ANNUAL REPORT AND ACCOUNTS
YEAR ENDED 31ST MARCH 2020
SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
ANNUAL REPORT AND ACCOUNTS
CONTENTS
1 Our Purpose, Values & Ambition
2 Cathedral Directory
5 Report of Chapter
5 Worship & Prayer
5 Reaching Further
6 Sustaining Heritage
6 Working Better Together
7 Public Benefit
7 Financial Review & Reserves
9 The Challenges of 2020 & Beyond
10 Governance & Key Risks
12 Conclusion
14 Independent Auditor’s Report
16 Accounts
16 Accounting Policies
21 Consolidated Statement of Financial Activities
23 Consolidated Balance Sheet
25 Cathedral Balance Sheet
27 Consolidated Cash Flow Statement
29 Notes to the Accounts
SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
OUR PURPOSE, VALUES & AMBITION
Our Purpose
Our purpose is to make a difference for God through exceptional worship and outreach.
Our Values
We are committed to developing a culture of faith and hope which is joyful, deeply serious and quietly confident. How we do things is as important as what we do, and we focus on three values in particular: • Integrity, reflected in transparent, fair and consistent actions. • Generosity, which generates a warm, open welcome to all. • Compassion, which promotes social justice, equality, diversity, dignity, consideration and respect for all.
Our Ambition
Our ambition is to be a beacon of confident, open Christianity with a reputation for warmth of welcome and willingness to engage with others.
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CATHEDRAL DIRECTORY The full name of Salisbury Cathedral is The Cathedral Church of the Blessed Virgin Mary. The Cathedral is a corporate body comprising the Chapter, the College of Canons and the Cathedral Council. It is a legal entity regulated by statute, principally the Cathedrals Measure 1999. This establishes the basic principles with which all Church of England cathedrals must comply. The Cathedrals Measure requires each cathedral to produce its own statutes which apply the principles of the Measure according to local or historic use, and in particular specify the functions and responsibilities of individuals, both clerical and lay, and establish the governance and administrative framework. The governing statutes of the Cathedral are the Salisbury Cathedral Constitution and Statutes dated 1st July 2001. Under these statutes, the governing body of the Cathedral is the Chapter, which is supported by a number of other bodies and individuals as set out in this directory. Further information about the governance of the Cathedral is given in the Report of Chapter. The address of the Cathedral is 6 The Close, Salisbury, Wiltshire, SP1 2EF. The Cathedral’s website is at http://www.salisburycathedral.org.uk
Chapter
Dean The Very Revd Nicholas Papadopulos Canons Residentiary The Revd Canon Anna Macham (Precentor) (from May 2019) The Revd Canon Edward Probert (Chancellor) The Revd Canon Robert Titley (Treasurer) Canons Non-Residentiary The Ven Sue Groom (from May 2019) The Ven Alan Jeans (up to April 2019) The Revd Canon Thomas Woodhouse (up to October 2019) The Revd Tim Daykin (from May 2020) Lay Canons Mrs Jane Barker Mrs Lucinda Herklots (from March 2019) Mr Ceri Hurford–Jones (up to July 2019) Vacancy (from July 2019) Mr Luke March
In attendance: Executive Mrs Jackie Molnar Director & Chapter Clerk
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Council
Lord Colin Sharman (Chair) The Bishop of Salisbury The Dean of Salisbury The Revd Canon Anna Macham (Precentor) (from May 2019) The Revd Canon Edward Probert (Chancellor) The Revd Canon Robert Titley (Treasurer) Mrs Jane Barker Mr John Pitt-Brooke (from May 2019 to October 2019) The Revd Canon Bill Cave The Revd Dr David Coulter Judge Keith Cutler Mrs Susanna Denniston Mr John Glen MP Ms Elinor Goodman Lady Laura Phillips Mrs Sonia Woolley
Finance Advisory Group
Mrs Jane Barker (Chair) The Dean of Salisbury Mr Robin Creswell Mrs Beatrice Hollond Mr Alastair Hunter Mr Stephen Lamdin Mr Luke March Mrs Emma Osborne In attendance: Mrs Jackie Molnar – Executive Director and Chapter Clerk Mr Richard Gurd – Director of Finance
Fabric Advisory Committee
Sir Hayden Phillips (Chair) The Dean of Salisbury The Revd Canon Robert Titley (Treasurer) Mr Ptolemy Dean Dr John Goodall Mrs Wendy James The Revd Bruce Saunders The Very Revd Victor Stock Ms Anna Eavis (in advisory capacity) In attendance: Mrs Jackie Molnar – Executive Director and Chapter Clerk Mr Gary Price – Clerk of Works Mr Izaak Hudson – Cathedral Architect Mr Graham Keevill – Cathedral Archaeologist
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Lay Managers
Executive Director & Mrs Jackie Molnar Chapter Clerk Director of Learning & Mrs Ariane Crampton (up to October 2019) Outreach Director of Finance Mr Richard Gurd Director of Music Mr David Halls Director of Communications & Ms Jane Morgan Development Human Resources Manager Ms Nicola Stafford
Professional Advisers
Bankers Lloyds plc, 38 Blue Boar Row, Salisbury, SP1 1DB Solicitors Parker Bullen, 45 Castle Street, Salisbury, SP2 7JR Auditors Fletcher & Partners, Crown Chambers, Bridge Street, Salisbury, SP1 2LZ Investment managers CCLA, Senator House, 85 Queen Victoria Street, London, EC4V 4ET Land agent Strutt & Parker, 41 Milford Street, Salisbury, SP1 2BP Architect Izaak Hudson, Dittrich Hudson Vasetti Architects, Studios 12-13, 9 Bath Buildings, Montpelier, Bristol, BS6 5PT Archaeologist Graham Keevil, 85 Kynaston Road, Didcot, Oxon, OX11 8HA
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REPORT OF CHAPTER Chapter are pleased to present their report and the Cathedral’s audited accounts for the year ended 31st March 2020.
Worship & Prayer The 2019/2020 year saw a number of changes and achievements. A new Canon Precentor was welcomed in May 2019 following an external recruitment process. The clergy team saw additional changes later in the year with the appointment of a new Vicar of the Close and the creation of a new post for the Cathedral – Minor Canon for Young People. Unfortunately, due to the outbreak of the global health pandemic, Covid19, the arrival of the Vicar of the Close had to be delayed. Throughout 2019 the Cathedral’s Father Willis Organ was out of commission due to a major restoration project. This presented both challenges and opportunities in terms of worship. The Director of Music and Assistant Director of Music oversaw the provision of music without the Cathedral organ and the Quire was inaccessible at different times. It is a tribute to all involved that the project proceeded so smoothly; the Development Team secured the majority of the £714,000 required to complete the work and new ways of worshipping were embraced. The restored Organ was installed just ahead of lockdown in early 2020. The majority of events that had been planned to celebrate the completion of the work had to be postponed, but nevertheless the restoration was a major achievement. Discussions have also continued through the year on possible designs for new liturgical furniture for the Trinity Chapel and Spire Crossing. This project continues and will take some time before it can be realised due to cost and the process of securing an agreed design which is approved by the Cathedrals Fabric Commission for England. It was a pleasure to host a number of special services during the year. In particular the Armed Forces Day Service in 2019 and a Service of Celebration for the Royal Corps of Signals in January 2020. It was also a privilege to be able to host a Golden Jubilee Retirement mass for Father Michael Fitzpatrick in June 2019 and La Folia’s Evening Songs in July 2019.
Reaching Further A notable achievement during the year was the increase in partnership working with many organisations in the City and Wiltshire Council. The Council established a Recovery Plan in response to the nerve agent attack in the City during 2018 and Cathedral staff were members of the different workstreams associated with this. The Cathedral also established a Project Group to oversee plans for the 800th anniversary of the Cathedral’s foundation and the subsequent development of the City. In preparation for this we led discussions with the Salisbury Business Improvement District, Wiltshire and Swindon Sports Partnership, Wiltshire Creative, Wiltshire Council and the City Council amongst others. It was a huge disappointment that the majority of the celebrations could not take place because of Covid19, however there were considerable benefits from the Cathedral facilitating collaboration with partners and closer working between the different organisations. Prior to the impact of the health pandemic, the Cathedral was able to produce a Light and Sound celebration in February 2020. This was a new and exciting activity for the Cathedral working in partnership with Peter Walker, and it sold out demonstrating the future potential of such events. Early 2020 also saw the installation of the largest Art Exhibition the Cathedral has ever had with twenty pieces of contemporary art exhibited in the Cathedral and the Close. The curation of this exhibition was undertaken by the Cathedral’s visual arts curator, Jacquiline Cresswell, to whom we are grateful. As always, we have continued to review what we offer to the many visitors who come to the Cathedral. In support of this we worked with an external consultant to develop an Interpretation Strategy. During the year we offered a number of events to attract visitors, an exhibition to explain the organ restoration work and continued our community outreach through the education programme and connections with other organisations such as Erlestoke Prison.
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It was very rewarding to see visitor numbers beginning to return to similar levels as we had received prior to the nerve agent attack in 2018. The financial year ended with a new challenge in Covid19, however we recognise the hard work and achievements of our staff prior to this. An important relationship within our wider life is with Salisbury Cathedral School. The School educates the Cathedral’s Choristers and the Cathedral is keen to see the School flourish. There is a continuing close working relationship between the Chapter and the Headmaster and Governing Body of the School in order to further this aim. The relationship between the Cathedral and School is, of course, very longstanding. For historical reasons, the Chapter has the right to ratify the appointment of the Governors of the School and exercises this right to ensure the continuance of the Christian and specifically Anglican ethos of the School. Except in this one regard, the Cathedral does not control the School, which is financially independent of the Cathedral. The School’s results are not included within the accounts of the Cathedral.
Sustaining Heritage An important aspect of our life is to care for the fabric of the Cathedral, its heritage, treasures, and the environment of the Cathedral Close. The longstanding aspiration to develop the South Side of the Cathedral progressed significantly during 2019/2020 with the plan to submit an expression of interest to the National Lottery Heritage Fund. Unfortunately, this had to be stopped in March 2020 due to the Covid19 pandemic. However, at the point where we can reignite this major capital project, we will be ready to do so. Similarly, we have progressed our plans to restore and possibly extend the site at Leaden Hall. This project remains a high priority for the Cathedral and during the next financial year we aim to submit a planning application for the project. We have been fortunate in securing external funding which has enabled the conservation and digitalisation of the 12th Century Salisbury Psalter. The project was completed in the year and is a significant achievement in enabling the preservation of this important document. Likewise, the Lottery Funded Beyond the Library Doors project has progressed and will ensure that the Cathedral has the majority of the Library items recorded on a digital catalogue management system. An exciting community project took place during 2019/2020 prompted in part by the Cathedral achieving a Silver EcoChurch Award. In agreement with the Cathedral, the Close Residents Association and Close Preservation Society worked with other members of the Close community to map the ecology within the Cathedral Close. This has produced a rich source of information as well as facilitating effective working across a number of important groups in the wider life of the Cathedral. The Cathedral Close is a place where many like to gather and that presents opportunities and challenges. We engaged a dedicated, trained security officer during the year who provides a welcome and reassuring presence as well as engaging well with the different people who come into the Close.
