The Diocesan Board of Finance: Constitution, Custody and Management
by Philip Jones
The property of an English diocese may be divided into 4 categories
(1) parochial (i.e parish property)
(3) episcopal and
The Diocesan Board of Finance (henceforward ‘DBF’) is only concerned with (1) and (2). (3) is now the responsibility of the Church Commissioners (cf Episcopal Endowments and Stipends Measure 1943). (4) is the responsibility of the Cathedral Corporation, though subject to some oversight by the Church Commissioners.
The Diocesan Boards of Finance Measure 1925 requires every diocese to have a DBF. However, the 1925 Measure did not invent DBFs. They have probably existed since Victorian times. Introducing the Measure to the House of Commons, Lord Hugh Cecil observed that ‘There are [already], all over England, diocesan boards of finance, and it is desired by this Measure to bring them all under one form’ i.e constituted as companies (Hansard vol 189, 16th December 1925).
The DBF must be incorporated as a company under the Companies Acts. This is in contrast to the parochial church council, which is a statutory body corporate, but not a company. Other ecclesiastical committees, if required to be incorporated, are statutory corporations, not companies.
Why are DBFs different? The evident policy of the 1925 Measure was to permit local flexibility and discretion. Thus the Measure provides that the DBF’s constitution may ‘confer … such further powers on the [DBF] as the diocesan synod … may think necessary or expedient in view of the requirements of the diocese’ (s.1(2)(c)). A Church of England report observed that ‘the diocesan synod has considerable discretion as to the constitution of its DBF … DBF constitutions … show a wide variety of provisions governing membership of a DBF and … [its] directors’ (DBFs: Conflicts of Interest, para 1).
The DBF’s title may cause confusion. A DBF is called a board, but it is constituted as a company. There is, of course, an important legal distinction between a company and its board of directors.
The bishop must be a member of the DBF (though not necessarily its chairman). A majority of the DBF’s members must be
(1) elected, either by the diocesan synod or by the deanery synods of the diocese
(2) members of the diocesan synod (membership of a deanery synod will not suffice) and
(3) laymen (or laywomen).
The DBF, then, is constituted by the diocesan synod, and is accountable to it. The 1925 Measure provides that the DBF ‘shall in the exercise of its powers and duties comply with such directions as may be given to [it] by the diocesan synod’ (s.3(1)).
S.19 of the Dioceses, Pastoral and Mission Measure 2007 suggests that it is possible for 2 or more DBFs to discharge their functions jointly, or delegate their functions to each other. It is also possible for 2 or more dioceses to create a single, interdiocesan DBF. Such interdiocesan arrangements concerning ‘any body corporate or unincorporate or committee … other than a diocesan synod or bishop’s council’ (s.19(1)) require the authority of a statutory scheme made by the bishops concerned, with the approval of their respective diocesan synods, and of the Charities Commission.
The 1925 Measure does not mention the Church Commissioners (or Ecclesiastical Commissioners as they were then known). However, as the DBF’s responsibilities have broadened since 1925, so it has become subject to the oversight of the Church Commissioners, as well as the local synod.
Thus the Church Property Measure 2018 obliges DBFs to provide information required by the Church Commissioners on any matter concerning its functions under that Measure. And the DBF must ‘have regard’ to any advice tendered by the Commissioners concerning those functions (s.40).
The DBF has broad powers ‘to hold real and personal property for purposes connected with the Church of England’, and ‘to transact business in connection with the Church of England and the diocese …’ (1925 Measure, s.1(2)). In practice, the DBF’s principal responsibility today is the maintenance of ministry in the diocese, and hence to acquire sufficient property and income to achieve this. Also to meet its own office expenses, and certain other diocesan expenses. However, it is argued that parochial and benefice property are the nucleus of the DBF’s function.
Parish property ((1) above) may be subdivided into
(1) property regulated by the Parochial Church Councils (Powers) Measure 1956. This includes ‘property … applicable to purposes connected with [the] powers, duties or liabilities’ of the parochial church council (‘the PCC’) (s.4(3)). Also property acquired property acquired by the PCC ‘for any ecclesiastical purpose affecting the parish’, or for ‘educational schemes’ (s.5(1)). Such property is likely to consist principally of a church hall and parish funds.
(2) property regulated by the Incumbents and Churchwardens (Trusts) Measure 1964. This is property ‘held on [specific] charitable trusts, established for ecclesiastical purposes’, of which trusts the incumbent and churchwardens are ex officio trustees (s.2), e.g trusts for the provision of religious education.
