DURHAM CATHEDRAL ANNUAL REVIEW AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018
Durham Cathedral, Accounts for the year ended 31 March 2018
Durham Cathedral is a Christian Church of the Anglican Communion, the shrine of St Cuthbert and the seat of the Bishop of Durham. It is a focus of pilgrimage and spirituality in North East England.
Our Purpose Our purpose is to worship God, share the gospel of Jesus Christ, welcome all who come, celebrate and pass on our rich Christian heritage and discover our place in God’s creation.
Our Vision Following the example of Saints Cuthbert and Bede, we share our faith and heritage globally and empower people to transform the communities in which we live and serve.
Our Place We inhabit a treasured sacred space set in the natural and human landscape of the World Heritage Site.
What We Do Six areas of life, experienced as strands in a rope which, as they interweave, touch and support each other, make Durham Cathedral what it is today.
1. Worship and Spirituality We worship God through daily prayer and praise, and celebrate the contributions of music and art to the spiritual life of the Cathedral.
2. Welcome and Care We welcome all who cross our threshold and express Christian care in all aspects of our life as a community.
3. Learning, Nurture and Formation We help people to encounter God and grow in faith and discipleship by offering opportunities for dialogue, learning and research.
4. Outreach and Engagement We work in active partnerships for the good of the Diocese and the communities of North East England and to contribute to Durham’s flourishing and significance.
5. Buildings, Treasures and Environment We conserve, develop and interpret our buildings, environment and historic collections, while respecting the Church as a place of prayer.
6. Finance and Stewardship We steward our resources prudently, generously and ethically to sustain our activities and provide extensive public benefit.
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Durham Cathedral, Accounts for the year ended 31 March 2018
Our Values In all things, we are inspired, motivated and challenged by the Christian faith and the values of the Gospel.
Spirituality We recognise and respond to God’s presence in our world and among us, practicing a reflective approach to what we do.
Respect We recognise the image of God in all human beings, honour their dignity and treat them with courtesy.
Justice We deal fairly in our personal and collective behaviours, work to the highest ethical standards, and are honest in our speech and behaviour. We think, speak and act with integrity, are professional in our conduct, and are publicly accountable for our actions.
Collaboration We are a community founded on trust that prizes team working and builds partnerships that contribute to the common good.
Sustainability We are business-like in our corporate life and prudent in our stewardship of resources. We pursue the sustainability of our operations and environment.
Welcome We are welcoming and hospitable to all. We show Christian love and care to our guests and those who need our help.
Aspiration We are an outward-facing Cathedral that reaches for the future with energy and courage, and reaches out to our communities in the hope of personal and social transformation.
Constitution
The Cathedral is governed by the Constitution and Statutes of the Cathedral Church of Christ, Blessed Mary the Virgin and St Cuthbert of Durham, which were most recently amended on 1 May 2015.
The Chapter The members during the year were:
The Very Revd. Andrew Tremlett The Dean The Revd. Canon Dr David Kennedy Canon Catherine Barnes Installed as a Lay Canon 11 February 2018 The Revd. Canon Rosalind Brown Retired 31st August 2018 The Venerable Ian Jagger The Archdeacon of Durham The Revd Canon Sophie Jelley The Revd Canon Professor Simon Oliver Canon Ivor Stolliday Treasurer, installed as a Lay Canon 11 February 2018 Canon Simon Wood Installed 11 February 2018
Members of the Chapter are also the Governors of The Chorister School.
Senior Office Holders Mr. Philip Davies Chapter Clerk, Retired 1 April 2018 Mrs. Amanda Anderson Chapter Clerk & Chief Operating Officer, Appointed 19 March 2018
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Durham Cathedral, Accounts for the year ended 31 March 2018
Senior Office Holder (continued)
Mrs. Jayne Manns Director of Finance Mrs. Yvette Day Headmistress of The Chorister School, Resigned December 2017 Mr. Ian Wicks Headmaster of the Chorister School Installed 14 January 2018 Canon Dr. James Lancelot Organist and Master of the Choristers, Retired 31 August 2017 Mr. Daniel Cook Organist and Master of the Choristers, Installed 16 September 2017
The Cathedral Council The members during the year were:
Canon Paul Chandler Chairman
The Right Revd Paul Butler The Bishop of Durham (non-voting) The Very Revd Andrew Tremlett The Dean (ex-officio) The Revd Canon Dr David Kennedy Chapter Representative Canon Ivor Stolliday Chapter Representative The Revd Canon Alec Harding College of Canons Representative The Revd Canon Judith Hirst College of Canons Representative Dr Patrick Gray Durham University Representative Miss Faye Dufferwiel Cathedral Community Representative Mr. Richard Hilton Cathedral Community Representative Mr. Khaiko Makwela-Wali Cathedral Community Representative Dr Maria Cockerill Co-opted Members Mrs. Kate Fenwick Co-opted Members The Revd Ruth Gee (resigned July 2018) Co-opted Members Mr. Roger Kelly Co-opted Members Mr. Ian Percy (retired October 2017) Co-opted Members Mrs. Jane Robinson Co-opted Members Mr. Simon Still Co-opted Members
Mr. Philip Davies (retired 1 April 2018) Secretary Mrs. Katharine Smith (appointed 1 April 2018) Secretary
The College of Canons The members during the year were:
The Very Revd Andrew Tremlett The Dean Canon Catherine Barnes Installed 11 February 2018 The Revd Canon Rosalind Brown Retired 31 August 2018 The Venerable Ian Jagger The Archdeacon of Durham The Revd Canon Sophie Jelley The Revd Canon Dr David Kennedy The Revd Canon Professor Simon Oliver Canon Ivor Stolliday Installed 11 February 2018 Canon Simon Wood Installed 11 February 2018 The Venerable Stuart Bain Archdeacon of Sunderland, Resigned 16 March 2018; Installed as a Supernumerary Non-Residentiary Canon 29 April 2018 The Revd Canon Sheila Bamber Installed 18 June 2017 The Venerable Nicholas Barker Archdeacon of Auckland, Retired 31 July 2017 The Revd Canon Dr Alan Bartlett
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Durham Cathedral, Accounts for the year ended 31 March 2018
The College of Canons (continued)
The Revd Canon David Brooke Resigned July 2018 The Right Revd Mark Bryant Bishop of Jarrow The Revd Canon Janet Burbury The Revd Canon Graeme Buttery Canon Paul Chandler The Venerable Robert Cooper Archdeacon of Sunderland, Installed 3 July 2018 The Revd Canon Caroline Dick The Revd Canon Raymond Dick The Revd Canon Vince Fenton The Revd Canon Adrian Gatrill The Revd Canon David Glover The Revd Canon Jane Grieve The Revd Canon William Hall Deceased 20 May 2017 The Revd Canon Alec Harding Canon Dr James Harrison The Revd Canon Judith Hirst Canon Dr David Hunt Retired April 2017 The Revd Canon Marilyn Jamieson The Revd Canon Colin Jay Installed 29 April 2018 Canon James Lancelot Retired 31 August 2017 Canon Dr Margaret Masson Installed 5 November 2017 The Revd Canon Heather Murray Canon Andrew Rogers Installed 18 June 2017 The Revd Canon John Ruscoe The Revd Canon Valerie Shedden Installed 5 November 2017 The Baroness Sherlock OBE Resigned July 2018 The Revd Canon Maurice Simmons Deceased 27 November 2017 The Venerable Richard Simpson Archdeacon o Auckland, Installed 11 February 2018 Canon Professor Michael Snape The Revd Canon Dorothy Snowball Installed 5 November 2017 The Revd Canon David Tomlinson Installed 5 November 2017 The Revd Canon Paul Tyler Canon Margaret Vaughan Installed 18 June 2017 The Revd Canon Michael Whitehead Deceased 22 May 2018 The Revd Canon Keith Woodhouse The Revd Canon Caroline Worsfold
Finance and General Purposes Committee The members during the year were:
Canon Ivor Stolliday Chairman The Very Revd Andrew Tremlett The Dean Canon Catherine Barnes Mrs. Jayne Manns Director of Finance Mr. Ian Percy Retired October 2017 Mr. Simon Still
Mr. Philip Davies Secretary, Retired 1 April 2018 Mrs. Katharine Smith Secretary, Appointed 1 April 2018
Resources Committee The members during the year were:
Canon Ivor Stolliday Chairman The Very Revd Andrew Tremlett The Dean
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Durham Cathedral, Accounts for the year ended 31 March 2018
Resources Committee (continued)
Canon Catherine Barnes Mr. Philip Davies Chapter Clerk, Retired 1 April 2018 Mrs. Amanda Anderson Appointed 19 March 2018 Mr. Ian Hunter Head of HR and OD Mrs. Jayne Manns Director of Finance
Fabric Advisory Committee The members during the year were:
Mr. Robin Dower Chairman, Retired July 2017 Mr. Humphrey Welfare Chairman, From July 2017 Mr. Andrew Boyce Dr. Mary Brooks From July 2018 Ms. Sarah Brown From July 2018 Mr. David Carrington Mr. Hugh Dixon Mr. Colin Haylock Dr Julian Luxford Mr. Martin Roberts
Mrs. Katharine Smith Secretary, from September 2017
Audit Committee The members during the year were:
Canon Paul Chandler Chairman Canon Catherine Barnes Dr Maria Cockerill The Venerable Ian Jagger Mr. Simon Still
Mr. Philip Davies Secretary, Retired 1 April 2018 Mrs. Katharine Smith Secretary, Appointed 1 April 2018
Investment Committee The members during the year were:
Mr. Simon Still Chairman The Very Revd Andrew Tremlett The Dean Mr. Andrew Martell Retired 30 April 2018 The Hon James Ramsbotham Mr. Ivor Stolliday Mr. Harry Swan Mr. Luke Busbridge Appointed 6 November 2017 Mr. John Newlands Appointed 6 November 2017
Mr. Philip Davies Secretary, Retired 1 April 2018 Mrs. Jayne Manns Secretary, Appointed 1 April 2018
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Durham Cathedral, Accounts for the year ended 31 March 2018
Title: The Cathedral Church of Christ Blessed Mary the Virgin and St Cuthbert of Durham.
