Friday, 12 December 2008

Chelmsford diocese considers sanctions against parishes not paying quota

Ed: This document was apparently considered at the November Diocesan Synod. If anyone knows different, please e-mail me.


This paper is the result of consideration at the Finance Executive level and the deliberations of the Finance Committee and finally redrafting in the light of those considerations as approved by the Finance Executive on 15th October 2008.

It is right and appropriate that any discourse on Deanery or Parish Share acknowledges with grateful thanks that the majority of parishes pay their share in full. We should celebrate that fact. In our recent budget consultation exercise we saw a relatively frequent assumption that those parishes that do pay in full are in a minority. That is not the case at all. The majority pay in full.

We should also celebrate the fact that our trend of collection of parish share over recent years has been moving upwards and we know that this is not the case in every part of the country. We celebrate that as well.

However, against that we must acknowledge that our percentage of giving in relation to take home pay remains stubbornly around 3% as against the long standing General Synod target of 5% and that even if we got half way from 3% to 5% we would not suffer the deficits that have been ail too common.

The theology of giving is vitally important and many resources are available, not least the recently approved Christian Giving Strategy which all our parishes are urged to consider in the coming months. It is not the purpose of this document to address that topic further.

It will be noted that we are about to classify parishes according to their share payment record. One thing that this will do is highlight those parishes that have an excellent record in excess of 100%. It is our intention that those deaneries that achieve 100% or more should be celebrated and complimented on a more formal basis and starting with the figures for 2008 we intend to initiate an event to say a better "thank you" to them. With the approval and involvement of Bishop John we will hold an annual event to record our thanks and to celebrate this success across our diocese. Furthermore we will work towards a better scheme of thanks to all those that do well by improving the current Porch Card scheme. The creation of new Platinum and Gold classifications will help to identify and celebrate the parishes that do well. Furthermore the graded classifications will create an incentive for parishes to improve.

Everyone should be aware that our Deanery Share Scheme (DSS) operates on the basis of mutual support. Share calculations are performed on the basis that the more affluent deaneries within our diocese pay more than the less affluent Our statistical data enables us to be accurate in calculating affluence ratings and when applied to the DSS this constitutes a major element of our mutual support. This is backed up by the way that we allocate our Ministry Grants to those Deaneries at the lower end of the affluence scale.

Our system of mutual support operates in harmony with the national system of mutual support. We benefit from a significant allocation of funds from the national church that is based on principles of mutual support. Basically what we contribute to national church funds is far outweighed by what we receive from national church funds. In round terms this provides us with nearly £2,000,000 of income from better off dioceses around the country. As a diocese we appreciate this and are grateful for it as it means that we are significant net beneficiaries of support from other dioceses.

Mutual Support is therefore an important principle at local and national level. However it only works to its full potential if, and when, every deanery pays it proportion of the share in full. If a deanery does not pay its share in full then that shortfall has to be found from somewhere else. That means that in effect there is an extra unofficial level of mutual support because those who do pay in full are carrying an extra layer of responsibility. This can be viewed both by looking at the provision that is made for shortfall in the budget itself and in the way that diocesan assets need to be realised to bridge the shortfall gap.

We have lived with shortfall and deficit for a considerable period of time and it places undue strain on the resources of our diocese. Furthermore it limits our ability to be as active as we would like to be in the fields of the mission and ministry of our church.

As part of our efforts to reduce the DSS shortfall it is essential that we take a closer look at this issue and do something about it. This has been done by our Finance Committee in Bishop's Council and in the Finance Executive. Note has been taken of the strong mood that the majority of parishes that do pay in full should know that proper steps are being taken to address those parishes where share is not paid.

As a result we believe it is appropriate to put in place a distinction between those parishes that "Can't" Pay and those parishes that "Won't" Pay, together with some consequences that flow from being in the latter category.

One area where we have worked successfully over recent years is those parishes that cannot pay because of a lack of equity in the way that our deaneries allocate share among their parishes. We have been involved in many exercises where there was a perception of inequality or unfairness and through a detailed process of analysis, education and sometimes adjustment those inequalities have either been corrected or satisfactorily explained. This has lead to far greater understanding which in turn leads to a higher percentage being paid. That process continues and the fruits of past exercises will continue to be seen.

At the other end of the scale from the parishes that cannot pay are the ones who will not pay and in between are those who simply do not give payment of share a sufficiently high priority. The Bishop's Council believes that these situations are not acceptable or compatible with a system of mutual support and they represent an abuse of the generosity of others.

This is not always (or even often) understood and there remains a widely held misconception that it is the Diocese that takes the hit when people do not pay in full when in fact it is parishioners in other places that ultimately take the hit. To put it simply; that is not fair.

It is acknowledged that payment of Share is not a legal obligation but it is the bedrock on which all of our finances are based and that is arguably a better reason for paying in full. Non payment causes problems for everyone and those problems will only get worse in years to come. Therefore it is imperative that we continue to raise the level of collection and this paper is aimed at putting in place some new rules that will enable us to do that.

Historically we have focused on the positive side of this issue by providing incentives, assistance, analysis, education and encouragement. This will be continued and improved over coming years. Furthermore we will be looking to find ways to better celebrate the successes of the majority of parishes and to encourage others to share in that success.

