BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Annual Report and Accounts for

Birmingham Cathedral

2016

The Cathedral Church of St Philip, Birmingham Colmore Row, Birmingham B3 2QB Tel: 0121 262 1840 Email: [email protected] Website: birminghamcathedral.com Facebook: Birmingham Cathedral St Philip’s Twitter: @bhamcathedral

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Birmingham Cathedral

Chapter Annual Report BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Letter from the Acting Dean 2016 was a year of coming and goings proving that life never stands still in the life of Birmingham Cathedral. Being situated at the highest point in the city and surrounded by the ever- growing business and commercial life of what is the youngest city in Europe makes for a busy, exciting life. 2016 saw our Canon Liturgist, Janet Chapman move on back into parish life The Revd Canon Nigel Hand to St Laurence Church in the diocese and the Dean, Catherine Ogle, prepare to move to Winchester Cathedral to become Dean. Both played a major part in making the cathedral ‘fit for purpose’ producing a reordered well- functioning building and a place of welcome and a house of prayer at the heart of the city. Their ministry in Birmingham is greatly appreciated, and we send them to St Laurence and Winchester Cathedral with our prayers and best wishes. We continue our daily round of prayer each day for the world, the city the church and many come in throughout the week to pray. Our visitors now number in excess of 100,000 per year, with 20,000 pedestrians each day walking through Cathedral Square. The ministry of the cathedral is a team effort and couldn’t exist without the committed and supportive staff of vergers, Administrator, communications, education, heritage and office staff. On top of the weekly services, the Wardens and Deputies, flower arrangers, bell ringers, those who regularly clean and many others are involved in numerous extra services, memorials and special occasions that are part of our broad ministry. We look forward to a new year with new possibilities of connecting more within the city and the Diocese, with the Good News of Christ. We look forward to deepening our existing relationships, and being a beacon to the Diocese for the renewed ‘Transforming Church’ strategy.

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Report from the Cathedral Administrator

We end the year with a small financial in-year surplus of £4k in our unrestricted funds against budget, which is an incredibly positive result in a year where we absorbed the £58k cost of new Cathedral boilers which hadn’t been budgeted for; we also end the year much warmer than we started! Financially, we were also able to meet the small shortfall in the Internal Works Project. This positive result is due to a combination of good Anna Pitt stewardship of our resources, consistent and generous support through planned giving, and financial discipline. 2016 has been a year of quiet

consolidation, reflecting retrospectively on a year of huge activity in 2015, and considering opportunities to grow and nurture the seeds of that fruitful year. 2016 saw the completion of the Internal Works project, which began back in May 2015. The culmination of the project was the installation of new electronic glass doors in the main entrance porch. The doors, whilst offering much easier access for all, also offer a clear line of sight into the Cathedral; a welcoming invitation to enter the building. Our relationships and partnerships within the Diocese and City continue to flourish. The St Basils Sleep Out was a hugely successful night, and one of the highlights of 2016 with 650 people sleeping out in Cathedral Square; a powerful and poignant evening. Our relationship with local partners (Colmore BID, WM Police and BCC Parks Department), have ensured consistent and careful custodianship of Cathedral Square for the benefit of the tens of thousands of people who use the space daily. The Cathedral Staff Team continues to grow, and are a daily blessing to the ministry of our Cathedral. We have recruited into 3 new lay roles, increasing the capacity of the team; Stephen Brooker joined us as Facilities Manager; Louisa Harrop joined as Education Officer and Ailsa Lightfoot joined as Administrative Assistant. Ashley Wagner also joined the music department as Organ Scholar. I wish to express my sincere gratitude to the whole lay staff of the Cathedral, together with our marvellous volunteers, for the grace, commitment and passion that each bring to their role. Our 2016-2020 Strategic Plan has been instrumental in highlighting the distinct areas where our lay team are bringing their gifts to bear with excellent results.

“Each of you should use whatever gift you have received to serve others, as faithful stewards of God’s grace in its various forms” Peter 1 4:10 BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Main Priorities for 2016

2016 was an opportunity to embed the grounding principles of our Strategic Plan into the daily life and rhythm of the Cathedral:

Living Worship - Growing Disciples - Connecting Communities

These principles have shaped the strategic and operational decision-making, and have added structure to the growing partnerships which have been nurtured.

Living Worship

‘Mindful of the invitation of our Patron Saint to ‘Come and See’, we seek to offer a growing diversity in worship offering rich opportunities for encounter with God, for all ages.’ Take the opportunity to respond to ‘missional moments’ of WW1 Anniversary (Commemoration of the Battle of the Somme) and Queen’s 90th Birthday Participate in the National ‘Thy Kingdom Come Initiative’; continued clergy involvement in ‘Pray for the City’; diverse spread of visiting preachers; engaging with unique worship opportunities such as hosting Roger Hiorns’ ‘Lying Down Evensong’

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Growing Disciples

‘We seek to grow in number and in depth of discipleship in order to witness to Christ more effectively’ We will employ a Cathedral Education Officer, continue to grow the number of Visitors’ Chaplains and volunteers; Annual Pentecost Birthday Party for school children; Annual Community Day; Support for Christian Aid, St Basils, and other charities; continued ministry of healing; continued engagement with and promotion of heritage, enriching the visitor experience.