Address The Cathedral Office Investment Cazenove Capital Management The College managers Limited Durham 12 Moorgate DH1 3EH London EC2R 6DA
Auditors UNW LLP Rathbone Investment Citygate Management Limited St James’ Boulevard 1 Curzon Street Newcastle upon Tyne London NE1 4JE W1J 5FB
Bankers Barclays Bank plc Solicitors Swinburn Maddison LLP Barclays House Venture House 5 St Ann’s Street Aykley Heads Business Centre Quayside Durham Newcastle upon Tyne DH1 5TS NE1 3DX
Insurers Ecclesiastical Insurance Cathedral Mr. Chris Cotton RIBA AABC Office plc Architect Purcell Beaufort House 29 Marygate Brunswick Road York Gloucester YO30 7WH GL1 1JZ
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Durham Cathedral, Accounts for the year ended 31 March 2018
Index Page(s)
The Chapter’s annual report 9 – 12
Financial review 12 – 14
Statement of the Chapter’s responsibilities 15
Report of the Auditors 16 – 18
Consolidated statement of financial activities 19
Consolidated balance sheet 20
Charity balance sheet 21
Consolidated statement of cashflows 22
Notes to the accounts 23 – 43
Special Trust accounts 44
Definitions
DCT Durham Cathedral Trading Limited
DCOT Durham Cathedral Open Treasure Limited
FY17 Financial year ended 31 March 2017 FY18 Financial year ended 31 March 2018
PYA Prior year actual
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Durham Cathedral, Accounts for the year ended 31 March 2018
THE CHAPTER’S ANNUAL REPORT
The Chapter presents its report and the Cathedral’s audited financial statements for the year ended 31 March 2018.
Strategic Plan 2018-2020 Durham Cathedral’s Strategic Goals for the period 2018-2020 are as follows:
1. ENRICH: To draw more people into enriching and imaginative encounters with the Cathedral and the Christian faith.
We will continue to develop the Cathedral’s offer to visitors and promote it widely. We will continue to develop both traditional and innovative forms of worship to engage with a broader worshipping constituency. We will extend our parish, ecumenical and community engagement through welcome, worship, education and outreach, supporting the Bishop’s mission. We will develop a pilgrimage that is diocesan, national and international leading to Pilgrimage 2020.
2. CONSERVE: To care for, develop, and improve access to our buildings, collections and environment.
We will continue to improve the management, stewardship, accessibility and promotion of the Cathedral’s collections. We will develop capacity, either in-house or through partnerships, to manage and conserve our buildings, collections and environment. We will implement 15-year repair and maintenance plans for the Cathedral and Precinct (including Riverbanks) and develop appropriate opportunities to improve public access.
3. PROMOTE: Through our work, and in partnership with others, to promote excellence in the North East and be a force for good in our region.
We will continue to enhance the Cathedral’s economic contribution regionally and nationally through taking initiatives to increase visitor numbers and dwell-time in North East England. We will actively promote and facilitate dialogue and public debate across the region, enhancing the role of the Cathedral as the seat of the Bishop’s teaching ministry. We will aim to achieve nationally recognised standards of excellence across the Cathedral and celebrate these achievements. We will build on the excellent standards of The Chorister School by growing pupil numbers, careful resource management and the development of the Chorister Endowment Fund.
4. TRANSFORM: To put the development of people at the heart of everything we do so as to transform our communities.
Through organizational development and workforce planning we will better harness the skills and talents of the Cathedral’s staff and volunteers, in support of the Cathedral’s vision and mission. We will support lifelong learning and encourage inter-generational engagement within our community. We will improve our internal communications and the flow of information across the Cathedral.
5. SUSTAIN: To achieve greater financial sustainability
We will produce and implement 3-year business plans for Durham Cathedral, Durham Cathedral Open Treasure Limited and Durham Cathedral Trading Limited.
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Durham Cathedral, Accounts for the year ended 31 March 2018
We will continue to grow voluntary, ticketed and commercial income, including fundraising for Foundation 2020. We will monitor financial performance and control costs by establishing a rigorous and timely financial reporting regime. We will improve cash management so as to achieve a steady state cash flow and remove the need for loan finance.
Role and Organisation Durham Cathedral, or to give it its full title, ‘The Cathedral Church of Christ, Blessed Mary the Virgin and St Cuthbert of Durham’, is a Christian Church of the Anglican Communion, the shrine of St Cuthbert, the seat of the Bishop of Durham and a focus of pilgrimage and spirituality in North East England. The Cathedral’s governing Constitution and Statutes were most recently amended on 1 May 2015, in accordance with the Cathedrals Measure 1999.
Three bodies together form the body corporate of the Cathedral – the Chapter, the Cathedral Council and the College of Canons.
The Chapter is the governing body of the Cathedral, providing strategic direction and oversight. Section 4 (8) of the Cathedrals Measure states that the main function of the Chapter is “to direct and oversee the administration of the affairs of the cathedral”. The Chapter is formed of both clergy and lay people. The Dean and all Residentiary Canons are members. In addition, up to four lay persons, who are communicants, may be appointed by the Bishop in consultation with the Dean and other members of the Chapter. The Chapter is chaired by the Dean.
All new Chapter members must undertake an Association of English Cathedrals programme of induction, which covers Cathedral legislation, governance, Cathedral finances and property management.
The Cathedral Council meets three times a year to further and support the work of the Cathedral and advise the Chapter. Its membership is again specified in the Constitution and Statutes (see page 4 of this document). The Council is chaired by Canon Paul Chandler, who is appointed by the Bishop. The Bishop can attend and speak at the Council although he is not a member.
The College of Canons consists of the Dean and Residentiary Canons, suffragan bishops, archdeacons and honorary and lay canons. The College meets at least once a year to consider cathedral affairs. It also has the task of electing a new bishop in accordance with the Appointment of Bishops Act 1533.
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Durham Cathedral, Accounts for the year ended 31 March 2018
Governance In addition to the Chapter, the governance committees of Durham Cathedral are shown in purple in the below diagram:
The membership of these committees is listed on pages 3 to 6 of this document.
Public benefit Although it is not a reporting requirement of the Church Commissioners, nevertheless Chapter confirm that they have complied with section 4 of the Charities Act 2006 to have regard to the public benefit guidance published by the Charity Commission in determining the activities of the Cathedral. The Cathedral not only serves the community daily in its religious and charitable work, but is an active resource of national importance in the promotion of religion, music, education, history and architecture.
Staff The Chapter is supported by a team of around 150 staff, led by the Chapter Clerk and Chief Operating Officer, the senior lay person responsible for the day-to-day operation of the Cathedral.
Volunteers Durham Cathedral relies heavily on its extensive team of volunteers, providing vital support to members of staff and Chapter in fulfilling the mission, values and activities of the Cathedral. There are in excess of 750 volunteers undertaking more than 100 different volunteer roles which cover every facet of the Cathedral’s community. These include senior volunteers who coordinate other volunteers, and both specialist and non-specialist responsibilities including welcome stewards, guides, education volunteers, flower arrangers, broderers, listeners, bell ringers, foodbank volunteers, conservation volunteers, NADFAS volunteers, servers, library volunteers, woodland and riverbanks volunteers, interns, administrative and reception volunteers. The members of most of the Cathedral’s governance committees are also volunteers and give valuable time and experience to assist Cathedral management. Their incredible contribution is estimated at easily 150,000 hours per annum which equates to approximately £1.5 million in-kind support for time given alone. In addition to adding value to the
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Durham Cathedral, Accounts for the year ended 31 March 2018
organisation and supplementing existing work, Guides and Tower Stewards raise much needed cash income. Group bookings generate approximately £65,000, plus additional spend on booked catering in Prior’s Hall. Public Tours generate approximately £22,000 per annum and NW Tower Trips have also started to generate income since spring of 2018. Volunteers are also often patrons, donors, and support the café and restaurant as well as being our greatest ambassadors and advocates.
Financial review These accounts have been prepared in accordance with the 2015 Accounting and Reporting Regulations for English Anglican Cathedrals (“the Regulations”) specified by the Church Commissioners under section 27 of the Cathedrals Measure 1999. The accounts comply with the Regulations other than in the treatment of two items capitalised as Inventory acquired partially with the aid of grants from public bodies. The accounting treatment for these items is disclosed in Note 1 under “Inventory” and the costs are disclosed in Note 7b.
The accounts have been prepared in thousands of pounds and this may result in rounding differences of £1k.
Income Income from donations and legacies totalled £1.83m compared to £1.05m in FY17.Legacies totalled £1.08m compared with £216k the prior year. Of this total, £250k related to the Cathedral fabric fund, £250k to the lobbies project, £225k to the library and collections department, £200k to Foundation 2020, and a further £100k to the cloister roof fund.
