APPROACH TO FOOD STRUCTURE AND FUNCTIONALITY

Annual Report2011

board of directors

Rt Revd Michael Perham (President)

Revd Canon John Wright (Chair)

Rt Revd John Went

The Very Revd Stephen Lake (from June 2011)

Ven Geoffrey Sidaway

Ven Robert Springett

Richard Bach

Revd Skye Denno

Revd Mark Evans

Revd Canon Paul Harris (Retired March 2011)

Revd Canon Neil Heavisides

Canon Ian Marsh

Anthony McFarlane

Revd Canon Richard Mitchell (Appointed March 2011)

Revd Canon Dr Jennifer Parsons (Resigned March 2011)

Revd Jacqueline Rodwell

Les Reilly

Tom Rucker

Revd Helen Sammon

Revd David Smith

Graham W Smith

Professor Jennifer Tann

Revd Canon Celia Thomson

solicitor

Christopher Peak – RegistrarDiocesan Registry34 Brunswick RoadGloucester GL1 1JJ

auditorsMazars LLP

Clifton Down HouseBeaufort Buildings

Clifton DownClifton, Bristol BS8 4AN

bankersBarclays Bank plc

288 Britannia WarehouseThe Docks

Gloucester GL1 2YJ

investment managersCCLA Investment Management Ltd

80 CheapsideLondon EC2V 6DZ

principal officersDr Kevin Brown – Secretary

Benjamin Preece Smith – Director of Finance

registered officeChurch HouseCollege Green

Gloucester GL1 2LY

Company limited by guaranteeRegistered number 162165

Registered charity number 251234

Year at a glance

Message from Bishop Michael

Message from the Chair of the GDBF

Achievements and activities

Our local role

o Supporting clergy and discipleship

o Mission and Communications

o Securing our Church’s future

o Caring for our communities and environment

o Caring for our buildings

o Encouraging children in Christian faith

The Diocese as part of the Anglican Communion

Performance and governance

Financial information

Contents

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Page

Year at a glance

How have we done?Highlights from this year’s accounts

number of stipendiary clergy funded

2011131 2010131 change

0parish share contributions

2011

£5.6m2010

£5.4mchange

+3%

general fund (ongoing) deficit for the year*

2011

£715k2010

£851kchange

-16%

balance sheet value (nett assets)

2011

£68.6m2010

£70.4mchange

-3%

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* Calculated as nett incoming resources before gains (£842k) less exceptional items (£127k)

YEAR AT A GLANCE

Message from the Chair of the GDBF

I recently had to sign off the accounts for one of the parishes of which I am the incumbent. I was amazed at

how complicated charity law makes a fairly straight-forward set of accounts. I am therefore pleased at what

a good job has been done by our Director of Finance, and his staff, together with our auditors, in presenting

the accounts of the Board of Finance, and especially for the excellent summary on the front page.

The real summary is that the results for 2011 are better than 2010 but not as good as we had hoped and

expected. We are working to a plan to eliminate the deficit by the end of 2015. Some of the actions we have

taken have borne fruit – a contribution of more than £250,000 from Good and Faithful Servant Ltd is one such,

but there have been other items which have worked the other way. The continuing increase in pension costs,

both clerical and lay, is a constant problem and we have no control over the costs of the clergy scheme.

It is not the task of the Board of Finance to run the Diocese – it is our task to see that sufficient resources are

provided to enable the mission of the Church in this Diocese to be carried out. Unfortunately a deficit can

only be sustained for so long before that mission will be adversely affected. This means the deficit must be

reduced now and eliminated entirely as soon as possible.

There are two ways this can be done. Either income needs to increase or expenditure to decrease. We have

worked hard to improve income but the only significant source of extra income is the parishes. There is a plan

to increase the Parish Share over the next four years and most parishes are working to achieve this. If this is

not done the deficit will increase.

The other side is to reduce expenditure. The substantial part of our expenditure is staff salaries so this will

mean employing fewer people. There are two myths which need to be rebutted. The first is that there is a vast

pool of under-employed people in the Diocesan offices who can easily be taken off the payroll with few, if any,

ill effects. The second is that groupings of parishes under one incumbent can continue to expand without that

being felt by both incumbents and parishes (my predecessor had two parishes, I came to three and have added

a fourth while here and there is now talk of two more being added after I retire).

I am sure we do have to review our budgets this year and reduce our costs so that we get back on course to

reduce the deficit to nil by 2015. It is important to realise that when we do this it will have an effect for both

Diocesan offices and parishes, which will be felt. Sadly there are no pain free solutions.

We are not alone in facing these problems. Almost every part of our country, government, business and

charitable organisations is doing the same. We have to focus on working together to ensure that we continue

the mission of Christ throughout our Diocese. And to seek God’s help in all we do.

The Revd John Wright, Vicar of Tetbury and Chair, Gloucester Diocesan Board of Finance

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Message from Bishop Michael

There is so much about the Diocese of Gloucester that fills one with gratitude and gives one encouragement.

Signs of growth in many of our churches, courageous and imaginative new ways of sharing the good news

and doing the work of ministry, talented staff at the centre, continuing vocations to the ordained ministry,

a cathedral chapter with fresh energy, faithful and yet adventurous clergy and laity.

One thing, however, makes one pause and do some heart-searching. Why, among all these encouraging signs,

do annual accounts and budgets suggest we are living beyond our means? Will we not have to cut back on

good work and reduce our contribution to the mission of God? The answer, of course, is partly that increased

pension contributions are a huge challenge to the Church. And partly that our investments are suffering

because of the economic climate. And partly because we have an expensive infra-structure across the Diocese

more suited to an earlier age, one that we need to simplify and slim down to make fit for purpose. But also

because, whilst our levels of Christian giving through channels such as the Parish Giving Scheme are improving,

we are 39th out of 44 dioceses for Parish Share contribution per member. One of the lowest in the land.

Places like Bradford and Liverpool have much to teach us about Christian stewardship. That is a sobering

statistic and a challenging one.

My hope and prayer is that everyone who reads this report, with all its good news, will take up that challenge

in every one of our communities. It would be wonderful to add increasing financial commitment to the list of

encouraging signs in the Diocese of Gloucester.

+Michael Gloucestr :

MESSAGE FROM BISHOP MICHAEL

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MESSAGE FROM THE CHAIR OF THE GDBF

ACHIEVEMENTS AND ACTIVITIES ACHIEVEMENTS AND ACTIVITIES

Achievements and activities

Directors’ Report for the year ended 31 December 2011

Our local roleSupporting clergy and discipleship

The Department of Discipleship and Ministry

An emerging priority for 2011was the

strengthening of discipleship amongst all the people

of God – clergy, laity, and church congregations.

A major survey on Discipleship Development

throughout the Diocese confirmed the priority

given to discipleship and so diocesan resources

were developed and strengthened.

It has again been an active year for those exploring

vocation of different sorts. A new Ministry

Development Officer was appointed and in 2011,

there were 50 people exploring ordination,

22 in pre ordination training and another 57 in

Initial Ministry Development (IMD). 26 were in

pre licensing training as Readers and another 21

in Reader IMD. 59 people were trained in the

Leading Worship course in 2011, and our 55

local ministry teams were supported in a variety

of training events.

The Effective Ministry in Every Parish Programme

carried out a pilot in three deaneries and work

continues to refine the project responding to the

expanding responsibilities of clergy.

Plans were laid in the course of the year for a new

Developing Ministry: Leading in a Changing Church

course, for those in the early stages of a new post.

The Diocese will be joining with neighbouring

dioceses of Hereford, Worcester, Birmingham,

Coventry and Lichfield in this provision. The first

intake has been confirmed for Summer 2012.

The successful ministry of the Church of England in

and around Gloucestershire is only made possible

with the support of lay people in the Diocese.

These include Readers, local ministry teams,

churchwardens, treasurers, PCC members and

the many volunteers who work tirelessly in their

mission for God. To all these people

we say thank you.

Human Resources

January 2011 saw the introduction of

the new Common Tenure legislation

for all clergy in the Church of

England. In the Diocese we have

implemented the new processes

and also further developed our

approaches to supporting clergy

through our model of pastoral,

professional, spiritual and practical

advice and support.

