Comments: Church Commissioners announce total 2015 return on investments at 8.2%

Congratulations to all concerned for achieving this encouraging result. I only wish my Savings Bank Account paid 8.2% in Interest as opposed to the measly 1/2%! The two videos begin with the motto "Investing in the Church's Growth". Would that the Church of England congregations had also grown nationally by 8.2% in the last year, that would have been yet more Good News.

Posted by Father David at Monday, 16 May 2016 at 6:34am BST

This is a fantastic result. We've got Archbishops' Council tomorrow, at which we will be looking at ways in which the money from the Commissioners can be used strategically for the mission and ministry development which is at the heart of Renewal and Reform. The encouraging thing about that is the rigour with which the Commissioners monitor and expect the Church to justify the spending of the money they have seen from the investments. It really does focus the mind.

Posted by Simon Butler at Monday, 16 May 2016 at 1:41pm BST

"Would that the Church of England congregations had also grown nationally by 8.2% in the last year, that would have been yet more Good News."

We tried to do our bit - but only achieved 9% growth (in a fairly 'central' parish). However, I can't believe it's all about numbers...

Posted by NJW at Monday, 16 May 2016 at 5:00pm BST

Whilst this is good news, I share the First Commissioner's apprehension about the future and the relative improbability of this rate of return continuing. The Commissioners are one of the most successful funds, so much so that I sometimes think they would provide much better value for the wider community of investors than many hedge funds with their egregious 2-and-20 compensation arrangements.

However, much of this positive performance is a function of QE goosing returns on equities (at least until early this year) and property inflation (which is pretty terrible news for tenants who have to pay higher rents or successors in title who are required to pay inflated prices for property).

Also, I suspect that the success of the Commissioners is, in large measure, attributable to the fact that, since 1 January 1998, its responsibility for pension accruals for the DB clergy pension scheme has reduced year-on-year, whilst that of the dioceses has increased: a stereotypical robbing-Peter-to-pay-Paul scenario which now warrants a reassessment.

If the Church authorities were to provide a composite picture of the finances of the Church, by including details of the state of diocesan finances (and any funding gaps on the part of the dioceses with respect to the pension scheme), together with reasonable projections of the cost of maintaining and insuring church buildings, then I think that we might have a more realistic appreciation of the financial state of the Church overall.

So much, of course, depends upon what is to happen with interest rates. The pressure that near-negative rates is putting on the fund management industry, the banks and insurers is becoming increasingly acute.

We have simply never been here before in the history of interest rates. If you had told a fund manager in 2000 (or even in 2008) that interest rates would be hovering around zero for most of the time since those dates, many would have laughed in your face. It used to be said that the British would stand anything, but they must have their 2%, and many would now be grateful even for that.

Interest rates are, arguably, validated by economic growth - but what if growth is increasingly difficult to generate? Also, if resource constraints start to bite as the global population nears 10 billion might we not see a ghastly combination of inflation and endemic low rates? Perhaps the Commissioners need to plan for the worst...

Posted by Froghole at Tuesday, 17 May 2016 at 12:54am BST

Of course it's not "all about numbers" but any reading of the Acts of the Apostles (aka the Acts of the Holy Spirit) will shew that numbers are important. Acts tells us, with its ever increasing number of those converting to Christianity and being baptised that it's all about Growth, Growth, Growth as opposed to Decline, Decline, Decline.

Posted by Father David at Tuesday, 17 May 2016 at 3:39am BST

Gosh! is this the direct consequence of enrolling clergy as MBAs? Saint Francis had a name for money, rhyming with wit! Will this windfall buy us out of the entrenched problems of sexism and homohobia?

Posted by Father Ron Smith at Wednesday, 18 May 2016 at 3:48am BST

The Church has a need for sound finances, both as a good employer, and as a guardian of buildings, and to empower and support service and mission. So these figures are at least reassuring in that sense.

Good stewardship is important, not least because of the 'widows mites' that get given by sometimes very poor church members in good faith.

It's also important as a witness to people in our communities, that we try to be ethical, environmentally friendly, and distanced from 'Caesar' and the whole imperial thing of pursuing profit as an end in itself.

The few questions I have (and I'm not trying to be negative about figures that could have good and positive results in supporting mission and the service of communities at home and abroad who desperately need support) are:

1. Hopefully the property profits have not been supported by raising rent above the rate of inflation. That would be unconscionable. Just because the market rate for rents has been soaring, that does not make it right.

2. I raised my eyebrows a little at some of the salaries being paid to a few high earners working for the Church - as detailed on page 63 of the report. It would be seem that some people are being paid 8 to 10 times what I earn as a nurse, and that there may even be additional performance-related payments. It's not that I'm asking for higher wages myself, but I think it's important that the Church does not follow corporate tendencies to pay high wage multiples to some of its employees, as if there is some kind of 'professional class' who deserve and are entitled to be paid vastly more than the rest of us. I don't really see that anyone is worth 10 times a nurse or a teacher, whatever they do. And don't get me started on carers working the shittiest but deeply precious roles on minimum wage.

Those points aside (and, obviously, hoping that investments grow increasingly ethical and environmentally friendly) I do think that these results indicate some good stewardship, for which those involved deserve acknowledgment.