Grants in support of mission totalled £1.16m compared with £1.22m in FY17, an decrease of 5%. This income includes £318k from the government’s World War 1 Centenary fund for the capital works on the Central tower and a further £378k of other revenue grants which included £265k for the lobbies project, which is a capital project that will continue until 2019.
Income from the Cathedral’s trading subsidiary, Durham Cathedral Trading Limited (DCT), is shown under the heading “Trading and chargeable events” and totalled £611k, down 5% compared with the prior year, the majority of this fall being due to the fall in visitor numbers to the cathedral. The gift shop (which is operated by DCT), continues to trade well in a competitive market and net profits are transferred to the Cathedral under the corporate gift aid rules.
Income from the property portfolio and stock market investments increased by 3% compared with FY17. Commentary on returns from the investment and property portfolios are given on page 13.
Total income is £8.08m, 16% higher than the prior year, easing the strain slightly on the Cathedral’s cashflow. Of this increase in overall income, unrestricted income showed a 8% increase, whilst restricted income showed a 52% increase due to non- recurring legacies and grants as mentioned in earlier paragraphs.
Expenditure Expenditure on raising funds increased by 4% to £3.84m and accounts for 39% of total expenditure. Within this category, shop, restaurant and other trading costs total £1.69m (£60k (4%) higher than FY17) and include £1.18m of costs from DCOT (FY17 - £991k). These costs, which primarily relate to activity costs and overheads from the Open Treasure project were partly reimbursed through grant income from the Heritage Lottery fund.
Education and outreach costs increased by 5.7% to £1.31m with the increase being due to increased educational activities within the Chorister School. This was offset however by a corresponding increase in income from the Chorister School.
Cathedral and precincts upkeep costs showed an increase of £1.85m, accounting for 36% of total expenditure compared to 24% in FY17. This was largely due to the write off of £1.43m of costs previously capitalised relating to stonework in Open Treasure. Major repairs and restoration also included further costs on the Central Tower project which is due to end in 2018. The cost of fabric repairs remains one of the key financial challenges faced by the Cathedral and fundraising is continuous; both now and in the medium to long term.
Total expenditure is £9.94m and is 27.5% higher than the prior year, most of this being accounted for by the “one-off” write down of the Open Treasure stonework previously capitalised as mentioned in earlier paragraphs.
Net gains on investments are £3.12m (FY17: £1.39m), reflecting the unrealised gain on revaluation of land at Pimlico and Darlington.
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Durham Cathedral, Accounts for the year ended 31 March 2018
Cashflow The Cathedral continues to face significant cashflow pressures. The consolidated cashflow statement shows a net cash inflow of £47k, compared to a net cash outflow of £1.51m for FY17.
The Cathedral does not have a steady state cashflow due to the material variance in many of its income and cost lines each year. Cash management is therefore critical and is actively managed to ensure that resources are optimised and funding charges are minimised.
Financial strategy The net FY18 deficit for unrestricted funds is £1.33m (FY17: £1.14m). FY18 was another challenging financial year, with property repairs and maintenance spend, a fall in visitor numbers, and a reduction in some non-recurring income streams combining to generate a significant deficit and increase pressure on the cashflow of the Cathedral.
This level of unrestricted deficit is clearly unsustainable and steps continue to be taken by Chapter to immediately reduce and, within the medium term, eliminate the deficit.
A strategic plan has been produced as outlined in earlier paragraphs and sets out key actions for the next three years. It includes growing the Cathedral’s endowment through property transactions and matched fundraising on both national and international levels.
It is through a combination of fundraising, realised proceeds from property deals (invested in a new expendable endowment), growing pupil numbers at the Chorister School and increasing voluntary donations to the Cathedral that the Chapter anticipates that the unrestricted fund will generate an annual surplus within five to 10 years.
More immediate measures include identifying new income streams, stringent budget management and overhead savings wherever possible.
Principal funding The Cathedral aims to be self-funded for day to day operations, but relies heavily on grants, legacies and other external funding for project spend – for both property and other non-recurring costs. The Cathedral has been notified that it will be in receipt of a legacy consisting of commercial land, residential properties, investments and cash estimated at approximately £6.8m. The transfer of some assets are underway with the full transfer expected in early 2019.
Adequate facilities to meet the strategic plan are in place, with an overdraft facility arranged to cover cashflow requirements in light of the negative unrestricted reserves.
Reserves policy Reserves are needed both to maintain the level of the Cathedral’s current activities and to enable the completion of long-term projects.
The Cathedral has had to utilise through necessity all of its unrestricted reserves over the last decade, despite improving efficiencies, as it has been running with an annual deficit. As noted above, there are plans to eliminate the deficit, with an aspiration to build unrestricted reserves to cover at least six months of normal operating costs.
Where specific future funding needs are identified, Chapter has the discretion to set aside free funds for designated purposes, those funds being declared as Designated Funds. Details of Designated Funds are given in Note 16 to the Accounts.
Investments The investment objective is to ensure the creation of sufficient income and capital growth to enable Durham Cathedral to carry out its purposes consistently each year with due and proper consideration to the future needs and maintenance and, if possible, the enhancement of the invested funds. The investments held by Durham Cathedral were managed during FY18 by two investment managers: Cazenove Capital Management (now part of Schroder & Co Limited) and Rathbone Investment Management Limited. A medium to low risk profile is taken on investments and performance is measured against composite benchmark indices for each fund manager.
UK equities continue to be the main investment class, accounting for 48.45% of the total portfolio (FY 17 – 49.46%). Investment levels are within ranges specified by the Cathedral’s Investment Committee.
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Durham Cathedral, Accounts for the year ended 31 March 2018
Gross investment income for FY18 was £571k (FY17: £550k), representing a yield of 3.47% (FY17: 3.7%) based on the average investment portfolio market value over the year. The total return earned is consistent with the benchmark return set for both fund managers.
Investment property Durham Cathedral owns property to house clergy, staff, the Chorister School, and Cathedral offices. Other property is held for investment purposes and is rented out on a commercial basis. The property portfolio includes commercial buildings, farms, houses and sundry property including garages and allotments.
The return on the property portfolio is as follows:
FY18 FY17 £'000 £'000
Gross rental income 919 896 less non-recurring income (67) (60)
Adjusted income 852 836
Repairs & maintenance costs (93) (102)
Net income 759 734
Weighted average capital value of investment properties - Note 1 22,283 23,218 Return on capital value 3.40% 3.16%
Note 1 - a weighted average has been used for the capital value, taking account of property sales during each year
Professional fees relating to managing the property portfolio have been excluded for both years since the majority of fees are in connection with future land deals and do not relate to the day-to-day management of the property portfolio.
The return of 3.40% in FY18 is below the target of 3.5% required from fund managers for managed funds. The return dropped to 3.16% in FY17 due to the continued high level of repairs and maintenance spend, which for some properties was required to compensate for under investment in prior years.
Plans for future periods Future financial strategic work includes the introduction of a regular business planning cycle and a complete commercial review. Other strategic work includes a full governance review.
The main “live” capital projects include completing the central tower project, the cloister roof and replacing the lobbies within the main body of the Cathedral.
Investment powers Under the Cathedrals Measure 1999, the Chapter may invest the Cathedral’s funds in the following categories:
Land; The improvement or development of property belonging to the Cathedral, except that endowment funds may not be used to improve or develop the Cathedral itself or its ancillary buildings; Funds administered by the Central Board of Finance of the Church of England by CCLA Investment Management Limited; and Investments in which trustees may invest under the general power of investment under the Trustee Act 2000.
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Durham Cathedral, Accounts for the year ended 31 March 2018
Statement of the Chapter’s responsibilities The Chapter is responsible under requirements laid down by the Church Commissioners under the powers given to it by Section 27 of the Cathedrals Measures 1999 for:
a. Keeping proper accounting records from which the financial position of the Cathedral can be ascertained with reasonable accuracy at any time; b. Preparing and publishing an annual report and audited accounts which give a true and fair view of the financial activities for each financial year of the assets, liabilities and funds at the end of each financial year of the Cathedral and its subsidiaries; c. Stating that they have complied in all material respects with the regulations on the subject prepared by The Cathedrals Administration and Finance Association or describing which regulations have not been complied with and giving reasons for non-compliance; d. Selecting suitable accounting policies and then applying them consistently; e. Making judgements and estimates that are reasonable and prudent; f. preparing the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue to operate; g. Safeguarding the assets of the Cathedral and hence taking reasonable steps for the prevention and detection of fraud and other irregularities; and h. The maintenance and integrity of the corporate and financial information included on Durham Cathedral’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The major risks to which Durham Cathedral is exposed are assessed on an annual basis based mainly on a specific risk register which covers most aspects of the organisation. The Chapter considers that systems are in place, which mitigate those risks. Monitoring of risk is undertaken throughout the course of the year by the Chapter, the senior management team and the Audit Committee.
In so far as the Chapter is aware:
there is no relevant audit information of which the auditor of Durham Cathedral and its subsidiaries is unaware; and the Chapter members have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.
Auditors UNW LLP will be proposed for re-appointment as auditors for the coming financial year.
On behalf of the Chapter
………………………………………………………….. Treasurer
………………………………………………………….. Dean
Date: 11 September 2018
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Durham Cathedral, Accounts for the year ended 31 March 2018
Independent Auditors’ report to the Chapter of Durham Cathedral Opinion
We have audited the financial statements of Durham Cathedral (the “parent charity”) and its subsidiaries (the “group”) for the year ended 31 March 2018 which comprise the consolidated statement of financial activities, the consolidated balance sheet, the charity balance sheet, the consolidated statement of cash flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the group’s and the charity's affairs as at 31 March 2018 and of the group’s incoming resources and application of resources, including its income and expenditure for the year then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and have been prepared in accordance with the requirements specified by the Church Commissioners under the power given to them by the Cathedrals Measure 1999.
