ARCHBISHOPS’ COUNCIL

House of Residence of Bishop of Bath and Wells

Determination of objection to regulated transaction

Parties: The Bishop’s Council and Standing Committee of the Diocesan Synod of the Diocese of Bath and Wells

– and –

The Church Commissioners for England

Background 1. On 27 February 2014 the Church Commissioners (“the Commissioners”), in their capacity as the “relevant housing provider”, served notice on the Bishop’s Council and Standing Committee of the Diocese of Bath and Wells (“the Bishop’s Council”) of the proposed exchange of the Palace, Wells (“the Palace”) for the Old Rectory, Croscombe (“the Old Rectory”) as the house of residence of the Bishop of Bath and Wells (“the Bishop”). 2. The proposed exchange would be a “regulated transaction” under section 7(1)(a) of the Ecclesiastical Offices (Terms of Service) Measure 2009 (“the Measure”). Where a regulated transaction concerns the house of residence for a diocesan bishop, section 7(2) requires the relevant housing provider to serve notice on the officer holder concerned and on the Bishop’s Council. Section 7(3) provides for any person on whom notice of a regulated transaction is served to have the right to object to the transaction in accordance with Regulations. We refer to the regulated transaction in this determination as “the transaction”. 3. The relevant Regulations are contained in regulation 16 of the Ecclesiastical Offices (Terms of Service) Regulations 2009 (“the Regulations”). They provide for a person or body who is served with notice of a regulated transaction to give notice of objection to the relevant housing provider within 28 days. (The time runs from the next working day after the date of the relevant housing provider’s notice.) (Regulation 16(1)) 4. If notice of objection is given, the relevant housing provider must within 5 days send the notice of objection to the body which is to consider the objection. Where the Commissioners are the relevant housing provider they are required to send the notice of objection to the Archbishops’ Council unless they consider that the objection is well founded and notify the objector accordingly; in which case they must either discontinue any action with respect to the regulated transaction or consider whether to proceed with a different regulated transaction. (Regulation 16(2) and (3)) 5. Where the Commissioners do not give notice that they consider the objection to be well founded and send the notice of objection for consideration by the Archbishops’ Council, regulation 16(4) provides (so far as relevant) – “The Archbishops’ Council … shall, after considering the grounds of objection and all relevant circumstances, direct that the transaction shall proceed if the relevant housing

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provider satisfies it … that any objection should not be upheld and, in any other case, direct that the transaction shall not proceed.” 6. The Bishop’s Council has objected to the proposed transaction in a notice of objection dated 19 March 2014 (“the Objection”). The Commissioners sent the Objection to the Archbishops’ Council on 21 March. 7. The Archbishops’ Council has, under regulation 16(5), delegated consideration of the Objection to a Committee consisting of three of its members: Mrs Mary Chapman, Mr Philip Fletcher and the Venerable Cherry Vann. Mary Chapman has been appointed to chair the Committee. This determination sets out the Committee’s decision in respect of the Objection, and our reasons for that decision.

Procedural matters 8. On 31 March 2014, at our request, the Secretary to the Committee sent out details of arrangements we had made for the consideration of the Objection. Among other things, the arrangements made provision for the Objection to be considered at a meeting of the Committee and for the parties – the Bishop’s Council and the Commissioners – to be represented. 9. The arrangements also made provision for the Committee to visit the Palace and the Old Rectory, for the parties to call witnesses and to provide documents. 10. We invited the Bishop, the Chapter of Wells and the Palace Trust to make representations either in writing or orally at the meeting. The Bishop and the Palace Trust accepted the invitation to make oral representations at the meeting. The Chapter of Wells sent written representations that are contained in a letter dated 17 April 2014. 11. We stated in the arrangements that the meeting would proceed as follows: (i) the Commissioners would briefly summarise their case, call their witnesses and present their documentary evidence; (ii) the Bishop’s Council would briefly summarise their case, call their witnesses and present their documentary evidence; (iii) if the Bishop, the Chapter or the Palace Trust had accepted our invitation to make representations at the hearing, their representatives would then be heard; (iv) the Bishop’s Council would make their closing submissions; (v) the Commissioners would make their closing submissions. 12. Our reason for proceeding in that way was that it appeared clear to us that under regulation 16(4) the burden of proof rested on the Commissioners to satisfy us that the Objection should not be upheld. They should, therefore, present their case first and make their closing submissions last. The arrangements sent by the Secretary to the parties stated our reason for proceeding in this way and neither party has questioned that the burden of proof rests on the Commissioners. We have accordingly considered the Objection on that basis. 13. On 2 April we received a request from the solicitors acting for the Bishop’s Council that we should direct the Commissioners to provide a statement of the reasons for their decision to exchange the Palace for the Old Rectory. The Commissioners did not object to providing a statement and we agreed that they should provide one by 5pm on 14 April,

