He's coming in on a wing and a prayer: Church Commissioners retrench under new leader

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The Independent Online
AS a candidate for the job, he was anything but promising. The advert specified someone with City experience, but Christopher Daws was an accountant who came from industry.

'I don't think I fulfilled any of the criteria,' he says. But when they interviewed him, the Church Commissioners decided he was the man to sort out their tangled and ailing finances. He had, at least, been the treasurer of a large parish church, St Mary's Reigate, although that could hardly count as sufficient training for the job he took over in January.

The Church Commissioners handle pounds 2.5bn of investments, contributing pounds 146m to the Church of England's running costs last year - about a quarter of the total. Most of the rest comes from local diocesan and parish funds, and from congregational giving.

The commissioners pay the pensions of all retired churchmen and the stipends of most ministers. They are thus central to the church's finances. They are also in a terrible mess.

Christopher Daws, fair haired and rather boyish-looking, is now in charge of their finances and investments. Until recently, that was not regarded as a particularly demanding position but the antics of the commission during the 1980s left it in a parlous state.

Mr Daws's task is to clear out of the Augean stables, a process that requires, among other things, the General Synod to agree to a reduction in the commissioners' overall contribution to church funds. The indications are promising. recently, the synod received the commissioners' latest annual report with some approval.

Mr Daws is determined to introduce techniques that are standard in industry but unfamiliar to the commissioners. He is well qualified to do so. After training and working at Coopers & Lybrand, he worked at Cadbury-Schweppes and Dowty, the engineering group. He then joined a management team buying out Sycamore Holdings, the building materials group, but their high hopes of running an expanding business quickly evaporated.

'When we got in there we found the accounts contained all kinds of hidden horrors - it was a can of worms. Instead of expanding, we found we had to sell a lot of businesses instead.'

It seemed to dampen his enthusiasm for working in industry, too. After 18 months, Daws left for the Church Commissioners, where any problems were at least out in the open.

Although he is a church- goer, he did not join through any particular religious vocation to save the church's finances, he says. It was simply a different job with a challenge. 'I've always gone for interesting jobs and let my career look after itself.'

One of the first techniques he brought with him to the commissioners was the habit of making long-term plans. 'I'm mainly interested in the way the finances of an organisation unfold over 20 or even 50 years.'

Until recently, the commissioners seemed to find it hard to look more than about a year ahead with any clarity. During the 1980s the property fund manager, Michael Hutchings, turned the commissioners into a big property developer.

Famous for his large cigars and his aversion to travelling by air, he bought properties all over Britain and the US and borrowed more than pounds 500m to increase the commissioners' property exposure.

The timing, of course, was all wrong. The market collapsed in the recession, leaving the organisation with expensive borrowings.

The commissioners' board directors knew little of what had been going on because the assets committee, responsible for investments, was used to keep them out.

And the committee did not know everything because the property manager did not keep it fully informed. 'The staff were not very accountable in those days,' says Mr Daws. 'One of my prime tasks is to rectify this.'

As a new boy from the private sector he is somewhat dismayed by the culture of the Church Commissioners office. 'There is a strong element of the Civil Service here, which is one thing I'm trying to change. There is a tendency to train generalists by moving people around rather than teaching them specialisations as you would in the private sector.'

In the meantime, he has no plans to reduce the commissioners' heavy 40 per cent weighting in property by very much. 'In today's market we'd be compounding our mistakes if we panicked and sold everything in a rush.'

The other problem is that the synod has pushed up the value of church pensions, which threaten to become an open- ended expense for the commissioners.

'If we don't solve this problem, it'll swamp us,' says Mr Daws candidly, contemplating the prospect of the church's finance falling into chaos if something is not done quickly. In 1984, pensions took up 34 per cent of the commissioners' income; now they take up 45 per cent and are still growing.

'The truth has dawned sharply that our income may not cover it. As pension expenses rose, the commissioners met it without calculating what it would cost in the long run.'

Again, with an industrialist's eye to controlling costs, Mr Daws has set out to rectify this. Distrustful of the church authorities' ability to avoid temptation and curb their generosity, he favours ring-fencing half the commissioners' assets for pensions and making the clergy contribute towards their pensions just as everyone else has to.

'Our expenditure is up by more than 7 per cent which is far too much. We have to bring that down to between 4 and 5 per cent, which is what you can reasonably pay out without eating into the real value of your capital.'

The commissioners' contribution to stipends and housing will be cut by pounds 12m next year, with further reductions up the year 2000.

To make up for the reduction in the amount the commissioners will pay out in future towards the church's costs, congregations will have to stump up more.

There is, in Mr Daws's view, no way round this unwelcome development, however much grumbling there may be in the parishes.

Slowly but surely, the commissioners are persuading the powers-that-be in the church that this has to happen. Indeed, it has already started, with congregational giving rising from 41 per cent of total church funding in 1992, to 43 per cent last year.

The choice is stark and simple: either the commissioners spend their money too fast, depriving future generations of churchmen of a stipend and a pension, or they conserve it.

Any conscientious fund manager would see it the same way, says Mr Daws. 'The core of it is that we've got a bundle of investments which put money where it's needed. Without that, large parts of the UK would be unchurched.'

(Photograph omitted)