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I am glad to be given the chance to talk about the work of the Church Commissioners. What we are today is a fund of £4.3 bn – it was over £5 bn before the credit crunch began. It may legally be the Church Commissioners’ money, but I prefer to think of it as the Church’s money, your money, our money. It is indeed a very large amount. It is money in trust. The Church Commissioners are trustees. I sometimes tell myself, of sums of money that have far greater value than the face value of the securities and property deeds that we hold. If you could trace back the lineage of every pound, you would probably find that some of it was originally given to the Church in Anglo Saxon times. When I visit the Commissioners farms, I am conscious that I may be standing on land that has been in the Church’s possession for many centuries.
I want to start by telling you how the Church Commissioners have come to be what they are today. For institutions do have distinct personalities, each different, largely formed by their histories. It often turns out that the early years are the most significant. In the case of the Church Commissioners, as with so many other parts of the Church of England, the story starts with Henry VIII and the Reformation. And it has a Sherlock Holmes element to it - the ‘dog that did not bark in the night’.
Henry VIII’s dissolution of the monasteries in 1536 is a famous event in English history. But the key point of it for my story is that that the King stopped there. He might have gone further for he had had surveyed the entire wealth of the Church. In the end, however, Henry contented himself with seizing the lands of the monasteries alone. The ‘dog that didn’t bark in the night’ is that the King didn’t touch bishops’ estates and left intact the wealth of the cathedrals, such as York, Lincoln, Salisbury, Exeter, Chichester, Lichfield, Wells, Hereford and St Pauls in London.
Which in due course passed to the Church Commissioners. Glance across the English Channel and see how differently things turned out on the Continent. The Roman Catholic Churches kept their wealth intact for a further 250 years. Then immediately following the French Revolution, the Church was stripped of virtually all its wealth, not only in France but in neighbouring countries, too.
There is a second reason for starting with Henry VIII. Before the break with Rome, the English Church in common with other national churches had paid regular sums of money to the Pope, Peter’s pence as it was sometimes described. Henry continued to collect the tax but decided to keep the revenue for his own purposes, as did his immediate successors. Until finally Queen Anne was persuaded in 1704 to use the funds to establish what was called Queen Anne’s Bounty for the augmentation of the incomes of the poorer clergy.
Queen Anne’s Bounty is one of the two predecessor institutions of the Church Commissioners. So here we have what is essentially a measure to equalize the wealth and income of the Church. For the Exchequer continued to collect Peter’s pence in the form of ‘first fruits” and ‘tenths’ – the whole of the first year’s rents from the Church’s landed property and a tenth of the revenue thereafter. But from 1704 onwards these funds were turned back into the Church and directed towards the poorer clergy.
Now we must go forward 130 years to the mid 1830s. England was well into the industrial revolution. Vast shifts in population had taken place. Cities like Liverpool, Manchester and Birmingham had grown so fast that much of the population was effectively unchurched. In Liverpool, for instance, by the 1840s there was only St Nicolas overlooking the Mersey serving a fast growing city that now stretched well out of sight of the river. Robert Peel gave notice of his intentions when he became prime minister: “if by an improved distribution of the revenues of the Church, its just influence can be extended, and the true interests of the Established religion promoted, all other considerations should be made subordinate’. He was actually announcing, though he didn’t say so in terms, the expropriation of the bishops’ wealth
As a result the Ecclesiastical Commissioners were set up by Parliament in 1836. This is the other parent body of the Church Commissioners. The Commissioners’ duties were to reorganize dioceses, abolish surplus posts in cathedrals and take over both the responsibility for funding bishops and some cathedral costs, and to take into their possession the assets that had supported those responsibilities. In other words it was to finance its work by acquiring the estates of bishops and cathedrals. Here in London, for instance, the Ecclesiastical Commissioners acquired what had originally been the Bishop of London’s fields north of Hyde Park and which are now a very valuable estate, comprising as it does the freehold interest in much of the property to be found in a triangle bounded by the Edgeware Road to the East, Suffolk Gardens to the North West and Bayswater Road to the South, culminating at a point where today stands the Royal Lancaster Hotel.
The Ecclesiastical Commissioners played a major role in financing churches for the new population centres that grew up in the Industrial Revolution and in supporting the stipends of the clergy who worked there. Like Queen Anne’s Bounty, this was a measure to equalize the Church’s wealth. Indeed Peel’s Act, with its instruction to make ‘additional provision for the cure of souls in parishes where such assistance is most required, in such manner as shall be deemed most conducive to the efficiency of the Established Church’ remains to this day the most succinct account of the work of the Church Commissioners.
What I notice in particular about this statement is that it draws our attention to the poorer parts of the Church and that it refers to the efficiency of the established Church. These are still fair tests of what we do today.
