe Measure 1976, as amended. The Fund consists of Clergy housing and CBF managed funds. Income generated from the Fund must be used to fund stipends. The Fund is expendable under certain circumstances.

During 2019, Bishops Council approved a total return approach to investment for the CBF managed funds of the DSF. This change in policy was to take effect from 1st January 2019. An Unapplied Total Return (UTR) of £10,800k was created on 1st January 2019, all of which related to the DSF.

The Unapplied Total Return comprises that part of the total return on the DSF which has not yet been allocated by the Board to either the General Fund or the Trust for Investment. It can be carried forward if not needed or allocated to be spent as income or reinvested in the DSF Trust for Investment in a particular year.

The value of the Trust for Investment of the DSF is preserved, by an amount equivalent to the application of RPI to the opening balance for the year being transferred from the Unapplied Total Return to the DSF Fund. For the year ended 31st December 2022, the Board took the decision to transfer £1,728k (2021: £1,647k) from the Unapplied Total Return to the General Fund. (see note 16c).

The Endowment Fund of the Charity of Ann Edwards represents the original endowment of the charity, comprising mainly the sale proceeds of Edwards College, the original Almshouse in South Cerney. This money may not be spent as income.

Glebe property represents glebe land previously held by incumbents but transferred to the Board under the Endowment and Glebe Measure 1976. Income derived from rents must be used to fund stipends. Proceeds of sale of glebe land must be transferred to the DSF.

53

Notes to the financial statements

for the year ended 31 December 2022

Note 23 Endowment funds cont.

Comparative Endowment funds Balance at
1 Jan 2021
£’000		 Income
£’000		 Expenditure
£’000		 Net gains/
(losses)
on assets
£’000		 Transfers*
£’000		 Balance at
31 Dec 21
£’000
Pensions & assistance 366 - - 33 - 399
Benefice property 30,267 819 - - - 31,086
Diocesan stipends fund 27,992 - (29) 3,713 (940) 30,736
Ann Edwards Charity 835 - - 106 - 941
Glebe property 15,477 (1) (2) 5,915 - 21,389
Total Funds at 31 Dec 2021 74,937 818 (31) 9,767 (940) 84,551
Note 24
Financial Commitments:Operating Leases
Total commitments under non-cancellable operating leases are as
follows:- 2022 2021
Office Equipment where the lease expires: £’000 £’000
Within one year of the balance sheet date 9 10
In the second to fifth years inclusive of the balance sheet date 10 20

54

Notes to the financial statements

for the year ended 31 December 2022

Note 25 Pensions

The GDBF participates in two pension schemes administered by the Church of England Pensions Board, which holds the assets of the schemes separately from those of the DBF and the other participating employers. One of these is the Church of England Funded Pensions Scheme for stipendiary clergy and the other is the Church Workers Pension Fund (CWPF) for lay staff.

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

Defined Benefits Scheme

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

For funding purposes, DBS is divided into sub-pools in respect of each participating employer as well as a further 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.

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

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

The next actuarial valuation is due at 31 December 2022.

Following the 2019 valuation, the Employer has entered into an agreement with the Church Workers Pension Fund to pay a contribution rate of 34.3% of pensionable salary and expenses of £12,800 per year. In addition, deficit payments of £167,784 per year have been agreed for 5.50 years from 1 April 2021 in respect of the shortfall in the Employer sub-pool.

55

Notes to the financial statements for the year ended 31 December 2022

Note 25 Pensions cont.

Due to the improvements in the projected funding position of the Fund, the Church of England Pensions Board agreed that deficit contributions should cease with effect from 31 December 2022 for employers whose pools were estimated to be materially in surplus. As a result, there is no obligation recognised as a liability within the Employer's financial statements as at 31 December 2022. A liability has been recognised at earlier dates.

The movement in the provision is set out below:

2022
£’000
2021
£’000
Balance sheet liability at 1 January
766
1,192
Deficit contribution paid
(168)
(168)
Interest cost (recognised in SoFA)
10
6

Remaining change to the balance sheet liability*
(recognised in SoFA)
(608)
(264)
Balance sheetliability at 31 December
-
766

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

December
2022
December
2021
December
2019
Discount rate
0.00%
1.4%
0.5%

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.

Church of England Funded Pension Scheme (CEFPS)

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

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

The scheme is considered to be a multi-employer scheme as described in Section 28 of FRS 102. This means it is not possible to attribute the Scheme’s assets and liabilities to specific Responsible Body, and this means contributions are accounted for as if the Scheme were a defined contribution scheme.

The pensions costs charged to the SoFA in the year are contributions payable towards benefits and expenses accrued in that year plus the figures highlighted in the table below as being recognised in the SoFA.

56

Notes to the financial statements for the year ended 31 December 2022

Note 25 Pensions cont.