Working Better Together Improving the effectiveness of the management and operation of the Cathedral is an important area of work, and during 2019/2020 some significant matters were considered. We enhanced our operating efficiency by streamlining our records systems. This was a major project involving many staff, but it brings a number of long-term benefits and will help us work more effectively. A review was conducted of IT polices and a new Information and Governance Policy was implemented. The Cathedral was audited by the Social Care Institute for Excellence in September 2019 as part of a national review of safeguarding in all English Cathedrals. We were very pleased to be assessed as a safe place with good policies and procedures in place. The outcomes and recommendations of the national Cathedrals Working Group consultation on cathedral governance have been given careful consideration and some changes implemented ahead of a new Cathedrals Measure being agreed. This included the creation of a Nominations and Development Committee which now advises on appointments to Chapter and other key Cathedral Committees when vacancies arise. The Cathedral will shortly need to develop a new Strategic Plan. During the latter part of 2019/2020 Chapter and Executive commenced discussion on what the Cathedral’s values might be. The Dean 6
SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020 and Executive Director & Chapter Clerk subsequently led staff engagement sessions on proposed new values. As noted in this report, the end of the financial year saw the outbreak of Covid19. This significant and unexpected health pandemic presented huge challenges for the Cathedral. It is a testament to our staff and volunteers that we were able to respond well in a very difficult and fast-changing situation and we are grateful for all that they undertook at that time.
Public Benefit The Cathedral is recognised as a charity in law and for tax purposes. The Church of England’s cathedrals are subject to supervision by the Church Commissioners and are not currently required to register with the Charity Commission. Nevertheless, Chapter confirms that it has had regard to the Charity Commission’s guidance on public benefit 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. The earlier sections of this report describe the Cathedral’s activities during 2019/2020 and the impact they have had.
Financial Review & Reserves The year to 31st March 2020 produced a reduction in the Cathedral’s financial resources of just under £1.5 million. This reduction takes into account the substantial fall in the valuation of investments. Looking at the performance before these unrealised losses on investments, expenditure outstripped income by £911,000 in the year. Overall income was down by £271,000 but overall expenditure was up by £425,000 against the prior year. Visitor numbers were gradually rebuilding after the sharp fall following the nerve agent attack in March 2018 and visitor donations produced £68,000 more than in the previous year. The numbers and donations had not yet recovered to the levels experienced in the year to March 2018. Congregational giving was marginally below that of the prior year. The Cathedral continued to benefit from the generosity of donors into the different restricted funds. Donations into the organ repair and general fabric funds were down year on year by over £400,000 reflecting the main drive for funds for the organ in the previous year and a considerable donation into the fabric fund from a trust that was wound down in that year. As with visitor donations, trading income increased from visitors for tower tours, the shop, and the refectory and this also included the ticket sales for the Sarum Lights event that took place in February. This increase was offset by a small drop in income from Masonry and Glazing contracts to produce a net improvement in revenue from trading of £73,000. Investment income held steady at the levels seen in the previous year, making a significant contribution of over £1 million. Turning to expenditure, there were as ever pluses and minuses in the overall cost base but the major increase in the year was in respect of the organ repair project. The total cost of this project amounted to £714,000 spread over two years. Most of the costs were met by the restricted donations given to support this major refurbishment, but the balance was met from the Cathedral’s unrestricted funds that had been set aside for this purpose. The costs of the Sarum Lights event also represented an increase in expenditure year on year together with the costs in advance of the planned celebrations for the 800th Anniversary; these amounted to £90,000 in total. This year, the support costs of the Cathedral included the costs of a new system to manage information about visitors and donors. Less money was expended on the management of the investment properties than in the previous year, but this was matched by an increase in the cost of managing the financial investment portfolio, reflecting a change in the method of charging these costs by the investment managers.
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Investments No investment properties were disposed of in the year ended 31st March 2020. At the end of the financial year, the financial investment portfolios were revalued to market values and this produced an unrealised loss of over £0.5 million. The losses on revaluation are unrealised reflecting the changes in market value from one year to the next. Stock markets in general experienced sharp falls in value towards the end of March 2020 in a reaction to the Covid19 pandemic across the world. Markets have recovered substantially since then and the portfolio has moved in line with these recoveries. The primary purpose of the investment portfolio is to generate income to support the mission and activities of the Cathedral. The Cathedral adopts a balanced approach to investment, seeking real growth in capital and income, with an objective of achieving an overall annual return over the long term of 5% above inflation whilst generating predictable and sustainable income from the portfolio. The investment objectives are achieved through an income-biased balanced portfolio of equities, property, and cash. Given the long-term horizon of the Cathedral, the investments are held in diversified multi-asset portfolios with an emphasis on equities and other real assets, designed to target both growth and income. A fluctuation in the capital value of the fund holdings may lead to unrealised gains or losses but will not necessarily change their ability to generate income. Our portfolio is managed by professional investment managers and their performance is monitored on behalf of Chapter by the Cathedral's Finance Advisory Group. The Cathedral has set an ethical investment policy (which draws on guidance given by the Church of England). Since the year end, all our financial investments have been moved to CCLA Investment Managers. The CCLA funds are fully compliant with the Church of England’s ethical investment policy. Funds The majority of the Cathedral’s funds are held as endowment funds. Chapter complies with the restrictions imposed by the Cathedral’s Measure 1999 in respect of the permitted investments for the Cathedral’s funds. In particular, the capital of the endowment funds cannot be used for the improvement or development of the Cathedral or its ancillary buildings without the express authority of the Church Commissioners. Only the income, not the capital, can be used to meet ordinary expenditure, to fund the repair of the Cathedral itself or the repair of its investment properties. A significant part of the endowment funds consists of properties in the Close, a number of which are let on long, tenant-repairing leases. The balance of the endowment is held in the investment portfolios and in cash. During the year ended 31 March 2020, as part of the donation from the Friends of Salisbury Cathedral, £74,000 (2019: £74,000) was paid into the endowment funds towards the costs of the Cathedral toilets known as Little Paradise. Expenditure during the year from the endowment funds was incurred on the investment properties and on managing the investment portfolios. These transactions resulted in a net cost to the endowment funds of £238,000 before the unrealised losses on the revaluation of the investment portfolio were taken into account. The Cathedral holds many individual funds that are restricted as to their use. Further detail on these is given in Notes 16 to 19 to the Accounts. The income from various sources into these funds has been matched in most cases by expenditure during the year, although it must be noted that the Cathedral records gifts in the year in which they are received even where the expenditure that they are intended to fund is incurred and therefore recorded in subsequent years. Inevitably this accounting requirement leads to swings in income and expenditure. One of the most important restricted funds is held for the maintenance of the fabric of the Cathedral. This funds the fabric repair programme that continues. The balance of the funds of the Cathedral are unrestricted both as to capital and income and can be used to further any of the purposes of the Cathedral. At 31st March 2020, the Chapter had designated funds for certain purposes within the unrestricted funds and these are set out in Notes 18 and 19 to the Accounts. Funds were designated to cover the visitor experience, to fund the repair to the organ and to support the Cathedral’s organisation development.
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Chapter has taken the decision to move back to the undesignated, unrestricted funds, those funds previously designated as a general legacy fund and the balance on the designated organ fund that was not required. Policy for Unrestricted Funds The Cathedral’s unrestricted funds are available to carry out its day to day ministry, education, and outreach activities together with the basic upkeep of its buildings and precincts. The income is principally derived from visitors, congregations, property rents, investments, and trading activities. Given the potential for fluctuations in these income streams that are largely outside of its control, Chapter has agreed a policy of seeking to maintain in unrestricted funds an amount at least equivalent to eight months’ annual expenditure. This gives the Cathedral some back-up resources in order to maintain necessary activities in times of income shortfall. This policy has been in place for the last four years and has stood the Cathedral in good stead through the time of the poison attack and now in the midst of the Covid19 pandemic. At 31st March 2020, the Cathedral had £4.5 million in unrestricted, undesignated funds, which was equivalent to just over nine months of the total annual expenditure across all funds. The Chapter has reviewed this policy since the year end and has decided to refine it to take into account only the expenditure that has been charged to the unrestricted funds in the previous year. This is on the basis that any expenditure in respect of the restricted funds and the endowed funds is only incurred if funds are available for that specific purpose. At 31st March 2020, the Cathedral had unrestricted, undesignated funds that would have been almost sufficient to meet unrestricted expenditure for one year without any income. Financial difficulties caused by the Covid19 pandemic (discussed in the following paragraphs) are, however, likely to reduce this in the current year.
The Challenges of 2020 & Beyond This financial review and the accounts relate to the year that ended on 31st March 2020. Towards the end of March 2020, the Cathedral was closed in accordance with the lockdown procedures mandated by the Government. At that time, our visitor income and congregational income fell almost to zero. Over the months from April to November, Chapter has applied successfully to several sources of funding to secure grants and donations to help tide the Cathedral over this very difficult time. The Cathedral has also made use of the Government’s Job Retention Scheme. During the summer of 2020, the Cathedral reopened to welcome back visitors and congregations but under Covid19-secure measures. Visitors started to return but it quickly became apparent that income from donations was not returning to its previous level. To help sustain income therefore, the Cathedral had to change its policy of asking for donations from visitors to one of charging for admission. A charge of £8 per adult visitor was introduced from the beginning of September 2020 with the unanimous support of Chapter. The outbreak of Covid19 has presented many challenges for the Cathedral and the second lockdown which started in November 2020 emphasises that there are more ahead. It is clear that there are many uncertainties about the future financial position of the Cathedral given the impact of not being able to welcome visitors as normal or carry out the range of events the Cathedral normally offers. In light of this, several scenarios were modelled taking account of the Cathedral’s funds and the income and grants mentioned above together with different projections of visitor numbers over the immediate future. The scenarios looked forward into the medium term assessing a range of possible outcomes. Taking account of this analysis, Chapter has concluded that the Cathedral has sufficient resources to meet its liabilities as they fall due and enable it to continue as a going concern at this time. This assessment work continues and necessarily so given the current uncertainties about future visitor numbers, the range of activities the Cathedral can undertake and the added factor that international visitors are not projected to return in significant numbers until 2022. An essential part of this is for Chapter, with the Executive, to consider the future priorities of the Cathedral, and Chapter recognises that difficult decisions may well need to be made.