Basis of opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the ‘Auditor's responsibilities for the audit of the financial statements’ section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
the Chapter's use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or Chapter have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group or the charity’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
Respective responsibilities of the Chapter and auditor
The Chapter are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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Durham Cathedral, Accounts for the year ended 31 March 2018
Opinion on other matters prescribed by the Cathedrals Measure 1999
In our opinion, based on the work undertaken in the course of the audit:
the information given in the Chapter's annual report, which includes the group strategic report for the financial year, for which the financial statements are prepared is consistent with the financial statements; and the Chapter’s report, which includes the group strategic report, has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of our knowledge and understanding of the group and the charity and its environment obtained in the course of the audit, we have not identified material misstatements in the Chapter’s report.
We have nothing to report in respect of the following matters in relation to which Companies Act 2006 requires us to report to you if, in our opinion:
the parent charitable company has not kept adequate and sufficient accounting records, or returns adequate for our audit have not been received from branches not visited by us; or the financial statements are not in agreement with the accounting records and returns; or certain disclosures of Chapter’s remuneration specified by law not made; or we have not received all the information and explanations we require for our audit.
Responsibilities of the Chapter
As explained more fully in the statement of the Chapter’s' responsibilities on page 14, the Chapter is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Chapter determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Chapter is responsible for assessing the charity's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Chapter either intend to liquidate the charity or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. The description forms part of our auditor's report.
17
Durham Cathedral, Accounts for the year ended 31 March 2018
Who are we reporting to
This report is made solely to the Chapter, as a body, in accordance with Sections 27 of the Cathedrals Measure 1999. Our audit work has been undertaken so that we might state to the Chapter those matters we are required to state to them in an Auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Chapter, as a body, for our audit work, for this report, or for the opinions we have formed.
Andrew Wilson BA FCA (Senior Statutory Auditor) for and on behalf of UNW LLP, Statutory Auditor Chartered Accountants Newcastle upon Tyne 11 September 2018
18
Durham Cathedral, Accounts for the year ended 31 March 2018
Consolidated Statement of Financial Activities for the year ended 31 March 2018
Note Unrestricted Restricted Endowment Total Total funds funds funds 2018 2017
£'000 £'000 £'000 £'000 £'000
Income and endowments from: 4 Donations and legacies 591 985 255 1,831 1,050 Grants in support of mission 478 680 - 1,158 1,219 Charges and fees in the course of 2,299 48 10 2,357 2,094 mission Trading and chargeable events 1,202 9 - 1,211 1,151 Investments 1,469 23 - 1,492 1,448 Other income 27 - - 27 24
Total income 6,066 1,745 265 8,076 6,986
Expenditure on: 5 Raising funds (3,582) (257) - (3,839) (3,700) Ministry (1,067) (24) - (1,091) (1,005) Education and outreach (1,171) (134) - (1,305) (1,235) Cathedral and precincts upkeep (1,571) (2,137) - (3,708) (1,857)
Total expenditure (7,391) (2,552) - (9,943) (7,797)
Net (outgoing)/incoming resources before investment gains/(losses) ( 1,325) (807) 265 (1,867) (811)
Net gains on investments - - 3,121 3,121 1,395
Net movement in funds ( 1,325) (807) 3,386 1,254 584
Funds brought forward 16 ( 1,457) 18,067 47,945 64,555 63,971
Funds carried forward 16 (2,782) 17,260 51,331 65,809 64,555
The consolidated SOFA for the year ended 31 March 2017 (by fund type) is included as Note 18.
The notes on pages 23 to 43 and the Special Trust accounts on page 44 form part of these Financial Statements.
19
Durham Cathedral, Accounts for the year ended 31 March 2018
Consolidated Balance Sheet as at 31 March 2018
Note Unrestricted Restricted Endowment Total Total funds funds funds funds funds 2018 2017
£'000 £'000 £'000 £'000 £'000 Fixed assets Investment assets Property 6a - 7,289 18,363 25,652 22,283 Listed Investments 6b - - 15,803 15,803 15,771
- 7,289 34,166 41,455 38,054 Non-investment assets Property 7a - 7,499 14,429 21,928 23,963 Inventory 7b 116 - - 116 116 Tangible fixed assets 7c 1,641 3 - 1,644 1,733
1,757 7,502 14,429 23,688 25,812
Total fixed assets 1,757 14,791 48,595 65,143 63,866
Current assets Stocks 9 115 - - 115 105 Debtors 10 465 6 - 471 436 Short term deposits 57 117 471 645 752 Cash at bank and in hand (3,855) 2,992 2,465 1,602 1,555
( 3,218) 3,115 2,936 2,833 2,848 Liabilities due within one year Creditors 11 (1,141) (1) (200) (1,342) (1,033)
Net current (liabilities)/assets (4,358) 3,114 2,736 1,491 1,815
Total assets less current liabilities ( 2,602) 17,905 51,331 66,634 65,681
Liabilities due after more than one year Creditors 12 (180) (645) - (825) (1,126)
(2,782) 17,260 51,331 65,809 64,555 Net assets
Funds Unrestricted (2,782) - - (2,782) (1,457) Restricted - 17,260 - 17,260 18,067 Endowment - - 51,331 51,331 47,945
(2,782) 17,260 51,331 65,809 64,555 Total funds 16.1
The financial statements were approved by the Chapter on 11 September 2018 and signed on their behalf by:
…………………………………………………………. …………………………………………………………….
Dean Treasurer
The notes on pages 23 to 43 and the Special Trust accounts on page 44 form part of these Financial Statements.
20
Durham Cathedral, Accounts for the year ended 31 March 2018
Durham Cathedral Balance Sheet as at 31 March 2018
Note Unrestricted Restricted Endowment Total Total funds funds funds funds funds 2018 2017
£'000 £'000 £'000 £'000 £'000 Fixed assets Investment assets Property 6a - 7,289 18,363 25,652 22,283 Listed Investments 6b - - 15,803 15,803 15,771 Investment in subsidiary 6c - 3,000 - 3,000 3,000
- 10,289 34,166 44,455 41,054 Non-investment assets Property 7a - - 14,429 14,429 15,856 Inventory 7b 116 - - 116 116 Tangible fixed assets 7c 380 - - 380 424
496 - 14,429 14,925 16,396
Total fixed assets 496 10,289 48,595 59,380 57,450
Debtors due after more than one year 10 - 1,767 - 1,767 1,718
Current assets Stocks 9 12 - - 12 14 Debtors 10 1,308 - - 1,308 1,350 Short term deposits 57 117 471 645 752 Cash at bank and in hand (3,523) 2,598 2,465 1,540 1,426
( 2,146) 2,915 2,936 3,505 3,542 Liabilities due within one year Creditors 11 (1,040) - (200) (1,240) (867)
Net current (liabilities)/assets (3,186) 2,715 2,736 2,265 2,675
Total assets less current liabilities ( 2,690) 14,771 51,331 63,412 61,843
Liabilities due after more than one year Creditors 12 (225) (600) - (825) (1,064)
(2,915) 14,171 51,331 62,587 60,779 Net assets
Funds Unrestricted (2,915) - - (2,915) (1,906) Restricted - 14,171 - 14,171 14,740 Endowment - - 51,331 51,331 47,945
(2,915) 14,171 51,331 62,587 60,779 Total funds 16.2
The financial statements were approved by the Chapter on 11 September 2018 and signed on their behalf by:
…………………………………………………………. …………………………………………………………….
Dean Treasurer
The notes on pages 23 to 43 and the Special Trust accounts on page 44 form part of these Financial Statements.
21
Durham Cathedral, Accounts for the year ended 31 March 2018
Consolidated statement of cashflows for the year ended 31 March 2018
Note 2018 2017 £'000 £'000 £'000 £'000
Net cash outflow from operating activities 17.1 (736) (1,744)
Returns on investments Rents received net of costs 724 654 Interest and dividends received net of costs 550 529
______
1,274 1,183 Capital expenditure & financial investment Purchase of investments (1,102) (2,404) Sales and transfers of investments 745 1,193 Sales of investment property & freehold land - 1,732 Addition to Open Treasure asset under construction - (1,162) Additions to tangible fixed assets (41) (80) ______(398) (721) ______Cash inflow/(outflow) before management of liquid resources and financing 140 (1,282)
Management of liquid resources Net decrease/(increase) in short term deposits 107 (230)
Financing Repayment of loan (200) - ______
Increase/(Decrease) in cash 17.3 47 (1,512)
The notes on pages 23 to 43 and the Special Trust accounts on page 44 form part of these Financial Statements.
22
Durham Cathedral, Accounts for the year ended 31 March 2018
Notes to the accounts for the year ended 31 March 2018
1. Accounting policies
The accounting policies which affect items that are material in determining the financial position of the Cathedral and its subsidiary entities are set out below. These policies form part of the notes to the financial statements.
Basis of accounting The financial statements have been prepared under the historical cost convention except for the valuation of investments and certain investment and non-investment properties that are carried at fair value. They have been drawn up in accordance with the 2015 Accounts and Reporting Regulations for English Anglican Cathedral Accounts (“the Regulations”) and Financial Reporting Standard (FRS) 102: The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland, effective for accounting periods commencing on 1 January 2015. The accounts are presented in £ sterling, which is considered to be the functional currency, and are rounded to the nearest £’000.