Finally in 1948 Queen Anne’s Bounty and the Ecclesiastical Commissioners were merged together to form the Church Commissioners. And now I must jump forward a further 60 years and say something about our work today. And I will, I am afraid, have to use some numbers.
In 2008 the Commissioners paid the pensions of clergy for their years of service up to 1998. Clergy pensions are non-contributory. This cost just over £100 million. Since then a separate scheme for service since 1998, paid for by the dioceses, has been set up. Then the Church Commissioners must also pay the stipends of all bishops, keep up their see houses and meet their office expenses. This is part of the 19th century deal – having taken the bishops’ estates, we must cover their costs. We likewise pay the stipends of deans and two residentiary canons in each cathedral for the same reason. We also acquired their estates.
Then, these sums set aside, we ask our actuaries to tell us what further sums we may distribute each year provided that we maintain the value of the fund in real terms through time. This is a relatively new principle, which we call inter-generational equality.
We will not dip into the funds that rightly belong to future generations of church members however desperate the needs might seem today. In 2008, the actuaries’ answer to our question was just under £45 million. More than half of this went to poorer dioceses; the rest was targeted on specific mission activities throughout the whole Church. And as the Church costs about £1 billion a year to run, you can see that the Church Commissioners contribute about 20% of this total. Almost all the rest comes from what Church members put into the collection plate or its equivalent.
So let us stand back and reflect on how the Commissioners’ funds are used. Believe it or not, there is reluctance within the Church to ask this question very often. So long have these funds been available, so comfortable have people become with the way they are used, so reluctant are Church leaders to see that money is an instrument like any other, which can be used wisely or foolishly even within the Church, that a very thorough questioning rarely takes place.
Let us first look at pensions. The important thing to say is that for the clergy, the pension they will receive in retirement is almost as important as the stipend they receive in service. Living in tied housing, they have not been able to build up any wealth through the residential property market. Unlike the rest of us, when they retire, they have no family home that they can sell and move into something smaller and put the difference into boosting their pension.
I put paying pensions up to 1998 into that section of the 1840 Act that refers to distributions being ‘conducive to the efficiency of the established Church’. Clergy excessively worried about their retirement would not be conducive to the efficiency of the established Church.
I should add by way of parenthesis here that the post 1998 scheme, run by a separate Pensions Board, is currently in a weak position. While the Church Commissioners’ pension liabilities are covered two and a half times by our capital, the new pensions scheme, in common with many others, has developed a deficit that will have to be made good over time.
Going back to the affairs of the Church Commissioners, of what is left after pensions, however, nearly 40% goes to covering the costs of bishops and deans. This is the hierarchy of the Church. I cannot say that Church leaders are excessively paid, far from it. It is extremely hard to find any profligacy in the Church at all. On the other hand while the Church has shrunk, with clergy number declining, there has been no diminution in the number of bishops and deans. The army is smaller but the complement of generals remains the same.
Unfortunately, I would say, there is not much that the Commissioners can do about this. The root cause is an excessive number of dioceses, 44 altogether, each with a bishop, in most cases with at least one suffragan bishop, plus a cathedral, a dean and canons and with, in addition, two sets of headquarters staff, for the diocese needs an office and so does the cathedral. But no diocese is going to offer to put itself out of business and merge itself with a larger neighbour. Local pride would prevent that. Even the most recently created dioceses are now 90 years old and feel themselves an essential part of the fabric of the Church.
So finally we come to the Commissioners’ activities that most resemble the work of Queen Anne’s Bounty and the Ecclesiastical Commissioners – recycling funds from what were once the richest parts of the Church to the poorer. In other words directing funds to places of need without considering opportunity. I would normally be pretty critical of such a distribution policy. The old rule, I think a good one, that one should direct funds to support success and let failure be starved, finds no place in Church thinking.
For which there is a very good reason – and one that speaks to me. To be the established Church, the national Church, the state church if you like seeing that so many of its senior appointments are made in the name of the Crown, carries with it a responsibility.
That is to stand ready serve all the people of England, regardless of whether they are Church members or not, regardless of whether they belong to other Christian faiths, regardless of whether they owe loyalty to non Christian faiths regardless of whether they have any faith at all.
You cannot, however, live up to this promise unless you maintain an extensive presence on the ground. So long as the Church of England claims to have a national vocation, I don’t believe that it should withdraw from, say, areas of the countryside where congregations may amount to only ten to twenty or from, say, city centres such as Leicester where the majority of the population is Muslim. Remember this, too, about the Church. In the most deprived areas of the country, the local vicar may be the only professional person actually residing in the area. All the other trained people who work is such areas, doctors, health visitors, police, social workers and so on, most likely live somewhere else. They are commuters. The vicar stays on his patch, he lives where he works. In the poorer parts of Manchester, for instance, I have visited streets where is vicarage is one of the few houses not boarded up.
It is this necessary and valuable witness that the funds of the Church Commissioners help to make possible.