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Mission and Communications

Engaging with our parishes and communities

A major focus for work in 2011 was completing the

first Mission-Shaped Ministry Course to be offered

in the Diocese. Run over an academic year it aims

to equip participants to grow fresh expressions of

church and to help existing churches become more

mission-focused. Over 20 people took part in the

course, both lay and ordained, and representing a

variety of traditions and contexts.

As part of this work, the Diocese also has a

number of designated ordained pioneer ministers

with a particular remit to grow fresh expressions

of church. Alongside support for pioneer ministry

and fresh expressions, the work of the Diocesan

Missioner has continued to be closely bound up

with Effective Ministry in Every Parish, contributing

to its on-going development and delivery.

Other work has included leading a review of

mission and ministry in the Forest South Deanery,

supporting the development of Experience Easter

and Back to Church Sunday, and working with

individual parishes and benefices. During 2011

the Diocesan Missioner was also interim priest of

St Aldate's, Gloucester, working with the parish on

renewing its links with the local community.

Work was also done to enable the Christian

counselling service Listening Post to move in to

part of the church building, providing a much-

needed base for its work in Gloucester.

Communication and engagement

The communications guide Messages was rolled

out more extensively during 2011 with over 10

benefices looking in detail and how they can engage

more effectively with their communities and putting

individual parish and benefice communication plans

in place.

The Communications Department also continued

to develop and manage external communications,

promoting the work of the Diocese of Gloucester

locally and nationally. Diocesan publications kept

clergy and parishes informed on local, regional and

international news and work continued on updating

and improving the Diocesan website.

Securing our Church’s future

The Parish Giving Scheme

The Parish Giving Scheme (PGS) is a donation

collection system operated by the DBF on behalf of

our parishes. After a thorough development stage

it was successfully introduced to the diocese in

2010. This has been built on in 2011 with growth

right across the diocese. Last year PGS collected

just under £800k in donations including £155k of

Gift Aid. The full amount was passed “back” to

parishes within 10 days, with no deductions or

management charges being made.

As well as administrative support and professional

presentation the unique benefit of this scheme is

that it enables donors to agree to increase their

gifts annually in line with inflation. Fortunately the

vast majority of donors take up this option giving

real long term security to parish finances – this

inflationary increase on current donors alone

should bring in an additional £30k next year.

Parishes have the option of delivering PGS through

a support programme “Giving for Life”. When this

has been done effectively parishes have reported

30-40% increases in giving, even in these financially

difficult times.

In the complex area of employment responsibilities,

work has continued with parishes to help them

resolve issues locally and to support them

practically with template documents, policies and

processes which ensure they employ people safely

within their unique contexts and comply with

ever-changing employment law.


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2012 so far shows PGS continuing to grow, with

May 2012 seeing the highest ever numbers of new

donors in this diocese. The scheme now processes

over 1,500 donations every month.

This success has been noted by other dioceses and

the National Church. In early 2012 the scheme was

piloted in Winchester Diocese, with several other

dioceses keen to look at similar pilots when the

DBF feels able to share the resource more widely.

Maximising our inheritance

Good and Faithful Servant (GFS) is a subsidiary of

the DBF. It buys redundant assets from the DBF at

market value and then seeks to make a commercial

developer’s profit to support the Church’s ministry

and mission.

In last year’s report we indicated we believed 2011

would be the first year of real profit for the DBF

and we are delighted that the efforts of DBF and

GFS staff have resulted in a £268k nett profit being

made in 2011, which is over and above the market

value already paid to the DBF for the sites. This

provides a welcome boost to our shared finances

and the difficulties being experienced in parishes.

Looking forward to 2012 there is a development

at Charlton Kings which will again mean G&FS

will be looking to support the ongoing ministry of

the Diocese financially, but it is also exploring at

the wider remit of what a Christian development

company should be doing and is working with

partners in Gloucester City on a development on

the old St Stephen’s vicarage site, which will deliver

much needed social housing in an ideal location.

G&FS recruited a full-time dedicated project

manager in the year, and whilst not every year will

be as profitable as 2011 we are confident that

G&FS is here to stay and will continue to support

the work of the DBF and the wider diocese.

Reaching out to society

The Social Responsibility Department leads

on working with and building relationships

with other charities, church denominations

and businesses. In common with many sectors

of the economy, voluntary and charitable

organisations suffered from a down turn

in funding during the year. Frequently the

church has been looked to to fill the gaps

in provision and this is likely to continue

during 2012 with planned cuts to services

provided by country and district councils.

There has been a response to those living on

the edges of society, for instance, provision

of accommodation for homeless people in

the Diocese has been improved with greater

services being provided at Gloucestershire

Nightstopand plans for a new project, Tony’s

House, in Cheltenham.

ACCORD, the organisation sponsored by the

Diocese to provide training and workshops

on marriage, family issues and bereavement

continued to provide support to clergy and

parishes.

Our environmental responsibility

Tackling climate change is a vital part of our

responsibility as Christians. The dioceses of Bath

and Wells, Exeter and Gloucester joined together to

form the South West Ecochurch scheme, offering

support to churches in fitting solar photovoltaic

(PV) panels to roofs of their buildings. During

2011the scheme undertook five pilot projects in

our Diocese. From this initial five, three installations

took place towards the end of the year and a

further church has already received planning

permission, with a faculty in preparation. Only one

scheme was ruled out on structural stability grounds.

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The work of the DAC

In the Diocese we have nearly 400 churches,

90 per cent of them are listed buildings, with 38 per

cent being grade one. Maintaining these precious

buildings as places for people to encounter God is

a priority. In the Diocese this work is overseen by

the Diocesan Advisory Committee (DAC) which

offers practical help and support.

Church buildings are the responsibility of the

parishes concerned, but in most cases consent

needs to be obtained before carrying out any

alterations or significant repairs. The DAC needs

to be consulted as part of the process of obtaining

the necessary consent or 'faculty'. During 2011,

a total of 103 faculties were forwarded to the

Registrar, a significant drop from 2010. Early

indications for 2012 suggest that the reduction

was a temporary one. The figure also reflects the

DAC’s policy of avoiding the need for a formal

faculty where possible, but retaining detailed

scrutiny where this is likely to be helpful.

In addition, the DAC recommended seven cases

involving expenditure over £100,000, comprising

a total of £1.8 million worth of work.

Anecdotal evidence from around the country

suggests that economic pressures are causing

a marked slow down in certain areas, such as

overhaul of pipe organs. 2011 also saw some fine

building conservation firms going out of business,

and there must be concern for continuity of the

skills on which our buildings depend.

The DAC welcomed Bishop Michael to its meeting

in December 2011. Members welcomed his desire

that the Committee should seek to be more

proactive and to forge closer links with parishes.

Caring for our communities and environment

In addition, the Diocese was fortunate to be

successful in its bid to the Local Energy Assessment

Fund (LEAF) and received £51,000 to fund a desk-

top assessment of all churches for solar potential,

as well undertaking thorough energy audits for 52

church buildings. It is hoped that the information

contained within the latter will enable churches

to save both energy and money. By the end of

summer 2012 we hope to collate the current

energy data into a ‘benchmarking’ system with

the intention of reviewing these results in

two years time to assess how successful the take up

of recommendations from the reports have been.

Caring for our buildings

In the Diocese we have nearly 400 churches, 90 per cent of them are listed buildings, with 38 per cent being grade one priority


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Encouraging children in Christian faith

It has been another busy year for the Children

and Young People’s Department. The department

supports schools and parishes in a variety of ways.

Supporting the Leadership of Church of England

Schools

We supported the appointment of seven new

head teachers and achieved the first Voluntary

Controlled and Voluntary Aided School Federation

in the Diocese and launched a new mentoring

scheme.

Academies and the changing educational landscape

Continued support has been given to governors

in navigating the new educational landscape,

including hosting an academy symposium. All Saints’

Academy, Cheltenham, opened its new £24.6m

purpose-built facilities. In addition we secured

£1.5m worth of funding from the Department

for Education for capital improvements at the

43 Church of England aided primary schools.

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Inspections, training and support in schools and parishes

During 2011 we oversaw the inspection of 22

church schools. Of those inspected, 41 per cent

were graded ‘outstanding’, 45.5 per cent were

graded ‘good’ and the remaining 13.5 per cent

were graded satisfactory.

Training for those people who work with children

in schools and youth groups continued this year.

In addition to ongoing programmes several large

events and conferences were held. “Living Values”

a head teacher and clergy conference was attended

by more than 120 delegates. A day event on the

flourishing 'Messy Church' was well received.

