DURHAM CATHEDRAL ANNUAL REVIEW AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2019 Durham Cathedral, Accounts for the year ended 31 March 2019

Durham Cathedral is a Chrisan Church of the Anglican Communion, the shrine of St Cuthbert and the seat of the Bishop of Durham. It is a focus of pilgrimage and spirituality in North East England.

Our Purpose Our purpose is to worship God, share the gospel of Jesus Christ, welcome all who come, celebrate and pass on our rich Chrisan heritage and discover our place in God’s creaon.

Our Vision Following the example of Saints Cuthbert and Bede, we share our faith and heritage globally and empower people to transform the communies in which we live and serve.

Our Place We inhabit a treasured sacred space set in the natural and human landscape of the World Heritage Site.

What We Do Six areas of life, experienced as strands in a rope which, as they interweave, touch and support each other, make Durham Cathedral what it is today. 1. Worship and Spirituality We worship God through daily prayer and praise, and celebrate the contribuons of music and art to the spiritual life of the Cathedral.

2. Welcome and Care We welcome all who cross our threshold and express Chrisan care in all aspects of our life as a community.

3. Learning, Nurture and Formaon We help people to encounter God and grow in faith and discipleship by offering opportunies for dialogue, learning and research.

4. Outreach and Engagement We work in acve partnerships for the good of the Diocese and the communies of North East England and to contribute to Durham’s flourishing and significance.

5. Buildings, Treasures and Environment We conserve, develop and interpret our buildings, environment and historic collecons, while respecng the Church as a place of prayer.

6. Finance and Stewardship

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We steward our resources prudently, generously and ethically to sustain our acvies and provide extensive public benefit. Our Values In all things, we are inspired, movated and challenged by the Chrisan faith and the values of the Gospel.

Spirituality We recognise and respond to God’s presence in our world and among us, praccing a reflecve approach to what we do.

Respect We recognise the image of God in all human beings, honour their dignity and treat them with courtesy.

Jusce We deal fairly in our personal and collecve behaviours, work to the highest ethical standards, and are honest in our speech and behaviour. We think, speak and act with integrity, are professional in our conduct, and are publicly accountable for our acons.

Collaboraon We are a community founded on trust that prizes team working and builds partnerships that contribute to the common good.

Sustainability We are business-like in our corporate life and prudent in our stewardship of resources. We pursue the sustainability of our operaons and environment.

Welcome We are welcoming and hospitable to all. We show Chrisan love and care to our guests and those who need our help.

Aspiraon We are an outward-facing Cathedral that reaches for the future with energy and courage, and reaches out to our communies in the hope of personal and social transformaon.

Constuon

The Cathedral is governed by the Constuon and Statutes of the Cathedral Church of Christ, Blessed Mary the Virgin and St Cuthbert of Durham, which were most recently amended on 1 May 2015.

The Chapter The members during the year were:

The Very Revd. Andrew Tremle The Dean The Revd. Canon Dr David Kennedy Resigned 30 September 2018 The Revd. Canon Michael Hampel Installed 17 November 2018 The Revd. Canon Charloe Allen Installed 22 September 2018 Canon Catherine Barnes The Revd. Canon Rosalind Brown Rered 31 August 2018 The Venerable Ian Jagger The Archdeacon of Durham, Rered 3 March 2019 The Revd. Canon Sophie Jelley The Revd. Canon Professor Simon Oliver Canon Ivor Stolliday Canon Treasurer, rered 9 April 2019

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Canon Andrew Thurston Canon Treasurer, installed 10 March 2019 Canon Simon Wood

Members of the Chapter are also the Governors of The Chorister School.

Senior Office Holders Canon Philip Davies Chapter Clerk, Rered 1 April 2018 Senior Office Holders (connued)

Ms. Amanda Anderson Chapter Clerk & Chief Operang Officer, Appointed 19 March 2018 Mrs. Jayne Manns Director of Finance Mr. Ian Wicks Headmaster of the Chorister School Mr. Daniel Cook Organist and Master of the Choristers

The Cathedral Council The members during the year were:

Canon Paul Chandler Chairman

The Right Revd. Paul Butler The Bishop of Durham (non-vong) The Very Revd. Andrew Tremle The Dean (ex-officio) The Revd. Canon Dr David Kennedy (resigned 30 September 2018) Chapter Representave Canon Ivor Stolliday (resigned 9 April 2019) Chapter Representave The Revd. Canon Alec Harding College of Canons Representave The Revd. Canon Judith Hirst College of Canons Representave Dr Patrick Gray Durham University Representave Miss Faye Dufferwiel Cathedral Community Representave Mr. Richard Hilton Cathedral Community Representave Mr. Khaiko Makwela-Wali Cathedral Community Representave Dr Maria Cockerill Co-opted Members Mrs. Kate Fenwick Co-opted Members The Revd. Ruth Gee (resigned 12 July 2018) Co-opted Members Mr. Roger Kelly (deceased 12 April 2019) Co-opted Members Mrs. Jane Robinson (resigned 20 March 2019) Co-opted Members Mr. Simon Sll Co-opted Members

Mr. Philip Davies (rered 1 April 2018) Secretary Ms. Amanda Anderson (appointed 1 April 2018) Secretary

The College of Canons The members during the year were:

The Very Revd. Andrew Tremle The Dean The Revd. Canon Charloe Allen Installed 22 September 2018 Canon Catherine Barnes The Revd. Canon Rosalind Brown Rered 31 August 2018 The Revd. Canon Michael Hampel Installed 17 November 2018 The Venerable Ian Jagger Archdeacon of Durham, Rered 3 March 2019 The Revd. Canon Sophie Jelley

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The Revd. Canon Dr David Kennedy Resigned 30 September 2018 The Revd. Canon Professor Simon Oliver Canon Ivor Stolliday Resigned 9 April 2019 Canon Andrew Thurston Installed 10 March 2019 Canon Simon Wood The Revd. Canon Stuart Bain Installed as a Supernumerary Non-Residenary Canon 29 April 2018 The Revd. Canon Sheila Bamber The Revd. Canon Dr Alan Bartle The Revd. Canon David Brooke Resigned July 2018 The Right Revd. Mark Bryant Bishop of Jarrow, rered 23 September 2018 The Revd. Canon Janet Burbury The Revd. Canon Graeme Buery

The College of Canons (connued)

Canon Paul Chandler The Right Revd. Sarah Clark Bishop of Jarrow, Consecrated 27 February 2019 The Venerable Robert Cooper Archdeacon of Sunderland, Installed 3 July 2018 The Revd. Canon Caroline Dick The Revd. Canon Raymond Dick Rered 24 April 2019 The Revd. Canon Vince Fenton The Revd. Canon Adrian Gatrill The Revd. Canon David Glover The Revd. Canon Jane Grieve The Revd. Canon Alec Harding Canon Dr James Harrison The Revd. Canon Judith Hirst The Revd. Canon Marilyn Jamieson The Revd. Canon Colin Jay Installed 29 April 2018 Canon Susan Marshall Installed 10 March 2019 Canon Dr Margaret Masson The Revd. Canon Heather Murray Canon Andrew Rogers The Revd. Canon John Ruscoe The Revd. Canon Valerie Shedden The Baroness Sherlock OBE Resigned July 2018 The Revd. Canon Dr Norman Shave Installed 10 March 2019 The Venerable Richard Simpson Archdeacon of Auckland Canon Professor Michael Snape The Revd. Canon Dorothy Snowball The Revd. Canon David Tomlinson The Revd. Canon Paul Tyler Canon Margaret Vaughan The Revd. Canon Michael Whitehead Deceased 22 May 2018 The Revd. Canon Elizabeth Wilkinson Installed 23 June 2019 The Revd. Canon Keith Woodhouse The Revd. Canon Caroline Worsfold

Mr. Philip Davies Secretary, Rered 1 April 2018 Ms. Amanda Anderson Secretary, Appointed 1 April 2018

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Resources Commiee The members during the year were:

Canon Ivor Stolliday Chairman, Resigned 9 April 2019 Canon Catherine Barnes Interim Chairman, Appointed 9 April 2019

The Very Revd. Andrew Tremle The Dean The Revd. Canon Charloe Allen From 22 September 2018 Ms. Amanda Anderson Chapter Clerk & Chief Operang Officer, Appointed 1 April 2018 Mr. Philip Davies Chapter Clerk, Rered 1 April 2018 The Revd. Canon Michael Hampel From 17 November 2018 Mr. Ian Hunter Head of HR and OD Mrs. Jayne Manns Director of Finance Canon Andrew Thurston From 10 March 2019 Mr. Ian Wicks From 4 September 2018

Miss Faye Dufferwiel Secretary

Fabric Advisory Commiee The members during the year were:

Mr. Humphrey Welfare Chairman Mr. Andrew Boyce Dr. Mary Brooks From 9 July 2018 Ms. Sarah Brown From 9 July 2018 Mr. David Carrington Mr. Hugh Dixon Resigned May 2019 Mr. Colin Haylock Dr Julian Luxford Mr. Marn Roberts

Mrs. Katharine Smith Secretary, resigned 24 July 2019 Ms. Amanda Anderson Secretary, appointed 24 July 2019

Audit Commiee The members during the year were:

Canon Paul Chandler Chairman Canon Catherine Barnes Dr Maria Cockerill The Venerable Ian Jagger Rered 3 March 2019 Mr. Simon Sll

Mr. Philip Davies Secretary, Rered 1 April 2018 Mrs. Katharine Smith Secretary, Appointed 1 April 2018

Investment Commiee The members during the year were:

Mr. Simon Sll Chairman The Very Revd. Andrew Tremle The Dean

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Mr. Andrew Martell Rered 30 April 2018 The Hon James Ramsbotham Canon Ivor Stolliday Resigned 9 April 2019 Mr. Harry Swan Canon Andrew Thurston From 10 March 2019 Mr. Luke Busbridge Mr. John Newlands

Mr. Philip Davies Secretary, Rered 1 April 2018 Mrs. Jayne Manns Secretary, Appointed 1 April 2018

Title: The Cathedral Church of Christ Blessed Mary the Virgin and St Cuthbert of Durham.

Address The Cathedral Office Investment Cazenove Capital Management The College managers Limited Durham 12 Moorgate DH1 3EH London EC2R 6DA

Auditors UNW LLP Rathbone Investment Citygate Management Limited St James’ Boulevard 1 Curzon Street Newcastle upon Tyne London NE1 4JE W1J 5FB

Bankers Barclays Bank plc Solicitors Swinburne Maddison LLP Barclays House Venture House 5 St Ann’s Street Aykley Heads Business Centre Quayside Durham Newcastle upon Tyne DH1 5TS NE1 3DX

Insurers Ecclesiascal Insurance Cathedral Mr. Chris Coon RIBA AABC Office plc Architect Purcell Beaufort House 29 Marygate Brunswick Road York Gloucester YO30 7WH GL1 1JZ

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Index Page(s)

The Chapter’s annual report 9 – 16

- Financial review 16 – 19

- Statement of the Chapter’s responsibilies 19 - 20

Report of the Auditors 21 – 23

Consolidated statement of financial acvies 24-25

Consolidated balance sheet 26-27

Charity balance sheet 28-29

Consolidated statement of cashflows 30

Notes to the accounts 31-60

Definions

DCT Durham Cathedral Trading Limited

DCOT Durham Cathedral Open Treasure Limited

FY18 Financial year ended 31 March 2018 FY19 Financial year ended 31 March 2019

PYA Prior year actual

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THE CHAPTER’S ANNUAL REPORT

The Chapter presents its report and the Cathedral’s audited financial statements for the year ended 31 March 2019.