Benefice property ((2) above) comprises
(1) the church and churchyard
(2) the parsonage (i.e the official residence of the incumbent)
(3) other official residences and
(4) glebe, which provided the incumbent’s income.
(Tithe and tithe rentcharge have now been abolished.)
Some dealings will affect all species of parochial and benefice property. Parishes and benefices, and hence their property, are regularly subject to reorganisation under statutory powers now contained in the Mission and Pastoral Measure 2011. The DBF is required to hold a pastoral account, for the income and expenses of a reorganisation (2011 Measure, ss.93 and 94). A reorganisation proposal is required to consider ‘the financial implications for the diocese’ (s.3(2)), but (perhaps surprisingly) the DBF is not required to be consulted about a reorganisation, except where this involves the closure of a church (s.21(7)).
Parochial and benefice property may also be subject to a sharing agreement, made with other Christian denominations under the Sharing of Church Buildings Act 1969. The 1969 Act provides that the DBF must be a party to such an agreement (s.1(3)), so will be able to influence its terms and performance.
The DBF has a general power to buy or otherwise acquire, and to grant, land and buildings for use as a church or other place of worship, or as a churchyard, church hall and parsonage (Church Property Measure 2018, s.28). The 2018 Measure also provides for the grant of land to the DBF for such uses (ss.29-31).
(1) The Parish
The PCC may not acquire, sell or otherwise deal with land (other than short leases) or trust property without the DBF’s consent. To ensure that this rule is observed, such land or trust property must be transferred to, or become vested in, the DBF as legal owner (1956 Measure, s.6). Nevertheless, the PCC remains responsible for all liabilities and outgoings relating to the property (s.6(4)). A similar rule applies to trust property regulated by the 1964 Measure.
These rules reflect the distinction found in trust law between (1) custody and (2) management. The DBF is custodian of parish property, while the parochial authorities are its managers.
Minor dealings with parish property below a certain specified value will not require the DBF’s consent (1956 Measure, s.6(4A), 1964 Measure, s.5A).
Parish accounts must be laid before the DBF annually (1956 Measure, s.8(4)).
The DBF has custody of parochial land and trust property, but it has no charge over parish funds (e.g bank deposits and ‘personal’ investments that are not subject to a specific trust). However, it has long been the practice (again, perhaps since Victorian times) for parishes to make an annual contribution to diocesan expenses. This is known as the parish share or quota. It is possible to see, proudly displayed on a church noticeboard, a ‘certificate’, signed by the grateful bishop, and ‘presented in recognition and appreciation of your [parish] share’.
The Synodical Government Measure 1969 makes an oblique reference to the practice: ‘the diocesan synod [may] delegate to the deanery synods … the determination of parochial shares’ (s.5(4)). Thus, unlike most charitable giving, the parish does not simply decide what it wants to donate. The local synod assesses what it should pay.
Roman Catholic law empowers the bishop to impose a ‘moderate tax’ (tributum) on parishes ‘proportionate to their income … for diocesan needs’ (Code of Canon Law 1983, canon 1263). This taxing power apparently originated in the cathedraticum, a payment made ‘as a sign of … subjection to … episcopal authority’ (The Code of Canon Law. A Text and Commentary, eds Coriden, Green and Heintschel, New York 1985, p.866). Perhaps the Anglican parish quota / share was inspired by this Catholic custom. However, though the quota / share assessment may resemble a charge or tax, payment of it is purely voluntary. The wording of the 1969 Measure does not empower the synod to enforce payment of its assessment, and there is no other statutory provision for enforcement.
Parish property, including trust property, can be appropriated (i.e converted) into glebe, but the PCC or trustees, and the Charities Commission, must consent to this (s.19(3)).
Where a joint PCC of 2 or more parishes is either created or dissolved, the DBF resolves any question that may arise concerning the property, rights, liabilities or functions of the PCCs concerned (Church Representation Rules, as amended by the Church Representation and Ministers Measure 2019).
If there is a dispute over an entry on the parish electoral roll, or over the outcome of a synodical election, the DBF may be liable to meet the legal expenses of resolving the dispute (ibid).
(2) Church and Churchyard
The DBF has less direct responsibility for churches (and churchyards) than any other parochial or benefice property. It is neither custodian nor manager. The incumbent and churchwardens have custody of the church and its contents, while the care of the church is now the financial responsibility of the PCC. Dealings with the parish church are subject to the oversight of the archdeacon and the ecclesiastical courts (under the faculty jurisdiction). Any grants or loans made by the DBF are discretionary.
The statute law follows the common law rule of ownership. Thus land acquired by the DBF for use as a church or churchyard automatically vests in the incumbent (2018 Measure, s.32).
