How does the parish share system work in the diocese of Guildford?
What goes into Parish Share?
- Parish Share is the name given in Guildford Diocese to the scheme by which the diocese apportions to parishes the various costs it meets on their behalf. All dioceses have such schemes, although they may operate differently or be called by other names (e.g. Quota, Common Purse).
- By far the largest cost which the diocese meets on the parishes' behalf is the cost of paying parish clergy and housing those of incumbent status (see 1 below under ministry contribution). There is also a contribution to the cost of the national church (a large part of which is training clergy). The third main element is the cost of running the services which the diocese provides; some of these are statutory, others are in accordance with diocesan policy, set by the Bishop, his Council and the Synod. The costs are all contained in the budget agreed each November by Synod.
- The detailed budget runs to some 20 pages and includes all relevant expenditure gross. Some of this is offset by income (also detailed), with only the net figure appearing in the summary. The Audit Committee examines the whole budget in detail before Synod is asked to agree it. The net total is then fed into the Parish Share spreadsheet to calculate the Share request for each benefice.
- The Parish Share is made up of two elements: the Ministry contribution and the Shared Costs. These are added together to give the Basic Share. In some cases, this may be adjusted. The Basic Share, adjusted as necessary, then becomes the Net Share; it is this figure the parish will be asked to pay.
The Ministry Contribution
- The Ministry Contribution is payable for Core Ministry - incumbent status clergy (Rectors, Vicars, Priests-in-Charge, Team Rectors, Team Vicars) and for House for Duty posts where the diocese owns and maintains the house. It is not payable for Title Curates - in their first post after ordination - or for non-stipendiary clergy.The actual contribution figure for each year is 100% of the budgeted average cost for that category of post; in other words, it is the same for everyone.
- By 2010, there were an increasing number of posts, some Senior Curate (including Associate Ministers) and some Lay Workers, which lay outside the budget and where the actual costs incurred by the diocese on behalf of the relevant parishes were reimbursed on invoice rather than averaged and collected via a Ministry Contribution. Changes in the number of budgeted posts from year to year were also having a significant (and largely meaningless) effect on the headline rate of budget increase. From 2011, all Senior Curate posts have been omitted from the budget and Parish Share and are invoiced on an actual costs basis.
- For incumbent status posts (Core Ministry), the average includes stipend, Employers National Insurance, pension, housing, council tax, relocation and ongoing training. For House for Duty posts, stipend ENI and pension are omitted. If there is more than one parish in a benefice, and they share one or more priests, the Ministry Contribution(s) can be shared between the parishes as they decide, but not in such a way as to change any adjustment due to the benefice as a whole. Ministry Contribution is otherwise charged pro rata for part-time posts.
- During periods of vacancy, parishes continue to pay full ministry costs. Savings from vacancies are thus shared among all parishes each time they occur.
- The net costs in the budget which are not included in the Ministry Contribution together form the Shared Costs. They include diocesan support for parishes (the work of the departments), non-parochial ministry and our contribution to national costs. These are apportioned to parishes according to their ability to pay. To do this, their "Potential", which is defined as Membership x Relative Prosperity, is calculated. The Potentials of all the parishes are then added together to form the Diocesan Potential and each Parish Potential is expressed as a percentage of the Diocesan Potential. They are asked to pay that percentage of the total Shared Costs.
- Membership is based on attendance. Every year, parishes are asked to count the numbers attending during October. This figure may be adjusted for special services, where the attendance is unusually high; it can also be adjusted for Local Ecumenical Partnerships, where payments are due to more than one denomination. The Membership figure used in the Potential calculation is taken as the rolling 3-year average of the most recently available data. Note that each October's figures only affect share in the next-but-one year, because they are only submitted after the year end. Please note that if attendance figures are not submitted on time, Synod's policy is for the largest number from the previous three years to be used. These returns are submitted online.
- Relative Prosperity iscalculated by considering the council tax band of each household on the church electoral roll, using the weighting adopted by councils (e.g. 1.2 for Band E). The average lowest (1.7:1) has been considered to be too low, so the RPFs are ranked in order and then 'skewed' about the middle to double the ratio to about 3.4:1. It is this adjusted RPF that is multiplied by the Membership to give the Parish Potential. Unlike Membership, RPFs are fixed for a period of three years and are due to be reviewed.
Capping - Expenditure
- The Ministry Contribution and Shared Costs are added together to give the Basic Share. For teams and united benefices, this is done at benefice level at this stage. The Basic Share (for next year) is then compared with the PCC Gross Expenditure (for last year). If the Basic Share exceeds 70% of the Gross Expenditure, then the Share is capped at the 70% level; if the Gross Expenditure is less than £70,000, then the Share is capped at the 65% level. (These levels and threshold are reviewed annually and confirmed or amended by Synod).
Please note that if finance returns are not submitted on time, a parish may miss out on benefitting from the expenditure cap. These returns are submitted online.
- Gross Expenditure is the 'Resources Expended' figure, taken from the Parish Finance Return which is now submitted online. It excludes major 'capital' expenditure, e.g. on building repairs or improvements, which is shown as such on the Return. In certain cases, significant trading expenditure (e.g. weekday nursery, coffee shop) may be deducted from Gross Expenditure for capping purposes. It has been suggested by some that outward or mission giving should also be excluded, but Bishop's Council is not currently persuaded this would be right. The matter remains under review.
Capping - Increases and Decreases
- Further caps are applied to prevent any parish being asked for an unreasonably large increase in Share over the previous year. For 2016, the maximum growth cap has been kept at 4%. And the minimum growth 'floor' has remained at 0%. NB: This cap applies after the Expenditure cap, and so in some instances, a parish will lose benefit from Gross Expenditure capping in order to meet the 0% growth floor, as the system does not allow parishes to pay less than the previous year.
Net Parish Share
- The Basic Share, adjusted by capping and/or discretionary relief, now becomes the Net Share.
- Parishes which do not submit their Annual Report (including the financial statements) will not be eligible for capping or discretionary relief.
Multi-Parish Teams and United Benefices
- For teams and united benefices, capping and discretionary relief are based on benefice figures, but if the parishes have agreed a division of the Ministry Contribution and want separate share requests, these can then be worked out. The cap and discretionary relief for individual parishes cannot vary the combined Net Shares from the benefice Net Share, and so the notional cap and discretionary releif for parishes in the benefice may need to be varied. A full explanation of this will be available to the parishes if this applies.
- In order to assist parishes in their own local budgeting processes, every effort will be made to circulate draft figures in August each year. As the Diocesan Synod does not finalise the budget until November, these figures can only be an indication, and it should be expected that they may change.
Support and Advice
- The Diocesan Office is committed to providing support and advice to all parishes concerned about Share or struggling with their Finances. The Deputy Diocesan Secretary should be the first point of contact for all enquiries relating to Share: firstname.lastname@example.org.