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which they duly did. That statement was made available to the Bishop’s Council as well as to the Committee. 14. In addition to the assistance of the Secretary, we have also had the benefit of legal advice from the Deputy Legal Adviser to the Archbishops’ Council throughout our consideration of the Objection. The decision we have arrived at, however, is ours.

Visits to the Old Rectory and the Palace 15. On the morning of 28 April we went to Croscombe and visited the Old Rectory. We had access to the house and garden. Additionally, we had the opportunity of seeing the house in its local setting. 16. We then drove from Croscombe to Wells, where we were shown around the Palace. We had access to both the residential and non-residential parts of the Palace, both public and private, and to the grounds.

The Committee meeting 17. The Committee then began its meeting in the Drawing Room in the non-residential part of the Palace. The meeting continued on 29 April. 18. Miss Ruth Arlow of Counsel represented the Commissioners and Mr Roland Callaby, Solicitor, represented the Bishop’s Council. We are grateful to both of them for the clear and helpful way in which they have presented their cases. 19. At the meeting we heard the parties’ representatives and their witnesses. We also heard oral representations from the Bishop (in person) and from the Palace Trust (by their nominated representative Rear Admiral David Wood). The meeting proceeded in the way we had envisaged in the written arrangements described above. 20. We received written representations from the Chapter of Wells in the form of a letter dated 17 April 2014, which we have taken into account. 21. We also take this opportunity to record that we received a number of letters from members of the public and from others more directly concerned with the affairs of the diocese and with the City of Wells. We have not set out details of the letters received in this determination. Our reasons are twofold. 22. First, our task was not to hold a public enquiry. Our role is prescribed by the Measure and the Regulations. The Objection to the transaction was essentially a dispute between two parties, the Bishop’s Council and the Commissioners. It was that inter-party dispute which it was our duty to determine in accordance with the applicable law. 23. Secondly, the letters we received did not raise any relevant issues over and above those which were put to us by the parties and by the others from whom we invited representations. We would, therefore, in any event, have found it unnecessary to give the individual letters specific treatment in this determination. All letters received have been acknowledged. 24. At the end of the meeting on 29 April we retired to consider what we had heard, seen and read before reaching our decision.

Legal approach 25. It is clear from regulation 16(4) that our role is not merely one of reviewing the Commissioners’ decision-making process and forming a view about that; we are required

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to consider the substantive merits of the proposed transaction in the light of the grounds of objection and all relevant circumstances. 26. As we have already noted, the burden of satisfying us that the Objection should not be upheld rests on the Commissioners. 27. The Commissioners’ duty under section 4(1) of the Measure is to provide the Bishop with accommodation which is “reasonably suitable for the purpose”. We understand that to mean accommodation that is reasonably suitable for the purpose of accommodating the individual currently holding office as Bishop of Bath and Wells and his family. That involves taking account of any relevant considerations concerning his role and duties as bishop of the particular diocese and any relevant considerations concerning his personal circumstances. 28. As the duty to provide accommodation is imposed on the Commissioners, it is they who in the first instance have to determine what is “reasonably suitable” in the particular case. We therefore accept that the Commissioners, as those with the primary responsibility, have a margin of appreciation in determining what is reasonably suitable in a particular case. 29. The objection which we have to consider is an objection to the transaction: see section 7(3) of the Measure. In this case the transaction, as defined in section 7(1) of the Measure, is “the exchange of a house of residence for another house of residence” – i.e. in this case, the exchange of the Palace for the Old Rectory. 30. Where any relevant fact has been in dispute we have applied the civil standard of proof – normally referred to as the balance of probabilities, but sometimes expressed as whether a disputed fact is more likely than not to be true.