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 2021. The 2021 valuation revealed a surplus of £560m, based on assets of £2,720m and a funding target of £2,160m, assessed using the following assumptions:

Following the 31 December 2018 valuation, a recovery plan was put in place until 31 December 2022 and the deficit recovery contributions (as a percentage of pensionable stipends) are as set out in the table below. An interim reduction to deficit contributions to 3.2% of pensionable stipends was made with effect from 1 April 2022. Following finalisation of the 31 December 2021 valuation, deficit contributions ceased with effect from 1 January 2023, since the Scheme was in surplus.

As at 31 December 2020 and 31 December 2021 the deficit recovery contributions under the recovery plan in force were as set out in the table below. For senior office holders, pensionable stipends are adjusted in the calculations by a multiple, as set out in the Scheme’s rules.

% of pensionable stipends January 2018 to January 2022 to
December 2021 December 2022
Deficit repair contributions 11.9% 7.1%

Section 28.11A of FRS 102 requires agreed deficit recovery payments to be recognised as a liability. However, as there are no agreed deficit recovery payments from 1 January 2023 onwards, the balance sheet liability as at 31 December 2022 is nil. The movement in the balance sheet liability over 2021 and over 2022 is set out in the table below.

2022 2021
£’000 £’000
Balance sheet liability at 1 January 213
418
Deficit contribution paid (126)
(214)
Interest cost (recognised in SoFA) -
1
Remaining change to the balance sheetliability*(recognised inSoFA) (87) 8
Balance sheet liability at 31 December -
213

57

Notes to the financial statements

for the year ended 31 December 2022

Note 25 Pensions cont.

This liability represents the present value of the deficit contributions agreed as at the accounting date and has been valued using the following assumptions. No assumptions are needed for December 2022 as there are no agreed deficit recovery payments going forward. No price inflation assumption was needed for December 2021 since pensionable stipends for the remainder of the recovery plan were already known.

December December 2021 December 2020
2022
Discount rate n/a 0.0% pa 0.2%
Price inflation n/a n/a 3.1%
Increase to total pensionable payroll n/a -1.5% pa 1.6%

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

Church of England Pension Builder Scheme (PBS)

For eligible salaried employees who commenced employment after 1st January 2013, the Gloucester Diocesan Board of Finance participates in the Church of England Pension Builder Scheme (PBS), within the Church Workers Pension Fund.

Pension Builder Scheme

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

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

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

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

The scheme is considered to be a multi-employer scheme as described in Section 28 of FRS 102. This is because it is not possible to attribute the Pension Builder Scheme’s assets and liabilities to specific employers and means that contributions are accounted for as if the Scheme were a defined contribution scheme. The pensions costs charged to the SoFA in the year are the contributions payable.

58

Notes to the financial statements

for the year ended 31 December 2022

Note 25

Pensions cont.

A valuation of the Pension Builder Scheme is carried out once every three years. The most recent valuation was carried out as at 31 December 2019. The next valuation is due as at 31 December 2022.

For the Pension Builder Classic section, the valuation revealed a deficit of £4.8m on the ongoing assumptions used. At the most recent annual review, the Board chose to grant a discretionary bonus of 10.1% following improvements in the funding position over 2022. There is no requirement for deficit payments at the current time. There is no requirement for deficit payments at the current time.

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

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

59

Notes to the financial statements

for the year ended 31 December 2022

Note 26

Prior year comparative SOFA

Note 26
Prior year comparative SOFA
Income & endowments from
Donations
parish share contributions
church commissioners
grants and other donations
Charitable activities – statutory fees
and licence to occupy income
Other activities
Investments
Other		 General
fund
£’000		 Designated
funds

£’000		 Restricted
funds

£’000		 Endowment
funds

£’000		 Total
2021

£’000
6,316 - - - 6,316
43 - - - 43
195 427 1,321 - 1,943
362 - 73 - 435
166 6 - - 172
834 5 115 - 954
36 1,089 331 818 2,274
Total 7,952 1,527 1,840 818 12,137
Expenditure on
Raising funds
Charitable activities
93 - - - 93
10,285 646 1,142 23 12,096
Total 10,378 646 1,142 23 12,189
Net income/(expenditure) before
investmentgains		 (2,426) 881 698 795 (52)
Net gains on investments - - 373 9,767 10,140
Net income/(expenditure) (2,426) 881 1,071 10,562 10,088
Total return transfer
Net income/(expenditure) after
total return transfer
Transfers between funds
Other recognised gains/(losses)
900
(1,526)		 -
881		 -
1,071		 (900)
9,662		 -
10,088
210 (151) (19) (40) -
264 - - (8) 256
Net movement in funds
Totalfunds broughtforward		 (1,052) 730 1,052 9,614 10,344
(3,360) 13,805 3,245 74,937 88,627
Totalfunds carriedforward (4,412) 14,535 4,297 84,551 98,971

60