Diocesan Finances Explained

This summary has been produced to help answer many of the common questions we receive from interested parties around the important matter of Diocesan finance.

It presents much of what is in the audited accounts and explanatory notes, published on the Diocesan website, but in a way designed to be more user-friendly and appropriate to the ‘real-life’ questions we are often asked.

Any figures used when providing examples will be estimates and rounded averages. All precise details around the Diocesan budget should be sought from the published Annual Budget on the Diocesan website.

Clergy Stipends

What are the largest costs to the Diocese?

• The cost of supporting our clergy constitutes the greatest single element of our overall expenditure.
• Direct clergy costs (stipends, national insurance, pensions etc) account for about 65% of all Diocesan costs.
• In addition to this, local parish and clergy costs (which include items such as clergy counselling, safeguarding support and legal support) constitute an additional 22% of the overall budget.

What is a stipend?

• A stipend is a salary for clergy.  It is paid to enable the clergy to exercise their ministry without the need to take another job.
• Clergy can be paid a full-time (FT) stipend, or they can be paid a part-time (PT) stipend.
• Most of the total diocesan costs associated to stipends is funded by the generous giving of congregations through Ministry Share.
• There are also many clergy holding a Bishop’s License that are non-stipendiary (where the clergy do not receive a stipend payment). Many of these clergy will be what are known as Self-Supporting Ministers (SSMs), but there are also other Licensed clergy with paid jobs that for one reason or another won’t be regarded as ‘SSMs’.

Do all stipends pay the same amount?

• No. Stipendiary clergy will receive a stipend appropriate to the full-time/part-time balance of their role.
• Additionally, the Bishop’s Licence they hold will determine the level of their stipend, categorised by the National Clergy Payroll team, who have three basic levels of stipend.
• Clergy receiving a stipend are paid by the National Clergy Payroll team as either a “Archdeacon”, “Incumbent” or “Assistant Curate”. This does not always intuitively align with what their Bishop’s Licence says.
• While the National Church sets recommendations and minimum levels of what a stipend should be, each Diocese has some margin of control over the precise final amount paid. The Diocese of Ely typically pays a level that has been recommended by the church of England.

What types of Clergy stipend posts are there?

• Parochial stipendiary posts: which many will understand as traditional vicars in a parish church.
• Other stipendiary clergy: this could be clergy with either a broader or perhaps a more limited geographical remit, for example those not attached to traditional parochial (parish or benefice) areas.
• Pioneer posts: people deployed in other less traditional church structure environments, perhaps as part of a Bishop’s Mission Order (BMO).

How much does a member of clergy get paid in their stipend?

• This varies between dioceses, who will all differ a little from the National Church recommendation, as well as whether it is a full-time or part-time stipend, and the payroll level at which the clergy person is recorded on the Clergy Payroll System.
• However, broadly speaking a full-time and full-stipend Vicar will receive a stipend of about £27,000 a year (before income tax, which clergy pay like anyone else).

Why is my Parish/Benefice asked to raise so much more than £27,000 for our one Vicar?

• A typical stipend figure of £27,000 only covers the money that goes to a member of clergy (before it is taxed).
• On top of this, money also needs to be found to help house your clergy, pay their pension and pay the national insurance.
• What this means is the actual yearly cost of each full-time, housed, stipendiary clergy is far closer to £75,000 per year. This is often quoted as being £65,000 for the ‘supported cost’, with £80,000 being the true ‘full cost’.
• Averaged across the whole Diocese, to allow for the mix of full-time, part-time and House for Duty clergy, the actual averaged cost of a stipend is about £40,000, which comprises the stipend (£27,000) plus employer’s National insurance (£2,500) and clergy pension contribution (£10,000). In addition to this, there is then the housing costs, which averages at about £11,000 per year and per house that is occupied.

What is the cost breakdown of these stipends for each clergy person receiving them?

• This will vary based on how the clergy person it recorded in the national payroll system, the type of stipend they have and local circumstances to their diocese, but in the Diocese of Ely, the broad figures are given below.
• These figures are based on 2022 costs.

*Please note, often you will see the term ‘Half Stipend’ which is 50% of a “Full Stipend.” However, it should be noted that while not common, clergy can also be paid a particular percentage of a Full Stipend, that is to say some clergy might be paid 30% of a full stipend, which might be due to a local decision based on particular local need, circumstance or affordability.

What is a “House for Duty” position?

• People may also occasionally see the term “House for Duty”. This quite literally means that the clergy person receives a house in return for their service, but do not receive a stipend.