The “Into Top Gear” conference enabled 200

volunteers to access workshops and resources.

For young people a second ‘Kenetic’ young leaders’

course was held within Cheltenham Deanery. New

ways of working with children and young people

continue to be developed including a new Djembe

drum set which is used as a means of promoting

engagement with contemplative prayer and

spirituality. The Diocese also partnered a successful

trip for a group of young people to Taize.

In addition the Youth Evangelism Fund has

supported specific projects such as the ‘Revive’

youth event at St Andrew’s, Churchdown and

young people from Anglican churches in the Forest

of Dean have come together to share their views

and opinions on their experience of church life,

and to contribute ideas on the shape

and focus of future ministry within

their Deanery.

Bicentenary Celebrations for the National Society

A series of events were held to celebrate the

bicentenary and discover more about the National

Society including: a special service for Head

teachers of Church of England Schools held at

Gloucester Cathedral and six hundred children

came to Gloucester cathedral for ‘Lifepath’.

Two candles and a prayer book entitled ‘Prayers

for the World’ travelled around the Diocese visiting

every Church of England school returning for the

2011 Cathedral Leaver’s Services.

Resources to support schools and churches

The REsource Centre, which houses a library of

approximately 15,000 resources, was well used

with over 14,000 loans issued to about 500 active

borrowers. During the year around 3,000 copies

of Jumping Fish publications were sold to schools

and churches throughout the UK. A new resource,

Living Values, was released in October.

Our long-standing DAC Roadshows have been

succeeded by Church Check-up days, co-ordinated

by our Churches Officer, with an emphasis on

maintenance problems. Aimed at churchwardens

and fabric officers, they encourage early detection

of problems and swift remedial action.

Housing our clergy

Working with clergy on a continual basis to keep

our property maintained to a high standard is a top

priority.

We try to ensure that our vicarages and properties

are economical, environmentally friendly and

functionally suitable for clergy. A major project for

2011 was implementing energy efficient measures

in our housing stock including: loft insulation in 95

per cent of housing; changing 20 boilers; installing

woodburners and; putting in secondary glazing.

Several new parsonages were built, at Stratton in

Cirencester, Badminton and Frampton on Severn,

offering more modern property to suit the needs

of ministry today.

We continue to manage the Glebe Land portfolio

and promoting it as and where appropriate to

maximize its return for the Diocese and parishes.

We try to ensure that our vicarages and properties are economical, environmentally friendly and functionally suitable for clergy

ACHIEVEMENTS AND ACTIVITIES PERFORMANCE AND GOVERNANCE

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The Diocese as part of the Anglican Communion Continuing Indaba

At a time of division in the Anglican Community

across the world, the Diocese is part of a pilot

project looking at deepening Christian unity.

Indaba is a Zulu word for a process of consensus

common in African countries and was used at the

2008 Lambeth Conference of Anglican Bishops.

Hoping to continue this process of consensus

the Archbishop of Canterbury set up and funded

five pilot groups to deepen understanding and

unity in Anglican communities across the world.

The Diocese already has strong links with other

dioceses, so formed a triangular partnership

with our partner dioceses of El Camino Real in

California and Western Tanganyika in Tanzania.

Over 18 months representatives from the three

dioceses have met to discover more about each

other and experience life as a Christian in each

others country. Meetings took place in Tanzania

in June, California in November and finally in

Gloucestershire in February 2012. The pilot groups

will report back to the Archbishop of Canterbury

and the Anglican Consultative Council during 2012.

Anglican Communion Covenant

The Anglican Communion Covenant was

prompted by the division which appeared in the

Anglican Communion following the election of

Gene Robinson as Bishop of New Hampshire.

The covenant is freely entered into and is designed

to resolve disagreements between national churches

by helping the Anglican Communion address the

challenges of living out the principle of autonomy-

in-communion by committing its member churches

to mutual accountability, consultation and the

achievement of consensus. At the February 2012

Diocesan Synod the Houses of Bishops, Laity and

Clergy voted against the motion.

Women Bishops

The General Synod of the Church of England

has agreed that the episcopate should be

open to women but there has been debate

around provision for those unable to accept

this decision. Dioceses across the country were

asked to consider and vote on proposals made

for alternative pastoral care. At the June meeting

of the Diocesan Synod in Gloucester members

overwhelmingly supported the prospect of women

bishops and also approved a proposal which

included provision for those uncomfortable with

appointing women bishops. These votes were fed

back into the General Synod. Final approval of the

legislation will happen in July 2012.

New Dean of Gloucester Cathedral

The Very Revd Stephen Lake was installed as the

37th Dean of Gloucester in June. The Dean is the

most senior priest in the Diocese after Bishop

Michael and Bishop John and chairs the Cathedral

Chapter and the governing body of the Cathedral.

Looking to the future

In July 2012 the Diocese will welcome The

Archbishop of Canterbury, the Most Revd

Dr Rowan Williams for a three day visit.

Called “Share the light” the visit will showcase the

good work of churches in the Diocese and give an

opportunity for people to meet the Archbishop

and find out more about the Christian Faith.

Performance and governance

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 Memorandum and Articles of Association.

Its membership comprises:

• The Bishop of Gloucester as president, ex-officio

• Each and every member for the time being of the Diocesan Synod.

• Members co-opted to ensure that lay members constitute a majority of the DBF.

Elections and co-options take place every three years. The current triennium runs until September 2012.

The DBF, which meets five times each year, is the principal policy making body. It takes advice from its Board

of Directors, constituted as the Bishop’s Council, which examines issues in detail and makes recommendations.

The Council also take executive action in certain matters and deals with day to day issues. The membership

of the Bishop’s Council is as follows:

Ex-officio members:

• The Bishop of Gloucester

• The Chair of the DBF

• The Bishop of Tewkesbury

• The Dean of Gloucester

• The Archdeacon of Gloucester

• The Archdeacon of Cheltenham

• The Chair of the House of Clergy of the Diocesan Synod

• The Chair of the House of Laity of the Diocesan Synod

• The Chair of the Diocesan Board of Education

• A nominated representative of the Houses Committee

• A nominated representative of the Diocesan Advisory Committee

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Members elected by the DBF – House of Clergy

• Two clergy members of the DBF from the Archdeaconry of Gloucester

• Two clergy members of the DBF from the Archdeaconry of Cheltenham

• One Proctor in Convocation from among the members of General Synod

Members elected by the DBF – House of Laity

• Three lay members of the DBF from the Archdeaconry of Gloucester

• Three lay members of the DBF from the Archdeaconry of Cheltenham

• One lay member from among the members of General Synod

Co-opted members

• Up to two members may be co-opted by the Bishop’s Council

Nominations

• Up to two members may be nominated by the Bishop

Trustees are recruited, as indicated above, through a mixture of ex-officio positions, elections and nominations.

The Nominations Committee in conjunction with the Diocesan Secretary oversee membership elections.

The DBF’s induction and training programme for trustees is currently under review, a new process will be in

place for the triennium commencing in 2012.

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

• the Finance Committee (Chair – The Reverend John Wright) acts in all matters relating to the

management of the DBF’s finances, including setting policy, framing the budget, critically reviewing the

budget to ensure value for money and monitoring financial performance;

• the Audit Committee (Chair – Thomas Rucker) reports to the DBF on matters relating to the auditors,

the annual accounts and internal controls. It also acts as the risk management group;

• the Glebe Committee (Chair – Malcolm Barlow) acts in all matters relating to the management of glebe

properties and the strategic conversion of glebe assets to maximise returns;

• the Houses Committee (Chair – Anthony McFarlane) discharges the responsibilities of the DBF in its

capacity as the Diocesan Parsonages Board and acts in all matters relating to the provision and

maintenance of clergy houses.

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:

• The Archbishops’ Council, to which it pays grants based on an apportionment system for funding

national training of ordinands and the activities of the various national boards and councils, as well as

General Synod.

• The Church Commissioners, from which the DBF receives grants and which acts for tax and national

insurance purposes as the pseudo-employer of diocesan clergy. The DBF pays for clergy stipends

through the Church Commissioners.

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PERFORMANCE AND GOVERNANCE

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• The Church of England Pensions Board, which provides pensions for clergy and the DBF’s lay staff.

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 grants and management

charges are paid, namely the Voluntary Schools Fund (VSF) and the Charity of Ann Edwards (AEC).