Strategic Plan 2018-2020 Durham Cathedral’s Strategic Goals for the period 2018-2020 are as follows:

1. ENRICH: To draw more people into enriching and imaginave encounters with the Cathedral and the Chrisan faith.

• We will connue to develop the Cathedral’s offer to visitors and promote it widely. • We will connue to develop both tradional and innovave forms of worship to engage with a broader worshipping constuency. • We will extend our parish, ecumenical and community engagement through welcome, worship, educaon and outreach, supporng the Bishop’s mission. • We will develop a pilgrimage that is diocesan, naonal and internaonal leading to Pilgrimage 2020.

2. CONSERVE: To care for, develop, and improve access to our buildings, collecons and environment.

• We will connue to improve the management, stewardship, accessibility and promoon of the Cathedral’s collecons. • We will develop capacity, either in-house or through partnerships, to manage and conserve our buildings, collecons and environment. • We will implement 15-year repair and maintenance plans for the Cathedral and Precinct (including Riverbanks) and develop appropriate opportunies to improve public access.

3. PROMOTE: Through our work, and in partnership with others, to promote excellence in the North East and be a force for good in our region.

• We will connue to enhance the Cathedral’s economic contribuon regionally and naonally through taking iniaves to increase visitor numbers and dwell-me in North East England. • We will acvely promote and facilitate dialogue and public debate across the region, enhancing the role of the Cathedral as the seat of the Bishop’s teaching ministry. • We will aim to achieve naonally recognised standards of excellence across the Cathedral and celebrate these achievements. • We will build on the excellent standards of The Chorister School by growing pupil numbers, careful resource management and the development of the Chorister Endowment Fund.

4. TRANSFORM: To put the development of people at the heart of everything we do so as to transform our communies.

• Through organizaonal development and workforce planning we will beer harness the skills and talents of the Cathedral’s staff and volunteers, in support of the Cathedral’s vision and mission. • We will support lifelong learning and encourage inter-generaonal engagement within our community. • We will improve our internal communicaons and the flow of informaon across the Cathedral.

5. SUSTAIN: To achieve greater financial sustainability

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• We will produce and implement 3-year business plans for Durham Cathedral, Durham Cathedral Open Treasure Limited and Durham Cathedral Trading Limited. • We will connue to grow voluntary, cketed and commercial income, including fundraising for Foundaon 2020. • We will monitor financial performance and control costs by establishing a rigorous and mely financial reporng regime. • We will improve cash management so as to achieve a steady state cash flow and remove the need for loan finance.

Role and Organisaon Durham Cathedral, or to give it its full tle, ‘The Cathedral Church of Christ, Blessed Mary the Virgin and St Cuthbert of Durham’, is a Chrisan Church of the Anglican Communion, the shrine of St Cuthbert, the seat of the Bishop of Durham and a focus of pilgrimage and spirituality in North East England. The Cathedral’s governing Constuon and Statutes were most recently amended on 1 May 2015, in accordance with the Cathedrals Measure 1999.

Three bodies together form the body corporate of the Cathedral – the Chapter, the Cathedral Council and the College of Canons.

The Chapter is the governing body of the Cathedral, providing strategic direcon and oversight. Secon 4 (8) of the Cathedrals Measure states that the main funcon of the Chapter is “to direct and oversee the administraon of the affairs of the cathedral”. The Chapter is formed of both clergy and lay people. The Dean and all Residenary Canons are members. In addion, up to four lay persons, who are communicants, may be appointed by the Bishop in consultaon with the Dean and other members of the Chapter. The Chapter is chaired by the Dean.

All new Chapter members must undertake an Associaon of English Cathedrals programme of inducon, which covers Cathedral legislaon, governance, Cathedral finances and property management.

The Cathedral Council meets three mes a year to further and support the work of the Cathedral and advise the Chapter. Its membership (see page 4 of this document) is again specified in the Constuon and Statutes. The Council is chaired by Canon Paul Chandler, who is appointed by the Bishop. The Bishop can aend and speak at the Council although he is not a member.

The College of Canons consists of the Dean and Residenary Canons, suffragan bishops, archdeacons and honorary and lay canons. The College meets at least once a year to consider cathedral affairs. It also has the task of elecng a new bishop in accordance with the Appointment of Bishops Act 1533.

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Governance In addion to the Chapter, the governance commiees of Durham Cathedral are shown in purple in the below diagram:

The membership of these commiees is listed on pages 3 to 6 of this document. An internal governance review is currently underway to examine the sufficiency, efficiency and effecveness of Durham Cathedral’s governance structure.

Public benefit Although it is not a reporng requirement of the Church Commissioners, nevertheless Chapter confirm that they have complied with secon 4 of the Charies Act 2006 to have regard to the public benefit guidance published by the Charity Commission in determining the acvies of the Cathedral. The Cathedral not only serves the community daily in its religious and charitable work, but is an acve resource of naonal importance in the promoon of religion, music, educaon, history and architecture.

The Chapter Clerk’s Office The past year has connued to be a me of change and transion in the Chapter Clerk’s Office. Amanda Anderson has completed her first year in post as the Chapter Clerk and Chief Operang Officer. Katharine Smith, the Chapter Steward and Governance Manager le Durham Cathedral in July 2019. The office’s agenda has been dominated by the annual budget process, changes to data protecon regulaon, an internal governance review, the producon of departmental risk registers and an instuonal risk register, and the introducon of a business planning process. The office also connues to provide comprehensive secretariat support to the Cathedral’s main commiees, and plays a key role in ensuring the effecve day-to- day running of the Cathedral Office.

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Liturgy and Worship In the past twelve months, we have staged over 1,200 statutory services and approximately 75 special services, engaging widely with external bodies and agencies, not least the Diocese of Durham, University of Durham, Lieutenancy Office, and many schools, charies and other organisaons, to enrich the life of the region and to help give expression in worship to people’s need to celebrate or commemorate who they are and what their relaonship is with God and neighbor.

Highlights which sought to promote excellence and exemplify the Cathedral as a force for good have been the Remembrance weekend of November 2018 during commemoraons for the 100th anniversary of the First World War when well over 10,000 people spent me with us during this poignant weekend, a special service marking Commonwealth Day in which large numbers of children took part under the aegis of the Lord Lieutenant, and a different focus to the annual lighng of the Christmas tree and Blessing of the Crib when a refugee child from Sudan lit the tree through the involvement of City of Sanctuary. Advent and Christmas were celebrated, Cuthbert and Bede were honored, and Holy Week and Easter marked reflecvely and joyously-and alongside thousands of worshippers, pilgrims and visitors.

We have experimented with the passage of the liturgy at the principal Sunday celebraon of the Eucharist in an aempt to improve the flow of the liturgy, engage more effecvely with worshippers (parcularly visitors), and encourage a greater sense of the people of God “gathering” round the alter of God.

Music The past year has been very busy for the music department. We have connued to develop strategies to aid recruitment, and a significant influx of boys in September 2018 is already starng to bear fruit. Chorister Experience events are now aracng around 30 children each me, and averaging around 90 children per academic year. In September 2018 we welcomed five new Choral Scholars, and a new Junior Organ Scholar, all of whom have made a posive impact on our acvies, both within the Cathedral and externally. A parcular highlight of the Autumn term saw Choral Evensong broadcast live on BBC Radio 3, and this was extremely well received. Performance of Handel’s Messiah and The St John Passion by J.S. Bach in collaboraon with the Avision Ensemble have served to embellish our liturgical life, as well as developing the breadth and range of the choir’s abilies, especially as soloists. Much aenon has been given to the organ recently, and plans are progressing with a view to a major restoraon project over the coming years. As a result of two generous donaons, we have been able to purchase a new Boston Grand Piano, which has dramacally improved our facilies. The end of the choir term in July saw us bid farewell to Francesca Massey, who has been appointed to Rochester Cathedral as Director of Music, and Phil Durrant, who has accepted a full scholarship to study music in London. Both of these opportunies are very well deserved.

Volunteering Our remarkable volunteer community connues to grow and diversify with increasing demand for volunteers across the organisaon with new roles being developed alongside the established roles. Mirroring an overall dip in the number of volunteers being recruited regionally and some sff compeons from other large organisaons and events, we have seen a need arise for more Welcome Stewards and Open Treasure volunteers in parcular. However, even without specialist recruitment, we sll receive an average of seven applicaons a month, so maintain a steady inflow.

We esmate that the annual contribuon in me is easily 150,000 volunteer hours per annum (roughly the full-me equivalent of 83 addional people per week). In addion to adding value and supplemenng exisng work, direct income is around £90,000 per annum from tours, talks and tower trips.

An area of significant need idenfied for 2019 was the increasing impact of mental health. Over the past year we have therefore concentrated a lot of volunteer training and support around this area. To that end, we have offered sessions in Mental Health Awareness, Stress and Resilience, Ausm Awareness, Demena Friends, Effecve Listening, Mental Health First Aid and are in discussions about Suicide Awareness sessions.

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Visitor Services The Visitor Services Desk Team has expanded to six members to help assist with the delivery of the Encouraged Donaons scheme which was trialed August to September 2018. Donaons have seen an increase of over 400% which is making a major contribuon to reducing the cathedral deficit. The team have done an amazing job in conjuncon with the volunteer teams in delivering welcome, promong what the Cathedral has to offer, Open Treasure, guided tours and North West Tower Tours on top of the incredible growth in donaons.

Cathedral Shop The Cathedral Shop has connued to put in a credible performance in spite of the retail difficules on the high street. Each year we refresh and refine the product offer. We seek to create a unique and interesng offer which best reflects the many aspects of the Cathedral, from architecture to stained glass windows, history to spirituality. This year we have added the Rose Window range to the bespoke offer, featured the Dean’s cat Badger in the Julia Gash Durham themed product range and also created his own range of ceramic thimbles, candlesnuffers and paperweights.

Undercro Restaurant Without doubt the outstanding success of 2018 was hosng the NEECC Annual Dinner in the Cathedral. Not only was it an exemplary piece of cross departmental working, the logiscs were not minor, but also a fantasc fundraising success for Foundaon 2020. 630 senior business leaders aended the dinner with food provided by the Baxter Storey team in the majesc seng of the Cathedral. The standard of cuisine was excellent as was the preparaon and delivery and service.

The Undercro Restaurant also showed its versality in the mouthwatering array of puddings presented in the Pudding Club (now “Divine Desserts at Durham Cathedral”) with a total of 64 members of the public aending. The day to day restaurant operaon connues to make a significant contribuon to Cathedral turnover. The food offer is constantly reviewed with a focus on sourcing ingredients locally where possible.

Development Foundaon 2020 has connued to be the main focus of our fundraising acvity in the last twelve months. The campaign to build an endowment of £10 million to support the annual programme of repair and conservaon of the Cathedral and precinct has received fantasc support from individuals and organisaons alike.

We have connued to welcome new supporters as Foundaon 2020 Patrons and 2020 Club members, and to give these donors special access to the Cathedral’s works programme so that they can see for themselves the difference their generosity is making. In March 2019, the campaign benefied from two generous pledges totaling £300,000. Thanks to match funding from the Naonal Loery Heritage Fund (NLHF, formerly Heritage Loery fund), these gis have been doubled to £600,000.