• Houses are provided from the Diocesan housing stock, which itself is carefully managed and budgeted for through what is known as the Houses Committee (a sub-committee of the Diocesan Finance Committee).

Aside from the Stipend (and on-costs) and the cost of housing, what constitutes the “wider ministry” and “investing in the future” element of the cost of clergy, as this seems quite a lot?

• The “wider ministry” element includes costs associated to items such as the Archdeacons (with support staff), Ministry support and training, Clergy support and counselling, Stewardship support, Safeguarding, Legal fees and Church inspection and faculty fees.
• This component constitutes about 22% of the overall Diocesan budget.
• Most central diocesan office functions are resourced from investment income.
• All expenses incurred by the Bishops and their offices are paid by the Church Commissioners and are not included in the diocesan budget.
• The Cathedral is directly funded by the Church Commissioners and not by the Diocese.
• The “investing in the future” line of the costs of clergy includes ‘future’ elements which include items such as Mission support, Curates, Director of Ordinands and Vocations and Local Ordinands maintenance grants.
• In 2022, the 2022 budget set out for 22.25 curates, in-line with National Church Guidelines for increasing numbers by 50%.
• Overall, about 16% of the budget is generally spent on these operational items.

What about parochial fees, it all goes to the clergy and diocese too doesn’t it?

• No. Parochial Fees are paid by parishioners for services such as weddings and funerals.
• Stipendiary Clergy cannot claim parochial fees, only clergy holding Permission to Officiate (PTO), Licensed Lay Ministers (LLMs) and Self-Supporting Ministers (SSMs) claim parochial fees, a portion of which also go to the Parochial Church Council (PCC) and Ely Diocesan Board of Finance (EDBF).

Paying a Clergy Stipend and Ministry Share

What is Ministry Share?

• Each Deanery is asked to make a contribution to its clergy costs. This is what is known as Ministry Share. (sometimes you will see this called ‘parish share’, but ‘Ministry Share’ is the preferred term)
• This combined cost includes the elements; Stipend and on-costs (“on-costs” include things like national insurance and pensions), Housing, Wider Ministry and Investing in the Future.
• These requests for costs vary by deanery and can typically be anywhere between £160,000 - £1,000,000 per deanery per year.
• This variance depends on each Deanery’s number of stipendiary clergy and its ability to pay (which itself is coupled by the level of Diocesan subsidy they may receive). The Deaneries themselves then decide how their costs are met by each benefice or parish.

Why are there different figures quoted (in the same year) for what the total Ministry Share income level is?

• Ministry Share receipts in any given year tyopically bring in about £5.6million.
• There is often a difference, for example, between the Ministry Share number reported in the Accounts, and then in the Annual Report.
• This is due to deaneries receiving a rebate for completing 100% of their requested Return. Payments can also be reduced when parishes set-up direct debits to pay their Ministry share.
• Similarly, depending on the documentation, the finance figures you might be looking at might only report for certain funds. For instance, in the Diocesan Annual Reports, the figures in the finance section will be with regard to the ‘unrestricted general fund’ – the ‘restricted funds’ and any costs associated with projects such as the Changing Market Towns work are typically reported elsewhere.

How do you calculate what my parish should pay for our clergy?

• The overall Annual Budget for the Diocese, from where these deanery-by-deanery costs are derived, is drawn up after consultation within Diocesan Departments and with the Deanery Liaison Group.
• The Finance Committee draws-up the final budget which goes to Bishop's Council and Diocesan Synod for their comment and approval.
• At the Deanery consultation stage(s) meetings such as the Deanery Liaison Group (the “DLG”) are held where all deanery-level finance representatives, Lay Chairs and Rural Deans meet with Finance Committee members and other key diocesan colleagues.
• This stage is very important regarding decisions around any possible uplift in Ministry Share request in order to meet increasing clergy costs, such as those that occur when centrally recommended inflation-linked increases in stipends and pension contributions increases are proposed.
• This is an important stage to help ensure the Diocese has the financial means to meet its clergy commitment and to ensure across-the-board Deanery support.
• It is critical that this is a fair, collaborative and transparent process so that all of our parishes, benefices and deaneries can see that the generous giving of our congregations is being used wisely and for the purposes intended.

Surely all the combined money the Deaneries are asked to give exceeds the cost of all the clergy we have?