Objectives and activities

The principal objective of the Gloucester Diocesan Board of Finance (“the DBF”), as set out in the

Memorandum of Association, is “to promote and assist the work, objects and purposes of the Church of England

for the advancement of the Christian religion in the Diocese of Gloucester”.

In pursuing this objective, the DBF acts as the financial executive of and employer for the Gloucester Diocesan

Synod. As such it undertakes three principle activities:

• It funds costs associated with the vast majority of Church of England clergy in the diocese,

• It is responsible for the custody and management of the synod's funds

• It provides services to other councils and committees within the diocese, primarily PCCs and schools.

Public benefit

The directors are aware of the Charity Commission’s guidance on public benefit and, in particular, the

supplementary guidance for charities whose aims include advancing religion and have regard to that guidance in

their administration of the charity.

The objectives of the Board, as set out above, is to support the work of the Church of England. The activities

the Church undertakes may be classed into four categories, each of which the GDBF supports directly.

Worshipping together

Offering facilities and services open to all in our communities is a core activity of the Church. The Board

ensures that a professional, trained minister of religion is available to every community in our diocese to take

and oversee public worship. The GDBF also supports and trains unpaid and lay ministry to undertake and

support this work.

Sharing faith and values

The Board supports the sharing of the Christian faith not only through provision of theological training and

ministers of religion but also through activities such as communication of the Christian faith through regional

media, the provision of officers to support the teaching of the Christian faith in schools and wider training

programme.


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Serving our community

The Church of England is a collection of people who, motivated by their faith, form part of the biggest

volunteer network in our country. It provides youth workers and independent public figures in areas and

to communities that the statutory sector may not reach. It is committed to caring for everyone in our

communities, whether or not they “do church”. The Board supports this by providing professional support

and training, ensuring stipendiary ministers are housed and paid and providing grants to organisations.

Valuing buildings

The Board supports parishes to maintain and develop local church buildings through oversight of the care and

maintenance of these buildings through the Faculty system, support and advice from the Diocesan Advisory

Committee (DAC), ensuring any buildings which are no longer needed for regular worship are reused in the

public interest and by making grants to other organisations.

Financial review

Ongoing Activities

The General Fund for the year shows a nett “loss” for the year of £715k before investment losses and after

adjusting for exceptional items. This represents a substantial improvement on 2010 (£851k) due to trading

profits from Good and Faithful Servant.

The Board however is disappointed that it has not met its budgeted deficit on £670k, despite the benefit of

these trading profits. This is due to lower than budgeted parish share receipts, higher than budgeted housing

costs and a change in investment policy to a lower-revenue portfolio which reduced investment income

substantially, although on the expectation of higher total return over the coming years.

Other Activities

A very low level of asset sales in the period and continued, managed spend from restricted funds has put

considerable strain on cash flow. This should be addressed in 2012 when there are a number of redundant

houses which will be marketed.

Investment performance and policy

The DBF maintains a review of its investments through the Finance Committee, which also monitors

performance against market benchmarks and considers the adequacy of its investment mix. The Finance

Committee retains the services of an independent investment advisor to ensure that it receives impartial

advice.

During 2010 the Committee moved £4m of non-cash investments from CBF funds (which are common

investment funds managed by CCLA Investment Management Limited) and placed them in a new mixed

portfolio under the management of Rathbones of Bristol. A further £1m was moved in 2011 into a bond

portfolio also held by Rathbones. The remainder of non-cash investment funds at the year end remained

in CBF funds.


18

The DBF considers that investing in a range of medium-low risk funds across two fund managers serves to

spread risk through diversity and uses the investment management skills of professional fund managers to

achieve good performance.

Investment markets in 2011 were very uncertain with difficulties in both the US and the Eurozone leading

to a general fall in markets. The adjustments to the investment funds made last year have had a significant

impact on investment income. The £4m yielded a nett income of £50k, compared with around £200k had

they remained in CCLA investment fund units. This reduction is in due to a long-term repositioning from

cash generative investments with limited capital growth to lower cash generating, higher capital appreciating

investments. The Investment Group is of the opinion that despite this short term impact the prospects for

the new portfolio are good.

During 2011 the DBF took a decision to install PV solar panels on vicarages. By 31 December 2011 the DBF

had invested almost £450,000. This will complement the investment portfolio with an income rich pseudo-

bond. This development continued into 2012 when the first impact on income will be realised.

Reserves policy

The policy of the DBF is to hold between 4 and 8 months of parish share plus the deficit for the year on

the general fund in free reserves (i.e. for 2011 between £2.1m and £4.2m). This level is considered prudent

to account 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 the end of 2011, free reserves stood at £2.2m which is at the bottom end of the specified range. This is

expected to be addressed by asset realisation in 2012.

Plans for future periods

Budget 2012 and onwards

The DBF are currently acting against a five year plan for deficit reduction. Whilst the outturn for 2011 was a

significant step forward overall the initial indications for parish share 2012 combined with reduced investment

income and pension issues (see below) means the DBF is actively considering further adjustments to its budget

to meet the ultimate goal of deficit eradication by 2015.

Lay pension scheme

The Defined Benefit pension scheme for lay staff has an indicative deficit attributed to Gloucester DBF of

£1.3m. Negotiations are underway with CEPB on settlement terms. The DBF reluctantly made the decision

to close the scheme to new members in March 2012.

Good and Faithful Servant Ltd

G&FS have a good year planned for 2012 and a good order book. The level of donated profits is likely to again

be significant but also below that for 2011 due to a delay in projects commencing.


19

Risk management

The Directors confirm that the major risks, to which GDBF is exposed, as identified by the management

and Directors, have been reviewed and that systems have been established to manage those risks. Directors

delegated to the Audit Committee the task of ensuring that risks are reviewed. Department heads have defined

the risks in their areas, reporting on the measures in place to manage and monitor such risks, implementing

procedures designed to minimise any potential impact on GDBF should any of the risks materialise.

Audit Committee members review the risk register and report to Bishop’s Council their findings and also

make recommendations as to areas for further work.

Directors’ responsibilities in respect of the financial statements

The directors are required by company law to prepare financial statements, based on applicable accounting

standards, which give a true and fair view of the state of affairs of the DBF as at the end of the financial year

and of the result of the year and which comply with the Companies Act 2006.

The directors ensure that, in preparing the financial statements, suitable accounting policies have been used and

applied consistently, and reasonable and prudent judgments and estimates have been made. The directors have

a reasonable expectation that the DBF has adequate resources to continue in operational existence for the

foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the accounts.

The directors are also responsible for ensuring that adequate systems of internal control are in operation,

for maintaining adequate accounting records, for safeguarding the assets of the DBF and for preventing and

detecting fraud and other irregularities.

Statements as to disclosure of information to auditors

The directors have taken all the necessary steps to make sure that they are aware of any relevant audit

information and to establish that the auditors are aware of that information.

As far as the directors are aware, there is no relevant audit information of which the company's auditors are

unaware.

Appointment of auditors

A resolution to reappoint Mazars LLP as auditors to the Company and to authorize the Directors to fix their

remuneration will be proposed at the Annual General Meeting.

+ Michael Gloucestr : President, Gloucester DBF


The Revd John WrightChair, Gloucester DBF

20



21 22


Independent Auditors’ Report to the Members of Gloucester Diocesan Board Of Finance

We have audited the financial statements of Gloucester Diocesan Board of Finance for the year ended 31

December 2011 which comprise the Consolidated Statement of Financial Activities, the Consolidated Summary

Income and Expenditure Account Profit and Loss Account, the Consolidated Statement of Total Recognised

Gains and Losses, the Consolidated and Charity Balance Sheets, the Consolidated Cash Flow Statement and

the related notes. The financial reporting framework that has been applied in their preparation is applicable law

and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Respective responsibilities of directors and auditor

As explained more fully in the Directors’ Responsibilities Statement set out on page 19, the directors are

responsible for the preparation of the financial statements and for being satisfied that they give a true and

fair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable

law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the

Auditing Practices Board’s (APB’s) Ethical Standards for Auditors. This report is made solely to the 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 company’s members those matters we are required to state to

them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept

or assume responsibility to anyone other than the company and the company’s members as a body for our

audit work, for this report, or for the opinions we have formed.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the APB's web-site at

www.frc.org.uk/apb/scope/private.cfm.