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Governance & Key Risks Under the Cathedral’s statutes, the governing body of the Cathedral is the Chapter. The Chapter is supported by the Cathedral Council and the College of Canons, both of which are established in accordance with the Cathedrals Measure 1999. A new Cathedrals Measure is currently going through the legislative process and is expected to become law in the next couple of years. This will result in some changes to the governance arrangements for Church of England cathedrals, to be implemented by cathedrals within three years. Once the new Measure has been passed into law, Chapter will bring forward proposals for such changes as are necessary at Salisbury. Cathedral Chapter The Cathedral’s Chapter is made up of the Dean, the three Residentiary Canons (Precentor, Chancellor and Treasurer), two non-residentiary Canons elected by the clerical members of the College of Canons, two lay members elected by the lay Canons of the College and two co-opted members appointed by Chapter. With the exception of the Dean and Residentiary Canons, members hold office for three years but are eligible for re-election or re-appointment. Induction and training of new members are the responsibility of the Executive Director and Chapter Clerk who produces a programme of briefings and visits to ensure familiarity with the administration, management, and finances of the Cathedral. New members of Chapter attend the training programme provided by the Association of English Cathedrals, which also provides the opportunity to meet with colleagues from other cathedrals. Chapter undertook a comprehensive review of governance in 2013 following consultation with the Cathedral Council and adopted a new code of good governance. This will be reviewed and updated in conjunction with implementation of the new Cathedrals Measure. Chapter has adopted and undertaken the self-evaluation framework supported by the Association of English Cathedrals (AEC). During the 2019/2020 year the new members of Chapter received an induction and briefing from the Executive Director and Chapter Clerk. They also attended the residential training provided through the AEC for all new Chapter members. A Nominations and Development Committee was established in 2019/2020. A number of vacancies arose on Chapter due to terms of office ending and the Committee supported the recruitment of new members of Chapter. A skills audit was also conducted to assess the knowledge and expertise of existing Chapter members and identify gaps in experience which were to be sought from new members. Chapter meets on a monthly basis; there is an established schedule of reports and matters for consideration. Decision making is informed by reports and information provided by the Executive Director and Chapter Clerk as well as the Cathedral’s Executive team and Advisory committees. Cathedral Council The Cathedral Council was established under the current Cathedrals Measure to “further and support the work of the Cathedral, spiritual and temporal, pastoral, evangelistic, social and ecumenical, reviewing and advising upon the direction and oversight of that work by the Chapter”. Members are appointed by Chapter, the Community Forum, College of Canons and by other Council members. The Cathedral Council met twice during the year under the chairmanship of Lord Sharman with a range of matters being discussed. This included development plans for the space to the South Side of the Cathedral and for Leaden Hall, the Safeguarding Audit of the Cathedral conducted by the Social Care Institute for Excellence and the Cathedral’s plans to celebrate its 800th anniversary year in 2020. The Council also received the 2018/2019 Annual Report and discussed the changes that are expected from the implementation of the Cathedrals Working Group report on the governance and management of cathedrals. College of Canons In accordance with the current Cathedrals Measure, the Cathedral has also established a College of Canons consisting of every Canon of the Cathedral, including the Bishop, the Dean, the suffragan bishops, and every archdeacon in the Diocese. In its membership the College expresses the close relationship between the Cathedral and the rest of the Diocese of Salisbury. The College met twice during the year and installed three new non-residentiary Canons, welcomed a further three new non-
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020 residentiary and one lay Canons and said farewell to six members. During the year, College received the 2018/2019 Annual Report and was updated on the Safeguarding Audit process and report. In addition, College discussed the impact of recommendations from the Cathedrals Working Group which will result in changes to College in the next couple of years. A presentation was also received from an external company, Heavenly, commissioned by Wiltshire County Council to develop a new vision and brand for the city of Salisbury. Executive Chapter is supported by lay Directors and staff who undertake the operational administration of the Cathedral. The Directors, together with the Residentiary Canons, form the Executive which provides operational management and core business management expertise. The Dean chairs both Chapter and the Executive which ensures that Chapter leads and directs, and the Executive implements the Cathedral’s objectives. The Executive meets on a monthly basis, receiving reports on regular items such as the Cathedral’s financial position and visitor numbers, and other matters that arise during the course of the year. During the 2019/2020 year, Chapter and Executive met collectively to discuss key strategic issues and concerns. This included initial discussions on the future vision for the Cathedral to support development of a new Strategic Plan, income diversification and visitor experience and an assessment of the current opportunities and challenges to the Cathedral’s strategy and operations. Key Risks and Uncertainties The Cathedral’s risk register records the principal risks to which the Cathedral is exposed. The risks are assessed under the following categories: financial failure, visitor numbers, people, Cathedral development, regulatory compliance, major physical disaster, IT and operations, reputation and standing. The risks are reviewed on a quarterly basis by the Executive and Chapter and systems are in place to mitigate risks as they are identified. The main area of risk and uncertainty arising during 2019/20 was the start of the impact of the Covid19 pandemic as the year drew to a close in March 2020. As discussed earlier in this report, the enforced closure of the Cathedral for more than three months and the ongoing restrictions on activities are having a profound effect on all aspects of the life of the Cathedral and significantly on visitor numbers and the Cathedral’s financial position. Aside from this particular risk, others managed through the year included the implementation of the new Customer Relationship Management System, the delivery of the 2020 anniversary celebrations and the potential for visitor numbers not to recover following the nerve agent attack in 2018. Controls are well established to ensure the Cathedral’s financial activities are properly managed. These include budgetary control, authority levels, and monthly management accounts reports to Executive and Chapter, as well as meetings of the Finance Advisory Group. In other principal risk areas, the Cathedral has continued to maintain the work of its Health and Safety Committee. The Cathedral’s fire evacuation policies and procedures are reviewed annually by the Committee. Operational oversight in this area is provided by the Executive Director and Chapter Clerk and strategic oversight by the Canon Treasurer. The Cathedral continues to be mindful of risks associated with security breaches. The Executive Director and Chapter Clerk continues to meet on a quarterly basis with the local Police Counter Terrorism Advisor to review security arrangements. The Cathedral’s safeguarding policy and procedures are kept under regular review by Chapter. The Cathedral has an independently chaired Safeguarding Advisory Group; members include representatives from the Diocesan Safeguarding Management Group, the Cathedral School and congregation, as well as Cathedral staff. The Cathedral works closely with the Diocesan Safeguarding Adviser and Training Officer to ensure compliance with Church of England safeguarding practice guidance and policies. From early January 2020 the Cathedral has benefited from the dedicated support of a Diocesan Safeguarding Adviser who spends a day a week with the Cathedral, the arrangement is covered within the service level agreement with the Diocese for safeguarding matters which was renewed during the year. As noted elsewhere in this report, the Cathedral was part of a SICE safeguarding audit in September 2019.
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Statement of Chapter's responsibilities for the preparation of the Accounts The members of Chapter are responsible for preparing the annual report and accounts in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice. Under the provisions of the Cathedrals Measure 1999 and the Constitution of Salisbury Cathedral, Chapter is required to prepare accounts, for each financial year, which give a true and fair view of the state of the Cathedral's affairs and of its financial activities during the year. In preparing those accounts members of Chapter are required to: • select suitable accounting policies and then apply them consistently; • make judgements and estimates that are reasonable and prudent; • comply with applicable accounting standards and, in particular, prepare the accounts in accordance with the Accounting and Reporting Regulations for English Anglican Cathedrals specified by the Church Commissioners under Section 27 of the Cathedrals Measure 1999, subject to any departures disclosed and explained in the accounts; • state whether accounting standards and the Regulations referred to above have been followed; and • prepare the accounts on the going concern basis unless it is inappropriate to presume that the Cathedral will continue to be financially viable. The members of Chapter are responsible for ensuring that the Cathedral keeps proper accounting records which disclose with reasonable accuracy the financial position of the Cathedral and which enable them to ensure that the accounts comply with the provisions of the Cathedrals Measure 1999 and the Regulations referred to above. The members of Chapter are also responsible for safeguarding the assets of the Cathedral and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Conclusion Compiling the Cathedral’s Annual Report is always a slightly strange and disorienting task. It is strange and disorienting because it is compiled more than halfway through the year after the year which is its subject. The most recent events referred to in this document took place, as I write, nine months ago. This year that strangeness and disorientation are compounded by the pandemic which was unleashed across the world and across the United Kingdom as the financial year 2020-21 was beginning. To look back to 2019-20, with which this Report is concerned, is to look back at a year when Covid-19 was unknown, and when hand sanitizer, face-coverings, and social distancing played no part in our national life. It is to look back to another world.
Cathedrals speak of permanence and stability across the generations, and it is of course possible to point to significant strands of continuity between the year 2019-20 and 2020-21. Cathedral governance has remained robust, even if it has been conducted remotely. The daily rhythm of prayer and worship has been unbroken, even if it has been expressed in new ways. But at the same time, the pandemic has changed everything.
The foundation stones of the Cathedral of New Sarum were laid on 28 April 1220. I wrote in last year’s Annual Report that “we look forward to working with city colleagues to ensure that the celebration is a truly city-wide affair”. We did exactly that. During 2019-20 a huge amount of energy and effort went into creating an attractive and comprehensive programme for the year, and the relationships built up with city partners remain significant. But it has not been possible to realize the overwhelming majority of what was planned. That in the weeks before the pandemic struck we were able to stage the truly remarkable Sarum Lights (in February 2020), and that we were also able to install Spirit and Endeavour, our most
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020 ambitious art exhibition yet, are things for which we can be thankful. They are the fruits of the year upon which we report here, and they are to be celebrated.
In a similar vein, I reported last year that “two sites in the Close are occupying the Chapter’s attention”. Again, intensive work was put into plans for the Leaden Hall and for the south side of the Cathedral (the Works Yard site) throughout 2019-20. But the financial crisis prompted by the pandemic means that plans for the latter have necessarily been shelved and plans for the former have proceeded at a much slower pace than had been expected.
As ought already be evident, the Cathedral staff worked with great diligence and purpose throughout 2019. They have redoubled their efforts in 2020. Throughout a very difficult year they have demonstrated huge resilience, huge energy, and huge appetite for change, and for this I am very grateful. It is a privilege to work among them.
I am now inevitably anticipating next year’s Report. But if 2019-20 was a year of preparation, and 2020-21 a year of crisis management, it is to be hoped that 2021-22 will be a year of recovery. The passage of the new Cathedrals Measure through the General Synod is complete and means that the task of rewriting the Constitution and Statutes will begin. The Chapter is working on the next phase of its Strategic Plan, shaped by values derived from the story of the Cathedral’s move in 1220: liberty, creativity, and eternity. The year that is ending has shown us to be a resourceful, hard-working, and adaptable community of faith, and that can give us all great confidence.
The first vaccine against Covid-19 is being administered: let us hope that when next year’s report is written the roll-out will be complete and Salisbury Cathedral will be flourishing once more. “Though built by kings” wrote Henry of Avranches “a place that all may share”.