Foundaon 2020 has also been the focus of a number of special fundraising events including further Giving Days to coincide with the foundaon of the Cathedral and Cuthbertside, and a fesve prize draw at the Christmas Market. The NEECC Dinner in the Nave (see above) raised a total of £31,000, thanks to the support of the event sponsors, including Gateshead College and Newcastle Internaonal Airport, and match funding through Barclays corporate volunteers: that total was then matched by NLHF to bring in £62,000.

Our Adopt a Book programme has now been running for three years and in that me has raised over £25,000 for the conservaon of the Cathedral’s historic library collecon restoring over 100 books back to their former glory. As ever, we would like to thank the Friends of Durham Cathedral for their generous support and to all those who help us to care for and enrich this wonderful place.

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Property During the year the department has: - Completed the Belfry repair works in preparaon for reopening to the public in June 2019; - Completed enabling work for Lobbies, obtained permissions and discharged all condions, with the works now on site; - Completed refurbishment work to College properes (Nos. 6A, 7. 16 and 16A The College); - Reviewed Fire Risk Assessments (FRA’s) for the enre Cathedral site and renewed fire warden training, and now geng on with acons arising from assessments; - Completed improvements in Health and Safety awareness, reporng procedures and departmental documentaon, which makes it easier for us to contribute to the ongoing safety of everyone on our site; - Completed the work force changes recommended by QIR 2013: i) Ongoing upskilling (promong a mason into SPAB Fellowship training, recruing a second Cathedral Workshop Fellowship (CWF) trained mason); ii) Improving management in the Works Yard; iii) Restructuring the Works Yard to increase maintenance. - Progressed and completed a first land sale for “Link 66” at Great Burdon, realizing a significant sum for the connued upkeep of Durham Cathedral; - Overseen a Strategic Review of the Property Investment Porolio by Savills, which allows us to improve weak areas and work towards beer future performance; - Facilitated talks, tours, Works Yard Open Day and Dinner in the Nave stone aucon to assist the promoon of Foundaon 2020.

Finance 2018/19 has seen a significant turnover of staff in the Finance team, with the remaining original long-serving members leaving by early January 2019. A full restructure of the team was undertaken in order to build a new Finance team and this process is now well underway. Despite this, the team have worked closely with colleagues from other Departments and has contributed where possible to a number of projects during the year, all of which are aimed at reducing the deficit in the Cathedrals finances, improving the flow of management informaon and assisng others to meet the Cathedrals mission.

Human Resource and Organisaonal Development During the year, the department has: - Assisted the Friends in the recruitment and appointment of a Friends Office Manager; implemented the External Secondment agreement and arrangement; and lead of the sickness absence management of the substanve post holder; - Assisted with recruitment and appointments to key roles-Canon Chancellor, Canon Precentor & Vice Dean, Member of Chapter (Finance) & Lay Canon, Canon Pastor, Head of Collecons, Security Manager and HR Manager; - Carried out staff restructuring in Finance, property, Educaon, Markeng & Events, and Visitor Services departments; - Achieved the Beer Health at Work Connuing Excellence recognion in November 2018 (the award ceremony was held in March 2019). The Service Agreement with “Competent Person” (NCSG Limited) was put in place and we have established and embedded the H & S Commiee and sub-Commiees. - Addressed idenfied priority training needs that include Safeguarding, Staff Reps (ACAS), H & S Staff Reps (NCSG), and First Aid; - Assisted in implemenng Terms of Reference for the Resources Commiee (including Delegated Decisions), GDPR, (including Employee and Recruitment Privacy Noces), personnel file and data management, Safeguarding, (including Terms of Reference, Service Contract for CSO, Acon Plan and DBS), and a review of Chorister School employment contractual arrangements (as commissioned by the Resources Commiee).

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Library and Collecons Open Treasure is now fully operaonal. In the summer of 2019 we achieved the milestone of 100,000 visitors to Open Treasure. Our varied programme of temporary exhibions included two highlighng the stores and possessions of Durham people: Miners: Pitmen, Pride and Prayer and Armisce. Feasng and Fasng illuminated the fascinang history of the Cathedral’s Great Kitchen-with recipes!

We connue to host library events: the most significant this year was the visit of the Associaon Internaonale de Bibliophile: an internaonal group of 120 book collectors, librarians and scholars. We have shared the Refectory Library and its treasures with tour groups, reading groups and special interest groups including the Art Fund and the Morley Medieval Society. Three of our popular public “show and tell” events were held, displaying books on the themes of “Inventors and Innovators”, “Art” and “Languages” conferences and “show and tells”.

We are connuing to work closely with our colleagues at Durham University. Library volunteers have transcribed 43 volumes of Hensley Henson’s diaries for the project Church, State and Naon: The Journals of Herbert Hensley Henson, 1900-1939. The Durham Priory Library project has made significant progress in digitally reuning the surviving manuscripts of the Durham monasc community online (175 volumes to date). The Residenal Research Library is bringing new scholars to the Barker Reading Room: the programme offers fellowships to researchers wishing to study the exceponal collecons held by Durham University and the Cathedral.

The potenal of our archives was demonstrated by the recent discovery of a lost volume by diarist Alice Thornton. We look forward to working with Dr Cordelia Beae to share the insights this volume will provide into 17th Century faith and family life.

Educaon 2018 saw the Educaon team engage with 16,558 parcipants in various areas including delivery in the Cathedral, Woodlands and Riverbanks, Outreach and in Open Treasure. The team were nominated for a Best of Wearside award for their new preschool Forest School sessions for parents and carers of under 5’s. We started to work with other organisaons naonally as a centre of excellence in heritage educaon including becoming a Sandford Award Cascade Partner. We completed bespoke sessions with various County Durham Area Acon Partnerships including “Mining in the Trimdons” with parcipants from Deaf Hill Primary School, St. Williams RC Primary School, Bluebell Meadows Primary School and Trimdon Community College. The schools researched their local mining history and its links to the Cathedral. They gathered visual informaon and even tried their hand at tradional pasmes popular in the mining communies of County Durham. The arsc outcome was then displayed in the Community Gallery within Open Treasure, which included rag rug inspired wall hangings. Aer their exhibion here they have returned to each school to be displayed for their whole school communies to enjoy. Delivery was updated and new sessions were introduced throughout the academic year. This included, amongst other sessions, a new GCSE Religious Educaon session, a new Key Stage 2 tour about Bede and his life and new onsite tours and outreach sessions on the Vikings and the Anglo Saxons.

The Chorister School The Chorister School has enjoyed many highlights during this year. We said a fond farewell to Canon David Kennedy aer 17 years in his role as Custos and have welcomed the return to Durham of Canon Michael Hampel as Vice Dean and Custos. We have been able to refurbish the IT room facilies with a bequest from the late Dr Brian Crosby, the room being renamed in his honour. The school now has a termly Eucharist in the Cathedral; we held our first at Cuthbert-de and another on the Eve of Bede. Eight children from Year 7 were confirmed at the dawn Eucharist on Easter Day.

Recruitment of choristers has connued strongly with a large conngent of boys joining the choir in September 2018 as a mixture of day and boarding probaoner choristers. It has been very grafying to see the difference that the introducon of

15 Durham Cathedral, Accounts for the year ended 31 March 2019

day choristers has brought to the choir although many sll choose to board. The next step is the provision of more bursaries to enable the net to be cast yet wider in the North East to make it possible for any musical child to join the choir.

The school has two new Directors of Music. Mr. Simon Lee is Director of Choral and Academic Music and Mrs. Clare Crinson, Director of Pre-Prep and Instrumental Music. Their complimentary skills have already made quite an impact on an already impressive department. Sport features strongly in the school curriculum and two new Directors of Girls and Boys games have brought energy and innovaon. We have an impressive programme of matches against a wide range of schools and it is very good to see that we “punch above our weight”. Our girls are now playing cricket and have also begun to play rugby.

Financial review These accounts have been prepared in accordance with the 2015 Accounng and Reporng Regulaons for English Anglican Cathedrals (“the Regulaons”) specified by the Church Commissioners under secon 27 of the Cathedrals Measure 1999. The accounts comply with the Regulaons other than in the treatment of two items capitalised as Inventory acquired parally with the aid of grants from public bodies. The accounng treatment for these items is disclosed in Note 1 under “Inventory” and the costs are disclosed in Note 7b.

The accounts have been prepared in thousands of pounds and this may result in rounding differences of £1k.

Income Income from donaons and legacies totalled £7.19m compared to £1.83m in FY18.This substanal increase was due to the recognion in the year of a large legacy due to be received aer the balance sheet date. Income from donaons increased by 32%, aer the introducon of a voluntary donaon scheme in August 2018, where visitors to the Cathedral are encouraged to donate £3.

Grants in support of mission fell slightly from £1.16m in FY18 to £1.03m in FY19. Included within this income is £293k for the compleon of capital works on the Central Tower which re-opened to the public in June 2019, and a further £313k of revenue grants for the replacement of wooden lobbies in the Cathedral with glass ones, which is a capital project that will connue into FY20.

Income from the Cathedral’s trading subsidiary, Durham Cathedral Trading Limited (DCT), is shown under the heading “Trading and chargeable events” and totalled £587k, down 4% compared with the prior year, the majority of this fall being due to the fall in visitor numbers to the Cathedral and the difficult retail condions generally. The gi shop (which is operated by DCT), connues to trade well in a compeve market and net profits are transferred to the Cathedral under the corporate gi aid rules.

Income from the property porolio and stock market investments remained comparable to FY18. Commentary on returns from the investment and property porolios are given on pages 13 and 14.

Total income is £12.87m, 59% higher than the prior year, helping to ease the strain slightly on the Cathedral’s cashflow. Of this increase in overall income, unrestricted income showed a 1.6% decrease, whilst restricted income showed a 279% increase, being due to the inclusion of the non-recurring Surtees legacy.

Expenditure Expenditure on raising funds increased by 6% to £4.08m and accounts for 47.5% of total expenditure. Within this category, shop, restaurant and other trading costs total £1.24m (£481k (28%) higher than FY18).

Educaon and outreach costs decreased slightly by 9% to £1.19m.

Cathedral and precincts upkeep costs showed a decrease of £1.36m, accounng for 27% of total expenditure compared to 36% in FY18. Major repairs and restoraon also included further costs on the Central Tower project which was completed aer the year-end and opened to the general public in June 2019. The cost of fabric repairs remains one of the key financial challenges faced by the Cathedral and fundraising is connuous; both now and in the medium to long term.

16 Durham Cathedral, Accounts for the year ended 31 March 2019

Total expenditure is £8.58m and is 13.7% lower than the prior year, most of this being accounted for by the “one-off” write down of the Open Treasure stonework in FY18 which had previously been capitalised.

Net gains on investments are £5.8m (FY18: £3.12m), reflecng the unrealised gain on revaluaon of land and property held as investments.

Cashflow The Cathedral connues to face significant cashflow pressures. The consolidated cashflow statement shows a net cash oulow of £1.37m, compared to a net cash inflow of £47k for FY18.

The Cathedral does not have a steady state cashflow due to the material variance in many of its income and cost lines each year. Cash management is therefore crical and is acvely managed to ensure that resources are opmised and funding charges are minimised.

Financial strategy The net FY19 deficit for unrestricted funds is £950k (FY18: £1.33m). FY19 was another challenging financial year, with property repairs and maintenance spend, a fall in visitor numbers, and a reducon in some non-recurring income streams combining to generate a significant deficit and increase pressure on the cashflow of the Cathedral.