Opinion

In our opinion the financial statements:

• give a true and fair view of the state of the group’s and the charitable parent company’s affairs as at

31 December 2011 and its incoming resources and application of resources, including its income and

expenditure, for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;

and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Directors’ Report for the financial year for which the financial

statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us

to report to you if, in our opinion:

• adequate accounting records have not been kept by the charitable parent company, or returns adequate

for our audit have not been received from branches not visited by us; or

• the charitable parent company financial statements are not in agreement with the accounting records

and returns; or

• certain disclosures of directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

Michael Stewart (Senior Statutory Auditor)

for and on behalf of Mazars LLP

Chartered Accountants and Statutory Auditor

Clifton Down House Beaufort Buildings Clifton Down Clifton Bristol BS8 4AN

Date


Gloucester DBF: accounting policies for the year ended 31 December 2011

23

These financial statements have been prepared in accordance with the Statement of Recommended Practice

(SORP) “Accounting and Reporting by Charities” issued in March 2005, and applicable Accounting Standards

in the United Kingdom. The principal accounting policies adopted are as follows:

Basis of Accounting

The financial statements are prepared under the historical cost convention, modified to include the revaluation

of listed investments.

The Board is a registered charity and so achievements cannot be measured by normal commercial criteria of

profit and loss. Accordingly, in order to give a true and fair view, the directors have applied the provisions of

section 396(5) of the Companies Act 2006 and have presented a Statement of Financial Activities instead of

a Profit and Loss Account. This has been prepared in accordance with the SORP and in the opinion of the

directors better reflects the nature of the Board’s activities.

These financial statements consolidate the results of the charitable company and its wholly-owned subsidiaries

on a line by line basis. 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 and SORP 2005. The deficit of the

parent charity for the year was £1,435k (2010: surplus of £88k).

Incoming resources

Parish Share contributions by parishes are included in the financial statements when received. 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.

Resources expended

All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate

all costs related to that category. Where costs cannot be directly attributed to particular headings they have

been allocated to activities on a basis consistent with the use of the resources. Overheads have been allocated

to various cost headings primarily on the basis of the head count. Grants payable are charged in the year

when the offer is conveyed to the recipient. Governance costs are those incurred in connection with the

administration of the Board as an organisation and compliance with constitutional and statutory requirements.

24

Parish Giving Scheme

The Parish Giving Scheme enables individuals to make a donation to GDBF, which is restricted to a specific

parish. GDBF makes a grant to the relevant parish for the full value of this gift and any related gift aid within

ten days of receipt.

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:

Office equipment 20% Telephone equipment 20%

Computer equipment 25% Office furniture 12½%

Hire equipment 25% Vehicles 20%

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 FRS15

and 11.

Pensions

The Board operates two defined benefit pension schemes for its lay staff, and contributes to the Clergy Pension

Scheme (also a defined benefit scheme) for serving clergy in the diocese. Costs are assessed in accordance

with actuarial advice and based on the most recent actuarial valuation of the scheme. Pension costs and

disclosures have been reported in accordance with FRS17.

Tangible fixed assets

Office equipment is stated at cost less accumulated depreciation.

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 directors 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 FRS5 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.



25

Fixed asset investments

Listed investments are stated at open market value at the balance sheet date. 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 directors’ 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.

Stock and WIP

Work in progress is valued at the lower of costs and nett realisable value. Cost includes all direct expenditure

and an appropriate proportion of fixed and variable overheads.

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:

• Endowment funds represent money that must be permanently held as capital, and may not be spent

as income. Expendable endowment may, however, be spent as income under certain circumstances.

• Restricted funds may only be used for the purposes for which the money was originally gifted or

bequeathed to the Board, or as expressed in the trusts under which the funds are held.

• Unrestricted funds are monies available for use at the discretion of the Board. The General Fund is

for the day to day running of the Board, and is funded by the parish share. However, certain

funds have been earmarked for particular purposes, and these are termed designated funds.

Such funds are kept separate for administrative purposes but do not constitute legally separate funds.

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.

26

Financial Information

FINANCIAL INFORMATION

FINANCIAL INFORMATION FINANCIAL INFORMATION

27 28

18

Consolidated statement of financial activities for the year ended 31 December 2011

Not

es Gen

eral

fu

nd

Des

igna

ted

fund

s

Res

tric

ted

fund

s

Endo

wm

ent

fu

nds

Total 2011

Total 2010

Incoming resources £’000 £’000 £’000 £’000 £’000 £’000

Voluntary income: parish share contributions 1 5,553 - - - 5,553 5,402 church commissioners 2 26 - - - 26 65 grants, donations & legacies 3 243 350 54 - 647 652 parish giving scheme 3a - - 796 - 796 - Activities for generating funds 4 2,103 123 - - 2,226 1,158 Investment income: interest & dividends 5 687 39 55 - 781 827 glebe rents - - 70 - 70 46 Income from charitable activities: fees, chaplaincy & other income 451 - - - 451 384 Other incoming resources: gain on disposal of fixed assets - - - 229 229 1,617 other 59 42 10 - 111 91

Total incoming resources 9,122 554 985 229 10,890 10,242

Outgoing resources

Activities for generating funds 4 1,650 41 - - 1,691 890 Charitable activities: provision of clergy 6 6,750 173 209 - 7,132 6,863 management of synodical funds 63 18 140 - 221 148 provision of support services 7 997 840 87 - 1,924 2,090 parish giving scheme grants 3a - - 796 - 796 - Governance costs 8 149 - - - 149 110 Exceptional item: pensions 22 116 11 - - 127 -

Total outgoing resources 9,725 1,083 1,232 - 12,040 10,101

Nett (outgoing) incoming resources (603) (529) (247) 229 (1,150) 141

Transfers between funds 18 (239) 239 - - - -

Nett (outgoing) incoming resources before gains (842) (290) (247) 229 (1,150) 141

Gains/(losses) on investment assets 14 34 (19) (67) (916) (968) 1,060 Realised gains (glebe disposal) 14 - - 315 315 183

Nett movement in funds (808) (309) (314) (372) (1,803) 1,201 Funds brought forward at 1 Jan 11 2,994 12,467 1,188 53,755 70,404 69,203

Funds carried forward at 31 Dec 11 17 2,186 12,158 874 53,383 68,601 70,404

19

Consolidated summary income & expenditure account for the year ended 31 December 2011

2011 2010

£’000 £’000

Gross income 10,661 8,625

Total expenditure (12,040) (10,101)

Nett expenditure for the year (1,379) (1,476)

Net realised gains on disposal of fixed assets 544 1,933

Nett surplus/(deficit) for the year (835) 457

All of the profits and losses shown above arise from continuing operations.

The summary income and expenditure account is derived from the statement of financial activities shown on page 27. Gross income represents total incoming resources of £10,890k less the gain on disposal of tangible fixed assets of £229k. The statement of financial activities, together with the accompanying notes provides full information on the movement of the Board’s funds in the year.

Full historical cost information is not available for glebe and certain benefice houses.

Consolidated statement of total recognised gains & losses for the year ended 31 December 2011

2011 2010

£’000 £’000

Nett surplus/(deficit) for the year (835) 457

Unrealised gains on revaluation of investment assets (968) 744

Total recognised gains/(losses) for the year (1,803) 1,201


29 30

20

Gloucester Diocesan Board of Finance Reg No. 162165

Consolidated balance sheet as at 31 December 2011

Not

es 2011 2010

£’000 £’000

Tangible assets 13 46,475 44,369

Investments 14 19,205 21,388

Fixed Assets 65,680 65,757

Stock and work in progress 498 660

Debtors: amounts falling due after one year 15 234 21

Debtors: amounts falling due within one year 15 1,233 2,226

Cash at bank and in hand 1,964 3,058

Current Assets 3,929 5,965

Creditors: amounts falling due within one year 16 (471) (781)

Nett Current Assets (Current assets less creditors <1 year) 3,458 5,184

Total Assets less current liabilities (Fixed Assets plus NCA) 69,138 70,941

Creditors: amounts falling due after one year 16 (537) (537)