Signed on behalf of Chapter
The Very Revd Nicholas Papadopoulos Dean of Salisbury 18th December 2020
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SALISBURY CATHEDRAL CHAPTER We have audited the financial statements of Salisbury Cathedral for the year ended 31 March 2020 which comprise the Consolidated Statement of Financial Activities, the Consolidated Balance Sheet, the Entity Only Balance Sheet, the Consolidated Cash Flow Statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law, the Accounting and Reporting Regulations for English Anglican Cathedrals dated December 2018 as specified by the Church Commissioners under Section 27 of the Cathedrals Measure 1999 and Financial Reporting Standard FRS 102. Opinion on the financial statements In our opinion the financial statements: • give a true and fair view of the state of the affairs of the Group and Cathedral at 31 March 2020 and of the net movement in funds for the year then ended: and • have been properly prepared in accordance with Financial Reporting Standard FRS 102 and the Accounting and Reporting Regulations for English Anglican Cathedrals dated December 2018 as specified by the Church Commissioners under Section 27 of the Cathedrals Measure 1999. Basis for 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 and Cathedral in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRCʼs 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 members use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or • the Chapter’s members have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Group’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. Other information The Chapter’s members are responsible for the other information. The other information comprises the information included in the Annual Report of Chapter, 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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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
Matters on which we are required to report by exception In the light of the knowledge and understanding of the Group and Cathedral and its environment obtained in the course of the audit, we have not identified material misstatements in the Annual Report of Chapter. We have nothing to report in respect of the following matters where we are required to report to you if, in our opinion: • the information given in the Annual Report of Chapter is inconsistent in any material respect with the financial statements; or • sufficient accounting records have not been kept; or • the financial statements are not in agreement with the accounting records and returns; or • we have not received all the information and explanations we require for our audit. Responsibilities of Chapter As explained more fully in the Statement of Chapter’s Responsibilities set out on page 12, the Chapter members are 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 they determine 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 members are responsible for assessing the Group and Cathedral’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 members either intend to liquidate the Group and Cathedral or to cease operations, or have no realistic alternative but to do so. Auditors’ 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. This description forms part of our auditor’s report. This report is made solely to the Chapter's members as a body, in accordance with Section 27 of the Cathedrals Measure 1999. Our audit work has been undertaken so that we might state to the members those matters we are required to state to them in the 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 Chapter and the Chapter’s members as a body for our audit work, for this report, or for the opinions we have formed.
FLETCHER & PARTNERS Chartered Accountants and Statutory Auditor Crown Chambers, Bridge Street Salisbury, Wiltshire, SP1 2LZ 18th December 2020
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
Accounting Policies The principal accounting policies adopted, significant judgements made and key sources of estimation and uncertainty in the preparation of the accounts are set out below.
Basis of accounting The accounts are for the year ended 31st March 2020 with comparative information given in respect of the year ended 31st March 2019. They have been prepared under the historical cost convention, with items recognised at cost or transaction value except for the revaluation of investment properties and other investments. They have been prepared in accordance with: • the Accounting and Reporting Regulations for English Anglican Cathedrals dated December 2018 as specified by the Church Commissioners under Section 27 of the Cathedrals Measure 1999; and • the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102). The Cathedral constitutes a public benefit entity as defined by FRS102. Compared with the accounts for the year ended 31st March 2019, some changes have been made to the layout of the consolidated statement of financial activities, balance sheets and consolidated cash flow statement to reflect the most recent accounting guidance and regulations. These do not affect the reported amounts.
Group structure The accounts consolidate the results of the Cathedral’s two wholly owned subsidiary companies, Salisbury Cathedral Works Department Limited and Salisbury Cathedral Enterprises Limited. Collectively, the Cathedral and its subsidiary companies are referred to as the Group. In previous years, three endowment funds administered by the Cathedral and their related income funds have been included in the consolidated accounts but not in the Cathedral-only balance sheet. This has been corrected in the accounts for the year ended 31 March 2020 by inclusion of the relevant amounts in the Cathedral-only balance sheet on page 25. The funds are the Prebendal fund, the Choristers’ Endowment Fund and the Choral Foundation. The comparative figures in the Cathedral- only balance sheet for the year ended 31 March 2019 have been revised as follows: Previously Revised reported amounts £000 £000 Investment assets Investment properties 14,406 15,416 Other investments 26,789 28,864 Net current assets 2,216 2,727
Endowment funds 44,011 46,970 Restricted funds 7,024 7,661 There are three charities whose objects are to support aspects of the work of the Cathedral, but which are not controlled by Chapter. Accordingly, the accounts of these charities are not included in these consolidated accounts. Further information about these charities is given in note 22 to the accounts. The accounts of Salisbury Cathedral School are also not included in these consolidated accounts. Although Chapter has the right to ratify the appointment of the Governors of the School, the purposes of the School and the Cathedral are distinct, and the School operates independently of the Cathedral. Accordingly, including the School in the Cathedral’s consolidated accounts would not give a true and fair view. Further information about transactions between the School and the Cathedral are given in note 22 to the accounts.
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
Funds The funds of the Group are divided into three categories, depending on the terms on which they have been received. Endowment funds, whose capital cannot be spent, but the income from which may be used for either general or specific purposes, as laid down by the donor. Restricted funds, whose capital and income are available for spending on specific purposes as laid down by the donor. Unrestricted funds, which may be used for any purpose within the broad ecclesiastical and charitable purposes of the Cathedral or the objects of the other group entity holding them. These include amounts which have been designated by Chapter for particular purposes but where the designation may be varied or removed in the future.
Significant accounting estimates and areas of judgement Preparation of the accounts requires Chapter to make judgements and estimates. Significant judgements and estimates have been made in relation to: • estimating the likely amount of legacy income once the Cathedral is aware of its entitlement to receive a legacy; • the allocation of shared costs across activities; and • estimating the useful economic life of tangible fixed assets. In addition to the above, the future impact of the global coronavirus pandemic is unclear. It is therefore not currently possible to evaluate all the potential implications for the Group’s activities, beneficiaries, funders, suppliers and the wider economy. In particular, the following are subject to a greater than normal degree of uncertainty and volatility: • the future level of visitor income; and • the future value of investments. This is discussed further in the Report of Chapter above and the assessment of going concern below.
Assessment of going concern These accounts have been prepared on the assumption that the Group will be able to continue to operate as a going concern which can meet its liabilities as they fall due. Chapter have assessed whether the use of this going concern assumption is appropriate. This assessment has been made in respect of a period of at least one year from the date of approval of the accounts. Chapter acknowledge and recognise the potential impact of the Covid19 coronavirus pandemic on the future operations of the Group. The income of the Group will be affected by the pandemic, particularly because of reduced visitor income, potential reductions in investment income for a period, and volatility in investment values. Similar factors may also have some impact on donors’ ability to support the Cathedral in the short term. Chapter are closely monitoring the impact of the current situation on visitor numbers. Despite these uncertainties, Chapter are of the opinion (as discussed on page 9 above) that the Group will have sufficient resources to meet its liabilities as they fall due and that the current circumstances do not impact on its ability to operate as a going concern at the present time.
Income recognition Income comprises: • donations, grants & legacies; • income arising in the course of mission; • income from trading activities; • investment income; and • other income.
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
All income is recognised once the Group has entitlement to the economic benefit, it is probable that the economic benefit will be received, and the monetary value can be measured with sufficient reliability. When a third party pays for goods or services on behalf of the Cathedral, the cost is recognised as income as well as being shown as expenditure in the statement of financial activities. Similarly, donated goods and services are valued on an arm's length basis and shown as income and either capital or revenue expenditure as appropriate. No monetary value, however, is placed on the services provided by the many Cathedral volunteers. Donations and grants are recognised when the Group has confirmation of both the amount and settlement date. In the event of donations pledged but not received, the amount is recognised where the receipt is considered probable. In the event that a donation is subject to conditions that require a level of performance before the Group is entitled to the funds, the income is deferred and not recognised until either those conditions are fully met, or the fulfilment of those conditions is wholly within the control of the Group and it is probable that the conditions will be fulfilled in the reporting period. Legacies are recognised when the Group is entitled to the legacy, the amount of the legacy receivable can be reliably measured, the executors have established that there are sufficient surplus assets in the estate to pay the legacy, and any conditions attached to the legacy are within the control of the Group. Entitlement is taken as the earlier of the date on which either: • the Group is aware that probate has been granted, the estate has been finalised and notification has been made by the executor to the Group that a distribution will be made; or • when a distribution is received from the estate. In the event that the legacy is in the form of an asset other than cash or a financial asset traded on a recognised stock exchange, recognition is subject to the value of the asset being reliably measurable with a degree of reasonable accuracy and title to the asset having being transferred to the Group. Where legacies have been notified to the Group, or the Group is aware of the granting of probate, but the criteria for income recognition have not been met, then the legacy is treated as a contingent asset and disclosed if material. Income arising in the course of mission comprises income from education and other activities undertaken as part of the Cathedral’s mission. Such income is recognised when the related activities take place. The majority of investment properties are subject to long-term leases for which a premium is charged on the grant of the lease. In accordance with the provisions of the Cathedrals Measure 1999, the lease premiums, less associated costs, are credited to endowed capital on receipt. The net proceeds are therefore shown as realised gains of the endowment funds in the year in which the lease premiums are received. Other investment income is recognised when it is receivable, as long as the amount can be measured reliably.
Expenditure Expenditure is included in the statement of financial activities when incurred and includes irrecoverable VAT. Expenditure is recognised as soon as there is a legal or constructive obligation committing the Group to make a payment to a third party, it is probable that a transfer of economic benefits will be required in settlement, and the amount of the obligation can be measured reliably. Expenditure includes the cost of goods or services paid for by third parties on behalf of the Cathedral. Expenditure comprises the direct costs of different activities, including the salaries of those employees directly involved, and support costs which support a number of activities. All expenditure, including support costs, is allocated or apportioned to the applicable activity headings within the following categories: • costs of raising funds; and • costs of charitable activities.
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
In order to carry out the primary purposes of the Group it is necessary to provide support in the form of staff development, office services and equipment, financial management, good governance and similar costs. Governance costs comprise audit fees and other expenditure relating to the public accountability of the Group and compliance with regulation and good practice, including expenditure relating to relevant meetings. Support costs, including governance costs, represent indirect charitable expenditure and are apportioned based on the full-time-equivalent numbers of staff time in the relevant cost centres.
Taxation No corporation tax is payable by the Group as the Cathedral is a charity and its subsidiary companies surrender their profits to the Cathedral under Gift Aid. Income tax recoverable on donations and investment income is included as part of the corresponding income. The Cathedral can recover only some of the Value Added Tax (VAT) incurred on its expenditure. Irrecoverable VAT is included as part of support costs.
Tangible fixed assets Apart from the Cathedral Church itself, which is treated as a heritage asset, properties used for the Group’s own activities are shown at their cost. This includes additions to the Cathedral to provide visitor facilities. These additions are depreciated on a straight-line basis over their anticipated useful economic lives at annual rates of 2% - 10%. The other properties used by the Group were acquired prior to 31st March 2015 and their existing use value at that date is treated as the deemed cost (as permitted by the changes to the Accounting Regulations in February 2015). No depreciation is charged on these properties on the basis that they are regularly maintained and therefore have an indefinite useful economic life and maintain their value. Accordingly, any depreciation would not be material. Other tangible fixed assets (apart from heritage assets) costing more than £1,000 and with an expected useful economic life exceeding one year are capitalised at cost. They are depreciated on a straight-line basis over their anticipated useful economic lives at the following annual rates: • Building improvements 2% - 10% • Workshop equipment & vehicles 20% • Office, shop & refectory equipment 20% - 33% • Cathedral furniture & equipment 10%
Heritage assets The Cathedral Church of the Blessed Virgin Mary in Salisbury and its historic ornaments, vestments and other artefacts are regarded as heritage assets because of their contribution to knowledge and culture. Such assets are not generally recognised on the balance sheet as information about their cost or valuation is not available. Because of the incomparable nature of these historic heritage assets, conventional valuation approaches lack sufficient reliability and, even if valuations could be obtained, the costs of doing so would not be justified by the usefulness of the information to users of the accounts and the Cathedral. Current additions to the Cathedral’s ornaments, vestments and other artefacts which qualify as heritage assets are shown at their cost or, if donated to the Cathedral, their fair value on an arm's length basis at the time of donation. This value is treated as the deemed cost. If, because of their nature, donated items cannot be valued with sufficient reliability, they are not recognised on the balance sheet. Heritage assets recognised on the balance sheet are not depreciated as they have indefinite lives. At each balance sheet date, a review is undertaken and the cost (or deemed cost) of recognised heritage assets is written down if the value of such an asset has been impaired for any reason.