Consideration 31. The Objection sets out three main grounds: (i) the proposed temporary accommodation at the Old Rectory, Croscombe was unsuitable as a house of residence, and that no case had been made for a move (either temporary or permanent); (ii) the recommendation to the Board [of Governors of the Church Commissioners] had been made by the Bishoprics and Cathedrals Committee with inadequate consultation; and that the Board had failed to respond to representations made by the diocese; (iii) the decision was damaging to the pastoral relationship between the Bishop and the diocese. 32. The Commissioners’ case reaffirms their contention that the Palace apartment accommodation does not provide reasonably suitable accommodation for the Bishop and that the Old Rectory does. The Commissioners also responded to other aspects of the Objection.

Context of the Diocese and City 33. From the evidence that we have heard and read it is clear to us that the City of Wells has a very particular history and identity within the Diocese of Bath and Wells. In this smallest of English cities, with a population of just 11,000, the Cathedral and Bishop’s Palace are a dominant presence in the community. The Bishop is closely associated with the city in the popular mind, notwithstanding his ministry to the whole of the diocese. 4

His predecessors have had a residence on the site for over 800 years. Whilst very few diocesan bishops still live in a historic palace we had a strong sense that it was important to the city and the diocese more widely that the Bishop should at least live within the community of Wells and be seen to go about it. 34. We have taken this into account in reaching our decision. However, we would not wish this particular set of circumstances to be taken as a pattern for any future such cases. They must equally be judged on their own merits as we have done in the case of Wells.

Suitability – the Old Rectory 35. While the Old Rectory is a spacious domestic property with well-proportioned rooms set in an extensive, enclosed garden, it has various features that concerned us. The privacy afforded by the house and garden, given their proximity to and visibility from the road and the primary school opposite, is limited. The first floor layout is not ideal, with no separation between the Bishop’s accommodation and the guest accommodation. More importantly, there is no provision for staff and room only for a domestic study for the Bishop. 36. We noted the Commissioners’ most recent policy statement “Strategic Review of See Houses” dated May 2005, which sets out principles and guidelines for the provision of see houses. In the case of existing, replacement and new houses these guidelines envisage that there should be adequate adjacent office space for the Bishop and his staff together with waiting areas and cloakroom facilities. We understand that it is the Commissioners’ intention that the Bishop’s office and offices for his staff should remain at the Palace in Wells. 37. We heard about the positive merits of the office arrangements in the Palace, where the Bishop works in close proximity to the Bishop of Taunton. We recognise, too, the argument that increasing importance is now placed on the boundaries between private and working life. There are, however, drawbacks to the split between home and office. In the first instance, the absence of staff at the Old Rectory would mean that any callers would have to be dealt with by the Bishop or his wife and this could create awkwardness in some cases. More importantly, living at Croscombe with his office and staff in Wells would mean that it would be considerably more difficult for the Bishop to have the flexibility that is afforded by having his office close to, or incorporated within, his residence, a flexibility provided by the Palace apartment much appreciated by the previous Bishop. 38. Had those been the only difficulties, the Old Rectory might, with appropriate modifications, still have been considered as being within the Commissioners’ margin of appreciation as to its suitability. 39. However, most significantly, the Old Rectory is not in Wells. The overwhelming weight of the evidence that we heard was that it is necessary for the Bishop to live in the City of Wells in order to exercise his ministry effectively. While the Commissioners do not accept that this is necessary, their own guidelines in relation to see houses state that “the particular needs of the diocese, as they impact upon the use of the see house” should be taken into account. 40. Furthermore, we note that the Commissioners, having listened to the views of the Bishop’s senior staff, decided to identify the Old Rectory as a temporary residence, acknowledging that it was desirable for the Bishop to reside in Wells. Even so, the

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Bishop would be expected to occupy the Old Rectory for an indefinite period that was not of merely insignificant duration. 41. Our conclusion, in the light of all the evidence and in the context of the diocese and city that we have already described, is that the Bishop of the diocese needs to reside in the City of Wells. 42. Accordingly, we find that even allowing the Commissioners a margin of appreciation, the Old Rectory cannot be considered as providing accommodation which is reasonably suitable as a residence for the Bishop, even on a temporary basis. 43. We note in passing that there has been some public criticism of the Commissioners for the purchase of the Old Rectory as representing poor value for money. We do not share that view. Substantial improvements have been made to the property since it was previously in diocesan ownership and we accept the Commissioners’ assertion that it represents an attractive investment asset.