The Cathedral is classed as a public benefit entity.
Basis of consolidation The group financial statements consolidate the accounts of Durham Cathedral and its wholly owned subsidiary undertakings Durham Cathedral Trading Limited and Durham Cathedral Open Treasure Limited, all with financial year ends of 31 March. Transactions between group entities are eliminated on consolidation. No Statement of Financial Activities (“SOFA”) is presented for Durham Cathedral alone as permitted by the Regulations. The finances of the Chorister School Durham, are included in the Cathedral’s accounts since the School is a department of the Cathedral.
Going Concern The Chapter has a stated intent to increase free reserves and has set in place a system of prudent budgets, forecasts and rigorous monitoring to this end. In addition, as part of improving the Cathedrals financial sustainability and addressing the unrestricted fund deficit, actions are being taken to grow a new endowment fund as well as identifying new income streams. Having taken these factors into account, and having considered the budgets and cash flow projections, the Chapter is confident that the Cathedral will continue to be able to meet its liabilities as they fall due for the foreseeable future and have sufficient levels of liquid reserves to cover short term fluctuations in income. The Chapter therefore considers that it is appropriate to prepare the accounts on a going concern basis.
Incoming resources All incoming resources are included in the SOFA when the Cathedral is legally entitled to the income and the amount can be quantified with reasonable accuracy.
Proceeds from the sale of property under the terms of the Endowment are credited to permanent Endowment capital, other than properties that have been transferred from Endowment as explained in Note 16. Any charges incurred in the purchase of property for the Endowment are capitalised where appropriate.
Resources expended All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs relating to the category. Expenditure on repairs, restoration and maintenance of the Cathedral is charged as incurred, with the cost of major repairs and restoration being charged against the Fabric Fund, a restricted fund as disclosed in Note 16. Expenditure on Investment Property is charged against revenue unless the work results directly in a substantial increase in the value of the property and also an increase in rental income when it is capitalised. Irrecoverable VAT has been added to the item of expenditure giving rise to it.
Allocation of support costs The Regulations require allocation of the support costs to those activities which they directly support. Support costs have been allocated to departments on the basis of headcount.
Cathedral and Inventory
The Cathedral and Ancillary Buildings No value is attributed on the balance sheet to the Cathedral or its ancillary buildings on the basis that this is not permitted under the Regulations.
23
Durham Cathedral, Accounts for the year ended 31 March 2018
Inventory Inventory assets relate to heritage assets acquired since 2002. Such assets are recorded in the balance sheet at cost.
Heritage Assets The Chapter considers that obtaining valuations for all of the books, manuscripts and artefacts and other heritage assets in its care would involve disproportionate cost compared with the benefit derived by users of the accounts. Consequently no values are attributed to heritage assets in the balance sheet. Disclosure regarding heritage assets is given in Note 8.
The Chapter has a policy of retaining its heritage assets for the long term and cannot dispose of such assets held within Endowment Funds without the agreement of the Cathedral Fabric Commission for England (CFCE) and/or the Church Commissioners. Heritage items are generally acquired by donation.
Tangible fixed assets and depreciation The Regulations recommend that a professional valuation of properties is carried out at least every five years with material movements between valuations being included in the accounts. The Regulations state that the valuation may be carried out by either an independent professional advisor or an appropriately qualified member of the Cathedral’s staff. Details of the basis of valuation adopted as at 31 March 2018 are given in Notes 6a and 7a.
Non-investment properties, which are occupied by clergy and lay employees of the Cathedral, the offices, library and stone yard are included at open market value at the last valuation date. The Chorister School buildings are included on the basis of depreciated replacement cost.
The Chapter considers that the properties (non-investment) need not be depreciated due to the policy of maintaining these assets to such a high standard that they retain a high residual value. Investment properties are not depreciated in accordance with FRS 102.
Equipment, plant and facilities are written off to the Revenue Account in the period in which the expenditure is incurred, except that capital expenditure on any item over £500 is capitalised at cost and depreciated over its useful economic life.
Depreciation rates Capitalised tangible fixed assets are written off at the following rates:
Land and buildings 2% to 6.67% pa straight line Plant and equipment 5% to 33% pa straight line Fixtures and fittings 2% to 20% pa straight line Motor vehicles 25% pa straight line IT costs 20% to 33% pa straight line
Financial Instruments Quoted and unquoted investments are included at fair value. Realised and unrealised gains and losses on investments are shown in the SOFA.
Debtors are measured at transactional prices less provision for any impairment. Creditors are measured at transaction prices less any amounts settled.
Cash at bank and in hand includes cash equivalents such as cash held on the CCLA CBF Deposit Fund repayable on demand.
Stock Stock is valued at the lower of cost and net realisable value.
Capital grants Grants given towards the capital cost of assets are credited as income to a restricted fund and the depreciation of the asset acquired is charged against the fund over the useful economic life of the associated asset.
24
Durham Cathedral, Accounts for the year ended 31 March 2018
Fund accounting Endowment funds are funds which are held for the permanent benefit of the Cathedral. There is no power to convert capital into income. Historically, all freehold properties were classed as Endowment, but transfers were made to restricted funds during the years ended 31 March 2012 and 31 March 2016. Please refer to Note 16 for details of this fund.
Restricted funds are funds that can only be used for particular restricted purposes within the objects of the Cathedral. Restrictions arise when specified by the funder or when funds are raised for a specific purpose.
Unrestricted funds are funds which can be used in accordance with the charitable objects at the discretion of the Chapter.
Designated funds are funds set aside by the Chapter out of the unrestricted general fund for specific purposes or projects.
Pensions The Chapter operates a stakeholder pension scheme that is open to all staff with three months or more service. Under new pension legislation, all eligible staff are auto-enrolled in the stakeholder pension scheme after three months service. Contributions are paid to approved funds and are charged as expenditure in the year in which they accrue.
The Chapter participates in a Teachers’ Pension Scheme, which is a defined benefit scheme for teaching staff only. This is a multi-employer defined benefits pension scheme and it is not possible or appropriate to identify the assets and liabilities of the scheme which are attributable to the school. The charge to the statement of financial activities is the amount payable in the period.
2. Key areas of judgement The key areas of judgements in the audited accounts are regarding accounting for grant income, Open Treasure construction spend and provisions for stocks and debtors.
Project specific grant income is accrued when conditions for capital and revenue grants have been fulfilled. Such grants are claimed in arrears. Other capital grants are accounted for on receipt of the grant, with the grant conditions having been fulfilled in advance. Open Treasure construction spend is capitalised if it is connected with creating a capital asset i.e. the Open Treasure exhibition spaces. Open Treasure spend that does not meet this criteria is expensed through the DCOT profit and loss account (and the consolidated group SOFA).
Stock provisions are calculated annually for specific stock lines based on stock holdings and slow moving stock lines. Bad debt provisions are principally in relation to Chorister School overdue fees and provisions are made on a prudent basis where fees are unlikely to be recovered in full.
25
Durham Cathedral, Accounts for the year ended 31 March 2018
3. Employees
The average number of employees (both by full time equivalent and headcount) during the year was as follows:
Full time equivalent 2018 2017 Number Number
Dean and Chapter 77 76 Durham Cathedral Trading Limited 7 7 Durham Cathedral Open Treasure Limited 16 8 Chorister School 39 39
Total 139 130
Headcount 2018 2017 Number Number
Dean and Chapter 95 94 Durham Cathedral Trading Limited 13 12 Durham Cathedral Open Treasure Limited 19 14 Chorister School 42 42
Total 169 162
The total cost of all paid staff of the Cathedral was: 2018 2017 £'000 £'000
Salaries and stipends 3,608 3,518 Employer's National Insurance costs 303 293 Employer's pension costs - teachers' pensions 133 130 Employer's pension costs - stakeholder pensions 110 103
4,154 4,044 Total
There were no employees who received remuneration between £60,000 and £70,000 in FY18 (FY17: One).
Members of Chapter received the following remuneration for the year ended 31 March 2018:
Salary or Employer's Pension Total stipend NIC contributions contributions £'000 £'000 £'000 £'000
The Very Revd Andrew Tremlett 35 4 12 51 The Venerable Ian Jagger 3 - - 3 The Revd Canon Rosalind Brown 33 3 9 45 The Revd Canon David Kennedy 33 3 9 45 The Revd Canon Professor Simon Oliver 21 2 3 26 The Revd Canon Sophie Jelley 3 - - 3
Total 128 12 33 173
26
Durham Cathedral, Accounts for the year ended 31 March 2018
Comparative figures for the year ended 31 March 2017 are as follows:
Salary or Employer's Pension Total stipend NIC contributions contributions £'000 £'000 £'000 £'000
The Very Revd Andrew Tremlett 25 2 8 35 The Venerable Ian Jagger 3 - - 3 The Revd Canon Rosalind Brown 33 3 9 45 The Revd Canon David Kennedy 32 3 9 44 The Revd Canon Professor Simon Oliver 20 2 3 25 The Revd Canon Sophie Jelley 6 - - 6
Total 119 10 29 158
The Dean and the two Residentiary Canons (Kennedy and Brown) received stipends in accordance with the scales laid down by the Church Commissioners, the Archbishops’ Council and the Church of England Pensions Board. Canons Jelley and Jagger were remunerated by the Diocese of Durham and as such their stipends were included in the Diocese accounts.
Canon Professor Oliver is an employee of Durham University. The remuneration shown above represents the proportion recharged to the Cathedral. None of the lay members of Chapter received remuneration in either year, other than reimbursement of travel and subsistence costs, as disclosed below.