• No. The total Ministry Share request made to our parishes only ever hopes to cover about 90% of clergy costs for our existing clergy and curates.
• It is our investment income that covers the remaining balance of direct clergy posts.
• Investment income is also what covers all of the ‘local support’ and office running costs. [Note: ‘local support’ includes similar elements as the ‘wider ministry’ figure, but unlike the ‘wider ministry’ figure, it excludes National Church costs].
• The Diocese of Ely is very fortunate that due to the generosity of its parishioners, most years almost all that is asked of them to cover the direct clergy costs is met. Typically this will be as much as 96% of all that was asked of them.
• This puts the Diocese in a very much better position than many dioceses in the country who may receive a far lower percentage of what they have asked to cover the cost of their clergy.
• The Diocese of Ely takes measures to plan for these small shortfalls in what is asked of deaneries, which can typically be filled by additional investment income ‘top-ups’. These ‘top-ups’ would normally come to the detriment of another planned expenditure that may then be delayed or cancelled.
• Concerns arise when Ministry Share returns drop further below what has been planned for, especially when the underlying reasons for this might also mean diocesan investment income cannot make up the shortfall.

Why are there such big differences in what each Deanery is asked to pay?

• There are many nuanced factors as to why some differences occur in what a deanery is asked to contribute, but very simplistically speaking one can break it down in to two main reasons.

1. Firstly each deanery, or perhaps more appropriately speaking each benefice and parish within that deanery, serve a different community need and population size. This means the numbers of clergy differ and thus the total stipend amounts differ. It is these population swings and changes that must also be considered in future deanery planning considerations so we can ensure we meet the needs of our changing communities.
2. A second significant factor is that some churches are blessed with larger and perhaps wealthier congregations who are able to financially support the church to a greater extent than some others. These deaneries might be able to meet a larger percentage of their total clergy costs while also not requiring such a large subsidy as some other deaneries. This, coupled with the difference in the communities they serve, results in differing contributions being sought.

Why can’t the Diocese pay for our clergy?

• The Diocese of Ely has been extremely fortunate that for many decades its central financial reserves (those other than the investments each parish church may hold) have been carefully stewarded.
• It is this careful stewardship that means that in any given year the dividend paid from these investments and lettings comes to about £3million.
• About £1.5million of yearly income from our Investments is from restricted funds, and so must be used to help meet clergy stipend costs not met through Ministry Share.
• Remaining investment income is then used to top-up any remaining stipend shortfall, support the central diocesan team such as the finance and safeguarding teams, and allow the Diocese to meet its essential National Church requests for payment.
• It is correct that there is transparency, rigour and challenge in where this investment income goes, but it is not possible to simply reinvest it all into clergy costs, and even if it were, it would only meet a relatively small proportion of the overall clergy total costs.
• For this reason, it is critical that investment income and Ministry Share are carefully used to collectively support both our parish clergy and the other essential activities of the wider church.

Does the Diocese pay anything toward our clergy?

• Deaneries are asked to meet the equivalent of about 93% of direct clergy costs.
• Each year, the collection of this 93% is usually just a little short.
• The remaining costs are met by the centrally invested income from investments.
• Not all parishes will require an on-going subsidy and some will require a greater subsidy than others.
• Broadly speaking, a subsidy towards a clergy’s ‘wider ministry’ costs, and also for costs associated with ‘investing for the future’, might reduce the total cost of a clergy to a deanery by up to £15,000/year.
•  It should remain the ambition of all of us that Deaneries seek to meet the full cost of their clergy, so that the full amount of eligible diocesan investment income can be put toward diocesan-wide support for the benefit of all of our parishes.

Can’t the Diocese divest some of its invested savings to pay for clergy when the financial position is tough?

• In any given year, the dividend from our invested income is critical to meeting the wider diocesan overall costs.
• If this yearly income stream was reduced by selling these assets to meet a short-term need, we would very likely enter a spiral of reducing income that would see more and more financial challenges as the years go on.
• It has fortunately remained the considered view of the Finance Committee, Bishop’s Council and Diocesan Synod through the decades that we should operate ‘within our means’ and this means controlling costs through other means, not by ‘selling-off assets’ for short term income relief.

Surely the Diocese can sell some land to recover an otherwise unrealised ‘lump sum’ of money to help pay for clergy?