This level of unrestricted deficit is clearly unsustainable and steps connue to be taken by Chapter to immediately reduce and, within the medium term, eliminate the deficit.

A strategic plan has been produced as outlined in earlier paragraphs and sets out key acons for the next three years. It includes growing the Cathedral’s endowment through property transacons and matched fundraising on both naonal and internaonal levels.

It is through a combinaon of fundraising, realised proceeds from property deals (invested in a new expendable endowment), growing pupil numbers at the Chorister School and increasing voluntary donaons to the Cathedral that the Chapter ancipates that the unrestricted fund will generate an annual surplus within five to 10 years.

More immediate measures include idenfying new income streams, stringent budget management and overhead savings wherever possible.

Principal funding The Cathedral aims to be self-funded for day to day operaons, but relies heavily on grants, legacies and other external funding for project spend – for both property and other non-recurring costs.

Adequate facilies to meet the strategic plan are in place, with an overdra facility arranged to cover cashflow requirements in light of the negave unrestricted reserves.

Reserves policy Reserves are needed both to maintain the level of the Cathedral’s current acvies and to enable the compleon of long-term projects.

The Cathedral has had to ulise through necessity all of its unrestricted reserves over the last decade, despite improving efficiencies, as it has been running with an annual deficit. As noted above, there are plans to eliminate the deficit, with an aspiraon to build unrestricted reserves to cover at least six months of normal operang costs.

Where specific future funding needs are idenfied, Chapter has the discreon to set aside free funds for designated purposes, those funds being declared as Designated Funds. Details of Designated Funds are given in Note 16 to the Accounts.

Investments The investment objecve is to ensure the creaon of sufficient income and capital growth to enable Durham Cathedral to carry out its purposes consistently each year with due and proper consideraon to the future needs and maintenance and, if possible, the enhancement of the invested funds. The investments held by Durham Cathedral were managed during FY19 by two investment managers: Cazenove Capital Management (now part of Schroder & Co Limited) and Rathbone Investment

17 Durham Cathedral, Accounts for the year ended 31 March 2019

Management Limited. A medium to low risk profile is taken on investments and performance is measured against composite benchmark indices for each fund manager.

UK equies connue to be the main investment class, accounng for 45.41% of the total porolio (FY 18 – 48.45%). Investment levels are within ranges specified by the Cathedral’s Investment Commiee.

Gross investment income for FY19 was £646k (FY18: £571k), represenng a yield of 3.57% (FY18: 3.47%) based on the average investment porolio market value over the year. The total return earned is consistent with the benchmark return set for both fund managers.

Investment property Durham Cathedral owns property to house clergy, staff, the Chorister School, and Cathedral offices. Other property is held for investment purposes and is rented out on a commercial basis. The property porolio includes commercial buildings, farms, houses and sundry property including garages and allotments.

The return on the property porolio is as follows:

FY19 FY18 £'000 £'000

Gross rental income 841 919 less non-recurring income (34) (67)

Adjusted income 807 852

Repairs & maintenance costs (146) (93)

Net income 661 759

Weighted average capital value of investment properes - Note 1 23,561 23,968 Return on capital value 2.89% 3.40%

Note 1 - a weighted average has been used for the capital value, taking account of property sales during each year

Professional fees relang to managing the property porolio have been excluded for both years in order to ensure comparability as FY19 was the first full year they were incurred in relaon to the day-to-day management of the property porolio.

The return of 2.89% in FY19 is below the target of 3.5% required from fund managers for managed funds. The return dropped due to the connued high level of repairs and maintenance spend, which for some properes was required to compensate for under investment in prior years.

18 Durham Cathedral, Accounts for the year ended 31 March 2019

Plans for future periods Future financial strategic work includes the introducon of a regular business planning cycle and a complete commercial review. Other strategic work includes a full governance review.

The main “live” capital projects include compleng the central tower project, the cloister roof and replacing the lobbies within the main body of the Cathedral.

Investment powers Under the Cathedrals Measure 1999, the Chapter may invest the Cathedral’s funds in the following categories:

• Land;

• The improvement or development of property belonging to the Cathedral, except that endowment funds may not be used to improve or develop the Cathedral itself or its ancillary buildings;

• Funds administered by the Central Board of Finance of the Church of England by CCLA Investment Management Limited; and

• Investments in which trustees may invest under the general power of investment under the Trustee Act 2000.

Statement of the Chapter’s responsibilies The Chapter is responsible under requirements laid down by the Church Commissioners under the powers given to it by Secon 27 of the Cathedrals Measures 1999 for:

a. Keeping proper accounng records from which the financial posion of the Cathedral can be ascertained with reasonable accuracy at any me;

b. Preparing and publishing an annual report and audited accounts which give a true and fair view of the financial acvies for each financial year of the assets, liabilies and funds at the end of each financial year of the Cathedral and its subsidiaries;

c. Stang that they have complied in all material respects with the regulaons on the subject prepared by The Cathedrals Administraon and Finance Associaon or describing which regulaons have not been complied with and giving reasons for non-compliance;

d. Selecng suitable accounng policies and then applying them consistently;

e. Making judgements and esmates that are reasonable and prudent;

f. preparing the financial statements on the going concern basis unless it is inappropriate to presume that the charity will connue to operate;

g. Safeguarding the assets of the Cathedral and hence taking reasonable steps for the prevenon and detecon of fraud and other irregularies; and

h. The maintenance and integrity of the corporate and financial informaon included on Durham Cathedral’s website. Legislaon in the United Kingdom governing the preparaon and disseminaon of financial statements may differ from legislaon in other jurisdicons.

The major risks to which Durham Cathedral is exposed are assessed on an annual basis based mainly on a specific risk register which covers most aspects of the organisaon. The Chapter considers that systems are in place, which migate those risks. Monitoring of risk is undertaken throughout the course of the year by the Chapter, the senior management team and the Audit Commiee.

19 Durham Cathedral, Accounts for the year ended 31 March 2019

In so far as the Chapter is aware:

• there is no relevant audit informaon of which the auditor of Durham Cathedral and its subsidiaries is unaware; and

• the Chapter members have taken all steps that they ought to have taken to make themselves aware of any relevant audit informaon and to establish that the auditor is aware of that informaon.

Auditors UNW LLP will be proposed for re-appointment as auditors for the coming financial year.

On behalf of the Chapter

………………………………………………………….. Treasurer

………………………………………………………….. Dean

Date: 17 September 2019

20 Durham Cathedral, Accounts for the year ended 31 March 2019

Independent Auditors’ report to the Chapter of Durham Cathedral Opinion

We have audited the financial statements of Durham Cathedral (the “parent charity”) and its subsidiaries (the “group”) for the year ended 31 March 2019 which comprise the consolidated statement of financial acvies, the consolidated balance sheet, the charity balance sheet, the consolidated statement of cash flows and the related notes, including a summary of significant accounng policies. The financial reporng framework that has been applied in their preparaon is applicable law and United Kingdom Accounng Standards, including FRS 102 'The Financial Reporng Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounng Pracce).

In our opinion the financial statements:

• give a true and fair view of the state of the group’s and the charity's affairs as at 31 March 2019 and of the group’s incoming resources and applicaon of resources, including its income and expenditure for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounng Pracce; and

• have been prepared in accordance with the requirements specified by the Church Commissioners under the power given to them by the Cathedrals Measure 1999.

Basis of opinion

We conducted our audit in accordance with Internaonal Standards on Auding (UK) (ISAs (UK)) and applicable law. Our responsibilies under those standards are further described in the ‘Auditor's responsibilies for the audit of the financial statements’ secon of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporng Council's Ethical Standard, and we have fulfilled our other ethical responsibilies 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 relang to going concern

We have nothing to report in respect of the following maers in relaon to which the ISAs (UK) require us to report to you where:

• the Chapter's use of the going concern basis of accounng in the preparaon of the financial statements is not appropriate; or

• Chapter have not disclosed in the financial statements any idenfied material uncertaines that may cast significant doubt about the group or the charity’s ability to connue to adopt the going concern basis of accounng for a period of at least twelve months from the date when the financial statements are authorised for issue.

Respecve responsibilies of the Chapter and auditor

The Chapter are responsible for the other informaon. The other informaon comprises the informaon included in the annual report, other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other informaon and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connecon with our audit of the financial statements, our responsibility is to read the other informaon and, in doing so, consider whether the other informaon is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we idenfy such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a

21 Durham Cathedral, Accounts for the year ended 31 March 2019

material misstatement of the other informaon. If, based on the work we have performed, we conclude that there is a material misstatement of this other informaon, we are required to report that fact.

We have nothing to report in this regard.

Opinion on other maers prescribed by the Cathedrals Measure 1999

In our opinion, based on the work undertaken in the course of the audit:

• the informaon given in the Chapter's annual report, which includes the group strategic report for the financial year, for which the financial statements are prepared is consistent with the financial statements; and

• the Chapter’s report, which includes the group strategic report, has been prepared in accordance with applicable legal requirements.

Maers on which we are required to report by excepon

In the light of our knowledge and understanding of the group and the charity and its environment obtained in the course of the audit, we have not idenfied material misstatements in the Chapter’s report.

We have nothing to report in respect of the following maers in relaon to which Companies Act 2006 requires us to report to you if, in our opinion:

• the parent charitable company has not kept adequate and sufficient accounng records, or returns adequate for our audit have not been received from branches not visited by us; or

• the financial statements are not in agreement with the accounng records and returns; or

• certain disclosures of Chapter’s remuneraon specified by law not made; or

• we have not received all the informaon and explanaons we require for our audit.

Responsibilies of the Chapter

As explained more fully in the statement of the Chapter’s' responsibilies on page 14, the Chapter is responsible for the preparaon of the financial statements and for being sasfied that they give a true and fair view, and for such internal control as the Chapter determines is necessary to enable the preparaon of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Chapter is responsible for assessing the charity's ability to connue as a going concern, disclosing, as applicable, maers related to going concern and using the going concern basis of accounng unless the Chapter either intend to liquidate the charity or to cease operaons, or have no realisc alternave but to do so.

Auditor's responsibilies for the audit of the financial statements

Our objecves 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 descripon of our responsibilies for the audit of the financial statements is located on the Financial Reporng Council's website at: www.frc.org.uk/auditorsresponsibilies. The descripon forms part of our auditor's report.

22 Durham Cathedral, Accounts for the year ended 31 March 2019

Who are we reporng to

This report is made solely to the Chapter, as a body, in accordance with Secons 27 of the Cathedrals Measure 1999. Our audit work has been undertaken so that we might state to the Chapter those maers we are required to state to them in an Auditor's report and for no other purpose. To the fullest extent permied by law, we do not accept or assume responsibility to anyone other than the Chapter, as a body, for our audit work, for this report, or for the opinions we have formed.

