Common Fund

Common Fund 2023: Update 2022  

Common Fund is  a contribution from every church in the Church of England Birmingham towards the costs of ministry and mission across the region.  Common Fund is not a payment for services, but a sharing of life together that the Gospel might be proclaimed everywhere, through the shared funding of Ministry. It continues to be a parish voluntary contribution, but it is what supports and funds our ability to deliver our wider mission.   

Life since March 2020 has been a roller-coaster for us all; as individuals, families and parishes.  We initially thought that the closure of our church buildings at the start of the pandemic would only be for a short time and that we would be able to weather the storm.  We could not foresee that 2021 would be more of the same and that circumstances would still not have returned to anything like “normal” until spring 2022. 

The financial fall-out from these challenging times has seen parishes hard hit – reserves have been spent on keeping going as our congregations have struggled to maintain levels of giving.  The sun may have shone on us all over the summer of 2022, but we now face further challenges with a cost-of-living crisis, the like we have not seen since the 1970’s.   

Throughout all of this, the Diocesan Board of Finance, just like every parish, has sought to maintain as steady a ship as possible in these difficult times.  It has not been easy when more than 60% of our unrestricted expenditure is spent on maintaining our parish clergy, and more than half of our unrestricted income comes from our parishes. 

Until 2019, the DBF had managed to deliver against a balanced budget year-on-year.  Since then we have been covering our expected deficits through a range of measures across all areas, gratefully assisted by some one-off unexpected income (including a very generous legacy).  Our much better than expected performance has however been substantially due to the amazingly resilient performance in terms of Common Fund. 

We were grateful for a £1m Sustainability Funding contribution from the Archbishops’ Council in 2020 and a further £500,000 awarded late in 2022, that enabled us to cover our 2020, 2021 and 2022 deficits.  However, we are not expecting any further or new sustainability funding for 2023 onwards.   

Since 2020, we have been prepared to use our available reserves to bridge our budget deficits – although Sustainability funding has meant that this has not been necessary up until now.  2023 is expected to be different and our 2023 budget currently indicates a deficit of around £796,000.  This is partly because we are projecting common fund performance to remain slightly below current levels and partly because in response to the cost-of -living crisis, we need to support clergy and staff more in 2023.  

We plan to use around £1m of our designated Strategic Investment Fund to balance the books in 2023.  The Strategic Investment Fund was designed to ensure that we could maintain strong levels of ministry and mission through the roll out of People & Places across the CofE Birmingham.  If we use these funds to maintain “business as usual”, it will impact our ability to achieve real transformation and the reimagining of mission and ministry that we are working for. On a positive note, our ongoing asset disposal programme has meant that  the Strategic Investment Fund is now at the original anticipated level despite the challenges of the last few years.  

To provide some further context, the table below shows common fund income (budget, commitments and actual received) since 2019 as well as our latest projected budget for 2023: 

The table also shows that our 2022 Common Fund performance was behind budget and commitments.  We have seen an increasing level of strain on collection as the year progressed and it was not possible to offset this shortfall by savings in costs, and, it only because of the late award of the additional £500,000 of Sustainability Grant that we were able to cover our 2022 operating deficit.   

When we set the 2022 budget, we were expecting to see a slow process of re-building Common Fund income back to pre-pandemic levels (around £6m p.a.).  We understood that maintaining the levels of generosity seen in 2020 and 2021 would be a very steep mountain to climb as there has been a great deal of damage done to parish finances, which will take a long time to repair.  This slow but steady improvement in parish finances has not fully materialised and our 2023 budget assumes that there will also be a further delay as we face the cost-of-living crisis.  

We have started to reflect on what a future Common Fund methodology post pandemic and cost-of-living crisis could look like.  Rebuilding in a post-pandemic landscape, with hope found in new mission opportunities and continuing our ministry to all souls across our region, the common fund methodology written at the outset of the People & Places programme is no longer reflective of the emerging picture of deanery ministry. With Oversight Areas now beginning to form, the original proposed context ministry model in particular needs to be reviewed and revised to fit this new reality. There will be more to come on this in 2023, but we all know that in the long-term, we must aim for a more just allocation of resources across the diocese to deliver a more sustainable financial future for the Church of England in Birmingham.  

In late 2020, we committed to a transitional Common Fund methodology to see us through 2021 and 2022 and earlier this year, we committed to continuing with the same approach for 2023. Once again, we really need to ask each PCC to discern how generous they can be in continuing to at least meet the basic costs of the ministry that they will receive over 2023. 

We will again set the same maximum and minimum Ask in 2023 using the 2020 Ask that was agreed with each parish.  Where there have been changes to the agreed ministry in a parish since last year (for example moving from a full-time to a part-time minister), we will adjust the 2023 Ask to reflect this.  The minimum 2023 Ask will then be 75% of this figure.  We will not increase these maximum and minimum figures by inflation (although there have of course been increases in the stipend and other costs). Gifts will remain at the discretion of parishes as they always have been, unless they reflect a previous agreement (such as funding an Associate Minister in the parish).