However, the Ecclesiastical Fees (Amendment) Measure 2011 provided that fees (traditionally known as ‘surplice fees’) that were formerly payable to the incumbent (eg for weddings and funerals) should in future be paid to the DBF. This was a sensible reform, as the DBF is now responsible for clergy remuneration, and incumbents should not be paid twice for the same work (a fortiori they should not be paid for work done by other clergy who deputise for them). These fees are the only statutory, compulsory income that the DBF receives.
An agreement between a PCC and a lay rector to compound the latter’s liability to repair the chancel (i.e get rid of the liability in return for a lump sum payment) requires the DBF’s approval (Ecclesiastical Dilapidations Measure 1923, s.52).
Every diocese must establish a fund to meet the cost of inspecting churches (Ecclesiastical Jurisdiction and Care of Churches Measure 2018, s.45(2)). The DBF is the obvious body to hold and administer this fund, though this is not explicitly provided for. The DBF must also meet the expenses of the diocesan advisory committee, which advises on the care of churches (s.37(10)). If the bishop or archdeacon intervenes in faculty proceedings, the DBF is responsible for their legal expenses, provided it has been consulted in advance (s.60(4-6)).
The DBF has little direct responsibility for a functioning parish church, but considerable responsibility for a church which has been closed, i.e made redundant, under the Mission and Pastoral Measure 2011.
The precise terms of the DBF’s involvement with a closed church will depend on the particular statutory scheme of closure. However, the DBF is usually responsible for the contents of a closed church, pending their disposal (s.76). The ownership and management of a closed church may be transferred to the DBF pending sale, or on a permanent basis, perhaps for commercial use and profit (s.63). If no further use can be found for a closed church, the DBF may be entrusted with the melancholy task of demolishing it (s.58(2)).
Parsonages, like churches and churchyards, vest in the incumbent, not the DBF. As with a church, any parsonage acquired by the DBF will automatically vest in the incumbent (2018 Measure, s.32). Thus the DBF, qua DBF, is neither custodian nor manager of parsonages.
The Repair of Benefice Buildings Measure 1972 requires every diocesan synod to appoint a parsonages board to manage parsonages (s.1). (Parsonages boards were formerly known as dilapidations boards, but the 1972 Measure abolished this depressing title.) The diocesan synod has the right to designate the DBF itself as the parsonages board. If the DBF is designated as parsonages board, it must delegate its managerial functions under the 1972 Measure to a special committee (or committees).
As the parsonage vests in the incumbent, and not the DBF, the DBF has no power to sell a parsonage. However, the surplus proceeds of any sale belong to the DBF (Church Property Measure 2018, s.13(1)).
Also, if the DBF is opinion that a parsonage house or land ‘is not required [for] the incumbent’s … convenient occupation’, it may request that the property be transferred to itself, and held as glebe (Church Property Measure 2018, s.8). If the Commissioners and the bishop agree, the bishop may then order the transfer of the parsonage to the DBF, even if the incumbent objects, without the need for any further conveyance (s.8).
As a general rule, parsonage land cannot now be leased. If not required for the incumbent’s residence, it must be transferred to the DBF as glebe. However, during a vacancy in the benefice, the DBF may agree to the benefice sequestrators leasing the parsonage. Any profit left over when the benefice is filled must be paid to the DBF (s.37(1)).
There may also be some old leases of parsonage land, granted by incumbents before the Endowments and Glebe Measure 1976 took effect. The incumbent remains the nominal landlord of such a lease. However, the DBF effectively manages the lease. It is entitled to information from the incumbent or sequestrators concerning leased parsonage land (s.6). The rent must be paid to the DBF (s.7), and is treated as the DBF’s income, not the incumbent’s. For its part, the DBF, not the incumbent, meets all the costs of the landlord’s obligations and liabilities.
(4) Other Official Residences
Non-incumbent parochial clergy (assistant curates, team vicars etc) do not own their official residences. If a curate’s house is supplied by the PCC, or by a parochial trust, it will vest in the DBF as custodian, under the 1956 or 1964 Measures discussed earlier.
An official residence may also be acquired and held by the DBF in its own right. The Diocesan Boards of Finance Measure 1925, as amended, provides that the DBF may not alter or dispose of a team minister’s residence without informing and consulting that minister (s.3(2)).
The Ecclesiastical Offices (Terms of Service) Measure 2009 provides that the parsonages board, not the DBF, is ‘housing provider’ for all non-incumbent diocesan officeholders who are entitled to housing as part of their ‘common tenure’ (s.4(7)). As housing provider, the parsonages board now has similar responsibility for managing other official residences as it has for parsonages (cf Terms of Service Regulations 2011, reg 12).