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
The costs of caring for the Cathedral’s heritage assets, including repairs to the Cathedral Church, are reported as expenditure in the statement of financial activities as the costs are incurred. The costs of routine maintenance and work on major repairs are each identified separately in notes to the accounts.
Fixed asset investments Fixed asset investments, including investment properties, are shown at their fair value at the balance sheet date. Fair value is the open market value for investment properties, and the mid-market value reported by the respective fund managers for other investments. The Group does not acquire complex financial instruments such as options and derivatives. Realised and unrealised gains and losses on investment assets are combined in the statement of financial activities and recorded in the year in which they arise.
Stock Stock includes: • materials held by the works and glazing departments; • goods for resale held by Salisbury Cathedral Enterprises Ltd.; and • work in progress under contracts for third parties. All stock is recognised at the lower of cost and net realisable value.
Debtors Debtors are recognised at the amount due to the Group, less any provision for non-recoverability. Prepayments are recognised at the amount prepaid. Debtors and prepayments are discounted to the present value of the expected future cash receipt where such discounting is material.
Cash at bank and in hand Cash at bank and in hand represents cash and bank balances that are available on demand or have a maturity of less than three months from the date of acquisition. Term deposits of more than three months but less than one year are disclosed as short-term deposits. Cash placed on deposit for more than one year is shown as a fixed asset investment. Bank balances held as part of investment portfolios are also included as part of fixed asset investments.
Creditors and provisions Creditors and provisions are recognised when there is an obligation to make a payment or other transfer of economic benefit as a result of a past event, and the amount can be estimated reliably. Creditors and provisions are recognised at the amount the Group anticipates it will pay to settle the debt. They are discounted to the present value of the future cash payment where such discounting is material.
Pensions The costs of retirement benefits provided to clergy employed by the Cathedral through a multi- employer defined pension scheme, the assets of which are held independently of the Group, are accounted for as if this were a defined contribution scheme, as information is not available to use defined benefit accounting in accordance with the requirements of FRS 102. The Group’s contributions to this scheme are recognised as an expense in the period in which the related stipends are payable. In addition, a liability is recognised at the balance sheet date for the discounted value of the expected future contribution payments under agreements to fund past service deficits. The Group also contributes to pension schemes of other employees. These schemes are defined contribution schemes, and the assets are held independently of the Group. Contributions made by the Group are recognised as an expense in the period in which the related salaries are payable.
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
Consolidated Statement of Financial Activities
Note Unrestricted Restricted Endowment Total Total Funds Funds Funds 2020 2019 £000 £000 £000 £000 £000 Income & endowments from: 1 Donations and legacies 1,556 608 74 2,238 2,555 Grants in support of mission 61 148 - 209 201 Charges and fees arising in the 91 41 - 132 130 course of mission Trading and fundraising 1,321 - - 1,321 1,248 Investments 838 297 - 1,135 1,147 Other income 1 9 1 11 36 ______Total income 3,868 1,103 75 5,046 5,317 ______
Expenditure on: Costs of raising income 2 1,881 64 282 2,227 2,094 Charitable activities 3 Ministry 1,011 751 - 1,762 1,560 Cathedral and precincts upkeep 972 485 31 1,488 1,413 Education and outreach 361 96 - 457 456 Other expenditure 23 - - 23 9 ______Total expenditure 4,248 1,396 313 5,957 5,532 ______
Net income/(expenditure) before gains/losses on investments (380) (293) (238) (911) (215)
Gains/(losses) on investment assets Investment properties: realised - - - - 264 Investment properties: unrealised - - - - - Other investments: realised - - - - 1,004 Other investments: unrealised - (421) (132) (553) (121) ______Net gains/(losses) on investments - (421) (132) (553) 1,147 ______
______Net income/(expenditure) (380) (714) (370) (1,464) 932
Reconciliation of funds Brought forward at 1st April 2019 4,880 7,661 46,970 59,511 58,579 ______
Balances at 31st March 2020 4,500 6,947 46,600 58,047 59,511 ______
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
Consolidated Statement of Financial Activities Comparative information Note Unrestricted Restricted Endowment Total Funds Funds Funds 2019 £000 £000 £000 £000 Income & endowments from: 1 Donations and legacies 1,511 970 74 2,555 Grants in support of mission 4 197 - 201 Charges and fees arising in the 107 23 - 130 course of mission Trading and fundraising 1,248 - - 1,248 Investments 862 285 - 1,147 Other income 8 28 - 36 ______Total income 3,740 1,503 74 5,317 ______
Expenditure on: Costs of raising income 2 1,716 27 351 2,094 Charitable activities 3 Ministry 915 645 - 1,560 Cathedral and precincts upkeep 868 514 31 1,413 Education and outreach 322 134 - 456 Other expenditure 9 - - 9 ______Total expenditure 3,830 1,320 382 5,532 ______
Net income/(expenditure) before gains/losses on investments (90) 183 (308) (215)
Gains/(losses) on investment assets Investment properties: realised - - 264 264 Investment properties: unrealised - - - - Other investments: realised - 5 999 1,004 Other investments: unrealised - 81 (202) (121) ______Net gains/(losses) on investments - 86 1,061 1,147 ______
______Net income/(expenditure) (90) 269 753 932
Reconciliation of Funds Brought forward at 1st April 2018 4,970 7,392 46,217 58,579 ______
Balances at 31st March 2019 4,880 7,661 46,970 59,511 ______
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
Consolidated Balance Sheet
Note Unrestricted Restricted Endowment Total Total Funds Funds Funds 2020 2019 £000 £000 £000 £000 £000 Fixed assets Tangible assets Non-investment properties 6 - - 12,331 12,331 12,458 Other tangible fixed assets 7 162 - - 162 70 ______162 - 12,331 12,493 12,528 ______
Heritage assets 8 - - - - - ______
Investment assets Investment properties 9 - - 15,512 15,512 15,416 Other investments 10 2,674 6,258 18,710 27,642 28,864 ______2,674 6,258 34,222 43,154 44,280 ______Total fixed assets 2,836 6,258 46,553 55,647 56,808 ______
Current assets Stock 12 157 - - 157 145 Debtors 13 546 - - 546 564 Cash at bank and in hand 1,636 689 47 2,372 2,639 ______Total current assets 2,339 689 47 3,075 3,348
Creditors: amounts falling due within one year 14 (669) - - (669) (626) ______Net current assets 1,670 689 47 2,406 2,722 ______
Provisions for liabilities and charges 15 (6) - - (6) (19) ______
Total net assets 4,500 6,947 46,600 58,047 59,511 ______
Funds Endowment funds 16 - - 46,600 46,600 46,970 Restricted funds 17 - 6,947 - 6,947 7,661 Designated unrestricted funds 18 421 - - 421 1,338 General unrestricted funds 18 4,079 - - 4,079 3,542 ______
4,500 6,947 46,600 58,047 59,511 ______
Approved by Chapter on 18th December 2020 and signed on their behalf by:
The Very Revd Nicholas Papadopulos Jane Barker Dean of Salisbury Chair, Finance Advisory Group
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
Consolidated Balance Sheet Comparative information Note Unrestricted Restricted Endowment Total Funds Funds Funds 2019 £000 £000 £000 £000 Fixed assets Tangible assets Non-investment properties 6 - - 12,458 12,458 Other tangible fixed assets 7 70 - - 70 ______70 - 12,458 12,528 ______
Heritage assets 8 - - - - ______
Investment assets Investment properties 9 - - 15,416 15,416 Other investments 10 3,149 6,731 18,984 28,864 ______3,149 6,731 34,400 44,280 ______Total fixed assets 3,219 6,731 46,858 56,808 ______
Current assets Stock 12 145 - - 145 Debtors 13 564 - - 564 Cash at bank and in hand 1,597 930 112 2,639 ______Total current assets 2,306 930 112 3,348
Creditors: amounts falling due within one year 14 (626) - - (626) ______Net current assets 1,680 930 112 2,722 ______
Provisions for liabilities and charges 15 (19) - - (19) ______
Total net assets 4,880 7,661 46,970 59,511 ______
Funds Endowment funds 16 - - 46,970 46,970 Restricted funds 17 - 7,661 - 7,661 Designated unrestricted funds 18 1,338 - - 1,338 General unrestricted funds 18 3,542 - - 3,542 ______
4,880 7,661 46,970 59,511 ______
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
Cathedral Balance Sheet
Note Unrestricted Restricted Endowment Total Total Funds Funds Funds 2020 2019 £000 £000 £000 £000 £000 Fixed assets Tangible assets Property 6 - - 12,331 12,331 12,458 Other tangible fixed assets 7 114 - - 114 65 ______114 - 12,331 12,445 12,523 ______
Heritage assets 8 - - - - - ______
Investment assets Investment properties 9 - - 15,512 15,512 15,416 Other investments 10 2,674 6,258 18,710 27,642 28,864 ______2,674 6,258 34,222 43,154 44,280 ______Total fixed assets 2,788 6,258 46,553 55,599 56,803 ______
Current assets Stock 12 5 - - 5 7 Debtors 13 832 - - 832 799 Cash at bank and in hand 1,445 689 47 2,181 2,459 ______Total current assets 2,282 689 47 3,018 3,265
Creditors: amounts falling due within one year 14 (565) - - (565) (538) ______Net current assets 1,717 689 47 2,453 2,727 ______
Provisions for liabilities and charges 15 (6) - - (6) (19) ______
Total net assets 4,499 6,947 46,600 58,046 59,511 ______
Funds Endowment funds 16 - - 46,600 46,600 46,970 Restricted funds 17 - 6,947 - 6,947 7,661 Designated unrestricted funds 18 421 - - 421 1,338 General unrestricted funds 18 4,078 - - 4,078 3,542 ______
4,499 6,947 46,600 58,046 59,511 ______
Approved by Chapter on 18th December 2020 and signed on their behalf by:
The Very Revd Nicholas Papadopulos Jane Barker Dean of Salisbury Chair, Finance Advisory Group
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
Cathedral Balance Sheet Comparative information Note Unrestricted Restricted Endowment Total Funds Funds Funds 2019 £000 £000 £000 £000 Fixed assets Tangible assets Property 6 - - 12,458 12,458 Other tangible fixed assets 7 65 - - 65 ______65 - 12,458 12,523 ______