• The simple answer to this is - no it cannot.
• Many of the resources available to us, both realised and not, are restricted. That is to say we can’t simply do whatever we please with any capital we receive from land or asset sales as they often have to be used for very specific purposes.
• For example, Clergy Stipends are supported from what is known as the ‘Stipend Fund’. When the Diocese agrees to sell certain assets, such as perhaps parcels of land, these sales may come with conditions that the money released must be put into the Stipend Fund for the purposes of paying Clergy stipends only.
• Another example would be that very often, selling a clergy parsonage (house) for whatever reason means we cannot then use that money to pay for a clergy post. The proceeds from most parsonage sales very often have to be used only for the purpose of buying another property. These monies are restricted and are kept in what is known as the ‘Diocesan Pastoral Account’.
• Decisions around the buying and selling of diocesan houses are made by the Houses Committee, which operates as a sub-committee of the Finance Committee.
• Almost irrespective of what the money can be legally used for following the sale of an asset (be it land or a property) good management and charity law demands that any sales of these assets, land being a good example, be done at an opportune time and at best value to the Diocese.
• Often, these timings are driven by market and commercial factors beyond Diocesan control. Decisions around land sales are made by the Diocesan Assets Committee, which operates as a sub-committee of the Finance Committee.
• It is the careful and prudent reinvestment of realised assets that has afforded the Diocese a stable investment income in the past. Using these assets for a short term non-returning purpose would not be in the best interests of the Diocese in the longer term. 
• It should be noted that as a rule of thumb, for every £1million reinvested from the sale of glebe (land) that is eligible for use on clergy stipends, the interest earned on that investment equates to being able to pay for one full-time stipendiary member of clergy - thus making it all the more important any monies realised from the sale of land are not lost though the propping-up of other unbudgeted costs.

How many paid clergy are there? I see different numbers depending on where I look and who I ask.

• The Diocese has made a financial commitment to ensure the total number of FTE (Full time equivalent) positions does not either exceed or fall below 104 posts.
• This figure will mostly consist of ‘full-time’ positions. There are in the region of 98-100 full-time clergy people.
• The remaining positions will comprise of part-time posts. This number might be in the region of 8-12 clergy people, each on a ‘part-time’ stipend.

How are SSMs, House for Duty and FTE (Full Time Equivalent) clergy counted towards the overall ‘paid’ clergy numbers?

• Another reason the figures around clergy numbers can sometimes appear to vary, is where other ‘types’ of clergy numbers are included in quoted in tables and documents.
• One thing when looking at ‘paid’ clergy numbers is to be mindful of what one means by “paid”. Clergy who are Self-Supporting Ministers (SSMs) – so those that do not received a stipend - are able to claim parochial fees and expenses, so to that extent they receive a payment for some of what they do, but this is not what most regard as ‘being paid’.
• Those clergy who are “House for Duty” - those who receive a house for their service but no stipend - are also not typically counted towards what most would regard as ‘paid clergy’.
• The next element to be mindful of is where one sees “FTE”. FTE stands for “Full Time Equivalent”.
• Most of the time when talking around matters of finance, it will be FTE clergy numbers that are referenced. At its most simple, two stipendiary clergy, each on a 50% stipend, would equate to one FTE clergy.  One full time clergy on 100% of stipend would then also be one FTE clergy.
• So, by way of simple example, if a Deanery is said to have ten (10) FTE clergy supporting it, they could have ten (10) people all “full-time” or within that number some of these ‘FTE’ roles may be split into two, meaning they may in fact have more than 10 actual clergy, but a FTE number of still 10.
• The reasons one (1) ‘FTE’ role might be split are many and can be based on the personal circumstances of the clergy, or the particular needs of a benefice. It is typically the case that smaller benefices tend to have part-time clergy posts (based on the local need and affordability), and similarly often the larger benefices might tend to have part time posts where the benefice requires a second post, but perhaps doesn’t have the need or resources for an additional full-time post.
• In summary, when speaking of ‘paid clergy’, one is speaking of those who receive a stipend. It is then a matter of whether one is speaking about a FTE (Full Time Equivalent) number of clergy, or whether the figure quoted is of all clergy in the Diocese who are receiving some level of payment.

Why do I see other figures than the stated 104 FTE (Full Time Equivalent) number quoted?

• Some observers of Diocesan documentation will notice other FTE (Full Time Equivalent) clergy numbers being quoted (such as 108 FTE or 96 FTE) and not the stated target of 104 FTE.
• This is typically the case where there are expected vacancies forecasted or realised, where the budget must allow for the full potential allocation of FTE clergy, but the reality perhaps recognises that not all positions were filled at any one time.
• A further common occurrence is where the number of paid clergy on the clergy payroll is larger than the comparable quoted number in the Diocesan financial literature. This is usually due to the clergy payroll list including stipendiary clergy who costs to the Diocese are reimbursed by the Parochial Church Council (PCC). Where this is the case, these clergy are often not like-for-like counted against the broader FTE clergy numbers quoted in some documentation.