Prudence with a Purpose

How the Financial Times gave front page coverage to the Church Commissioners’ annual results. Personal Finance Editor Robert Budden wrote: "The Church of England's £4.3 bn investment fund was the second-best performer of more than 1,000 funds over the past decade. "The Chuch Commissioners’ fund, which has a history going back over 300 years and supports a wide range of Church activities, including the clergy’s pensions, has achieved an average annual return of 11.1 per cent." The Financial Times also noted that the Church Commissioners operate an ethical investment policy: "The fund eschews investments in pornography, weapons, alcohol, tobacco and newspapers"

Commissioners visit the Rogerley Mine at Weardale, County Durham. The mine, on one of the Commissioners’ estates, extracts fluorite

Ever wondered how much it costs to run the Church of England? In 2004 the figure was £900 million – and the Church Commissioners contributed 18% of that figure.

After taking some knocks to their historically prudent reputation in the early 1990s, the Commissioners are now quietly but steadily delivering enviable results for the Church.

Last year, they achieved a healthy 13.6% return on investments, putting them in the top 3% of 700 similar funds. Over the past decade they have been the number two performer out of more than 1,000 funds, increasing total asset values by £1.3 billion to £4.3 billion.

Pensions

The end result is that an additional £37 million each year is being distributed to the Church than if investments had performed at the industry average.

"Most of our contribution of £163.8 million last year was devoted to paying for clergy pensions based on service before 1998," explained Andrew Brown, Secretary of the Church Commissioners. "We also support the ministry of bishops and cathedrals, as well as parish ministry, particularly in the poorer dioceses. Good performance enables us to fulfil our responsibilities better and make a contribution to the work of every diocese in the Church of England."

Two-thirds of the Church's income each year comes through parishes, with Christian giving primarily the responsibility of those who worship. But the Commissioners' assets – stock market investments as well as commercial, residential and rural property investments – play a critical role in balancing the books. The Commissioners' support for ministry within dioceses totalled £51.6 million last year – an increase of £1.3 million.

As well as reducing administrative costs by approximately one-third in real terms in a decade, the Commissioners have also announced the sale of their Westminster headquarters at 1 Millbank for £65 million to the House of Lords. In 2007, staff will move in to Church House, headquarters of the General Synod.

Efficient

The sale of the property is part of a review of Commissioners’ assets, which also includes bishops' houses. But the Commissioners reject suggestions that selling off properties like 1 Millbank is a short-term reaction to wider financial problems. "The transaction demonstrates how the Commissioners are managing their assets in the interest of the wider Church," said Gavin Oldham, a Church Commissioner. "Theologically, we’re on thin ground if we rest on the retention of particular assets. It is incumbent on the Church to operate as efficiently as we can, to keep administration lean and effective in terms of delivering mission and ministry."

More information

How The Commissioners’ Spent £163.8m in 2004 (2003 figures in brackets)

The Church Commissioners contributed £163.8 million to the mission and ministry of the Church through:

• £100.2 million (£98.3 million) for clergy pensions based on service before 1998

• £1.5 million (£3.7 million) transitional help for dioceses and parishes with the cost of clergy pension contributions

• £27.1 million (£26.4 million) for parish ministry, mainly payments to dioceses for clergy stipends

• £18.5 million (£17.8 million) for bishops’ stipends, office and working costs, and housing

• £6.1 million (£6.1 million) for stipends of cathedral clergy and grants to cathedrals, mainly for staff salaries

• £8.0 million (£8.4 million) for administration and restructuring costs, support for other Church bodies and church buildings

Did You Know ?

• The Church Commissioners were formed in 1948 by joining together two bodies - Queen Anne’s Bounty and the Ecclesiastical Commissioners

• In 2004 the Church Commissioners had £114.6 million invested in telecoms giant Vodafone and a £108.2 million stake in energy multinational BP

• Their ethical investment policy means not only avoiding investment in companies focussing on alcohol, gambling, pornography, tobacco and armaments, but also using positive criteria so that investments are made in businesses that demonstrate responsible employment, governance, environment and human rights practices

• The 33 Church Commissioners include the two archbishops and 11 members elected from General Synod – as well as the Prime Minister, the Lord Chancellor, the Lord President of the Council, the Home Secretary, the Secretary of State for Culture, Media and Sport, and the Speaker of the House of Commons