As mentioned, the DBF may also be the parsonages board. If it is not, the parsonages board has an independent power to hold property (1972 Measure, s.1(5)). However, the common tenure regime does not require the parsonages board to be the legal owner of the housing that it provides. ‘Housing provider‘ does not necessarily mean ‘housing owner‘. It should be possible for a parsonages board to provide and manage a residence that is legally owned by the DBF.
The most significant extension of the DBF’s functions since 1925 occurred when the Endowments and Glebe Measure 1976 transferred all benefice glebe to the DBF (by s.15). Hitherto the glebe had vested in the individual incumbents and been managed from London by the Church Commissioners.
The effect of the 1976 Measure was to convert benefice glebe into diocesan glebe, making it the investment property of the entire diocese. The DBF’s function was ‘to hold, manage and deal with the diocesan glebe land for the benefit of the diocesan stipends fund‘, i.e clergy remuneration.
The Church Property Measure 2018 makes a distinction between 2 types of glebe
(1) historic glebe, which vested in the DBF under s.15 of the Endowments and Glebe Measure 1976 and
(2) glebe held under the 2018 Measure or its predecessors, or under a reorganisation scheme (s.48(6)), i.e property acquired by the DBF after the 1976 Measure came into force.
The parish share, discussed above, is income. The glebe, by contrast, is capital, a portfolio of capital assets. The DBF’s functions concerning glebe are different from those concerning parish property. While the DBF has custody of parish property, it is required ‘to hold, manage and deal with the diocesan glebe land for the benefit of the Diocesan Stipends Fund’ (s.16(1)). The DBF both owns and manages the glebe.
To this end the DBF must have a scheme for the management of glebe land (s.17). In managing and dealing with glebe, the DBF is itself subject to the oversight of the Church Commissioners. Any changes to a management scheme require the Commissioners’ consent (s.17). The Commissioners may even suspend a scheme if it is not being complied with, or not achieving ‘efficient management’ (s.18(1)), effectively putting the DBF into ‘special measures’. The DBF is also required to report to the Commissioners on ‘such matters as the Commissioners specify’, and transactions concerning glebe (s.16(2)).
Some dealings with glebe (sale, lease, mortgage) may require the consent of the Commissioners. However, consent is not required if the dealing is an arm’s-length commercial transaction and the DBF is advised by a qualified surveyor (s.21). The same rules apply to the purchase of land by the DBF (s.28). The relevant PCC and clergy must be notified of a proposed dealing (s.22). Disposal proceeds must be allocated to the stipends fund. The DBF must keep appropriate accounts (s.26(5) and (6)).
The DBF is empowered to require an incumbent or benefice sequestrators to provide information and documents concerning historic glebe ((1) above) in their area, and may even take them to court if they neglect to comply (s.16(4) and (5)).
Any dispute between the DBF and an incumbent or sequestrators concerning the historic glebe ‘or rights … to which the land was subject or of which it had the benefit’ is decided by the Commissioners.
Although the ownership and management of glebe was transferred to the DBF by the 1976 Measure, the Commissioners continued to hold the diocesan stipends fund for many years thereafter. Not until the Miscellaneous Provisions Measure 2000 were the funds transferred to the DBFs (s.1(1)). The funds are regulated by the Diocesan Stipends Fund 1953, as amended.
As well as stipends, the DBF is responsible for certain compensation payments to clergy for loss of office. Compensation for officeholders who are made redundant as a result of pastoral reorganisation is regulated by Schedule 4 of the Mission and Pastoral Measure 2011. An incumbent who is removed under the Vacation of Benefices Measure 1977 (though this hardly ever happens) is also entitled to compensation.
An officeholder who is dismissed for incapability under the ‘common tenure’ regime can bring a claim of unfair dismissal in the (secular) Employment Tribunal. The DBF is respondent to such a claim and hence liable for any compensation awarded (Terms of Service Regulations 2011, reg 33).
The DBF also has an increasing responsibility for clergy pensions (and those of lay ministers). The Pensions Measure 1997 provided that, while the Commissioners continue to be responsible for pension contributions in respect of pre-1997 service, the DBF is required to contribute to the post-1997 pension fund held by the central Pensions Board (Pensions Measure 2018, ss.9 and 10).
As part of its pension responsibilities, the DBF must appoint a widows and dependants committee, and a special officer to represent the interests of widows and dependants (2018 Measure, s.51).