Four members (FY17: five) of the Chapter were reimbursed a total of £3,427 (FY17: £5,017) in respect of travel and subsistence whilst carrying out the business of the Chapter.
27
Durham Cathedral, Accounts for the year ended 31 March 2018
4. Income Unrestricted Restricted Endowment Total Total funds funds funds 2018 2017 £'000 £'000 £'000 £'000 £'000
Donations and legacies Congregational collections and giving 208 - - 208 188 Donations 226 90 - 316 469 Income from appeals and 20 - - 20 14 fundraising Tax recoverable under gift aid on 50 - - 50 66 voluntary donations Income from Friends and local trusts 32 125 - 157 97 Legacies 55 770 255 1,080 216
591 985 255 1,831 1,050
Grants in support of mission Church Commissioners 131 - - 131 114 Heritage Lottery Grants 288 43 - 331 936 World War 1 Centenary grants - 318 - 318 79 Other revenue grants 59 319 - 378 90
478 680 - 1,158 1,219
Charges and fees in the course of mission Facility and other fees 322 - - 322 118 Income of the Chorister School 1,977 48 10 2,035 1,976
2,299 48 10 2,357 2,094
Trading and chargeable events Charges to visitors 138 - - 138 144 Income from shop, restaurant and other trading activities 1,064 9 - 1,073 1,007
1,202 9 - 1,211 1,151
Investments Investment property 919 - - 919 896 Investments 548 23 - 571 550 Interest receivable on short term deposits 2 - - 2 2
1,469 23 - 1,492 1,448
Other sundry income 27 - - 27 24
Total income 6,066 1,745 265 8,076 6,986
Please refer to Note 18 for the FY17 SOFA analysed by fund type.
28
Durham Cathedral, Accounts for the year ended 31 March 2018
5. Expenditure Unrestricted Restricted Endowment Total Total funds funds funds 2018 2017 £'000 £'000 £'000 £'000 £'000
Raising funds Shop, restaurant and other trading 1,442 247 - 1,689 1,629 costs Chorister School teaching costs 1,370 - - 1,370 1,384 Marketing and development 381 10 - 391 278 Investment property 195 - - 195 242 Allocated support costs 194 - - 194 167
3,852 257 - 3,839 3,700
Ministry Clergy stipends and working expenses 155 - - 155 135 Clergy housing costs 23 - - 23 26 Services, music and congregational 667 24 - 691 653 costs Allocated support costs 222 - - 222 191
1,067 24 - 1,091 1,005
Education and outreach Chorister School costs 864 27 - 891 834 Educational activities 79 65 - 144 160 Archives and library 131 7 - 138 140 Charitable and other giving - 35 - 35 18 Allocated support costs 97 - - 97 83
1,171 134 - 1,305 1,235
Cathedral and precincts upkeep Major repairs and restoration 22 1,982 - 2,004 475 Maintenance and interior upkeep 615 155 - 770 519 Utilities 121 - - 121 122 Cathedral insurance 153 - - 153 153 Precincts, security and gardens 215 - - 215 208 upkeep Allocated support costs 445 - - 445 380
1,571 2,137 - 3,708 1,857
Total expenditure 7,391 2,552 - 9,943 7,797
Please refer to Note 18 for the FY17 SOFA analysed by fund type.
29
Durham Cathedral, Accounts for the year ended 31 March 2018
6. Investment assets Consolidated and Charity
6a. Investment property at valuation Unrestricted Restricted Endowment Total Total funds funds funds 2018 2017 £'000 £'000 £'000 £'000 £'000
At 1 April 2017 - 7,289 14,994 22,283 24,152 Disposals - - - - (1,869) Net increase on revaluations - - 3,369 3,369 -
At 31 March 2018 - 7,289 18,363 25,652 22,283
Basis of property valuation
All investment properties are freehold. The Regulations recommend that an independent formal professional valuation is carried out at least every five years with material movements between valuations being included in the accounts.
None of the property portfolio was valued during FY18 as a result of finalising the re-tendering of property management services. Commercial and residential properties were valued during FY12, with commercial property valued on an Open Market value and residential property valued on an Aggregate Market Value basis (being the value of the freehold interest in the individual properties in their current physical condition with vacant possession). The agricultural properties were valued during FY13 by the Head of Property, with the assistance of professional valuers. These were valued on a yield, discounted yield or flat rate per acre basis, depending on the individual tenancy valued. The current valuations remain appropriate. A revaluation exercise will be carried out in FY19.
6b. Listed Investments
Consolidated and Charity Unrestricted Restricted Endowment Total 2018 Total funds funds funds 2017 £'000 £'000 £'000 £'000 £'000
Investments at market value 1 April - - 15,771 15,771 13,050 2017 Additions - - 1,102 1,102 2,404 Proceeds from disposals - - (745) (745) (1,193) Net (decrease)/increase on revaluation - - (325) (325) 1,510
Investments at market value 31 March 2018 - - 15,803 15,803 15,771
Analysed as follows: £'000 £'000
UK equities 7,656 7,801 Overseas equities 3,181 2,687 UK fixed interest 2,180 2,348 Overseas fixed interest 433 179 Other investments 1,646 2,078 Cash at investment managers 707 678
Total investments 15,803 15,771
30
Durham Cathedral, Accounts for the year ended 31 March 2018
6c. Subsidiary Undertakings
Charity Unrestricted Restricted Endowment Total 2018 funds funds funds £'000 £'000 £'000 £'000
Investments at 1 April 2017 - 3,000 - 3,000 Additions - - - -
Investments at market value 31 March 2018 - 3,000 - 3,000
The subsidiary undertakings of the Cathedral comprise:
Entity Company Percentage Net assets Profit/(loss) registered shareholding as at 31 for year number March 2018 ended 31 March 2018 £'000 £'000
Durham Cathedral Trading Limited 06366806 100 319 108 Durham Cathedral Open Treasure Limited 08009824 100 2,602 (424)
During the FY17 the Cathedral converted £3,000,000 of loan finance to investment in Durham Cathedral Open Treasure Limited, reflecting the long term investment of the Cathedral in the Open Treasure project.
7a. Non-investment property Unrestricted Restricted Endowment Total funds funds funds £'000 £'000 £'000 £'000
Consolidated
At cost/valuation 1 April 2017 - 9,978 14,429 24,407 Additions - - - -
At cost/valuation 31 March 2018 - 9,978 14,429 24,407
Depreciation
At 1 April 2017 - 444 - 444 Charge for the year - 2035 - 2035
At 31 March 2018 - 2,479 - 2,479
Net Book Value
At 31 March 2018 - 7,499 14,429 21,928
At 31 March 2017 - 9,534 14,429 23,963
31
Durham Cathedral, Accounts for the year ended 31 March 2018
Unrestricted Restricted Endowment Total funds funds funds £’000 £’000 £’000 £’000
Charity
At cost/valuation 1 April 2017 - 1,493 14,429 15,922 Additions - - - -
At cost/valuation 31 March 2018 - 1,493 14,429 15,922
Depreciation
At 1 April 2017 - 66 - 66 Charge for the year - 1,427 - 1,427
At 31 March 2018 - 1,493 - 1,493
Net Book Value
At 31 March 2018 - - 14,429 14,429
At 31 March 2017 - 1,427 14,429 15,856
The Endowment properties are occupied as follows: 2018 2017 £'000 £'000
Clergy and staff housing 9,130 9,130 Chorister School 3,429 3,429 Cathedral activities 1,870 1,870
Total 14,429 14,429
All non-investment properties are freehold and most relate to Endowment funds. The majority of these properties were valued at open market value as at 31 March 2013 by JK Property Consultants LLP. The Chorister School non-investment properties were valued as at 31 March 2013 by JK Property Consultants LLP on the basis of depreciated replacement cost.
7b. Inventory Unrestricted Restricted Endowment Total funds funds funds funds £'000 £'000 £'000 £'000
Consolidated and Charity - Net book value at 1 April 2017 and 31 March 2018 116 - 116
Inventory assets relate to works of art and heritage assets, at purchase cost.
32
Durham Cathedral, Accounts for the year ended 31 March 2018
7c. Tangible fixed assets
Consolidated Land & Plant & Fixtures, Motor Total buildings Equipment fittings & vehicles IT Equipment £'000 £'000 £'000 £'000 £'000
Cost At 1 April 2017 1,012 629 933 68 2,642 Additions - 7 34 - 41 Disposals - (116) - (21) (137)
At 31 March 2018 1,012 520 967 47 2,546
Depreciation At 1 April 2017 142 361 344 62 909 Charge for the year 33 43 52 2 130 Disposals - (116) - (21) (137)
At 31 March 2018 175 288 396 43 902
Net book value At 31 March 2018 837 232 571 4 1,644
At 31 March 2017 870 268 589 6 1,733
Charity
Cost At 1 April 2017 237 518 353 68 1,176 Additions - 5 11 - 16 Disposals - (116) - (21) (137)
At 31 March 2018 237 407 364 47 1,055
Depreciation At 1 April 2017 65 331 294 62 752 Charge for the year 14 37 7 2 60 Disposals - (116) (21) (137)
At 31 March 2018 79 252 301 43 675
Net book value At 31 March 2018 158 155 63 4 380
At 31 March 2017 172 187 59 6 424
33
Durham Cathedral, Accounts for the year ended 31 March 2018
8. Heritage assets not recognised in the balance sheet
Cathedral, Ancillary Buildings and Inventory
The construction of Durham Cathedral commenced in 1093 and was completed by about 1135. It is regarded as one of the finest examples of Norman architecture in the world and is situated within the Durham UNESCO World Heritage Site. The Cathedral replaced the 10th Century “White Church” built as part of a monastic foundation to house the shrine of St Cuthbert of Lindisfarne.