Nett Assets 68,601 70,404

Endowment funds 17,20 53,383 53,755

Restricted funds 17,19 874 1,188

Designated funds (unrestricted) 17,18 12,158 12,467

General fund (unrestricted) 17 2,186 2,994

Reserves 68,601 70,404

Approved by the Board of Directors on 25 May 2012 and signed on its behalf by

the Rev’d John Wright, Chairman

21

Parent company balance sheet as at 31 December 2011

Not

es 2011 2010

£’000 £’000

Tangible assets 13 46,475 44,369

Investments 14 19,205 21,388

Fixed Assets 65,680 65,757

Debtors: amounts falling due after one year 15 234 421

Debtors: amounts falling due within one year 15 1,860 2,601

Cash at bank and in hand 1,612 2,702

Current Assets 3,706 5,724

Creditors: amounts falling due within one year 16 (416) (552)

Nett Current Assets (Current assets less creditors <1 year) 3,290 5,172

Total Assets less current liabilities (Fixed Assets plus NCA) 68,970 70,929

Creditors: amounts falling due after one year 16 (537) (537)

Nett Assets 68,433 70,392

Endowment funds 17,20 53,383 53,755

Restricted funds 17 913 1,188

Designated funds (unrestricted) 17,18 12,492 12,467

General fund (unrestricted) 1,645 2,982

Reserves 68,433 70,392

Approved by the Board of Directors on 25 May 2012 and signed on its behalf by

the Rev’d John Wright, Chairman


31 32 22

Consolidated cash flow statement for the year ended 31 December 2011

Not

es 2011 2010

£’000 £’000

Parish Share SoFA 5,553 5,402

Other nett cash outflows 21 (7,034) (8,321)

Operating activities 21 (1,481) (2,919)

Dividends received 5 577 770

Interest received 5 204 57

Interest paid 10 (21) (36)

Return on investment and servicing finance 760 791

Purchase of tangible fixed assets 13 (2,132) (1,975)

Sale of tangible fixed assets 13/SoFA 229 3,635

Transfer of fixed asset to current assets 13 - 250

Purchase of fixed asset investments 14 (3,435) (4,000)

Sale of fixed asset investments 14 4,965 4,000

Investing activities (373) 1,910

Decrease in cash in the year (1,094) (218)

2011 2010

Reconciliation of nett cash flow to movement in nett funds: £’000 £’000

Cash at Bank Bal Sh 3,058 1,276

Deposits included in Fixed Asset Investments 14 - 2,000

Funds as at 1 January 2011 3,058 3,276

Cash at Bank Bal Sh 1,964 3,058

Funds as at 31 December 2011 1,964 3,058

Decrease in cash in the year (1,094) (218)

23

Notes to the consolidated accounts for the year ended 31 December 2011

Note 1 Parish Share

Com

mitt

ed in

20

11 (m

emo)

Rece

ived

in 2

011

re

201

1

Rece

ived

in 2

011

re

prio

r ye

ars

2011 2010

£’000 £’000 £’000 £’000 £’000

Gloucester City 474 450 7 457 467

Severn Vale 497 495 10 505 481

Forest South 397 365 25 390 385

Wotton 600 591 2 593 606

Stroud 751 711 7 718 732

Cheltenham 988 983 37 1,020 934

North Cotswold Deanery 662 648 61 709 661

Cirencester (Includes Fairford deanery for 2010 and part year 2011)

689 675 16 691 684

Tewkesbury & Winchcombe 465 470 - 470 452

Parish Share contributions 5,523 5,388 165 5,553 5,402

Note 2 Income from the Church Commissioners 2011 2010

£’000 £’000

Temporary pension support and Mission & Ministry grant - 40

Grant re Bishop’s share of registrar’s retainer 26 25

Church Commissioner grants rec’d 26 65

Note 3 Grants, donations & legacies 2011 2010

£’000 £’000

Ecclesiastical Insurance Group grant 101 100

Voluntary Schools Fund grants 274 260

Landfill Tax Credit Scheme grants 33 83

Other grants 182 206

Donations 57 3

Grants, donations & legacies 647 652


33


34 24


Note 3a Parish Giving Scheme The Parish Giving Scheme enables individuals to make a donation to the Gloucester DBF restricted to a specific parish. Gloucester DBF then makes a grant for the full donation plus any relevant gift aid to the parish to which the gift is restricted. This is carried out on a monthly basis. In 2011 grants were made to a total of 75 parishes totalling £796k funded by donations of £640k and related gift aid of £156k. This activity is in support of the general objectives of the DBF and therefore the costs of operating the scheme are borne from general funds.

Note 4 Activities for generating funds

Inco

me

2011

Expe

nditu

re

2011

Nett Profit

2011 Inco

me

2010

Expe

nditu

re

2010

Nett Profit

2010

£’000 £’000 £’000 £’000 £’000 £’000

Rental of vacant housing 183 - 183 171 - 171

Other rents 67 - 67 44 - 44

Property Development: G&FS 1,918 1,650 268 867 842 25

Educational services: Jpg. Fish 58 41 17 76 48 28

Total 2,226 1,691 535 1,158 890 268

Note 5 Interest & dividends 2011 2010

£’000 £’000

Income from fixed asset investments 652 770

Other interest receivable and similar income 129 57

Interest & dividends 781 827

25


Note 7 Provision of support services

Direct costs

Over-heads 2011 2010

£’000 £’000 £’000 £’000

Parish Resources Department 5 - 5 7

Churches Buildings 122 44 166 170

Pastoral Committee 93 - 93 99

Social Responsibility 196 35 231 231

Education (designated) 427 205 632 620

Children and Young People (general) 77 - 77 92

Youth Strategies (fixed term designated) 79 - 79 50

Communications 110 36 146 127

Giving 81 - 81 66

Grants made payable (see below) 131 - 131 335

Grant to Archbishops’ Council 235 - 235 239

Diocesan Office* - 48 48 54

Provision of support services 1,556 368 1,924 2,090

* The administrative departments of the DBF undertake work on behalf of related organisations, such as the Diocesan Trust and Voluntary Schools Fund. Whilst this is in certain respects a “direct cost” of providing Services to other councils it is presented as an overhead to better reflect the nature of the cost.

Note 6 Provision of clergy

2011 2010

£’000 £’000

National Church responsibilities:

Training of ordinands 246 238

Pooling of ordinand support costs (88) (104)

Mission agencies pension contributions 16 17

Diocesan responsibilities:

Stipends 4,193 4,269

Housing 1,823 1,570

Selection of ordinands 159 182

Diocesan training and support 492 461

Other costs 291 230

Provision of clergy 7,132 6,863


35


26


Note 7 continued Provision of services: Grants made 2011

Detail of grants over £1,000: number £’000 purpose

The Rock 2 44 DV

Tirely 1 25 LT

Psalms 1 14 DV

Gloucester Historic Churches Trust 1 13 CR

WEMTC 1 13 T of O

Viney Hill Christian Adventure Centre 1 6 DV

Newnham 1 4 LT

Wyck Rissington 1 4 LT

Western Tanganyika 1 4 DV

Weston on Avon 1 2 CR

The Big Society 1 2 DV

Grants made in the year 12 131

2010 2011 2011 2010

Summary of grants made: number number £’000 £’000

Church repairs (CR) 3 2 17 13

Landfill Tax Credit Scheme* (LT) 12 3 33 83

Training of Ordinands (TofO) - 1 13 -

Development Grants (DV) 12 6 68 239

Grants made in the year 27 12 131 335

* Grants made under the Landfill Tax Credit Scheme are funded entirely by matching grants received from the Gloucestershire Environmental Trust. The grants received are shown as donations in the incoming resources section of the Statement of Financial Activities.

^One off grant to WEMTC to assist training provision.

36 27


Note 8 Governance costs 2011 2010

£’000 £’000

Diocesan Office 31 34

Synod expenses 14 16

Auditor’s remuneration 16 13

Legal and professional costs 88 47

Governance costs 149 110

Note 9 Items of expenditure required to be disclosed 2011 2010

Net outgoing/incoming resources are stated after charging: £’000 £’000

Income from fixed asset investments 63 44

Other interest receivable and similar income 8 2

Operating leases: Land and buildings 35 45

Operating leases: Other 10 8

Note 10 Interest on long term loans 2011 2010

£’000 £’000

Interest on loans wholly or partly repayable beyond 5 years 21 36

All interest relates to value linked loans, being equity share loans made to the DBF by the Church Commissioners in respect of Parsonage Housing (note 6).

