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Church faces funding crisis: York Synod is told lay giving must rise by half to avoid cutting clergy

THE Church of England is facing a financial crisis which could lead to far-reaching changes in the parish system, members of the General Synod were told yesterday in a debate on finances. Lay giving will have to rise by half in seven years if cuts in the number of clergy are to be avoided.

The Church Commissioners, who pay all the clergy pensions and a substantial portion of their salaries, are still reeling from the effects of ill- judged property speculations in the 1980s, which wiped pounds 500m off the notional value of their assets.

As a result, the proportion of clergy salaries paid by the congregations will have to rise from about 60 per cent to 80 or 90 per cent by the end of the decade, according to John Smallwood, a former deputy chief accountant at the Bank of England. Figures released by one pressure group at Synod suggest that every full-time salaried member of the clergy costs the diocese about pounds 26,000 a year in wages, housing and national insurance, though the average stipend is only pounds 12,800.

Mr Smallwood said that without greatly increased giving from the laity, the Church would have to choose between freezing clergy pay until the end of the century, cutting back on the numbers of proposed ordinations and encouraging retirements.

The Bishop of Chelmsford, the Rt Rev John Waine, said that all parishes would have to move towards financial self-sufficiency. In his diocese, 'a third of the parishes are to some degree supporting the other two-thirds and that cannot be a sound situation'.

No one in the debate suggested how the laity might be induced to pay a great deal more to a fundraising system that is thoroughly unpopular. David Webster, a lay member from Rochester, who is a former Financial Times journalist, said that the trouble surrounding the commissioners' investments 'could easily lead to a crisis in confidence which would not help calls for increased giving'.

Mike Tyrrell, an accountant from Leamington Spa, claimed the commissioners had been maximising their income unwisely at the expense of capital and that their losses on property holdings were still substantial.

The quota system under which parishes are assessed by the diocese for their contributions both to their own running expenses and those of the wider Church mixes the two categories so that a parish will almost always believe that it is paying more to central funds than it actually is.