Heritage assets 8 - - - - ______
Investment assets Investment properties 9 - - 15,416 15,416 Other investments 10 3,149 6,731 18,984 28,864 ______3,149 6,731 34,400 44,280 ______Total fixed assets 3,214 6,731 46,858 56,803 ______
Current assets Stock 12 7 - - 7 Debtors 13 799 - - 799 Cash at bank and in hand 1,417 930 112 2,459 ______Total current assets 2,223 930 112 3,265
Creditors: amounts falling due within one year 14 (538) - - (538) ______Net current assets 1,685 930 112 2,727 ______
Provisions for liabilities and charges 15 (19) - - (19) ______
Total net assets 4,880 7,661 46,970 59,511 ______
Funds Endowment funds 16 - - 46,970 46,970 Restricted funds 17 - 7,661 - 7,661 Designated unrestricted funds 18 1,338 - - 1,338 General unrestricted funds 18 3,542 - - 3,542 ______
4,880 7,661 46,970 59,511 ______
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
Consolidated Cash Flow Statement
Note 2020 2020 2019 2019 £000 £000 £000 £000
Cash flows from operating activities Net cash provided by/(used in) operating activities A (1,580) (861)
Cash flows from investing activities Rents received net of expenses (9) (59) Interest and dividends received 712 752 Purchase of plant and equipment (134) (73) Proceeds from sales of investment properties - 1,164 Proceeds from sales of other investments 216 18,592 Purchase of investments (25) (18,537) ______760 1,839 Cash flows from financing activities Receipts of endowment 75 74 ______
Change in cash & cash equivalents B (745) 1,052
Cash & cash equivalents at 1st April 2019 10,003 8,951 ______
Cash & cash equivalents at 31st March 2020 B 9,258 10,003 ______
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
A Reconciliation of net income/(expenditure) to net cash flow from operating activities
2020 2019 £000 £000 Net income/(expenditure) (1,464) 932 Depreciation 73 57 (Gains)/losses on investments 553 (1,147) Rents (346) (347) Interest & dividends (720) (747) Investment property expenses 355 406 Receipts of endowment (75) (74) (Increase)/decrease in stocks (12) 36 (Increase)/decrease in debtors 26 (124) Increase/(decrease) in creditors 30 147 ______Net cash provided by/(used in) operating activities (1,580) (861) ______
B Analysis of movement in cash & cash equivalents Balance Net cash Balance 1st April cash 31st March 2019 flow 2020 £000 £000 £000 Cash at bank and in hand Unrestricted funds 1,597 39 1,636 Restricted funds 930 (241) 689 Endowment funds 112 (65) 47 ______2,639 (267) 2,372 ______Investment deposits Unrestricted funds 3,149 (500) 2,649 Restricted funds 2,315 11 2,326 Endowment funds 1,900 11 1,911 ______7,364 (478) 6,886 ______Total cash & cash equivalents 10,003 (745) 9,258 ______
Comparative information Balance Net cash Balance 1st April cash 31st March 2018 flow 2019 £000 £000 £000 Cash at bank and in hand Unrestricted funds 1,679 (82) 1,597 Restricted funds 794 136 930 Endowment funds 179 (67) 112 ______2,652 (13) 2,639 ______Investment deposits Unrestricted funds 3,140 9 3,149 Restricted funds 2,263 52 2,315 Endowment funds 896 1,004 1,900 ______6,299 1,065 7,364 ______Total cash & cash equivalents 8,951 1,052 10,003 ______28
SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
Notes to the Accounts
1. INCOMING RESOURCES
Unrestricted Restricted Endowment Total Total Funds Funds Funds 2020 2019 £000 £000 £000 £000 £000 Donations & legacies Congregational collections 227 - - 227 239 Visitors 1,241 - - 1,241 1,173 Other donations 85 446 - 531 956 Friends of the Cathedral - 41 74 115 183 Cathedral Trust - 115 - 115 - Legacies 3 6 - 9 4 ______1,556 608 74 2,238 2,555 ______
Grants in support of mission Church Commissioners - 148 - 148 148 Lottery Heritage Fund - - - - 49 Other grants 61 - - 61 4 ______61 148 - 209 201 ______
Charges and fees arising in the course of mission Facilities and other fees 72 41 - 113 110 Education centre 19 - - 19 20 ______91 41 - 132 130 ______
Trading and fundraising Charges to visitors 226 - - 226 159 Shop, refectory and car park 876 - - 876 822 Masonry and glazing contracts 219 - - 219 267 ______1,321 - - 1,321 1,248 ______
Investments Property 293 53 - 346 347 Investments 499 221 - 720 747 Interest on short-term deposits 46 23 69 53 ______838 297 - 1,135 1,147 ______
Other income Other income 1 9 1 11 36 ______1 9 1 11 36 ______
Total incoming resources 3,868 1,103 75 5,046 5,317 ______
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
1. INCOMING RESOURCES (continued) Comparative information Unrestricted Restricted Endowment Total Funds Funds Funds 2019 £000 £000 £000 £000 Donations & legacies Congregational collections 239 - - 239 Visitors 1,173 - - 1,173 Other donations 95 861 - 956 Friends of the Cathedral - 109 74 183 Legacies 4 - - 4 ______1,511 970 74 2,555 ______
Grants in support of mission Church Commissioners - 148 - 148 Lottery Heritage Fund - 49 - 49 Other grants 4 - - 4 ______4 197 - 201 ______
Charges and fees arising in the course of mission Facilities and other fees 87 23 - 110 Education centre 20 - - 20 ______107 23 - 130 ______
Trading and fundraising Charges to visitors 159 - - 159 Shop, refectory and car park 822 - - 822 Masonry and glazing contracts 267 - - 267 ______1,248 - - 1,248 ______
Investments Property 295 52 - 347 Investments 534 213 - 747 Interest on short-term deposits 33 20 53 ______862 285 - 1,147 ______
Other income Other income 8 28 - 36 ______8 28 - 36 ______
Total incoming resources 3,740 1,503 74 5,317 ______
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
2. COSTS OF RAISING INCOME
Unrestricted Restricted Endowment Total Total Funds Funds Funds 2020 2019 £000 £000 £000 £000 £000 Appeals and fundraising expenses 87 1 - 88 105 Facilities for visitors 469 26 - 495 370 General marketing costs 90 - - 90 97 Shop, refectory and car park 613 - - 613 577 Masonry and glazing contracts 223 - - 223 252 Property expenses 205 - 150 355 406 Investment management costs - 36 132 168 120 Support costs 194 1 - 195 167 ______1,881 64 282 2,227 2,094 ______
3. CHARITABLE ACTIVITIES
Unrestricted Restricted Endowment Total Total Funds Funds Funds 2020 2019 £000 £000 £000 £000 £000 Ministry Clergy stipends and expenses 10 152 - 162 219 Clergy housing costs 36 - - 36 31 Clergy support costs 30 - - 30 43 Services and music 682 599 - 1,281 1,056 Support costs 253 - - 253 211 ______1,011 751 - 1,762 1,560 ______
Cathedral and precincts upkeep Major repairs and restoration - 346 - 346 350 Maintenance and interior upkeep 533 135 - 668 629 Cathedral insurance 79 1 - 80 77 Little Paradise development - - 31 31 31 Precincts, security and garden upkeep 92 3 - 95 75 Support costs 268 - - 268 251 ______972 485 31 1,488 1,413 ______
Education and outreach Educational activities 252 44 - 296 273 Archives and library 53 45 - 98 80 HLF funded projects - - - - 27 Charitable and other giving 26 7 - 33 36 Support costs 30 - - 30 40 ______361 96 - 457 456 ______
Other expenditure Strategic planning and restructuring 23 - - 23 9 ______23 - - 23 9 ______
Total expenditure on charitable activities 2,367 1,332 31 3,730 3,438 ______
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
2. COSTS OF RAISING INCOME (continued) Comparative information Unrestricted Restricted Endowment Total Funds Funds Funds 2019 £000 £000 £000 £000 Appeals and fundraising expenses 103 2 - 105 Facilities for visitors 362 8 - 370 General marketing costs 97 - - 97 Shop, refectory and car park 577 - - 577 Masonry and glazing contracts 252 - - 252 Property expenses 158 - 248 406 Investment management costs 2 15 103 120 Support costs 165 2 - 167 ______1,716 27 351 2,094 ______
3. CHARITABLE ACTIVITIES (continued) Comparative information Unrestricted Restricted Endowment Total Funds Funds Funds 2019 £000 £000 £000 £000 Ministry Clergy stipends and expenses 67 152 - 219 Clergy housing costs 31 - - 31 Clergy support costs 36 7 - 43 Services and music 570 486 - 1,056 Support costs 211 - - 211 ______915 645 - 1,560 ______
Cathedral and precincts upkeep Major repairs and restoration - 350 - 350 Maintenance and interior upkeep 476 153 - 629 Cathedral insurance 76 1 - 77 Little Paradise development - - 31 31 Precincts, security and garden upkeep 72 3 - 75 Support costs 244 7 - 251 ______868 514 31 1,413 ______
Education and outreach Educational activities 210 63 - 273 Archives and library 45 35 - 80 HLF funded projects - 27 - 27 Charitable and other giving 27 9 - 36 Support costs 40 - - 40 ______322 134 - 456 ______
Other expenditure Strategic planning and restructuring 9 - - 9 ______9 - - 9 ______
Total expenditure on charitable activities 2,114 1,293 31 3,438 ______
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
4. STAFF NUMBERS AND COSTS
The average weekly number and the average full-time-equivalent number of paid staff of the Group were as follows: 2020 2019 No. FTE No. FTE Cathedral and precincts 42 28 39 27 Visitors and education 34 19 35 19 Works and glazing departments 21 21 22 22 Administration 18 12 18 14 ______115 80 114 82 ______
The total staff costs were as follows: 2020 2019 £000 £000 Wages, salaries and stipends 2,242 2,225 Employer's national insurance 180 170 Employer’s pension contributions 123 104 ______2,545 2,499 ______
One member of staff received emoluments (excluding employer's pension contributions) in the band of £70,000-£79,999 during the year ended 31st March 2020 (2019: £60,000-£69,999).
Included in the staff referred to in the tables above are the Dean and the three Canons Residentiary who are paid stipends and the related pension contributions in accordance with scales set annually by the Church Commissioners, the Archbishops’ Council and the Church of England Pensions Board. The stipends of the Dean and two Canons Residentiary are funded by the Church Commissioners. The stipends (including employer’s national insurance) and employer’s pension contributions were as follows:
2020 2019 Stipend Pension Stipend Pension £ £ £ £ The Very Revd Nicholas Papadopulos (Dean) 40,188 12,050 12,507 3,677 (from September 2018) The Revd Canon Tom Clammer (Precentor) - - 73,414 19,107 (up to January 2019) The Revd Canon Anna Macham (Precentor) 20,217 6,361 - - (from May 2019) The Revd Canon Edward Probert (Chancellor) 30,732 9,640 36,745 9,460 The Revd Canon Robert Titley (Treasurer) 31,539 9,615 30,923 9,425
The clergy pension contributions are paid to the Church of England Funded Pensions Scheme. Further details of the Scheme are shown in note 20.