Posted by Susannah Clark at Wednesday, 18 May 2016 at 2:18pm BST

I think, Susannah Clark, that "The Church" is a misleading phrase to use. The Church Commissioners for England is (like each parish church) an independent charity, and its finances, as Froghole pointed out, are but a fragment of the finances of "The Church". It's also the case that "The Church" has remarkably few employees --- the parochial clergy are mostly not employees, and most employees are employees of parishes or dioceses, not of the central C of E. Likewise almost all the buildings are not in the ownership of any central body, but of incumbents or cathedral chapters.

Oh for a readable account of the finances of the mosaic that we call the C of E, and the flows of resource within it: can anyone point me to one?

Posted by american piskie at Wednesday, 18 May 2016 at 4:43pm BST

@American Piskie: I am afraid that you will probably struggle to find much material that gives a composite picture of the finances of the modern Church of England rather than the Commissioners per se. Information about the Church of Ireland and the Church in Wales is still more difficult to obtain; they were both comprehensively disendowed on disestablishment, and then re-endowed heroically by voluntary subscriptions and bequests. How much of those endowments remain is moot, but their respective representative bodies may have information they are willing to divulge (much the same applies to the Scottish Episcopal Church, though it was [arguably] not subject to the same process of disendowment). It is likely that these churches are financially enfeebled and that they have already sold most of what is worth selling. Others - who are better informed - may be able to correct me, and I must apologise for any inadvertent slight.

There are two excellent books on the history of the Church Commissioners and its predecessors, the Ecclesiastical Commissioners and Queen Anne's Bounty. These are: (i) G. F. A. Best 'Temporal Pillars: Queen Anne's Bounty, the Ecclesiastical Commissioners, and the Church of England' (Cambridge, 1964 - which is superb); and (ii) Andrew Young 'The Church of England in the Twentieth Century: The Church Commissioners and the Politics of Reform, 1948-1998' (Woodbridge, 2006). These are works of institutional history.

There is an enormous literature on the finances of the Church in the more distant past, especially in the sixteenth and seventeenth centuries (when it was being pretty effectively asset stripped), but to provide even a limited bibliography would take me well over the 400 word limit.

I have heard quite a lot of anecdotal evidence during the course of my travels which indicates that many dioceses are in acute distress. Even formerly well-to-do dioceses like Rochester are now running substantial deficits, and I think this must have something to do with the transfer of responsibility for pensions post-1998 from the Commissioners to the dioceses. And, of course, the dioceses are financed to a great extent by the parish share system, which is slowly killing many weaker parishes. This situation is only going to get worse until the Commissioners share the responsibility for pension liabilities after 1998.

The Commissioners have done so well in part because the dioceses (and parishes) have done so badly.

Posted by Froghole at Wednesday, 18 May 2016 at 11:58pm BST

Andrw Chandler not Andrew Young froghole.

Posted by Perry Butler at Thursday, 19 May 2016 at 7:53am BST

Thanks, Froghole. In an age of transparency, the current situation is somewhat, hmm, obscure; I trust not intentionally so. What I would really like to have is a feeling for the order of magnitude of the annual flows between (it's a lengthy list, and no doubt incomplete): The Commissioners, the pensions body (?), the central bureaucratic bodies, the bishops, the dioceses, the diocesan trustee companies, the diocesan schools, the cathedral chapters, the cathedral clergy, the parishes, the parish clergy, the PCCs, other ecclesiastical charities, bodies like Church Army, Ch Urb Fund, missionary societies.

For example, I'd like to understand in broad terms how the chunk of money raised in my parish to cover an incumbent's salary and housing costs flows to the diocese as Share and then somehow back as a Ch Comm cheque to the incumbent, the pension fund etc.

Posted by american piskie at Thursday, 19 May 2016 at 8:50am BST

american piskie: let's take a simple one -- the relationship between your parish share (or whatever it's called in your diocese) and the stipend paid by the Ch Comms.

The Ch Comms act as a central body that legally pays the stipends of stipendiary clergy, and collects tax and national insurance on behalf of HMRC. Each diocese is responsible for telling the CCs what to pay each individual, and for transferring the appropriate sum to the CCs to cover the total diocesan bill that month. If a diocese does not transfer enough money then the stipends will still get paid, but the CCs will charge the diocese interest on the sum not paid. This keeps the clergy happy (because they still get paid) but the diocese has to cough up more money in the longer term. Which is why dioceses tend to like parishes to pay their Share in equal installments rather than leaving most of it to the end of the year.

Of course, not all the parish share goes to the CCs to cover stipends. Some of it will cover the diocesan office costs, some will cover clergy housing costs, some will cover pension payments, and so on.

Posted by Simon Kershaw at Thursday, 19 May 2016 at 5:18pm BST

Thanks, Simon Kershaw.

You can see that what I really want is a gigantic directed graph with appropriately weighted edges, with the sinks and the sources clearly marked!

Posted by american piskie at Thursday, 19 May 2016 at 5:49pm BST

AP, London diocese provide some information of some of the distribution of money from parish giving here :

But that's far from a comprehensive explanation of how even a single diocese operates.

Posted by Alastair Newman at Thursday, 19 May 2016 at 8:51pm BST

The C of E system as described by Simon Kershaw seems unusually centralized to me. Is that normal across the Communion? Certainly here in Canada, as far as I know it's usually done at a diocesan level, and I worked in one diocese where clergy were on local payroll (i.e. paid by the parish treasurer).

Posted by Tim Chesterton at Monday, 23 May 2016 at 10:27pm BST
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