Anne Hallowell BSc FCA DChA (Senior Statutory Auditor) for and on behalf of UNW LLP, Statutory Auditor Chartered Accountants Newcastle upon Tyne 17 September 2019

23 Durham Cathedral, Accounts for the year ended 31 March 2019

Consolidated Statement of Financial Acvies for the year ended 31 March 2019

Note Unrestricted Restricted Endowment Total Total 2018 funds funds funds 2019

£'000 £'000 £'000 £'000 £'000

Income and endowments from: 4

Donaons and legacies 1,126 5,872 193 7,191 1,831

Grants in support of mission 247 682 101 1,030 1,158

Charges and fees in the course of 2,038 31 - 2,069 2,357 mission

Trading and chargeable events 1,047 - - 1,047 1,211

Investments 1,467 24 - 1,491 1,492

Other income 44 - - 44 27

Total income 5,969 6,609 294 12,872 8,076

Expenditure on: 5

Raising funds (3,441) (635) - (4,076) (3,839)

Ministry (956) (9) - (965) (1,091)

Educaon and outreach (1,149) (39) - (1,188) (1,305)

Cathedral and precincts upkeep (1,722) (628) - (2,350) (3,708)

Total expenditure (7,268) (1,311) - (8,579) (9,943)

Net (outgoing)/incoming resources before investment gains/(losses) (1,299) 5,298 294 4,293 (1,867)

Net gains on investments - (63) 5,868 5,805 3,121

Net (expenditure)/income (1,299) 5,235 6,162 10,098 1,254

Transfer between funds 349 (349) - - -

Net movement in funds (950) 4,886 6,162 10,098 1,254

Funds brought forward 16 (2,782) 17,260 51,331 65,809 64,555

Funds carried forward 16 (3,732) 22,146 57,493 75,907 65,809

24 Durham Cathedral, Accounts for the year ended 31 March 2019

The consolidated SOFA for the year ended 31 March 2018 (by fund type) is included as Note 18.

The notes on pages 27 to 48 and the Special Trust accounts on page 49 form part of these Financial Statements.

25 Durham Cathedral, Accounts for the year ended 31 March 2019

Consolidated Balance Sheet as at 31 March 2019

Note Unrestricted Restricted Endowment Total Total funds funds funds funds funds 2019 2018

£'000 £'000 £'000 £'000 £'000

Fixed assets

Investment assets Property 6a - 7,226 19,732 26,958 25,652

Listed Investments 6b - - 20,381 20,381 15,803

- 7,226 40,113 47,339 41,455

Non-investment assets Property 7a - 6,888 14,429 21,317 21,928

Inventory 7b 116 - - 116 116

Tangible fixed assets 7c 1,550 70 - 1,620 1,644

1,666 6,958 14,429 23,053 23,688

Total fixed assets 1,666 14,184 54,542 70,392 65,143

Current assets Stocks 9 100 - - 100 115

Debtors 10 577 5,709 - 6,286 471

Short term deposits 373 117 262 752 645

Cash at bank and in hand (5,195) 2,537 2,889 231 1,602

(4,145) 8,363 3,151 7,369 2,833

Liabilies due within one year Creditors 11 (1,041) (1) (200) (1,242) (1,342)

Net current (liabilies)/assets (5,186) 8,362 2,951 6,127 1,491

Total assets less current liabilies (3,520) 22,546 57,493 76,519 66,634

Liabilies due aer more than one year

Creditors 12 (212) (400) - (612) (825)

26 Durham Cathedral, Accounts for the year ended 31 March 2019

Net assets (3,732) 22,146 57,493 75,907 65,809

Funds Unrestricted (3,732) - - (3,732) (2,782)

Restricted - 22,146 - 16,438 17,260

Endowment - - 57,493 63,201 51,331

Total funds 16.1 (3,732) 22,146 57,493 75,907 65,809

The financial statements were approved by the Chapter on 17 September 2019 and signed on their behalf by:

…………………………………………………………. …………………………………………………………….

Dean Treasurer

The notes on pages 27 to 48 and the Special Trust accounts on page 49 form part of these Financial Statements.

27 Durham Cathedral, Accounts for the year ended 31 March 2019

Durham Cathedral Balance Sheet as at 31 March 2019

Note Unrestricted Restricted Endowment Total Total funds funds funds funds funds 2019 2018

£'000 £'000 £'000 £'000 £'000

Fixed assets

Investment assets Property 6a - 7,226 19,732 26,958 25,652

Listed Investments 6b - - 20,381 20,381 15,803

Investment in subsidiary 6c - 3,000 - 3,000 3,000

- 10,226 40,113 50,339 44,455

Non-investment assets Property 7a - - 14,429 14,429 14,429

Inventory 7b 116 - - 116 116

Tangible fixed assets 7c 331 45 - 376 380

447 45 14,429 14,921 14,925

Total fixed assets 447 10,271 54,542 65,260 59,380

Debtors due aer more than one year 10 - - - - 1,767

Current assets Stocks 9 5 - - 5 12

Debtors 10 1,452 5,709 - 7,161 1,308

Short term deposits 373 117 262 752 645

Cash at bank and in hand (5,255) 2,537 2,889 171 1,540

(3,425) 8,363 3,151 8,089 3,505

Liabilies due within one year Creditors 11 (933) (1) (200) (1,134) (1,240)

Net current (liabilies)/assets (4,358) 8,362 2,951 6,955 2,265

Total assets less current liabilies (3,911) 18,633 57,493 72,215 63,412

28 Durham Cathedral, Accounts for the year ended 31 March 2019

Liabilies due aer more than one year

Creditors 12 (212) (400) - (612) (825)

Net assets (4,123) 18,233 57,493 71,603 62,587

Funds Unrestricted (4,123) - - (4,123) (2,915)

Restricted - 18,233 - 12,525 14,171

Endowment - - 57,493 63,201 51,331

Total funds 16.2 (4,123) 18,233 57,493 71,603 62,587

The financial statements were approved by the Chapter on 17 September 2019 and signed on their behalf by:

…………………………………………………………. ……………………………………………………………. Dean Treasurer The notes on pages 27 to 48 and the Special Trust accounts on page 49 form part of these Financial Statements.

29 Durham Cathedral, Accounts for the year ended 31 March 2019

Consolidated statement of cashflows for the year ended 31 March 2019

Note 2019 2018

£'000 £'000 £'000 £'000

Net cash oulow from operang acvies 17.1 (2,167) (736)

Returns on investments

Rents received net of costs 661 724

Interest and dividends received net of costs 646 550 ______

1,307 1,274

Capital expenditure & financial investment

Purchase of investments (6,693) (1,102)

Sales and transfers of investments 2,336 745

Sales of investment property & freehold land 4,278 -

Addions to tangible fixed assets (125) (41)

(204) (398)

______Cash (oulow)/inflow before management of liquid resources and financing (1,064) 140

Management of liquid resources

Net (increase)/decrease in short term deposits (107) 107

Financing

Repayment of loan (200) (200) ______

(Decrease)/increase in cash 17.3 (1,371) 47

The notes on pages 27 to 48 and the Special Trust accounts on page 49 form part of these Financial Statements.

30 Durham Cathedral, Accounts for the year ended 31 March 2019

Notes to the accounts for the year ended 31 March 2019

1. Accounng policies

The accounng policies which affect items that are material in determining the financial posion of the Cathedral and its subsidiary enes are set out below. These policies form part of the notes to the financial statements.

Basis of accounng

The financial statements have been prepared under the historical cost convenon except for the valuaon of investments and certain investment and non-investment properes that are carried at fair value. They have been drawn up in accordance with the 2015 Accounts and Reporng Regulaons for English Anglican Cathedral Accounts (“the Regulaons”) and Financial Reporng Standard (FRS) 102: The Financial Reporng Standard applicable in the United Kingdom and Republic of Ireland, effecve for accounng periods commencing on 1 January 2015. The accounts are presented in £ sterling, which is considered to be the funconal currency, and are rounded to the nearest £’000.

The Cathedral is classed as a public benefit enty.

Basis of consolidaon

The group financial statements consolidate the accounts of Durham Cathedral and its wholly owned subsidiary undertakings Durham Cathedral Trading Limited and Durham Cathedral Open Treasure Limited, all with financial year ends of 31 March. Transacons between group enes are eliminated on consolidaon. No Statement of Financial Acvies (“SOFA”) is presented for Durham Cathedral alone as permied by the Regulaons. The finances of the Chorister School Durham, are included in the Cathedral’s accounts since the School is a department of the Cathedral.

Going Concern

The Chapter has a stated intent to increase free reserves and has set in place a system of prudent budgets, forecasts and rigorous monitoring to this end. In addion, as part of improving the Cathedrals financial sustainability and addressing the unrestricted fund deficit, acons are being taken to grow a new endowment fund as well as idenfying new income streams. Having taken these factors into account, and having considered the budgets and cash flow projecons, the Chapter is confident that the Cathedral will connue to be able to meet its liabilies as they fall due for the foreseeable future and have sufficient levels of liquid reserves, including bank borrowing, to cover short term fluctuaons in income. The Chapter therefore considers that it is appropriate to prepare the accounts on a going concern basis.

Incoming resources

All incoming resources are included in the SOFA when the Cathedral is legally entled to the income and the amount can be quanfied with reasonable accuracy.

Proceeds from the sale of property under the terms of the Endowment are credited to permanent Endowment capital, other than properes that have been transferred from Endowment as explained in Note 16. Any charges incurred in the purchase of property for the Endowment are capitalised where appropriate.

Resources expended

All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs relang to the category. Expenditure on repairs, restoraon and maintenance of the Cathedral is charged as incurred, with the cost of major repairs and restoraon being charged against the Fabric Fund, a restricted fund as disclosed in Note

31 Durham Cathedral, Accounts for the year ended 31 March 2019

16. Expenditure on Investment Property is charged against revenue unless the work results directly in a substanal increase in the value of the property and also an increase in rental income when it is capitalised. Irrecoverable VAT has been added to the item of expenditure giving rise to it.

Allocaon of support costs

The Regulaons require allocaon of the support costs to those acvies which they directly support. Support costs have been allocated to departments on the basis of headcount.

Cathedral and Inventory

The Cathedral and Ancillary Buildings

No value is aributed on the balance sheet to the Cathedral or its ancillary buildings on the basis that this is not permied under the Regulaons.

Inventory

Inventory assets relate to heritage assets acquired since 2002. Such assets are recorded in the balance sheet at cost.

Heritage Assets

The Chapter considers that obtaining valuaons for all of the books, manuscripts and artefacts and other heritage assets in its care would involve disproporonate cost compared with the benefit derived by users of the accounts. Consequently no values are aributed to heritage assets in the balance sheet. Disclosure regarding heritage assets is given in Note 8.

The Chapter has a policy of retaining its heritage assets for the long term and cannot dispose of such assets held within Endowment Funds without the agreement of the Cathedral Fabric Commission for England (CFCE) and/or the Church Commissioners. Heritage items are generally acquired by donaon.

Tangible fixed assets and depreciaon

The Regulaons recommend that a professional valuaon of properes is carried out at least every five years with material movements between valuaons being included in the accounts. The Regulaons state that the valuaon may be carried out by either an independent professional advisor or an appropriately qualified member of the Cathedral’s staff. Details of the basis of valuaon adopted as at 31 March 2019 are given in Notes 6a and 7a.

Non-investment properes, which are occupied by clergy and lay employees of the Cathedral, the offices, library and stone yard are included at open market value at the last valuaon date. The Chorister School buildings are included on the basis of depreciated replacement cost.

The Chapter considers that the properes (non-investment) need not be depreciated due to the policy of maintaining these assets to such a high standard that they retain a high residual value. Investment properes are not depreciated in accordance with FRS 102.

Equipment, plant and facilies are wrien off to the Revenue Account in the period in which the expenditure is incurred, except that capital expenditure on any item over £500 is capitalised at cost and depreciated over its useful economic life.

Depreciaon rates

Capitalised tangible fixed assets are wrien off at the following rates:

Land and buildings 2% to 6.67% pa straight line

32 Durham Cathedral, Accounts for the year ended 31 March 2019

Plant and equipment 5% to 33% pa straight line Fixtures and fings 2% to 20% pa straight line Motor vehicles 25% pa straight line IT costs 20% to 33% pa straight line

Financial Instruments

Quoted and unquoted investments are included at fair value. Realised and unrealised gains and losses on investments are shown in the SOFA.

