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Tuesday, March 28, 2017
Diocese of Lancaster faces £10m debt
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¬†Bishop Pat O'Donoghue sent the following letter to all Lancaster parishes in Lancaster on Sunday, after a financial review revealed that the Diocese is £10m in debt. Dear Friends, It's now nearly five years since I was called to be your Shepherd and Bishop. When I reflect on our Diocese I realise that we are blessed with many talented priests, deacons, religious and numerous lay men and women, who are tirelessly committed to the proclamation of the Gospel of Jesus Christ in the many parish, school and other communities. I am encouraged by the signs of hope that I witness on a regular basis travelling around the Diocese. There are indeed many signs of faith and new life, signs that the Lord is in our midst, in our communities, encouraging us and strengthening us in our mission. May I thank you for your response to Christ's call and the mission of the Church. In recent months, however, it has seemed that other issues have risen to the fore, appearing, as it were, to diminish the hope we possess as a diocesan family. The financial difficulties that we are experiencing cannot fail to have disturbed us but we should not allow them to distract us from the call we have all received to live lives of holiness, lives which profess our faith in the Lord Jesus. I am frequently asked what alerted me to our present financial situation. I answer quite simply that I sensed we were, as a Diocese, living beyond our means. Every so often, I questioned if we could afford certain structures only to be told there was no problem because we were 'asset rich'. However, I was still troubled, still concerned, that we were not, as a relatively small Diocese, able to support the current level of funding being given to our Finance, Property and Education Departments. I responded in a number of ways: firstly, by ring-fencing monies from the sale of Bishop's House and a number of bequests for the purposes of Evangelisation and secondly by commissioning a number of Reviews to provide a realistic and clearer picture of our financial situation. The Reviews highlighted a number of strengths within the Diocese, but they also brought to light our true financial position and the weaknesses that created the situation we were in. They revealed that the Central Diocesan Administration, part funded by parish monies and trust funds, was eating up our resources. It also transpired that there was no financial plan in place to fund these services over the past years, especially as they were not directly supported by a levy. These weaknesses had not been detected earlier due to the way in which the Diocese compiled its accounts, in the main to satisfy Civil Law. According to the Charities Commission and Civil Law, the Central Administration and Parishes of the Diocese are all seen as one complete unit. It is just the restricted funds (e.g. Sick & Retired Priests Fund and Ecclesiastical Education Fund) which should be kept separate. However, in Canon Law, the Law of the Church, every parish is distinct, a unique body within the Diocese with its own monies and assets. Due to the confusion between these two laws Parish monies, and even some Restricted Funds, were used as if they belonged to the Diocese (when in fact they didn't). What saddens me more is that they were used without permission of the Parishes, I am sorry that this should have happened over many years, leaving us with a debt to the Parishes and Restricted Funds of more than £10 million. As your Bishop I sincerely apologise for this. As this has come to light I have received many responses from individuals and groups throughout the Diocese. I share your anger and frustration that monies accumulated in your deposit and current accounts have been borrowed largely to shore up Central Administration. What is even more frustrating is that it is highly unlikely that the Central Diocesan administration will ever be able to pay them back in full. As I have said at the beginning of this letter, there is still hope, there is light at the end of the tunnel ≠ we should not allow our financial difficulties to dishearten us, to dampen our zeal for the Gospel. I have set in place a whole raft of measures designed to guard against irregular use of Parish funds, to restore confidence and offer hope for the future. In response to the Reviews and their recommendations, we will have a leaner, yet more focussed central administration and a de-centralisation of some services. To reduce spending we have called for a short-term moratorium on building projects to enable the Central Diocesan service, to Parishes and the Diocese, to function appropriately. We are currently discussing a diocesan levy to provide adequate funding for these services. Unfortunately, these measures have led to some redundancies but I can assure you they were necessary in order to safeguard the mission of the Church. We will need your co-operation in coping with the historic debt that has accrued over many years; indeed without your help in recent months, through your prayers and support, we would not be offering such a positive response to the problem. It is gratifying to know that our Diocese is a family of parishes where the less well-off can count on the support of richer ones. The strength and generosity of our parishes is the single most consoling feature of all of this. I thank you for this, so generously expressed at our Diocesan meetings at Kendal and Preston, and assure you that our commitment to the proclamation of Gospel of Jesus Christ, to the Church - His Body - is at the heart of all that we do. With my sincerest good wishes, prayers and thanks, As ever in Christ our Lord, +Patrick O'Donoghue, Bishop of Lancaster
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