FINANCIAL INFORMATIONFINANCIAL INFORMATION

37 28

Notes to the consolidated accounts for the year ended 31 December 2011 Note 11 Employees and office holders

2011 2010

Costs of employees and officer holders £’000 £’000

salaries and stipends 1,413 1,318

social security costs 120 105

other pension costs 379 353

Employees, incl. clergy in DBF employment: 1,912 1,776

stipends 2,743 2,789

social security costs 235 170

other pension costs 980 1,144

Parochial clergy funded by the DBF: 3,958 4,103

2011 2010

Number of employees and officer holders number number

Full time 34 32

Part time 28 28

Employees, incl. clergy in DBF employment: 62 60

Parochial clergy funded by the DBF: 131 131

Employees earning between £60,001 and £70,000 1 1

Certain directors 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. These benefits are disclosed as related party transactions in note 24 below.

38 29


Note 12 Pensions

The Gloucester DBF participates in the Church of England Funded Pensions Scheme and employs 131 members of the Scheme out of a total membership of approximately 9,000 active members.

The Church of England Funded Pensions Scheme is a defined benefit scheme but the Gloucester DBF is unable to identify its share of the underlying assets & liabilities – each employer in that scheme pays a common contribution rate.

A valuation of the Scheme was carried out as at 31 December 2009. This revealed a shortfall of £262m, with assets of £605m and a funding target of £867m, assessed using the following assumptions:

• An investment strategy: For investments backing liabilities for pensions in payment, an allocation to gilts, increasing linearly from nil at 31 December 2009 to 2/3 by 31 December 2029, with the balance in return-seeking assets. For investments backing liabilities prior to retirement an alternative strategy of 100% allocation to return-seeking assets.

• Investment return: 4.4% p.a. on gilts and 5.9% p.a. on equities;

• RPI inflation of 3.8% p.a. (and pension increases consistent with this);

• Increase in pensionable stipends: 3.8% p.a.

• Post-retirement mortality in accordance with 80% of the S1NA tables, with allowance for future improvements according to the “medium cohort” projections, and subject to a minimum annual improvement in mortality rates of 1.5% for males and 1.0% for females.

For schemes such as the Church of England Funded Pensions Scheme, paragraph 9(b) of FRS 17 requires the Gloucester DBF to account for pension costs on the basis of contributions actually payable to the Scheme in the year.

Following the valuation of the Scheme as at 31 December 2009, and some agreed changes to benefits, the contribution rate for Gloucester DBF has been set at 38.2% with effect from 1 January 2011.

The next valuation of the Scheme will be due as at 31 December 2012.

FINANCIAL INFORMATIONFINANCIAL INFORMATION

39 30


Note 13 Tangible Fixed Assets

Freehold Property

Office Equip’t Total

Cost or valuation: £’000 £’000 £’000

At 1 January 2011 44,318 337 44,655

Additions 2,128 4 2,132

Disposals - - -

Transfers - - -

At 31 December 2011 46,446 341 46,787

Depreciation:

At 1 January 2011 - 286 286

Additions - 26 26

Disposals - - -

At 31 December 2011 - 312 312

Nett book value:

At 1 January 2011 44,318 51 44,369

At 31 December 2011 46,446 29 46,475

Tangible Fixed Assets are the same for both the parent company and the consolidated group. On consolidation there is a gain on a house built by G&FS of £183k. The open market value of this house is considered by the directors (under professional advice) to be at or in excess of the carrying value.

Freehold properties include Glenfall House, the diocesan retreat and conference centre, at valuation. See note 18 for details.

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.

40 31


Note 14 Fixed Asset Investments Properties Investm’ts Cash

Total 2011

Total 2010

£’000 £’000 £’000 £’000 £’000

Market value at 1 Jan 2010 3,384 18,004 - 21,388 22,328

Additions 351 3,084 - 3,435 4,000

Disposals - (4,650) - (4,650) (6,000)

Gains/(losses) - (968) - (968) 1,060

Market Val at 31 Dec 2011 3,735 15,470 - 19,205 21,388

Historic cost at 31 Dec 2011 - 14,659 - 14,659 14,550

Gains on investment assets

Unrealised gains (as above) - (968) - (968) 1,060

Gains realised on disposal 315 - - 315 -

Total investment gains 315 (968) - 653 1,060

The Investments of the parent company are £1,100 greater than that of the consolidated group, both cost and market value, being 100% holdings in Good and Faithful Servant Ltd and Jumping Fish Ltd.

Both investments are in ordinary share capital and both companies are registered in England and Wales. As at 31 December 2011 the nett assets of Jumping Fish were £1,000 and G&FS had nett liabilities of £100,000 caused by tax treatment, which is under review. A summary income and expenditure for the year for each is included in Note 4.

Of the investment portfolio £4,873,000 is managed by Rathbones in listed investments. Of these investments £2,808,000 are UK investments and £2,065,000 are overseas investments. No one investment is deemed material to the GDBF.

All other fixed asset investments are unlisted investments, and primarily represent holdings in Central Board of Finance managed funds.

No historical cost is quoted for investment properties as these represent historic glebe assets brought on to the balance sheet in 1994 at valuation.


41 32


Note 15a Consolidated group debtors

Due within one year Due after one year

2011 2010 2011 2010

£’000 £’000 £’000 £’000

Prepayments and sundry debtors 1,165 1,482 - -

Amounts recoverable on contracts - 367 - -

Staff car loans 3 4 4 7

Loans to parishes 34 295 230 14

Due from the Church Commissioners 31 78 - -

Debtors 1,233 2,226 234 21

Included in debtors is an amount of £256k (2010 - £313k) due from related charities. These charities are administered by staff of the Board, but the trustees are separate from the directors of the Board.

Note 15b Parent company debtors


2011 2010 2011 2010

£’000 £’000 £’000 £’000

Prepayments and sundry debtors 1,162 1,472 - -

Staff car loans 3 4 4 7

Loans to parishes 34 295 230 14

Good & Faithful Servant Ltd 613 721 - 400

Jumping Fish Ltd 17 31 - -

Due from the Church Commissioners 31 78 - -

Debtors 1,860 2,601 234 421

Included in debtors is an amount of £256k (2010 - £313k) due from related charities. These charities are administered by staff of the Board, but the trustees are separate from the directors of the Board.


42

33


Note 16a Consolidated group creditors


2011 2010 2011 2010

£’000 £’000 £’000 £’000

Accruals and sundry creditors 411 523 - -

Amounts owing on long term contracts - 87 - -

Deferred income on contracts - 110 - -

Loans 60 60 - -

Value Linked Loans (Church Commissioners) - - 537 537

Grants payable - 1 - -

Creditors 471 781 537 537

Included in 'Accruals and sundry creditors' is a total of £52,000 (2010 - £52,000) due to related charities which are administered by staff of the Board and whose trustees are also 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.

Note 16b Parent company creditors


2011 2010 2011 2010

£’000 £’000 £’000 £’000

Accruals and sundry creditors 356 491 - -

Loans 60 60 - -

Value Linked Loans (Church Commissioners) - - 537 537

Grants payable - 1 - -

Creditors 416 552 537 537

Included in 'Accruals and sundry creditors' is a total of £52,000 (2010 - £52,000) due to related charities which are administered by staff of the Board and whose trustees are also 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.


43 34


Note 17 Analysis of nett assets by fund: Summary

Gen

eral

Fu

nds

Des

igna

ted

Fu

nds

Rest

ricte

d

Fund

s

Endo

wm

ent

Fund

s

Total

Funds at 31 Dec 2011 are represented by: £’000 £’000 £’000 £’000 £’000

Tangible fixed assets 23 11,709 - 34,743 46,475

Fixed asset investments - 1,005 1,224 16,976 19,205

Current assets 2,324 788 505 312 3,929

Creditors (454) (537) (17) - (1,008)

Inter-fund indebtedness 293 (807) (838) 1,352 -

Total Funds at 31 Dec 2011 2,186 12,158 874 53,383 68,601

Funds include the following unrealised gains on investments:

Unrealised gains at 1 Jan 2011 1,416 79 269 3,022 4,786

Nett gains on revaluation in the year 34 (19) (67) (916) (968)

Unrealised gains at 31 Dec 2011 1,450 60 202 2,106 3,818

Inter-fund indebtedness arises as a result of transactions relating to certain funds being effected through the General Fund. Such indebtedness is settled periodically, usually by cash transfer.