Debtors are measured at transaconal prices less provision for any impairment. Creditors are measured at transacon prices less any amounts seled.

Cash at bank and in hand includes cash equivalents such as cash held on the CCLA CBF Deposit Fund repayable on demand.

Stock

Stock is valued at the lower of cost and net realisable value.

Capital grants

Grants given towards the capital cost of assets are credited as income to a restricted fund and the depreciaon of the asset acquired is charged against the fund over the useful economic life of the associated asset.

Fund accounng

Endowment funds are funds which are held for the permanent benefit of the Cathedral. There is no power to convert capital into income. Historically, all freehold properes were classed as Endowment, but transfers were made to restricted funds during the years ended 31 March 2012 and 31 March 2016. Please refer to Note 16 for details of this fund.

Restricted funds are funds that can only be used for parcular restricted purposes within the objects of the Cathedral. Restricons arise when specified by the funder or when funds are raised for a specific purpose.

Unrestricted funds are funds which can be used in accordance with the charitable objects at the discreon of the Chapter.

Designated funds are funds set aside by the Chapter out of the unrestricted general fund for specific purposes or projects.

Pensions

The Chapter operates a stakeholder pension scheme that is open to all staff with three months or more service. Under new pension legislaon, all eligible staff are auto-enrolled in the stakeholder pension scheme aer three months service. Contribuons are paid to approved funds and are charged as expenditure in the year in which they accrue.

33 Durham Cathedral, Accounts for the year ended 31 March 2019

The Chapter parcipates in a Teachers’ Pension Scheme, which is a defined benefit scheme for teaching staff only. This is a mul-employer defined benefits pension scheme and it is not possible or appropriate to idenfy the assets and liabilies of the scheme which are aributable to the school. The charge to the statement of financial acvies is the amount payable in the period.

2. Key areas of judgement

The key areas of judgements in the audited accounts are regarding accounng for grant income, Open Treasure construcon spend and provisions for stocks and debtors.

Project specific grant income is accrued when condions for capital and revenue grants have been fulfilled. Such grants are claimed in arrears. Other capital grants are accounted for on receipt of the grant, with the grant condions having been fulfilled in advance. Open Treasure construcon spend is capitalised if it is connected with creang a capital asset i.e. the Open Treasure exhibion spaces. Open Treasure spend that does not meet this criteria is expensed through the DCOT profit and loss account (and the consolidated group SOFA).

Stock provisions are calculated annually for specific stock lines based on stock holdings and slow moving stock lines. Bad debt provisions are principally in relaon to Chorister School overdue fees and provisions are made on a prudent basis where fees are unlikely to be recovered in full.

34 Durham Cathedral, Accounts for the year ended 31 March 2019

3. Employees

The average number of employees (both by full me equivalent and headcount) during the year was as follows:

Full me equivalent 2019 2018 Number Number

Dean and Chapter 75 77 Durham Cathedral Trading Limited 7 7 Durham Cathedral Open Treasure Limited 11 16 Chorister School 38 39

Total 131 139

Headcount 2019 2018 Number Number

Dean and Chapter 86 95 Durham Cathedral Trading Limited 13 13 Durham Cathedral Open Treasure Limited 16 19 Chorister School 44 42

Total 159 169

The total cost of all paid staff of the Cathedral was: 2019 2018 £'000 £'000

Salaries and spends 3,666 3,608 Employer's Naonal Insurance costs 295 303 Employer's pension costs - teachers' pensions 129 133 Employer's pension costs - stakeholder pensions 100 110

Total 4,190 4,154

There was one employee who received remuneraon between £60,000 and £70,000 in FY19 (FY18: None).

35 Durham Cathedral, Accounts for the year ended 31 March 2019

Members of Chapter received the following remuneraon for the year ended 31 March 2019:

Salary or Employer's Pension Total spend NIC contribuons contribuons £'000 £'000 £'000 £'000

The Very Revd Andrew Tremle 36 4 12 52 The Venerable Ian Jagger 3 - - 3 The Revd Canon Charloe Allen 10 1 3 14 The Revd Canon Rosalind Brown 21 2 6 29 The Revd Canon Michael Hampel 5 - - 5 The Revd Canon David Kennedy 25 2 10 37 The Revd Canon Professor Simon Oliver 21 2 3 26 The Revd Canon Sophie Jelley 3 - - 3

Total 124 11 34 169

Comparave figures for the year ended 31 March 2018 are as follows:

Salary or Employer's Pension Total spend NIC contribuons contribuons £'000 £'000 £'000 £'000

The Very Revd Andrew Tremle 35 4 12 51 The Venerable Ian Jagger 3 - - 3 The Revd Canon Rosalind Brown 33 3 9 45 The Revd Canon David Kennedy 33 3 9 45 The Revd Canon Professor Simon Oliver 21 2 3 26 The Revd Canon Sophie Jelley 3 - - 3

Total 128 12 33 173

36 Durham Cathedral, Accounts for the year ended 31 March 2019

The Dean and the two Residenary Canons received spends in accordance with the scales laid down by the Church Commissioners, the Archbishops’ Council and the Church of England Pensions Board. Canons Jelley and Jagger were remunerated by the Diocese of Durham and as such their spends were included in the Diocese accounts.

Canon Professor Oliver is an employee of Durham University. The remuneraon shown above represents the proporon recharged to the Cathedral. None of the lay members of Chapter received remuneraon in either year, other than reimbursement of travel and subsistence costs, as disclosed below.

Four members (FY18: four) of the Chapter were reimbursed a total of £5,337 (FY18: £3,427) in respect of travel and subsistence whilst carrying out the business of the Chapter.

4. Income Unrestricted Restricted Endowment Total Total funds funds funds 2019 2018 £'000 £'000 £'000 £'000 £'000

Donaons and legacies Congregaonal collecons and giving 216 - - 216 208 Donaons 318 55 108 481 316 Income from appeals and fundraising 4 - - 4 20 Tax recoverable under gi aid on 45 - - 45 50 voluntary donaons Income from Friends and local trusts 12 16 40 68 157 Income from AllChurches Trust - 27 - 27 - Legacies 531 5,774 45 6,350 1,080

1,126 5,872 193 7,191 1,831

Grants in support of mission Church Commissioners 170 - - 170 131 Heritage Loery Grants 25 89 76 190 331 World War 1 Centenary grants - - - - 318 Other revenue grants 52 593 25 670 378

247 682 101 1,030 1,158

Charges and fees in the course of mission Facility and other fees 216 - - 216 322 Income of the Chorister School 1,822 31 - 1,853 2,035

37 Durham Cathedral, Accounts for the year ended 31 March 2019

2,038 31 - 2,069 2,357

Trading and chargeable events Charges to visitors 155 - - 155 138 Income from shop, restaurant and other trading acvies 892 - - 892 1,073

1,047 - - 1,047 1,211

Investments Investment property 841 - - 841 919 Investments 622 24 - 646 571 Interest receivable on short term deposits 4 - - 4 2

1,467 24 - 1,491 1,492

Other sundry income 44 - - 44 27

Total income 5,969 6,609 294 12,872 8,076

Please refer to Note 18 for the FY18 SOFA analysed by fund type.

5. Expenditure Unrestricted Restricted Endowment Total Total funds funds funds 2019 2018 £'000 £'000 £'000 £'000 £'000

Raising funds Shop, restaurant and other trading 986 616 - 1,602 1,689 costs Chorister School teaching costs 1,385 13 - 1,398 1,370 Markeng and development 490 6 - 496 391

38 Durham Cathedral, Accounts for the year ended 31 March 2019

Investment property 391 - - 391 195 Allocated support costs 189 - - 189 194

3,441 635 - 4,076 3,839

Ministry Clergy spends and working expenses 153 - - 153 155 Clergy housing costs 17 - - 17 23 Services, music and congregaonal 570 9 - 579 691 costs Allocated support costs 216 - - 216 222

956 9 - 965 1,091

Educaon and outreach Chorister School costs 828 6 - 834 891 Educaonal acvies 116 10 - 126 144 Archives and library 111 13 - 124 138 Charitable and other giving - 10 - 10 35 Allocated support costs 94 - - 94 97

1,149 39 - 1,188 1,305

Cathedral and precincts upkeep Major repairs and restoraon 148 628 - 776 2,004 Maintenance and interior upkeep 672 - - 672 770 Ulies 119 - - 119 121 Cathedral insurance 156 - - 156 153 Precincts, security and gardens upkeep 196 - - 196 215 Allocated support costs 431 - - 431 445

1,722 628 - 2,350 3,708

Total expenditure 7,268 1,311 - 8,579 9,943

39 Durham Cathedral, Accounts for the year ended 31 March 2019

Please refer to Note 18 for the FY18 SOFA analysed by fund type.

6. Investment assets Consolidated and Charity

6a. Investment property at valuaon Unrestricted Restricted Endowment Total Total funds funds funds 2019 2018 £'000 £'000 £'000 £'000 £'000

At 1 April 2018 - 7,289 18,363 25,652 22,283 Disposals - - (4,278) (4,278) - Net increase on revaluaons - (63) 5,647 5,584 3,369

At 31 March 2019 - 7,226 19,732 26,958 25,652

Basis of property valuaon

All investment properes are freehold. The Regulaons recommend that an independent formal professional valuaon is carried out at least every five years with material movements between valuaons being included in the accounts.

A professional valuer undertook desktop valuaons based of the property porolio based on reports provided by the Cathedral’s management agents. Valuaons reflect the opinion of fair value in FRS 102: The price that would be received to sell an asset, or paid to transfer a liability, in an orderly transacon between market parcipants. These valuaons excluded Durham School as well as the residenal and operaonal properes of the Cathedral Precinct. The laer were last valued at open market value as at 31 March 2013 by JK Property Consultants LLP.