Suitability – the Palace apartment 44. We heard in evidence that the Commissioners carried out a review of the Bishop’s accommodation at the Palace in 2007 and found it to be suitable. The Commissioners’ policy guidelines on see houses (to which we refer above) have not changed since then. Work is needed to bring the apartment up to an acceptable decorative standard after nearly twelve years’ occupation by the previous Bishop and his wife, but it is not clear that the accommodation itself has changed since then in a way that would make it unsuitable now. 45. While the layout of the apartment is not ideal, it is at least satisfactory. There is a separation of the Bishop’s private rooms from guest rooms and separate entrances make it possible for Bishop and his family to come and go without having to pass through the guest accommodation or vice versa. 46. We noted the proximity to the apartment of office facilities for the staff who work in the Palace and of other residential accommodation (including that of the Bishop’s domestic chaplain and the Head Gardener and his family), but entirely satisfactory arrangements for the separation of the Bishop’s private accommodation are in place. Once inside the front door of the apartment, the Bishop and his family would be entirely private. 47. We also consider that although access to the Bishop’s private garden is through public areas of the grounds, it is nevertheless itself private. We echo the Commissioners’ concerns that aspects of the grounds and the access to the private garden present safety issues in relation to young children and pets. We believe, however, that these issues can be managed and would encourage the Commissioners and the Palace Trust to consider more precisely how to achieve that. 48. The Commissioners, however, say that changes have taken place at the Palace since 2007 that mean that the apartment is now unsuitable. They base their case for unsuitability primarily on concerns about privacy, the demands of a close relationship with the affairs of the Palace Trust and the risk of reputational damage to the Bishop and his ministry through association with any financial difficulties encountered by the Palace Trust. 49. They point to the improvement in the facilities at the Palace as a visitor attraction. They are concerned that an increasing number of visitors would impact on the privacy of the Bishop and affect his ministry negatively.

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50. While we accept that these are very proper concerns on the part of the Commissioners, having visited the Palace and the apartment ourselves it is our view that the concerns about privacy are significantly overstated. 51. It is true that the visitors are present during the Palace’s hours of opening to the public (essentially, during office hours), but public access is clearly well managed so that such visitors are kept away from the area of the Bishop’s offices and private apartment. The apartment’s location on the first floor further distances the residents from the visitors. The projected visitor levels of 200-260 per day on average seem to us entirely manageable on this extensive site. We are satisfied that if the Bishop and his family were in the apartment during the day they would not be disturbed by those visitors. 52. Furthermore, the Commissioners were concerned that if the Bishop were to reside in the Palace, he would be at risk of becoming drawn excessively into the affairs of the Palace Trust. They have cited the concern expressed by the diocese in its statement of needs relating to the recent vacancy in see that the new Bishop “will need to develop a new, and less demanding relationship, with the Palace Trust, in order to be able to focus better on the life of the wider diocese.” The Commissioners’ view is that it will be impossible for the Bishop to avoid becoming heavily involved in the Trust’s affairs if he lives in the apartment at the Palace. 53. On the basis of the evidence we have heard, we do not consider that the place where the Bishop resides will have any significant impact on the extent to which he might be drawn into the Trust’s affairs. We consider that the risk will not be appreciably different whether the Bishop resides in the Palace or elsewhere. The extent to which he is involved, whether through the governance structure of the Trust or otherwise, is a matter for him, advised by his Council, and for the Trust itself. 54. The Commissioners are also concerned about the risk of reputational damage to the Bishop and the impact on his ministry should the Palace Trust find itself in serious financial difficulties. They consider that the risk, and impact, will be much greater if he is living in the Palace. 55. We do not consider that there is any basis for concluding that the risk of reputational damage or impact on his ministry would, were such circumstances to arise, be any less if he lived elsewhere. The public do not, on the whole, differentiate between one part of the Church and another. Financial difficulties for the Trust would almost certainly draw public attention not only to the Trust, but also to the Church of England in the diocese and the Bishop. We cannot see any basis for concluding that the impact would be different if the Bishop lived outside the Palace. 56. Moreover, while there clearly are risks associated with the current strategy of the Palace Trust – as there are with any such enterprise – we do not consider that the evidence indicates that the current strategy will not succeed. We heard directly from the Trust and reviewed the figures and future strategy presented to us and balanced that against the information presented to us by the Commissioners. 57. We accept that the information presented by staff to the Bishoprics and Cathedrals Committee on which that Committee based its advice to the Board of Governors reflected the financial position of the Trust and was as up-to-date as possible when the decision in respect of Croscombe was announced in October 2013 and that it gave reasonable cause for concern at the time. 58. However, it was clear to us that the position had altered in a positive direction since then and that the Trust was taking a proper and professional approach to the successful

