Facing the future

Southwark Diocese faces a shortfall of £1.5 million a year from 2002.

This shortfall is caused in almost equal parts by three factors.

The first of these is the phasing in of clergy pensions costs which the Diocese had planned for and is already in the budget.

Then, Southwark's share of the money that the Church Commissioners divide amongst the Dioceses will probably reduce to nothing. At most Southwark might receive a relatively small amount (£70,000). In the past the Diocese has received up to £672,000. This change has come about because Southwark Diocese is deemed to be wealthier than it was some ten years ago. Other dioceses, such as London and Liverpool, are also losing out as they too are believed to be wealthier than in the past.

Finally, the remainder comes from further extra money which needs to be raised towards clergy pensions. Southwark, like the other dioceses around the country, knew that the costs of clergy pension was gradually to become their responsibility and cease to be the responsibility of the Church Commissioners. However, the need for further contributions from the dioceses has come to light as a result of a review of the pension scheme.

So, in these ways the Diocese of Southwark has been dealt a triple financial blow for its forthcoming annual budgets. Southwark's Diocesan Synod had worked hard to make provision for the extra money which needs to be spent on pensions. But, the extra amount which it has become necessary for the Diocese to find, as a result of the review of the pension scheme and the loss of the selective allocation from the Church Commissioners means that there will be a shortfall in the Diocesan budget amounting to £1.5 million. This shortfall will begin in 2002.

Although this is very worrying and difficult for Southwark Diocese, it is clear that many dioceses are affected by these changes.

Whilst some dioceses are gaining money from the changes in allocation all are affected by the need for changing arrangements concerning pensions and the effect that this will have on their budget.

Changes are also having to be made at Church House, Westminster and the Church Commissioners to help to meet this challenge.

In Southwark, the Board of Finance set up a working group to consider the shortfall and how it could be met. Their report has now been compiled and is about to go out to the parishes for consultation. More details and information can be found in the folloewing pages of this edition of The Bridge.

Southwark Diocese has always worked hard to ensure that its finances are in good order and it is particularly hard for us at this time as last year over 99% of the money which was needed from the parishes came in.

Bishop Tom comments: 'Clearly this is an unsettling time with much change for everyone in the Diocese. However, we look forward to developing new ways of working which will continue to carry forward God's mission in Southwark Diocese.'

Facing the Financial Challenge
Special Report Index

Bishop Tom's Introduction

Working Party Report

Where do we go from here?

What happens now?