6b. Listed Investments

Consolidated and Charity Unrestricted Restricted Endowmen Total 2019 Total funds funds t funds 2018 £'000 £'000 £'000 £'000 £'000

Investments at market value 1 April - - 15,803 15,803 15,771 2018 Addions - - 6,694 6,694 1,102 Proceeds from disposals - - (2,749) (2,749) (745) Net increase/(decrease) on revaluaon - - 633 633 (325)

40 Durham Cathedral, Accounts for the year ended 31 March 2019

Investments at market value 31 March 2019 - - 20,381 20,381 15,803

Analysed as follows: £'000 £'000

UK equies 9,255 7,656 Overseas equies 4,204 3,181 UK fixed interest 2,700 2,180 Overseas fixed interest 436 433 Other investments 2,036 1,646 Cash at investment managers 1,750 707

Total investments 20,381 15,803

6c. Subsidiary Undertakings

Charity Unrestricted Restricted Endowmen Total 2019 funds funds t funds £'000 £'000 £'000 £'000

Investments at 1 April 2018 - 3,000 - 3,000 Addions - - - -

Investments at market value 31 March 2019 - 3,000 - 3,000

The subsidiary undertakings of the Cathedral comprise:

41 Durham Cathedral, Accounts for the year ended 31 March 2019

Enty Company Percentage Net assets Profit/(loss) registered shareholding as at 31 for year number March ended 31 2019 March 2019

£'000 £'000

Durham Cathedral Trading Limited 06366806 100 311 (8) Durham Cathedral Open Treasure Limited 08009824 100 3,925 1,323

7a. Non-investment property Unrestricted Restricted Endowment Total funds funds funds £'000 £'000 £'000 £'000

Consolidated

At cost/valuaon 1 April 2018 - 9,978 14,429 24,407 Addions - - - -

At cost/valuaon 31 March 2019 - 9,978 14,429 24,407

Depreciaon

At 1 April 2018 - 2,479 - 2,479

Charge for the year - 611 - 611

At 31 March 2019 - 3,090 - 3,090

Net Book Value

At 31 March 2019 - 6,888 14,429 21,317

At 31 March 2018 - 7,499 14,429 21,928

42 Durham Cathedral, Accounts for the year ended 31 March 2019

Total Unrestricted Restricted Endowment funds funds funds £’000 £’000 £’000 £’000

Charity

At cost/valuaon 1 April 2018 - 1,493 14,429 15,922 Addions - - - -

At cost/valuaon 31 March 2019 - 1,493 14,429 15,922

Depreciaon

At 1 April 2018 - 1,493 - 1,493 Charge for the year - - - -

At 31 March 2019 - 1,493 - 1,493

Net Book Value

At 31 March 2019 - - 14,429 14,429

At 31 March 2018 - - 14,429 14,429

The Endowment properes are occupied as follows: 2019 2018 £'000 £'000

Clergy and staff housing 9,130 9,130 Chorister School 3,429 3,429 Cathedral acvies 1,870 1,870

Total 14,429 14,429

43 Durham Cathedral, Accounts for the year ended 31 March 2019

All non-investment properes are freehold and most relate to Endowment funds. The majority of these properes were valued at open market value as at 31 March 2013 by JK Property Consultants LLP. The Chorister School non-investment properes were valued as at 31 March 2013 by JK Property Consultants LLP on the basis of depreciated replacement cost.

7b. Inventory Unrestricted Restricted Endowment Total funds funds funds funds £'000 £'000 £'000 £'000

Consolidated and Charity Net book value at 1 April 2018 and 31 March 2019 116 - - 116

Inventory assets relate to works of art and heritage assets, at purchase cost.

7c. Tangible fixed assets

Consolidated Land & Plant & Fixtures, Motor Total buildings Equipment fings & vehicles IT Equipment £'000 £'000 £'000 £'000 £'000

Cost At 1 April 2018 1,127 517 883 47 2,574 Addions - 22 103 - 125 Disposals - - - - -

At 31 March 2019 1,127 539 986 47 2,699

Depreciaon At 1 April 2018 175 288 424 43 930 Charge for the year 27 48 72 2 149 Disposals - - - - -

44 Durham Cathedral, Accounts for the year ended 31 March 2019

At 31 March 2019 202 336 496 45 1,079

Net book value At 31 March 2019 925 203 490 2 1,620

At 31 March 2018 952 229 459 4 1,644

Charity

Cost At 1 April 2018 237 407 364 47 1,055 Addions - 20 48 - 68 Disposals - - - - -

At 31 March 2019 237 427 412 47 1,123

Depreciaon At 1 April 2018 79 252 301 43 675 Charge for the year 9 43 19 1 72 Disposals - - - - -

At 31 March 2019 88 295 320 44 747

Net book value At 31 March 2019 149 132 92 3 376

At 31 March 2018 158 155 63 4 380

45 Durham Cathedral, Accounts for the year ended 31 March 2019

8. Heritage assets not recognised in the balance sheet

Cathedral, Ancillary Buildings and Inventory

The construcon of Durham Cathedral commenced in 1093 and was completed by about 1135. It is regarded as one of the finest examples of Norman architecture in the world and is situated within the Durham UNESCO World Heritage Site. The Cathedral replaced the 10th Century “White Church” built as part of a monasc foundaon to house the shrine of St Cuthbert of Lindisfarne.

Objects considered to be of architectural, archaeological, arsc or historic interest are recorded in an Inventory in accordance with S13 (1) of the Care of Cathedrals Measure 1990. These objects are held primarily for use by the Cathedral in its mission or have been vested in Chapter over me and are held as part of the historical record of the Cathedral. Items disclosed in Note 7b Inventory, are separate from those held in the S13 (1) Inventory. No value is aributed on the balance sheet to the Cathedral, ancillary buildings or items recorded in the Inventory as explained in the accounng policy note.

By virtue of its extensive history Durham Cathedral owns many valuable heritage assets with historic and educaonal value. The nature and scale of the collecon belonging to the Chapter of Durham Cathedral include:

• Prebends Bridge;

• The riverbanks and woodlands that extend round the Cathedral to the River Wear;

• Mediaeval manuscripts from the sixth century onwards;

• 1,000 volumes of post-mediaeval manuscripts;

• 10,000 books printed in the 20th and 21st centuries;

• Printed volumes of music, mainly 16th-19th century;

• A collecon of artefacts associated with the shrine of St Cuthbert: the wooden coffin, pectoral cross and other items.

The Chapter considers that the Cathedral’s heritage assets are praccally very difficult and prohibively expensive to value, as a result of the unique nature of many of the items. None of the aforemenoned heritage assets are therefore included on the Cathedral’s balance sheet. Despite the difficules in valuaon, the Chapter believes that there is significant value in the heritage assets relave to the Cathedral’s net asset value at the financial year end.

The Chapter has a statutory duty under the Cathedrals Measure 1999 to manage and maintain the Cathedral, its contents and other buildings and monuments. The Chapter has a planned programme of major restoraon works to the Cathedral and other buildings which is informed by a full quinquennial review by the Cathedral Architect. Works are overseen by the Clerk of Works and the Cathedral Architect. The majority of the conservaon and repair is carried out by highly skilled crasmen employed by the Cathedral.

The collecons in the Library are managed by a Head of Collecons and library team. Necessary conservaon works are carried out by accredited conservators. The Library welcomes researchers with interests in the collecons. Access to the Library's collecons is freely available to members of the public.

There have been no material movements in the heritage assets of the Cathedral over the last five years.

46 Durham Cathedral, Accounts for the year ended 31 March 2019

9. Stocks Charity Consolidated Charity Consolidated 2019 2019 2018 2018 £'000 £'000 £'000 £'000

Goods for resale 5 100 12 115

10. Debtors Long Term Debtors Charity Consolidated Charity Consolidated 2019 2019 2018 2018 £'000 £'000 £'000 £'000

Amounts owed by group companies - - 1,767 - - - 1,767 -

Debtors-amounts due within one year Charity Consolidated Charity Consolidated 2019 2019 2018 2018 £'000 £'000 £'000 £'000

Trade debtors 283 292 179 173 Other debtors 120 120 67 67 Prepayments and accrued income 5,842 5,874 102 231 Amounts owed by group companies 916 - 960 -

7,161 6,286 1,308 471

11. Creditors - amounts falling due within one year

Charity Consolidated Charity Consolidated 2019 2019 2018 2018 £'000 £'000 £'000 £'000

47 Durham Cathedral, Accounts for the year ended 31 March 2019

Trade creditors 21 316 738 817 Other creditors 145 145 32 23 Accruals and deferred income 454 470 218 250 Taxes and social security 81 111 52 52 Loans due within one year 200 200 200 200 Amounts owed to group companies 3 - - -

1,134 1,242 1,240 1,342

12. Creditors - amounts falling due aer more than one year

Charity Consolidated Charity Consolidated 2019 2019 2018 2018 £'000 £'000 £'000 £'000

Loan 400 400 600 600 Final term deposits 22 22 25 25 Other creditors 190 190 200 200

612 612 825 825

A £1m loan was advanced from the Durham Diocese Board of Finance during FY13 to fund expenditure on the Open Treasure project. The key terms of the loan are as follows:

• The loan is unsecured;

• Interest at the rate of interest applicable to deposits in the CBF Church of England Deposit Fund;

• Loan term is up to 10 years, expiring on 31 March 2022;

• The loan is repayable in five annual tranches of £200,000 commencing 31 March 2018.

13. Future commitments and conngent liabilies

There are three potenal legal claims against the Chapter outstanding at the date of signing the annual accounts, two of which the future liability have yet to be determined.

48 Durham Cathedral, Accounts for the year ended 31 March 2019

Capital commitments

As at 31 March 2019 the Cathedral was commied to spend a further £689k on the compleon of capital works in connecon with ongoing projects.

Commitments under operang leases

The Cathedral’s commitments under operang leases is as follows:

Computer & Motor 2019 2018 other IT vehicles total total equipment £'000 £'000 £'000 £'000

Total payable within one year 18 10 28 28 Total payable during years 2 to 4 17 15 32 60

35 25 60 88

14. Pensions

Stakeholder scheme

The Chapter introduced a new individual stakeholder pension scheme in April 2002. This is for all non-teaching staff employed by the Chapter, the School and/or the trading subsidiaries. Employer payments under the stakeholder pension scheme in FY19 totaled £100,344 (FY18: £110,234).

Teachers’ pension scheme

Introducon The Teachers' Pension Scheme (“TPS”) is a statutory, contributory, defined benefit scheme, governed by the Teachers' Pensions Regulaons (2010) and, from 1 April 2014, by the Teachers’ Pension Scheme Regulaons 2014. Membership is automac for full-me teachers in academies and, from 1 January 2007, automac for teachers in part-me employment following appointment or a change of contract, although they are able to opt out. The TPS is an unfunded scheme and members contribute on a ‘pay as you go’ basis – these contribuons along with those made by employers are credited to the Exchequer. Rerement and other pension benefits are paid by public funds provided by Parliament.

Valuaon of the Teachers’ Pension Scheme Not less than every four years the Government Actuary, using normal actuarial principles, conducts a formal actuarial review of the TPS in accordance with the Public Service Pensions (Valuaons and Employer Cost Cap) Direcons 2014 published by HM Treasury. The aim of the review is to specify the level of future contribuons. Actuarial scheme valuaons are dependent on assumpons about the value of future costs, design of benefits and many other factors.

49 Durham Cathedral, Accounts for the year ended 31 March 2019

The latest actuarial valuaon of the TPS was carried out as at 31 March 2012 and in accordance with the Public Service Pensions (Valuaons and Employer Cost Cap) Direcons 2014. The valuaon report was published by the Department for Educaon on 9 June 2014. The key elements of the valuaon and subsequent consultaon are:

• employer contribuon rates set at 16.48% of pensionable pay (including a 0.08% employer administraon charge (currently 14.1%); • scheme liabilies (pensions currently in payment and the esmated cost of future benefits) for service to the effecve date of £191,500 million, and noonal assets (esmated future contribuons together with the noonal investments held at the valuaon date) of £176,600 million giving a noonal past service deficit of £14,900 million; • an employer cost cap of 10.9% of pensionable pay will be applied to future valuaons; • the assumed real rate of return is 3.0% in excess of prices and 2% in excess of earnings. The rate of real earnings growth is assumed to be 2.75%. The assumed nominal rate of return is 5.06%.

During the year the employer contribuon rate was 14.1%. The TPS valuaon for 2012 determined an employer rate of 16.4% from September 2015, which will be payable during the implementaon period unl the next valuaon which was due at March 2016, whereupon the employer contribuon rate is expected to be reassessed and will be payable from 1 April 2019.

The pension charge for the year includes employer contribuons payable to the TPS of £128,753 (FY18: £133,333). At the financial year end £11,086 (FY18: £11,297) was accrued in respect of employer contribuons to this scheme.

