“We’ve been living beyond our means” is how Mgr Paddy Mulvany V. G., V. F., described the financial state of the diocese. “It was good while it lasted, it has to stop.” Monsignor Mulvany was speaking to a meeting of the diocesan council of Priests, on March 16th last.
The Council of Priests had been asked to give its approval to a Financial Plan of Action prepared by the Trustees following their acceptance of the Diocesan Finance and Property Review in January. The Review, marked “confidential” is not on general release in the diocese though copies were given to the Diocesan Clergy at meetings in Preston and Kendal in January.

STATEMENT FROM THE DIOCESE
LETTER FROM FINANCE COMMITTEE TO DIOCESAN ORGANISATIONS AND AGENCIES
AGREEMENT REACHED AT THE COUNCIL OF PRIESTS
CENTRAL DIOCESAN EXPENDITURE YEAR TO 5 APRIL 2004
HOW THIS EFFECTS “The Voice”

STATEMENT FROM THE DIOCESE
Balancing the Budget - Bishop Patrick
You may have heard of some diocesan constraints on expenditure. Alerted to financial difficulties a year ago I immediately sought professional help and their Review was presented to me in January. This I shared with the Trustees and priests.

As you can see from the tables (below) the financial situation of the diocese is very serious and it is incumbent on us to implement the recommendations of the Review. The diocese cannot sustain an annual deficit of £1 million and the huge borrowings from parish surplus monies and diocesan trust funds. To help remedy this situation the Diocesan Trustees, on the recommendation of the Finance Committee, have proposed a 25% reduction on expenditure during the next financial year. This applies to all Agencies and Commissions and they are being asked for their cooperation.

I hope you will find the material from the Finance Committee and the Council of Priests helpful, along with the tables.

Thank you for your unflinching support, so characteristic of this diocese. Working together, we can overcome our financial difficulties and go on to fully embrace the mission of the Church in preaching the Gospel of the Risen Christ.

Thank you for your help and patience.

May God bless you.

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LETTER FROM FINANCE COMMITTEE TO DIOCESAN ORGANISATIONS AND AGENCIES
Arising from the recent independent and professional report presented to the Trustees in January 2005, actions are necessary in order to stabilise the financial position of the diocese. The Review reported that:
1. The central diocesan budget was annually operating in deficit, recently by as much as £1million and in the year to April 2004 gave rise to an overall cash loss to the Diocese of £1million.
2. In order to finance this deficit, the diocese centrally was borrowing parish and special trust surplus funds which were either placed with the central diocese or with investment brokers.
The report also took in a clergy consultation (which covered 10% of the priests of the diocese) conducted on an anonymous basis to gain their views in recommending a structure for the future. It was a genuine independent consultation.

The present financial position:
Surplus deposits placed by parishes and special trusts with the central diocese have been borrowed to fund these deficits. Parish and other current account credit balances (which are subject to an offset arrangement with the Central Diocese) have effectively been borrowed by the Central Diocese and the Bank limit of £350,000 would be breached but for withdrawals of Parish and Special Trust Funds lodged with brokers for investment purposes and used to fund pastoral services. It is essential that expenditure is reduced and income is increased within the Central Diocese soon.

Progress made since presentation of the review:
The Trustees accepted the Executive Summary (with some amendments) on 21st January, since when the following changes have been implemented:

• A new Finance Committee to the Trustees has been appointed.
• A new Property Committee to the Trustees has been appointed.
• A Steering Committee has been appointed to oversee implementation of the recommendations of the Review Report.
• Two new Trustees, Fr Bob Dewhurst and Fr Simon Hawksworth have been appointed.

The future:
Preparation of a diocesan budget for the financial year 2005-2006 is already well underway, and a first draft has indicated a Central Diocesan deficit of a further £800k. As a result Diocesan Commissions and Organisations have been asked to achieve a 25% reduction in their costs for the forthcoming year. A review of parish levies is also under consideration. It is proposed to present a budget for approval by the Trustees in April.

A balanced budget for the central diocese is essential so that more parish and special trust funds will be freed up for evangelisation and for capital expenditure. In order to sustain ourselves for the future, during what are transitionary times for our Church in this country, there will have to be re-evaluation of Diocesan Commissions and Organisations and the essential objectives and services within the overall missions of the Diocese.

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• To create a new Parish levy of 8% towards the central Administration Fund by reducing the annual levies on the following
  A. Sick & Retired Priests Fund - reduce by 5%, from 9% to 4%
  B. School Building Fund - reduce by 4%, from 14% to 10%
  C. By increasing the commission charged on Gift Aid from 5% to 7%
  
• All Commissions and agencies of the diocese reduce their expenditure by 25%.

CENTRAL DIOCESAN EXPENDITURE YEAR TO 5 APRIL 2004

EDUCATION	561239
FINANCE OFFICE	223784
PROPERTY OFFICE	98068
YOUTH	60000
CASTLERIGG	25000
MARRIAGE TRIBUNAL	52500
VOICE	18394
TRUSTEES	25586
BISHOP - STAFF, RENT, TRAVEL	38609
COMMISSIONS (MARRIAGE, JUSTICE-PEACE, JOINT DIALOGUE, ETC.)	60049
DIOCESAN PROTECTION OFFICE	62075
UNIVERSITY CHAPLAINCIES	59802
LEGAL, CONSULTANCY, AUDIT, ETC	49587
LEVIES NATIONAL CATHOLIC FUND, ECUMENICAL BODIES, MISCELLANEOUS EXPENSES	97345

In the year to April 2004 the Diocese as a whole made a cash loss of £1M (primarily due to the Central Diocesan costs)

HOW THIS EFFECTS “The Voice”
Rather than simply accept a reduction in size or frequency the Paper has been endeavouring to raise funds to meet the 25% shortfall in the annual diocesan grant. The Trustees have since encouraged this approach with the following statement.
“where it is possible for Commissions, Organisations and Departments to increase sources of external income from elsewhere other than the Central Diocesan Budget, to compensate for some or all of the 25% shortfall in diocesan grant, this is to be encouraged and welcomed.”

To date the Paper has raised £1700 and that was by email contact alone. We now appeal to all our readers to help us raise the remaining £3000. The Trustees have never threatened to stop publication altogether, but asked us for various cuts so as to save 25%. But if we can just raise that remaining £3000, no reductions in the Paper will be necessary and we can go on as before.

Do please help us if you can. Most readers will agree that there has been a steady improvement in The Voice and we are now one of the most attractive diocesan newspapers in the U.K. Without the need to cut back on our production we can promise you still further improvements. If you need further information just contact us. PLEASE

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