However the financial need now is such that we must also focus on the other side of the issue. Those that won't pay should experience some sort of sanction or penalty. It is essential to bear in mind that this would never obviate the need for the constructive approach but that in the event that we experience resistance to improvement we should have some agreed mechanism for taking a firmer line.
By focusing efforts on helping those who feel that they can't pay we will put in place a system that seeks to encourage improvement rather than penalise failure whilst creating a backdrop of sanctions for those places that resolutely refuse to co-operate in an effort to improve.

We will create an environment where it will be very easy not to be classed as a parish that "won't" pay. That environment will involve seeking and accepting help.

Defining a "Won't Pay" parish as opposed to a "Can't Pay" parish is not simple. We need to take account of objective criteria in order to avoid subjective criticism.

Therefore we have set a minimum level of payment to be reached each year. That level is initially 96%. This minimum level is to be calculated on a three year rolling average starting with the years 2008, 2009 and 2010. By phasing the scheme in no parish can become a "Won't Pay" parish until the figures for 2010 are confirmed. We will however take past performance into account in relation to those parishes that can go into the Platinum and Gold categories straight away. Thus no parish can possibly go into the "Won't Pay" category straight away and everyone will have the chance to improve their payment record before any sanctions begin to come into force.

In order to avoid being classed as a "Won't Pay Parish", a parish should initially achieve at least 96% each year. All parishes are urged to continue to try to improve on their current situation no matter how good it is at the moment. We will create classifications for our parishes as follows :

1. Platinum
2. Gold.
3. Silver
4. Bronze
5. Won't Pay

These classifications will focus not simply on the parish payment record (although that remains the most important factor) but also on the effort that a parish is making to improve. They will help parishes to recognise their achievements and to identify where work needs to be done. They will also provide a way to measure improvement which can be reflected in the way we report to parishes.

A Platinum Parish will:
a) have paid 100% or more in each of the last three years working backwards from the last completed year. (i.e. to start with 2008, 2007 and 2006), AND
b) have made monthly payments throughout the year.

A Gold Parish will have a three year rolling average of 100% or better working backwards from the last completed year. (i.e. to start with 2008, 2007 and 2006)

A Silver Parish will have:
a) a three year rolling average of 96% or better starting with 2008, 2009 and 2010 AND all of the following:
b) undertaken a formal stewardship campaign in at least one of the last two years.
c) formally sought assistance from its deanery and acted in accordance with any recommendations, (a deanery synod minute will be required) in at least one of the last two years.
d) formally considered the Diocesan Christian Giving Strategy document at one of its PCC meetings in the last two years.

This classification can only be achieved at the end of 2010.

A Bronze Parish will not fulfil all the criteria to be in any of the above classifications. However it will have all of the following:
a) undertaken a formal stewardship campaign in at least one of the last two years.
b) formally sought assistance from its deanery and acted in accordance with any recommendations, (a deanery synod minute will be required) in at least one of the last two years.
c) sought formal assistance from the Diocesan Parish Finance Officer and acted in accordance with any recommendations in at least one of the last two years.
d) formally considered the Diocesan Christian Giving Strategy document at one of its PCC meetings in the last two years.

A "Won't Pay Parish" will not have fulfilled the criteria to be in one of the other 4 classifications by the end of 20 !0. If even the basic Bronze classification is not met by the end of 2010 the parish will then be classified as a "Won't Pay Parish" unless and until it satisfies the criteria to become a Silver Parish.

For the purposes of Silver and Bronze and Won't Pay classification the first year to be taken into account will be 2008. Therefore it will be impossible to be classified as either a Silver or Bronze or Won't Pay parish until the end of 2010.

Until the end of 2010 parishes that cannot be classified as Platinum or Gold will be identified as "Classification Pending".

A "Won't Pay Parish" would suffer certain consequences. Such a parish would :
1. be ineligible for any diocesan loans
2. be ineligible for any Mission Opportunity Funding
3. be ineligible for any London Over the Border Funding
4. not be eligible to receive a curate
5. not be considered for any improvements to a clergy house*
6. have the categorisation taken into account at the next vacancy and consideration would be given to the viability of the parish and potential pastoral reorganisation.
This does not include normal maintenance or repairs.

It is our intention that this scheme will change at the end of 2010 so that from the end of 2012 the Silver classification should be amended by changing the rolling average figure upwards from 96% to 98%. The adoption of lower percentages in the early stages coupled with these higher levels at a later stage is in order to make it even easier for parishes to stay out of the "Won't Pay" category in the early stages as everyone adapts to the new scheme.

For the avoidance of doubt it should be noted that any parish that has an existing loan outstanding is required to make the due repayment each year BEFORE any payment can be attributed to Parish Share. A parish should not and cannot default on a loan repayment to boost its parish share record.

It will be easy to avoid ever becoming a "Won't Pay" and therefore those that do will stand out more. This approach will focus minds on the priority needs for all to improve towards full payment and it will encourage those who think they "can't" to seek the appropriate help. The consequences are seen more as a deterrent but in order to be such they will be acted upon if the situation ever came to pass.

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