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management of a visitor attraction, coupled with sensitivity towards the privacy of the Bishop and his family. 59. Our conclusion therefore – again allowing the Commissioners a proper margin of appreciation – is that the apartment in the Palace does amount to accommodation which is reasonably suitable for the purpose of a residence for the Bishop. 60. For the avoidance of doubt, however, we have not, in reaching this conclusion, concluded that only the apartment in the Palace could ever provide reasonably suitable accommodation. 61. The Commissioners drew our attention to their responsibilities to the wider Church, both in relation to their duty to make provision “for the cure of souls in parishes where such assistance is most required” and their responsibility for clergy pensions under the pre- 1998 pension scheme. 62. While we entirely accept that the Commissioners must take account of these wider responsibilities in deciding how to allocate their resources, we do not regard this as a strong argument in this case. 63. We wish to be clear that we do not accept the interpretation placed on the legislation by the Bishop’s Council that the legislation in some way creates a presumption in favour of the status quo. If the Commissioners were faced with a choice between two properties, one of which was the existing see house and both of which were found to be reasonably suitable, it would be within the Commissioners’ discretion to determine which of the two properties should be the see house. That determination might well be informed by the financial implications of the choice on their wider responsibilities. 64. But here, where we have concluded that the Old Rectory does not amount to reasonably suitable accommodation, the position is different. The Commissioners’ wider responsibilities do not qualify the duty to provide accommodation for bishops which is reasonably suitable for the purpose.

Consultation 65. We accept that the Commissioners are not under a statutory duty to carry out consultation before deciding how to exercise their duty to provide accommodation for bishops. We also accept that they carried out some consultation with the Bishop’s senior staff in the present case. But we consider that, in reaching their decision, the Commissioners needed to take into account the particular context of Wells. A proper recognition of the needs of the Church and the wider community in the diocese should have led them to carry out a wider and earlier consultation exercise in the present case. We were surprised that the Bishop’s Council was not involved in such consultation as was carried out. 66. We have not reached our decision on the basis of inadequate consultation: our conclusions have been reached on the merits of the decisions in question. But it seems to us that the wrong result might have been avoided had more satisfactory consultation been carried out and at an earlier stage.

Damage to pastoral relationships 67. The Commissioners failed to anticipate the impact of their decision in Wells and in the wider diocese. While we acknowledge that the extent of public dissatisfaction significantly increased following the involvement of the local Member of Parliament,

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adverse public reaction had in fact been predicted in October 2013 by one of the Bishop’s senior staff. And we note that, although the full extent of concern both in the diocese and amongst a wider public only became clear following the announcement of the Commissioners’ intention to move the see house, evidence was apparent to the Commissioners before their confirmation of the decision at the end of February this year. 68. We accept that the Commissioners were anxious not to undermine the position of the Palace Trust by raising questions about its prospects and were therefore cautious about the reasons that they initially gave. However, we also recognise that the level of public discontent has been exacerbated because the Commissioners felt unable to declare from the outset the reasons for their decision. 69. We nevertheless wish to make it clear that we have not reached our decision on the basis of any damage to pastoral relationships that may have occurred. We heard from both parties and from witnesses of their commitment and determination to move forward in a spirit of collaboration from the Committee’s decision. We trust that all concerned will work to rebuild relationships within the diocese and more widely.

Decision 70. The Commissioners have failed to satisfy us that the Objection should not be upheld. 71. We accordingly direct that the transaction shall not proceed.

Mary Chapman Philip Fletcher Cherry Vann

1 May 2014

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