5. SUPPORT COSTS
Support costs include: 2020 2019 £000 £000 Remuneration of the auditors of the Group Audit services 15 15
Irrecoverable VAT 135 128
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
6. NON-INVESTMENT PROPERTIES Little Shop and Staff Paradise refectory Offices houses Total £000 £000 £000 £000 £000 COST OR DEEMED COST At 1st April 2019 1,391 877 1,020 10,202 13,490 Additions - - - - - Disposals - - - - - Transfers from/(to) investment properties - - - (96) (96) ______At 31st March 2020 1,391 877 1,020 10,106 13,394 ______DEPRECIATION At 1st April 2019 155 877 - - 1,032 Charge for the year 31 - - - 31 ______At 31st March 2020 186 877 - - 1,063 ______
NET BOOK VALUE At 31st March 2020 1,205 - 1,020 10,106 12,331 ______
At 31st March 2019 1,236 - 1,020 10,202 12,458 ______
The offices and staff houses were acquired prior to 31st March 2015 and their existing use value at that date is treated as the deemed cost (as permitted by the changes to the Accounting Regulations in February 2015).
7. OTHER TANGIBLE FIXED ASSETS
GROUP Workshop Shop & Cathedral Building equipment Office refectory furniture & improvements & vehicles equipment equipment equipment Total £000 £000 £000 £000 £000 £000 COST At 1st April 2019 102 210 465 64 276 1,117 Additions - 76 53 5 - 134 Disposals - (15) - - - (15) ______At 31st March 2020 102 271 518 69 276 1,236 ______DEPRECIATION At 1st April 2019 102 203 402 64 276 1,047 Charge for the year - 11 30 1 - 42 On disposals - (15) - - - (15) ______At 31st March 2020 102 199 432 65 276 1,074 ______
NET BOOK VALUE At 31st March 2020 - 72 86 4 - 162 ______
At 31st March 2019 - 7 63 - - 70 ______
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
7. OTHER TANGIBLE FIXED ASSETS (continued)
CATHEDRAL Workshop Cathedral Building equipment Office furniture & improvements & vehicles equipment equipment Total £000 £000 £000 £000 £000 COST At 1st April 2019 97 162 465 276 1,000 Additions - 28 53 - 81 Disposals - (15) - - (15) ______At 31st March 2020 97 175 518 276 1,066 ______DEPRECIATION At 1st April 2019 97 160 402 276 935 Charge for the year - 2 30 - 32 On disposals - (15) - - (15) ______At 31st March 2020 97 147 432 276 952 ______
NET BOOK VALUE At 31st March 2020 - 28 86 - 114 ______
At 31st March 2019 - 2 63 - 65 ______
8. HERITAGE ASSETS
As set out in the accounting policies, the Cathedral Church of the Blessed Virgin Mary in Salisbury and its historic ornaments, vestments and other artefacts are regarded as heritage assets and are not recognised in the balance sheet. The Cathedral’s heritage assets are both extensive and of international significance. As well as the Cathedral Church itself, construction of which started in 1220, heritage assets include an original copy of the 1215 Magna Carta, the oldest working mediaeval clock in the world, significant works of art and an extensive library and archives. The Cathedral maintains a record of its heritage assets as part of its inventory of all the Cathedral’s furniture, ornaments, vestments and vessels. The Cathedral Church is open to the public daily and there are also arrangements to allow access to the Cathedral’s archives and other collections.
In accordance with the Care of Cathedrals Measure 2011, the Cathedral has established a Fabric Advisory Committee. No work may be carried out on the Cathedral Church that would materially affect its architectural, archaeological, artistic or historic character, nor may any object of architectural, archaeological or artistic interest be sold, lent or disposed of, without the approval of either the Fabric Advisory Committee or the Cathedrals Fabric Commission.
It is the responsibility of Chapter to ensure that necessary repairs, maintenance and conservation of the fabric of the Cathedral itself and other heritage assets are carried out. The related costs are reported as expenditure in the statement of financial activities. An independent architect makes a detailed quinquennial report on the condition of the fabric of the Cathedral and provides an annual update.
There have been no transactions relating to heritage assets within the last five years and the Cathedral does not currently recognise any heritage assets on its balance sheet.
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
9. INVESTMENT PROPERTIES General Choristers' Endowment Endowment Fund Fund Total £000 £000 £000 Valuation at 1st April 2019 14,406 1,010 15,416 Additions - - - Disposals - - - Transfers from/(to) non-investment properties 96 - 96 Revaluation - - - ______Valuation at 31st March 2020 14,502 1,010 15,512 ______
The Cathedral does not have a record of the original cost of the investment properties.
The properties held for investment purposes are all within the Cathedral Close. They are held freehold and the majority are let on long, tenant-repairing leases. The properties were valued at 31st March 2016 by Strutt & Parker LLP, Chartered Surveyors, on the basis of open market value.
10. OTHER INVESTMENTS Unrestricted Restricted Endowment Total Funds Funds Funds £000 £000 £000 £000 Market value at 1st April 2019 3,149 6,731 18,984 28,864 Additions 25 - - 25 Disposals - (63) (153) (216) Increase/(decrease) in cash (500) 11 11 (478) Revaluation - (421) (132) (553) ______Market value at 31st March 2020 2,674 6,258 18,710 27,642 ______
The original cost of these investments was: At 31st March 2020 2,674 6,662 19,196 28,532 ______
At 31st March 2019 3,149 6,653 19,185 28,987 ______
The market values comprise: 2020 2019 Total Total £000 £000 Collective investments holding: UK listed investments 6,768 7,944 Overseas listed investments 9,866 9,436 Unlisted investments 4,097 4,120 Other unlisted investments 25 - ______20,756 21,500 Cash on deposit 6,886 7,364 ______Market value at 31st March 27,642 28,864 ______
During the year, the collective investments were managed by Sarasin & Partners LLP, Schroders & Co. Limited and CCLA Investment Management Limited. Since the year end, Chapter has transferred the portfolios managed by Sarasin and Schroders to CCLA, who now manage all the Cathedral’s non-property collective investments.
Other unlisted investments are shown at cost as Chapter does not consider that the market value is materially different.
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
11. SUBSIDIARY COMPANIES
The consolidated accounts include the income, expenditure and net assets of the following two companies which are wholly owned by the Cathedral. In both cases, figures relate to years ended 31st March. Salisbury Cathedral Salisbury Cathedral Works Department Ltd Enterprises Ltd 2020 2019 2020 2019 £000 £000 £000 £000 Turnover 94 111 1,024 1,009 Expenditure 50 61 744 742 ______Net profit 44 50 280 267
Gift Aid donations and distributions Friends of Salisbury Cathedral - - 15 15 Salisbury Cathedral – paid in year 25 50 240 256 Salisbury Cathedral – Deferred Gift Aid 19 - 25 (4) ______Retained profit/(loss) - - - - ______
Gross assets 54 24 388 386 Liabilities (54) (24) (388) (386) ______Net assets - - - - ______
Salisbury Cathedral Works Department Ltd (company number 02919446) is the trading arm of the Cathedral works department. It carries out outside contracts, principally repairs to historic buildings, by the works department.
Salisbury Cathedral Enterprises Ltd (company number 00556116) operates the Cathedral shop and car parking and receives commission from sales in the Cathedral Refectory restaurant (which is operated by an independent catering company). It also carries out outside contracts, principally repairs to historic buildings, by the glazing department.
In addition to the Gift Aid donations and distributions referred to in the table above, the following transactions took place at arm’s length between the Cathedral and its subsidiary companies. The Cathedral incurs expenses which are recharged to the subsidiary companies. During the year, the total amount of such recharges to Salisbury Cathedral Works Department Ltd was £28k (2019: £33k) and to Salisbury Cathedral Enterprises Ltd was £369k (2019: £346k). Salisbury Cathedral Enterprises Ltd charged the Cathedral £24k (2019: £21k) for glazing repairs undertaken. Salisbury Cathedral Works Ltd charged the Cathedral £nil (2019: £8k) for an outreach project.
12. STOCK GROUP CATHEDRAL 2020 2019 2020 2019 £000 £000 £000 £000 Raw materials 29 27 5 7 Goods for resale 107 96 - - Work in progress 21 22 - - ______157 145 5 7 ______
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
13. DEBTORS GROUP CATHEDRAL 2020 2019 2020 2019 £000 £000 £000 £000 Trade debtors 211 191 145 108 Income tax recoverable 65 126 63 124 VAT recoverable 11 4 11 4 Investment income receivable 186 179 186 179 Other debtors - 3 - 3 Prepayments 73 61 70 58 Due from subsidiary companies - - 357 323 ______546 564 832 799 ______
14. CREDITORS: amounts falling due within one year GROUP CATHEDRAL 2020 2019 2020 2019 £000 £000 £000 £000 Trade creditors 361 276 345 252 VAT payable - - - - PAYE & NIC payable 46 44 46 44 Due to Friends of Salisbury Cathedral 15 15 - - Other creditors 11 29 9 25 Accruals 120 172 115 168 Deferred income 116 90 50 49 ______669 626 565 538 ______
15. PROVISIONS FOR LIABILITIES AND CHARGES GROUP CATHEDRAL 2020 2019 2020 2019 £000 £000 £000 £000 Pension provision (see note 20) 6 19 6 19 ______6 19 6 19 ______
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
16. ENDOWMENT FUNDS
Balance Transfers, gains Balance 1st April 2019 Income Expenditure and losses 31stMarch 2020 £000 £000 £000 £000 £000 Endowed capital 44,011 75 (313) (126) 43,647 Prebendal fund 41 - - - 41 Choristers' Endowment Fund 2,492 - - (8) 2,484 Choral Foundation 426 - - 2 428 ______46,970 75 (313) (132) 46,600 ______
See note 19 for a description of the purpose of each fund.
17. RESTRICTED FUNDS
Balance Transfers, gains Balance 1st April 2019 Income Expenditure and losses 31stMarch 2020 £000 £000 £000 £000 £000 Prebendal fund 104 4 (3) (1) 104 Choristers' Endowment Fund 261 112 (112) - 261 Choral Foundation 272 66 (65) - 273 General fabric legacy fund 2,263 194 (346) - 2,111 Ivor Read fabric legacy fund 4,100 144 (112) (420) 3,712 Willis organ fund 311 165 (376) - 100 Other specific grants, legacies & donations 350 418 (382) - 386 ______7,661 1,103 (1,396) (421) 6,947 ______
See note 19 for a description of the purpose of each fund.
18. UNRESTRICTED FUNDS
Balance Surplus/ Gains/ Balance 1st April 2019 (deficit) (losses) Transfers 31stMarch 2020 £000 £000 £000 £000 £000 Designated unrestricted funds Cathedral interior development fund 66 (9) - - 57 Property repair reserve 110 - - - 110 General legacy fund 215 3 - (218) - Organ fund 480 (57) - (423) - Safer environment fund 90 (42) - - 48 Organisation development fund 125 (13) - - 112 Visitor experience fund 216 (158) - - 58 Community & outreach projects 10 - - - 10 Library fund 26 - - - 26 ______1,338 (276) - (641) 421
General unrestricted funds 3,542 (104) - 641 4,079 ______4,880 (380) - - 4,500 ______
See note 19 for a description of the purpose of each fund.