15. Associated enes and related pares

Controlled by the Chapter

Durham Cathedral Trading Limited, a wholly owned subsidiary, undertakes trading acvies on behalf of the Chapter and transfers profits back to the Chapter through Gi Aid or cash/profit transfers. Durham Cathedral Open Treasure Limited is also a wholly owned subsidiary which became operaonal in July 2016. Profits will also be transferred back to the Chapter through Gi Aid. Transacons undertaken by both wholly owned subsidiaries are included in the Cathedral’s consolidated financial statements.

Not controlled by the Chapter

The Friends of Durham Cathedral

Durham Cathedral Choir Associaon

Durham Cathedral Academic Charity

Whilst both The Friends of Durham Cathedral and Durham Cathedral Choir Associaon give support to Durham Cathedral, the powers of both charies regarding distribuon of income are discreonary.

The following pares have been idenfied as being related pares, through the involvement of Member(s) of Chapter in their management. Values of transacons between Durham Cathedral and each related party for the year ended 31 March 2019 are disclosed below.

Related party Sales to Purchases Year-end Rent Year-end from debtor or charged rent owed (creditor) or (prepaid)

50 Durham Cathedral, Accounts for the year ended 31 March 2019

£'000 £'000 £'000 £'000 £'000

1. Durham University 54 67 5 34 - 2. St Chad's College - - - 65 - 3. Lord Crewe's Charity - - - - - 4. Durham Diocese Board of Finance - 9 1 - - 5. Friends of Durham Cathedral 27 - 10 - - 6. Durham School - - - 159 13 7. Visit County Durham - 3 - - -

Total 81 79 16 258 13

Comparave figures for the year ended 31 March 2018 are as follows:

Related party Sales to Purchases Year-end Rent Year-end from debtor or charged rent owed (creditor) or (prepaid) £'000 £'000 £'000 £'000 £'000

1. Durham University 116 63 (2) 34 - 2. St Chad's College - - - 60 - 3. Lord Crewe's Charity - - - - - 4. Durham Diocese Board of Finance - - - - - 5. Friends of Durham Cathedral 59 - 5 - - 6. Durham School 3 - - 158 5 7. Visit County Durham - 2 - - -

Total 178 65 3 252 5

51 Durham Cathedral, Accounts for the year ended 31 March 2019

16. Statement of Funds Brought Incoming (Outgoing) Gains, Balance forward resources resources (losses) & carried transfers forward £'000 £'000 £'000 £'000 £'000 16.1 Consolidated Endowment funds Permanent endowment 47,360 - - - 47,360 Expendable endowment 3,971 294 - 5,868 10,133

51,331 294 - 5,868 57,493

Restricted funds 1. Freehold property fund 7,500 - - (63) 7,437 2. Open Treasure restricted fund 7,871 36 (616) (349) 6,942 3. Academic fund (3) - - - (3) 4. Chapter copes fund 25 - - - 25 5. Inventory funds 106 - - - 106 6. Library department fund 300 20 (7) - 313 7. Cathedral fabric fund 520 45 - - 565 8. Liturgical and Worship fund 5 - - - 5 9.Music fund 147 10 - - 157 10.Cathedral charitable fund 12 10 (8) - 14 11.Other restricted funds 115 87 (7) - 195 12.Educaon funds 16 4 (10) - 10 13.School outreach fund 85 15 (13) - 87 14.Special trust funds 103 23 (10) - 116 15.Central Tower - Belfry project (287) 293 - - 6 16.North Quire window 19 37 (40) - 16 17.Adopt a book 2 8 (8) - 2 18. Lobbies 624 313 (589) - 348 19. Cloister Roof 100 - (3) - 97 20. Surtees legacy fund - 5,708 - - 5,708

Total Restricted funds 17,260 6.609 (1,311) (412) 22,146

52 Durham Cathedral, Accounts for the year ended 31 March 2019

Unrestricted funds General fund (3,016) 5,946 (7,216) 349 (3,937) Designated funds 234 23 (52) - 205

(2,782) 5,969 (7,268) 349 (3,732)

Total consolidated funds 65,809 12,872 (8,579) 5,805 75,907

53 Durham Cathedral, Accounts for the year ended 31 March 2019

16. Statement of Funds - connued Brought Incoming (Outgoing) Gains, Balance forward resources resources (losses) carried & forward transfers £'000 £'000 £'000 £'000 £'000 16.2 Enty Endowment funds Permanent endowment 47,360 - - - 47,360 Expendable endowment 3,971 294 - 5,868 10,133

51,331 294 - 5,868 57,493

Restricted funds - as analysed above 17,260 6,609 (1,311) (412) 22,146 Deduct DCOT element of OT Restricted fund (3,089) (21) (1,152) 349 (3,913)

Total Restricted funds 14,171 6,588 (2,463) (63) 18,233

Unrestricted funds General fund (3,149) 5,227 (6,235) (171) (4,328) Designated funds 234 23 (52) - 205

(2,915) 5,250 (6,287) (171) (4,123)

Total enty funds 62,587 12,132 (8,750) 5,634 71,603

Endowment funds

Permanent endowment funds are funds which are held for the permanent benefit of the Cathedral. There is no power to convert capital into income.

Expendable endowment funds have been created by Chapter using income from property transacons to create a fund that will generate income. This income will contribute towards annual expenditure, in parcular in relaon to property maintenance. Capital from this fund may be used in certain circumstances, with express permission of Chapter, for example on capital work on the historic fabric. It is hoped that money will be added to the fund from future donaons and legacies.

Restricted funds

54 Durham Cathedral, Accounts for the year ended 31 March 2019

1. Freehold property fund

This fund was created in the year ended 31 March 2012, with properes valued at £5.6m transferred from Endowment. The fund has been created to separately idenfy properes purchased post-1872.

2. Open Treasure Restricted fund

This was created to ensure that funds (donaons and grants) given specifically for this project are ring-fenced. The fund will be released as the capital assets are depreciated.

3. Academic fund

This was created to promote the establishment of a theology research post.

4. Chapter Copes fund

This was created by a donaon for the replacement of Copes worn by Chapter members.

5. Inventory funds

These were originally created by grants and relate to the acquision of items added to the Cathedral’s inventory.

6. Library fund

Generous donaons were received during the year ended 31 March 2012 to enable the Library to buy back books and manuscripts that were owned by Durham Cathedral (Durham Priory) before the dissoluon of the monasteries in 1540.

7. Cathedral Fabric fund

Income comprises donaons towards the cost of cathedral repairs. Expenditure represents repairs and maintenance of the Cathedral fabric.

8. Liturgy and Worship fund

A donaon of £5,000 enabled the creaon of this fund in 2013.

9. Music fund

The Music fund is used to facilitate special musical enhancements of the Cathedral’s worship.

55 Durham Cathedral, Accounts for the year ended 31 March 2019

10. Cathedral Charitable fund

This fund arises from allocaons from offertory accounts and is dispersed annually to worthy causes.

11. Other Restricted funds

This comprises sundry funds ranging from £1,000 to £11,000 that have been created by donaons for specific purposes.

12. Educaon Centre fund

This includes two restricted funds which are to be used solely by the Educaonal department.

13. School outreach fund

This fund is for Choral outreach: to inspire as many children as possible in the joy of singing, supported by both Choristers and the Cathedral.

14. Special Trust funds

These funds are analysed on page 45 of the Financial Statements.

15. Central Tower – Belfry project

This fund was created for donaons to the Belfry renovaons that are taking place between 2015 and 2019.

16. North Quire window

This fund was created for a new stained glass window that was created through the generosity of donors.

17. Adopt a Book

This fund supports the conservaon and repair of the Cathedrals collecon of early printed books. Donaons are generated through the Adopt a Book programme, which offers donors the opportunity to select a book from a list of eligible tles for restoraon work.

18. Lobbies

Income in the fund comprises grants and donaons given towards a project to replace the 1970’s lobbies at the Cathedral’s north and south doors with new glazed lobbies. The project will improve visitor access, flow and orientaon for all those who visit.

19. Cloister Roof

56 Durham Cathedral, Accounts for the year ended 31 March 2019

This fund has been created for grants and donaons in support of a planned project to repair the cloister roof. The repairs were first idenfied in the 2013 Quinquennial Report (QIR) and have subsequently become “high priority” status due to further deterioraon of the roof beams.

Unrestricted funds

Designated Funds are set aside by the Chapter out of the unrestricted general fund for specific purposes or projects. Movements for the year ended 31 March 2019 are as follows:

Consolidated and Charity Balance Incoming Outgoing Fund Balance brought resources resources transfers carried forward forward £'000 £'000 £'000 £'000 £'000

Property designated fund 99 - - - 99 Altar frontals 13 - - - 13 Riverbanks project 8 - - - 8 School premises fund 114 23 (52) - 85

Total 234 73 (52) - 205

Transfers Transfers from restricted to unrestricted funds represent balances held within the Open Treasure fund that have now been ulised within the project, thus releasing the restricon. The remaining restricted balances represent the assets of the project that are being depreciated through the fund, as noted above.

17. Cashflow notes

17.1 Reconciliaon of net incoming resources before recognised gains to net cash (oulow) from operang acvies 2019 2018 £'000 £'000

Net incoming resources 10,098 1,254

Less: income from property - net of costs (661) (724) Less: investment income - net of costs (646) (550) Less: unrealised gain on investments (5,805) (3,043)

57 Durham Cathedral, Accounts for the year ended 31 March 2019

Add: depreciaon 760 738 Add: write off of Open Treasure stonework - 1,426 Decrease/(increase) in stocks 15 (10) (Increase) in debtors (5,815) (35) (Decrease)/Increase in creditors (113) 208

Net cash oulow from operang acvies (2,167) (736)

58 Durham Cathedral, Accounts for the year ended 31 March 2019

17.2 Reconciliaon of cash and cash equivalents 2019 2018

£'000 £'000

Cash at bank and in hand 231 1,602

Short term deposits 752 645

983 2,247

Loans (600) (800)

Cash and cash equivalents 383 1,447

17.3 Analysis of changes in net funds/(debt) As at 1 Cashflow As at 31 April March 2018 2019 £'000 £'000 £'000

Cash at bank and in hand 1,602 (1,371) 231 Debt due within one year (200) - (200) Debt due aer more than one year (600) 200 (400) Short term deposits held as current assets 645 107 752

Net funds 1,447 (1,064) 383

59 Durham Cathedral, Accounts for the year ended 31 March 2019

18. Prior year SOFA analysed by fund type

Unrestricted Restricted Endowment Total funds funds funds 2018

£'000 £'000 £'000 £'000

Income and endowments from: Donaons and legacies 591 985 255 1,831 Grants in support of mission 478 680 - 1,158 Charges and fees in the course of mission 2,299 48 10 2,357 Trading and chargeable events 1,202 9 - 1,211 Investments 1,469 23 - 1,492 Other income 27 - - 27

Total income 6,066 1,745 265 8,076

Expenditure on: Raising funds (3,582) (257) - (3,839) Ministry (1,067) (24) - (1,091) Educaon and outreach (1,171) (134) - (1,305) Cathedral and precincts upkeep (1,571) (2,137) - (3,708)

Total expenditure (7,391) (2,552) - (9,943)

Net (outgoing)/incoming resources before investment gains/(losses) (1,325) (807) 265 (1,867)

Net gains on investments - - 3,121 3,121

Net movement in funds (1,325) (807) 3,386 1,254

Funds brought forward (1,457) 18,067 47,945 64,555

Funds carried forward (2,782) 17,260 51,331 65,809

60