Objects considered to be of architectural, archaeological, artistic or historic interest are recorded in an Inventory in accordance with S13 (1) of the Care of Cathedrals Measure 1990. These objects are held primarily for use by the Cathedral in its mission or have been vested in Chapter over time and are held as part of the historical record of the Cathedral. Items disclosed in Note 7b Inventory, are separate from those held in the S13 (1) Inventory. No value is attributed on the balance sheet to the Cathedral, ancillary buildings or items recorded in the Inventory as explained in the accounting policy note.
By virtue of its extensive history Durham Cathedral owns many valuable heritage assets with historic and educational value. The nature and scale of the collection belonging to the Chapter of Durham Cathedral include:
Prebends Bridge; The riverbanks and woodlands that extend round the Cathedral to the River Wear; Mediaeval manuscripts from the sixth century onwards; 1,000 volumes of post-mediaeval manuscripts; 10,000 books printed in the 20th and 21st centuries; Printed volumes of music, mainly 16th-19th century; A collection of artefacts associated with the shrine of St Cuthbert: the wooden coffin, pectoral cross and other items.
The Chapter considers that the Cathedral’s heritage assets are practically very difficult and prohibitively expensive to value, as a result of the unique nature of many of the items. None of the aforementioned heritage assets are therefore included on the Cathedral’s balance sheet. Despite the difficulties in valuation, the Chapter believes that there is significant value in the heritage assets relative to the Cathedral’s net asset value at the financial year end.
The Chapter has a statutory duty under the Cathedrals Measure 1999 to manage and maintain the Cathedral, its contents and other buildings and monuments. The Chapter has a planned programme of major restoration works to the Cathedral and other buildings which is informed by a full quinquennial review by the Cathedral Architect. Works are overseen by the Clerk of Works and the Cathedral Architect. The majority of the conservation and repair is carried out by highly skilled craftsmen employed by the Cathedral.
The collections in the Library are managed by a Head of Collections and library team. Necessary conservation works are carried out by accredited conservators. The Library welcomes researchers with interests in the collections. Access to the Library's collections is freely available to members of the public.
There have been no material movements in the heritage assets of the Cathedral over the last five years.
9. Stocks Charity Consolidated Charity Consolidated 2018 2018 2017 2017 £'000 £'000 £'000 £'000
Goods for resale 12 115 14 105
34
Durham Cathedral, Accounts for the year ended 31 March 2018
10. Debtors
Long Term Debtors Charity Consolidated Charity Consolidated 2018 2018 2017 2017 £'000 £'000 £'000 £'000
Amounts owed by group companies 1,767 - 1,718 - 1,767 - 1,718 -
Debtors-amounts due within one year Charity Consolidated Charity Consolidated 2018 2018 2017 2017 £'000 £'000 £'000 £'000
Trade debtors 179 173 191 196 Other debtors 67 67 36 48 Prepayments and accrued income 102 231 82 192 Amounts owed by group companies 960 - 1,041 -
1,308 471 1,350 436
11. Creditors - amounts falling due within one year
Charity Consolidated Charity Consolidated 2018 2018 2017 2017 £'000 £'000 £'000 £'000
Trade creditors 738 817 335 377 Other creditors 32 23 27 20 Accruals and deferred income 218 250 219 347 Taxes and social security 52 52 86 89 Loans due within one year 200 200 200 200
1,240 1,342 867 1,033
12. Creditors - amounts falling due after more than one year
Charity Consolidated Charity Consolidated 2018 2018 2017 2017 £'000 £'000 £'000 £'000
Loan 600 600 800 800 Final term deposits 25 25 54 54 Other creditors 200 200 210 272
825 825 1,064 1,126
A £1m loan was advanced from the Durham Diocese Board of Finance during FY13 to fund expenditure on the Open Treasure project. The key terms of the loan are as follows:
The loan is unsecured; Interest at the rate of interest applicable to deposits in the CBF Church of England Deposit Fund; Loan term is up to 10 years, expiring on 31 March 2022; The loan is repayable in five annual tranches of £200,000 commencing 31 March 2018.
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Durham Cathedral, Accounts for the year ended 31 March 2018
13. Future commitments and contingent liabilities
There is one potential legal claim against the Chapter outstanding at the date of signing the annual accounts, the future liability of which has yet to be determined. Advice received from DAS legal expenses would indicate that there is legal liability cover for some aspects of the claim.
Commitments under operating leases
The Cathedral’s commitments under operating leases is as follows:
Computer & Motor 2018 2017 other IT vehicles total total equipment £'000 £'000 £'000 £'000
Total payable within one year 18 10 28 28 Total payable during years 2 to 4 35 25 60 60
53 35 88 88
14. Pensions
Stakeholder scheme
The Chapter introduced a new individual stakeholder pension scheme in April 2002. This is for all non-teaching staff employed by the Chapter, the School and/or the trading subsidiaries. Employer payments under the stakeholder pension scheme in FY18 totaled £110,234 (FY17: £103,000).
Teachers’ pension scheme
Introduction The Teachers' Pension Scheme (“TPS”) is a statutory, contributory, defined benefit scheme, governed by the Teachers' Pensions Regulations (2010) and, from 1 April 2014, by the Teachers’ Pension Scheme Regulations 2014. Membership is automatic for full-time teachers in academies and, from 1 January 2007, automatic for teachers in part-time employment following appointment or a change of contract, although they are able to opt out. The TPS is an unfunded scheme and members contribute on a ‘pay as you go’ basis – these contributions along with those made by employers are credited to the Exchequer. Retirement and other pension benefits are paid by public funds provided by Parliament.
Valuation of the Teachers’ Pension Scheme Not less than every four years the Government Actuary, using normal actuarial principles, conducts a formal actuarial review of the TPS in accordance with the Public Service Pensions (Valuations and Employer Cost Cap) Directions 2014 published by HM Treasury. The aim of the review is to specify the level of future contributions. Actuarial scheme valuations are dependent on assumptions about the value of future costs, design of benefits and many other factors.
The latest actuarial valuation of the TPS was carried out as at 31 March 2012 and in accordance with the Public Service Pensions (Valuations and Employer Cost Cap) Directions 2014. The valuation report was published by the Department for Education on 9 June 2014. The key elements of the valuation and subsequent consultation are:
employer contribution rates set at 16.48% of pensionable pay (including a 0.08% employer administration charge (currently 14.1%); scheme liabilities (pensions currently in payment and the estimated cost of future benefits) for service to the effective date of £191,500 million, and notional assets (estimated future contributions together with the notional investments held at the valuation date) of £176,600 million giving a notional past service deficit of £14,900 million; an employer cost cap of 10.9% of pensionable pay will be applied to future valuations; the assumed real rate of return is 3.0% in excess of prices and 2% in excess of earnings. The rate of real earnings growth is assumed to be 2.75%. The assumed nominal rate of return is 5.06%.
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Durham Cathedral, Accounts for the year ended 31 March 2018
During the year the employer contribution rate was 14.1%. The TPS valuation for 2012 determined an employer rate of 16.4% from September 2015, which will be payable during the implementation period until the next valuation which was due at March 2016, whereupon the employer contribution rate is expected to be reassessed and will be payable from 1 April 2019.
The pension charge for the year includes employer contributions payable to the TPS of £133,333 (FY17: £130,114). At the financial year end £11,297 (FY17: £12,301) was accrued in respect of employer contributions to this scheme.
15. Associated entities and related parties
Controlled by the Chapter Durham Cathedral Trading Limited, a wholly owned subsidiary, undertakes trading activities on behalf of the Chapter and transfers profits back to the Chapter through Gift Aid or cash/profit transfers. Durham Cathedral Open Treasure Limited is also a wholly owned subsidiary which became operational in July 2016. Profits will also be transferred back to the Chapter through Gift Aid. Transactions undertaken by both wholly owned subsidiaries are included in the Cathedral’s consolidated financial statements.
Not controlled by the Chapter The Friends of Durham Cathedral Durham Cathedral Choir Association Durham Cathedral Academic Charity
Whilst both The Friends of Durham Cathedral and Durham Cathedral Choir Association give support to Durham Cathedral, the powers of both charities regarding distribution of income are discretionary.
The following parties have been identified as being related parties, through the involvement of Member(s) of Chapter in their management. Values of transactions between Durham Cathedral and each related party for the year ended 31 March 2018 are disclosed below.