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
16. ENDOWMENT FUNDS (continued) Comparative information Balance Transfers, gains Balance 1st April 2018 Income Expenditure and losses 31stMarch 2019 £000 £000 £000 £000 £000 Endowed capital 43,322 74 (378) 993 44,011 Prebendal fund 39 - - 2 41 Choristers' Endowment Fund 2,450 - (3) 45 2,492 Choral Foundation 406 - (1) 21 426 ______46,217 74 (382) 1,061 46,970 ______
See note 19 for a description of the purpose of each fund.
17. RESTRICTED FUNDS (continued) Comparative information Balance Transfers, gains Balance 1st April 2018 Income Expenditure and losses 31stMarch 2019 £000 £000 £000 £000 £000 Prebendal fund 97 4 (3) 6 104 Choristers' Endowment Fund 231 112 (82) - 261 Choral Foundation 276 78 (85) 3 272 General fabric legacy fund 2,275 338 (350) - 2,263 Ivor Read fabric legacy fund 4,020 133 (128) 75 4,100 Willis organ fund 138 454 (281) - 311 Other specific grants, legacies & donations 355 384 (391) 2 350 ______7,392 1,503 (1,320) 86 7,661 ______
See note 19 for a description of the purpose of each fund.
18. UNRESTRICTED FUNDS (continued) Comparative information Balance Surplus/ Gains/ Balance 1st April 2018 (deficit) (losses) Transfers 31stMarch 2019 £000 £000 £000 £000 £000 Designated unrestricted funds Cathedral interior development fund 66 - - - 66 Property repair reserve 90 - - 20 110 General legacy fund 213 2 - - 215 Organ fund 550 - - (70) 480 Safer environment fund 90 - - - 90 Organisation development fund 105 (20) - 40 125 Visitor experience fund 220 (44) - 40 216 Community & outreach projects 10 - - - 10 Library fund 26 - - - 26 ______1,370 (62) - 30 1,338
General unrestricted funds 3,600 (28) - (30) 3,542 ______4,970 (90) - - 4,880 ______
See note 19 for a description of the purpose of each fund.
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
19. PURPOSES OF FUNDS
The endowment and restricted funds shown in notes 16 and 17 comprise, respectively, the capital and the unexpended income of funds given for the following specific purposes:
Endowed capital: to improve the freehold properties owned by the Cathedral Prebendal fund: to meet expenditure incurred by non-residentiary and lay canons Salisbury Cathedral Choristers’ Endowment Fund: to fund the fees of boy choristers Salisbury Cathedral Choral Foundation: to promote and enhance church music in the Cathedral General fabric legacy fund: repair and maintenance of the fabric of the Cathedral Ivor Read legacy fund: repair and maintenance of the fabric of the Cathedral Willis organ fund: maintenance of the Willis organ in the Cathedral Other specific grants, various specific purposes including music, artwork, education & legacies & donations: library projects, and repairs & improvements to the Cathedral
Although separately registered charities, Salisbury Cathedral Choristers’ Endowment Fund (charity no. 309485) and Salisbury Cathedral Choral Foundation (charity no. 1058899) are regarded as funds of the Cathedral as they are administered by the Cathedral for its charitable purposes. The Cathedral, through Chapter, is the trustee of both charities.
The designated funds shown in note 18 comprise income that has been designated by Chapter for the following purposes:
Cathedral interior development fund: improvements to the interior of the Cathedral Property repair reserve: repairs to properties (other than the Cathedral) occupied by the Group General legacy fund: legacies for general purposes not yet expended Library fund: purchase of books for the Cathedral library Organ fund: refurbishment of the Willis organ Safer environment fund: improvements to CCTV in the Cathedral and Close Organisation development fund: continued improvements to the Cathedral’s organisation Visitor experience fund: improvements to the visitor environment at the Cathedral Community & outreach projects: the Cathedral’s outreach work
20. PENSIONS
Salisbury Cathedral participates in the Church of England Funded Pensions Scheme for stipendiary clergy, a defined benefit pension scheme. This is administered by the Church of England Pensions Board, which holds the assets of the scheme separately from those of the Cathedral. Each participating employer in the scheme pays contributions at a common contribution rate applied to pensionable stipends. The scheme is considered to be a multi-employer scheme as described in Section 28 of FRS 102. This means it is not possible to attribute the Scheme’s assets and liabilities to each specific employer, and contributions are accounted for as if the Scheme were a defined contribution scheme.
A valuation of the Scheme is carried out once every three years. The most recent completed Scheme valuation was carried out at 31 December 2018. The 2018 valuation revealed a deficit of £50m, based on assets of £1,818m and a funding target of £1,868m, assessed using the following assumptions: • An average discount rate of 3.2% p.a. • RPI inflation of 3.4% p.a. (and pension increases consistent with this). • Increases in pensionable stipends of 3.4% p.a. • Mortality in accordance with 95% of the S3NA_VL tables, with allowance for improvements in mortality rates in line with the CMI2018 extended model with a long-term annual rate of improvement of 1.5%, a smoothing parameter of 7 and an initial addition to mortality improvements of 0.5% p.a.
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
Following the 31 December 2018 valuation, a recovery plan was put in place until 31 December 2022 and the deficit recovery contribution rates (as a percentage of pensionable stipends) are 11.9% up to 31 December 2020 and 7.1% thereafter (2019 and 2018: 11.9% up to December 2025).
Agreed deficit recovery payments are recognised as a liability. Movements in the liability during the year were as follows: 2020 2019 £000 £000 Liability at 1st April 2019 19 24 Deficit contribution paid (3) (3) Expense charge - effect of changes to agreed deficit recovery plan, discount rate and other actuarial assumptions (10) (2) ______Liability at 31st March 2020 (see note 15) 6 19 ______
This liability represents the present value of the deficit contributions agreed as at the accounting date and has been valued using the following assumptions set by reference to the duration of the deficit recovery payments: December December December 2019 2018 2017 Discount rate (per annum) 1.1% 2.1% 1.4% Price inflation (per annum) 2.8% 3.1% 3.0% Increase to total pensionable payroll (per annum) 1.3% 1.6% 1.5%
The legal structure of the Scheme is such that if another employer fails, Salisbury Cathedral could become responsible for paying a share of that employer’s pension liabilities under the Scheme.
Employees of the group other than stipendiary clergy may enrol in a group personal pension scheme with AVIVA. This is a defined contribution scheme to which the Group makes employer’s contributions.
The total pension costs for all employees charged as an expense during the year were as follows: 2020 2019 £000 £000 Contributions payable for the year 123 102 Movement in deficit recovery liability, as above 10 2 ______133 104 ______
21. COMMITMENTS
The Group had no major contractual expenditure commitments at 31st March 2020 (2019: £nil).
22. CONNECTED CHARITIES
For the benefit of the Cathedral There are three charities whose objects are to support aspects of the work of the Cathedral, but which are not controlled by Chapter and whose accounts are therefore not included in these consolidated accounts.
Salisbury Cathedral Trust is an independent charity whose objects are the furtherance of religion and education, in particular by giving priority to the repair and maintenance of Salisbury Cathedral. During the year, two of its four trustees were members of Chapter.
The Association of the Friends of Salisbury Cathedral is a members' association whose object is to enhance the fabric, contents, work and worship of the Cathedral. It is an independent charity and is governed by its Executive Council which includes a member of Chapter.
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
Salisbury Cathedral Girl Choristers' Fund is an independent charity whose objects are to pay bursaries for girl choristers at Salisbury Cathedral. During the year two of its seven trustees were members of Chapter. The grants shown below were paid directly by the Fund to the Cathedral School and are not included in the Cathedral's accounts.
Summaries of the most recent accounts of these charities are as follows: Cathedral Trust Friends of Cathedral Girl Choristers’ Fund Year ended 31.3.20 31.3.19 31.3.20 31.3.19 31.8.19 31.8.18 £000 £000 £000 £000 £000 £000 Gross income 149 365 163 408 120 411 Net income, including investment gains, before grants 118 365 42 353 216 349 Grants to or for the benefit of the Cathedral 116 20 115 189 96 92 Gross assets 844 842 798 877 2,269 2,178 Net assets 844 841 778 851 2,268 2,148
The grants to the Cathedral shown above do not always correspond exactly to the income shown in the Cathedral’s accounts due to timing differences in the recognition of grants.
The accounts of The Association of the Friends of Salisbury Cathedral have been audited. The accounts of Salisbury Cathedral Trust and Salisbury Cathedral Girl Choristers' Fund have been independently examined but not audited.
Not for the benefit of the Cathedral Salisbury Cathedral School is a registered charity and company limited by guarantee of which the Cathedral as a corporation aggregate is the sole member. Chapter has the right to ratify the appointment of the Governors of the School, but the School is not included in these consolidated accounts for the reasons set out in the accounting policies. During the year the Cathedral received rent totalling £116k (2019: £117k) from the School, £78k (2019: £78k) under the lease from the Cathedral of the School's main premises, and £38k (2019: £39k) in respect of the lease from the Choristers' Endowment Fund of a property in The Close owned by that fund. The School educates the Cathedral’s choristers. The Cathedral, the Choristers' Endowment Fund and the Choral Foundation paid a total of £146k (2019: £131k) to the School in respect of choristers' bursaries and a further £57k (2019: £110k) in relation to choir tours and other chorister expenses. These costs are included in these accounts as part of the cost of services and music.
23. OTHER RELATED PARTY TRANSACTIONS
The Dean and the three Canons Residentiary receive stipends from the Cathedral as shown in note 4. In accordance with the Church of England’s normal policy, they also live in houses provided by the Cathedral. The Dean and the three Canons Residentiary were reimbursed expenses totalling £4,552 (2019: £6,062) and three other Chapter member were reimbursed expenses totalling £622 (2019: one Chapter member, £773).
Members of Chapter donated a total of £13k (2019: £10k) to the Cathedral during the year.
The Cathedral has chosen not to hold trustee and management liability insurance but there is provision in the overall insurance policy for a nominal amount of £100,000. This provides for the personal liability of trustees, directors, officers and employees. The insurance premium paid in the year for a combined insurance policy which also covered the Group against other risks was £78,671 (2019: £76,365).
Except as noted above, none of the members of Chapter (or anyone connected with them) received from the Group any remuneration, benefit or payment for services during the year (or the preceding year).
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SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2020
24. COVID19 PANDEMIC
The outbreak of Covid19 has presented many challenges for the Cathedral and these are ongoing. It is clear that many uncertainties remain which will have an impact on the future financial position of the Cathedral. These accounts have been prepared on the assumption that the Cathedral will be able to continue to operate as a going concern which can meet its liabilities as they fall due. Chapter has assessed whether the use of this going concern assumption is appropriate. This assessment has been made in respect of a period of at least one year form the date of approval of the accounts.
Chapter acknowledge and recognise the potential impact of the Covid19 pandemic on the future operations of the Cathedral. The Cathedral’s income will be affected by the pandemic, particularly because of reduced visitor income, and the potential reductions in investment income and volatility in investment values as well as other factors. Chapter will therefore continue to closely monitor the impact of the current situation in the next financial year.
However, despite these uncertainties, Chapter is of the opinion that the Cathedral will have sufficient resources to meet its liabilities as they fall due and that the current circumstances do not impact on its ability to operate as a going concern at the present time.
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