44 35


Note 17 (continued) Analysis of nett assets by fund Detail

Tang

ible

Fi

xed

Asse

ts

Fixe

d As

set

Inve

stm

ents

Curr

ent

Asse

ts

Cred

itors

Inte

r-fun

d In

debt

edne

ss

Total

£’000 £’000 £’000 £’000 £’000 £’000

General Fund 23 - 2,324 (454) 293 2,186

Development 5 1,005 788 - (697) 1,101

Albright general 1,200 - - - - 1,200

Houses capital 10,333 - - (537) (911) 8,885

Curates’ Housing Fund - - - - 802 802

Education 1 - - - (1) -

Viney Hill 170 - - - - 170

Designated Funds 11,709 1,005 788 (537) (807) 12,158

Housing for elderly clergy - 28 34 - 43 105

Ordination training - 124 - - 32 156

Diocesan Pastoral Fund - 813 415 - (680) 548

Stratton Davis - 226 18 - (9) 235

Other restricted funds - 33 38 (17) (224) (170)

Restricted Funds - 1,224 505 (17) (838) 874

Pensions & assistance 17 88 - - - 105

Benefice Property 33,439 - - - (1,485) 31,954

Diocesan Stipends Fund - 13,422 - - 2,799 16,221

Glebe Property 1,287 3,466 312 - 38 5,103

Endowment Funds 34,743 16,796 312 - 1,352 53,383

Total Funds at 31 Dec 2011 46,475 19,205 3,929 (1,008) - 68,601


45 36


Note 18 Designated funds

Bala

nce

at

31 Ja

n 20

11

Inco

min

g

Reso

urce

s

Reso

urce

s Ex

pend

ed

Net

t ga

ins/

(loss

es)

on a

sset

s

Tran

sfer

s

Bal

ance

at

31 D

ec 1

1

£’000 £’000 £’000 £’000 £’000 £’000

Development Fund 1,347 32 (259) (19) - 1,101

Albright Bequest 1,200 - - - - 1,200

Houses Capital 8,885 - - - - 8,885

Curates’ Housing Fund 865 77 (140) - - 802

Education - 445 (684) - 239 -

Viney Hill development 170 - - - - 170

Total Funds at 31 Dec 2011 12,467 554 (1,083) (19) 239 12,158

Unrestricted funds are monies available for use at the discretion of the Board. The General Fund is for the day to day running of the Board, and is funded by the parish share. However, certain funds have been earmarked for particular purposes, and these are termed designated funds. Such funds are kept separate for administrative purposes but do not constitute legally separate funds.

The Development Fund has been designated to make a fund available to finance mission initiatives approved by Bishop’s Council.

The Albright Bequest represents monies bequeathed by Miss Albright. From this bequest two loans were made to Glenfall House Trust (GHT) secured on the freehold of Glenfall House which is owned by the GHT. The directors are of the opinion that the terms of these loans are such that the ultimate benefits and liabilities of ownership of Glenfall House remains with the Board with a right to use the house granted to the GHT. Glenfall House has therefore been recognised as an asset of the Board of Finance in accordance with FRS5. It is included in the balance sheet at £1.2m based on a valuation carried out in 2000 by a qualified chartered surveyor.

The Houses Capital Fund represents the cost, less outstanding loans, of houses owned by the Board to provide accommodation for assistant curates and team vicars.

The Curate’s Housing Fund was established in 2009 using proceeds from the sale of curate’s housing to fund housing allowances for curates to enable them to purchase their own house and thereby make better provision for their retirement.

The Education Fund brings together the Education work undertaken by GDBF in one column with income specific to that activity, primarily from the Voluntary Schools Fund and St Matthias Trust. The transfer to the General Fund at the year end is the portion of this work funded by the general fund, and by extension Parish Share.

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


46 37


Note 19 Restricted funds

Bala

nce

at

31 Ja

n 20

11

Inco

min

g

Reso

urce

s

Reso

urce

s Ex

pend

ed

Net

t ga

ins/

(loss

es)

on a

sset

s

Tran

sfer

s

Bal

ance

at

31 D

ec 1

1

£’000 £’000 £’000 £’000 £’000 £’000

Housing for elderly clergy 110 4 (10) 1 - 105

Ordination training 162 - - (6) - 156

Diocesan pastoral fund 764 68 (234) (50) - 548

Stratton Davis fund 249 12 (15) (11) - 235

Parish Giving Scheme - 796 (796) - - -

Other (97) 105 (177) (1) - (170)

Total Funds at 31 Dec 2011 1,188 985 (1,232) (67) - 874

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. Periodically, excess funds are allocated to designated funds.

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.


47 38


Note 20 Endowment funds

Bala

nce

at

31 Ja

n 20

11

Inco

min

g

Reso

urce

s

Reso

urce

s Ex

pend

ed

Net

t ga

ins/

(loss

es)

on a

sset

s

Tran

sfer

s

Bal

ance

at

31 D

ec 1

1

£’000 £’000 £’000 £’000 £’000 £’000

Pensions & assistance 106 - - (1) - 105

Benefice property 31,934 229 - - (229) 31,954

Diocesan stipends fund 16,907 - - (915) 229 16,221

Glebe property 4,788 - - 315 - 5,103

Total Funds at 31 Dec 2011 53,755 229 - (601) - 53,383

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 under FRS5 – see Accounting Policy f on page 13 for details. 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 is mainly invested in CBF managed funds. Income generated from the Fund must be used to fund stipends. The Fund is expendable under certain circumstances.

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.


48 39


Note 21 Statement of consolidated cash flow: 2011 2010

£’000 £’000

Nett incoming/(outgoing) resources for the year (1,150) 141

Depreciation 26 33

Decrease in stock 162 137

Decrease/(Increase) in debtors and prepayments 780 (1,080)

(Decrease)/Increase in creditors and accruals (310) 258

Investment income and interest paid (760) (791)

Surplus on disposal of tangible fixed assets (229) (1,617)

Cash outflow from operating activities (1,481) (2,919)

Note 23 Financial Commitments: Operating Leases 2011 2010

Annual commitments in respect of operating leases £’000 £’000

which expire within one year 1 3

which expire between two and five years 9 5

Operating leases; equipment 10 8

which expire within one year 1 -

which expire between two and five years 9 11

Which expire after five years 25 34

Operating leases; property 35 45

Note 22 Exceptional item

Pensions liability

The Board resolved its treatment of the 2008 actuarial valuation of its lay staff pension scheme in the year. In this regard a charge was made for retrospective pension service higher than previous estimated. Given the size of this adjustment and its relative distortion on the ongoing comparison of financial performance the Board has disclosed the item as an exceptional item.

49 40


Note 24 Related Party Transactions

Management Charges

During the year, GDBF made a management charge of £7,188 (2010 - £7,047) to the Charity of Ann Edwards, a registered charity of which the Board is sole corporate trustee. The charge is in respect of costs incurred by the Board in providing administration services to the charity. The Board is entitled to recover these costs under the provisions of the governing instrument of the charity.

Payments to Trustee Directors

Certain directors are also holders of ecclesiastical office and receive a stipend, pension and accommodation to enable them to meet the duties of their office and not their duties as trustees. Stipends payable were in the range £22,970 to £32,454 for 2011. Pension contributions are as for the Church of England Funded Pension Scheme outlined in note 12. The number of directors receiving these stipends and benefits was 9 (2010 -13). In addition two directors received reimbursement of expenses in connection with their ecclesiastical office.

Directors’ expenses for 2011 and 2010 were less than £1,000.

Note 25 Lay Pension Scheme

GDBF participates in the Church of England Defined Benefits Scheme (DBS), part of the Churchworkers Pension Fund.

GDBF is unable to identify its share of the underlying assets and liabilities as each employer is exposed to actuarial risks associated with the current and former employees of other entities participating in the DBS. A valuation of the fund is being carried out as at 31 December 2010 and the contribution rate was revised from 1 April 2012 to 31.2%.

As at 31 December 2011 GDBF had 42 active and 20 deferred members in the fund.

During the year GDBF agreed amendments to the scheme and finalised payments to the Church of England Pensions Board (CEPB) in regard of accrued contributions. To the extent to which these relate to prior years the Board has disclosed the payments as exceptional to ensure greater consistency of comparison of expenditure.


Documents

APPROACH TO FOOD STRUCTURE AND FUNCTIONALITY