Related party Sales to Purchases Year-end Rent Year-end from debtor or charged rent owed (creditor) or (prepaid) £'000 £'000 £'000 £'000 £'000
1. Durham University 116 63 (2) 34 - 2. St Chad's College - - - 60 - 3. Lord Crewe's Charity - - - - - 4. Durham Diocese Board of Finance - - - - - 5. Friends of Durham Cathedral 59 - 5 - - 6. Durham School 3 - - 158 5 7. Visit County Durham - 2 - - -
Total 178 65 3 252 5
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Durham Cathedral, Accounts for the year ended 31 March 2018
Comparative figures for the year ended 31 March 2017 are as follows:
Related party Sales to Purchases Year-end Rent Year-end from debtor or charged rent owed (creditor) or (prepaid) £'000 £'000 £'000 £'000 £'000
1. Durham University 102 5 5 63 16 2. St Chad's College - - - 60 - 3. Lord Crewe's Charity - - - - - 4. Durham Diocese Board of Finance 3 5 - - - 5. Friends of Durham Cathedral 32 - 2 - - 6. Durham School - - - 144 (50) 7. Visit County Durham - 12 - - -
Total 137 22 7 267 (34)
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Durham Cathedral, Accounts for the year ended 31 March 2018
16. Statement of Funds
Brought Incoming (Outgoing) Gains, Balance forward resources resources (losses) & carried transfers forward £'000 £'000 £'000 £'000 £'000 16.1 Consolidated Endowment funds Permanent endowment 44,229 10 - 3,121 47,360 Expendable endowment 3,716 255 - - 3,971
47,945 265 - 3,121 51,331
Restricted funds 1. Freehold property fund 7,500 - - - 7,500 2. Open Treasure restricted fund 9,534 9 (1,672) - 7,871 3. Academic fund 51 - (54) - (3) 4. Chapter copes fund 26 - (1) - 25 5. Inventory funds 106 - - - 106 6. Library department fund 75 225 - - 300 7. HLF Riverbanks and Woodlands fund (6) 14 (8) - - 8. Cathedral fabric fund 338 250 (68) - 520 9. Liturgical and Worship fund 5 - - - 5 10.Music fund 143 4 - - 147 11.Cathedral charitable fund 12 - - - 12 12.Other restricted funds 149 28 (62) - 115 13.Education funds 9 18 (11) - 16 14.School outreach fund 64 48 (27) - 85 15.Special trust funds 116 23 (36) - 103 16.Central Tower - Belfry project (93) 353 (547) - (287) 17.North Quire window 29 33 (43) - 19 18.Adopt a book 4 - (2) - 2 19.Bute Cross 5 - (5) - - 20. Lobbies - 640 (16) - 624 21. Cloister Roof - 100 - - 100
Total Restricted funds 18,067 1,745 (2.,552) - 17,260
Unrestricted funds General fund (1,644) 6,139 (7,511) - (3,016) Designated funds 186 174 (127) - 234
(1,457) 6,313 (7,638) - (2,782)
Total consolidated funds 64,555 8,323 (10,190) 3,121 65,809
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Durham Cathedral, Accounts for the year ended 31 March 2018
16. Statement of Funds - continued Brought Incoming (Outgoing) Gains, Balance forward resources resources (losses) carried & forward transfers £'000 £'000 £'000 £'000 £'000 16.2 Entity Endowment funds Permanent endowment 44,229 10 - 3,121 47,360 Expendable endowment 3,716 255 - - 3,971
47,945 265 - 3,121 51,331
Restricted funds - as analysed above 18,278 1,745 (2,552) - 17,471 Deduct DCOT element of OT Restricted fund (3,538) (9) 247 - (3,300)
Total Restricted funds 14,740 1,736 (2,305) - 14,171
Unrestricted funds General fund (2,092) 4,773 (5,830) - (3,149) Designated funds 186 173 (125) - 234
(1,906) 4,946 (5,955) - (2,915)
Total entity funds 60,779 6,947 (8,260) 3,121 62,587
Endowment funds
Permanent endowment funds are funds which are held for the permanent benefit of the Cathedral. There is no power to convert capital into income.
Expendable endowment funds have been created by Chapter using income from property transactions to create a fund that will generate income. This income will contribute towards annual expenditure, in particular in relation to property maintenance. Capital from this fund may be used in certain circumstances, with express permission of Chapter, for example on capital work on the historic fabric. It is hoped that money will be added to the fund from future donations and legacies.
Restricted funds
1. Freehold property fund This fund was created in the year ended 31 March 2012, with properties valued at £5.6m transferred from Endowment. The fund has been created to separately identify properties purchased post-1872.
2. Open Treasure Restricted fund This was created to ensure that funds (donations and grants) given specifically for this project are ring-fenced. The fund will be released as the capital assets are depreciated.
3. Academic fund This was created to promote the establishment of a theology research post.
4. Chapter Copes fund This was created by a donation for the replacement of Copes worn by Chapter members
5. Inventory funds These were originally created by grants and relate to the acquisition of items added to the Cathedral’s inventory.
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Durham Cathedral, Accounts for the year ended 31 March 2018
6. Library fund Generous donations were received during the year ended 31 March 2012 to enable the Library to buy back books and manuscripts that were owned by Durham Cathedral (Durham Priory) before the dissolution of the monasteries in 1540.
7. HLF Riverbanks and Woodlands fund Generous legacy funding of £146,000 was used as matched funding for the HLF Riverbanks project that the Cathedral ran for three years from 2012 to spring 2015.
8. Cathedral Fabric fund Income comprises donations towards the cost of cathedral repairs. Expenditure represents repairs and maintenance of the Cathedral fabric.
9. Liturgy and Worship fund A donation of £5,000 enabled the creation of this fund in 2013.
10. Music fund The Music fund is used to facilitate special musical enhancements of the Cathedral’s worship.
11. Cathedral Charitable fund This fund arises from allocations from offertory accounts and is dispersed annually to worthy causes.
12. Other Restricted funds This comprises sundry funds ranging from £1,000 to £11,000 that have been created by donations for specific purposes.
13. Education Centre fund This includes two restricted funds which are to be used solely by the Educational department.
14. School outreach fund This fund is for Choral outreach: to inspire as many children as possible in the joy of singing, supported by both Choristers and the Cathedral.
15. Special Trust funds These funds are analysed on page 42 of the Financial Statements.
16. Central Tower – Belfry project This fund was created for donations to the Belfry renovations that are taking place between 2015 and 2018. The fund shows a deficit balance at 31 March 2018 pending reimbursement through grant funding.
17. North Quire window This fund has been created for a new stained glass window that is to be created through the generosity of donors.
18. Adopt a Book This fund supports the conservation and repair of the Cathedrals collection of early printed books. Donations are generated through the Adopt a Book programme, which offers donors the opportunity to select a book from a list of eligible titles for restoration work.
19. Bute Cross This fund comprises grant income from the Heritage Lottery Fund through its First World War- Then and Now programme. The grant was awarded for an exhibition of the three Bute Crosses in 2016 and associated educational activities linked to the First World War.
20. Lobbies Income in the fund comprises grants and donations given towards a project to replace the 1970’s lobbies at the Cathedral’s north and south doors with new glazed lobbies. The project will improve visitor access, flow and orientation for all those who visit.
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Durham Cathedral, Accounts for the year ended 31 March 2018
21. Cloister Roof This fund has been created for grants and donations in support of a planned project to repair the cloister roof. The repairs were first identified in the 2013 Quinquennial Report (QIR) and have subsequently become “high priority” status due to further deterioration of the roof beams.
Unrestricted funds Designated Funds are set aside by the Chapter out of the unrestricted general fund for specific purposes or projects. Movements for the year ended 31 March 2018 are as follows:
Consolidated and Charity Balance Incoming Outgoing Fund Balance brought resources resources transfers carried forward forward £'000 £'000 £'000 £'000 £'000
Property designated fund 20 79 - - 99 Altar frontals 13 - - - 13 Riverbanks project 14 - (6) - 8 School premises fund 139 94 (119) - 114
Total 186 173 (125) - 234
17. Cashflow notes
17.1 Reconciliation of net incoming resources before recognised gains to net cash inflow/(outflow) from operating activities 2018 2017 £'000 £'000
Net incoming resources 1,254 584
Less: income from property - net of costs (724) (654) Less: investment income - net of costs (550) (529) Less: unrealised gain on investments (3,043) (1,510) Add: depreciation 738 544 Add: loss on disposal of assets - 136 Add: write off of Open Treasure stonework 1,426 - (Increase)/Decrease in stocks (10) 16 (Increase)/decrease in debtors (35) 820 Increase/(decrease) in creditors 208 (1,151)
Net cash outflow from operating activities (736) (1,744)
17.2 Reconciliation of cash and cash equivalents 2018 2017 £'000 £'000
Cash at bank and in hand 1,602 1,555 Short term deposits 645 752
2,247 2,307
Loans (800) (1,000)
Cash and cash equivalents 1,447 1,307
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Durham Cathedral, Accounts for the year ended 31 March 2018
17.3 Analysis of changes in net funds/(debt) As at 1 As at 31 April Cashflow March 2017 2018 £'000 £'000 £'000
Cash at bank and in hand 1,160 442 1,602 Debt due within one year (200) - (200) Debt due after more than one year (800) 200 (600) Short term deposits held as current assets 752 (107) 645
Net funds 912 535 1,447
18. Prior year SOFA analysed by fund type
Unrestricted Restricted Endowment Total funds funds funds 2017
£'000 £'000 £'000 £'000
Income and endowments from: Donations and legacies 480 570 - 1,050 Grants in support of mission 511 708 - 1,219 Charges and fees in the course of mission 2,075 19 - 2,094 Trading and chargeable events 1,151 - - 1,151 Investments 1,425 23 - 1,448 Other income 24 - - 24
Total income 5,666 1,320 - 6,986
Expenditure on: Raising funds (3,257) (443) - (3,700) Ministry (994) (11) - (1,005) Education and outreach (1,094) (141) - (1,235) Cathedral and precincts upkeep (1,456) (401) - (1,857)
Total expenditure (6,801) (996) - (7,797)
Net (outgoing)/incoming resources before investment gains/(losses) (1,135) 324 - (811)
Net gains on investments - - 1,395 1,395
Net movement in funds (1,135) 324 1,395 584
Funds brought forward (322) 17,743 46,550 63,971
Funds carried forward (1,457) 18,067 47,945 64,555
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