Connecting Communities

‘Birmingham is the place ‘where the world meets’ and, as Archbishop Justin memorably told us in 2015, Birmingham has perhaps a unique opportunity to show the world how people can live together in peace’ We will work towards establishing the Cathedral as a forum for Public Theology; continue collaborative working with Diocesan Directors and parishes; hosting charitable events in the Cathedral and on Cathedral Square; work with Colmore BID to create safe and welcoming space in Cathedral Square; deepen partnerships with Heritage organisations; Continue to develop ‘Something Good’ and the work of Cathedral ARTS Group.

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Good Order

‘We seek to achieve good order in the governance of the Cathedral to reflect the good order of God’s creation and to enable the Cathedral to model good working practices, good working relationships for staff, volunteers and good communications fostering mutual understanding and respect.’ Cathedral Safeguarding Audit; Annual review of Chapter policies; regular review of staff terms and conditions; review and benchmarking of lay salaries; Clergy participation in national cathedral life Conferences and AEC; establish a new Cathedral database.

Care of our Building and Environs

‘We strive for the highest standards of care as an expression of our faith and worship’ Complete the second phase of internal restoration works (new glass doors, porch mat, entrance furniture); commission new candle stand; review liturgical furniture; Progress the implementation of a planned maintenance programme; replacement of boiler, update of security systems; appointment of a Cathedral Facilities Manager; review shop/welcome desk.

Sustainable Financial Growth

‘We will steward our resources prudently and ethically, with the intention of achieving sustainable growth to resource growing ministry’ Support the work of the stewardship committee; update legacy policy and information; explore ways of generating further generating income from fee paying events and commercial income; increase in grant income; purposeful management of investment and review of investment policy; review St Philip’s House management and income; review regular contractors;

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

A Year in View: Highlights of 2016

Mothers’ Union Street Party - to celebrate 140 years of Mothers’ Union/Queen’s 90th birthday. Red, white and blue theme. Entertainment for children and families, picnic facilities and fundraising activities.

Malawi Fundraising Fair – Event on Cathedral Square organised by the Cathedral community to raise money for our partnership with Malawi

In:Site Craftspace - Annual festival of graduate creativity on Cathedral Square over five days involving 15 new graduates. Each day graduates made bespoke work responding to the site and its heritage.

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Aston University 50th Year Commemoration Service - A celebration that marked the 50th anniversary of the University of Aston and Rededication. The event brought together current students and former academics.

The Choral Eucharist on Palm Sunday was streamed live by the Church of England, and the live broadcast of Choral Evensong on BBC Radio 3 in October received many complimentary comments from listeners.

Over 600 people slept out in Cathedral Square to raise nearly £140,000 for St Basils, the West Midlands youth homelessness charity. The cathedral building was open throughout the night and hosted a candlelit carol service at midnight. The Sleep Out was returning to its original home in Cathedral Square after outgrowing its previous location.

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

As part of Birmingham’s Chinese New Year celebrations, British-Chinese artist Aowen Jin created ‘Midlight,’ a group of magical sound-reactive light boxes, which responded to a special service conducted in the dark in both Chinese and English.

Revd Chris Thorpe and artist Jake Lever led a quiet day under the Soul Boats installation. Participants used words, music, creative activity and silence to reflect on their life journey, exploring the “storms” that they encounter, the “vessel” that is their own life, and the “voyage” that they were embarking upon.

As part of International Dance Festival Birmingham, Cathedral Square played host to ‘Phone Box’, an acrobatic dance performance in and on a vintage red telephone box. Cathedral Square hosted performances by ‘The Busquitos’ and ‘Saxitude’ as part of the Birmingham and Solihull Jazz and Blues Festival.

To celebrate Birmingham Poppy Day, The Band of The Royal Logistics Corps played on Cathedral Square and around the city, raising £43,600 for the Royal British Legion.

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

The ornate brass cross made by John Paul Cooper, a Birmingham jeweller, has been restored and re-displayed in the South Aisle. The cross was made to mark the change from parish church to cathedral in 1905 and its re-display was made possible with the generosity of Hortons’ Estate.

The third and final Tercentenary Festival of Voices was held at the cathedral in February. The event explored the heritage of the cathedral through music, word and performance. This wonderful, celebratory evening compered by Canon Janet & Jane McArdle even featured the choir singing a Beatles medley!

The Pride of the Place by Canon Dr Terry Slater was published and launched, at the cathedral in 2016. The comprehensive, fully illustrated book examines the history and significance of St Philips since 1715. Terry entertained a packed cathedral with a lively talk on the launch evening.

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BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

‘Wonder’ Children’s Christmas Craft Event was a multi-sensory event, for children and families in collaboration with the Electric Cinema. The Cathedral was transformed so that families could enjoy and engage with a range of fun activities such as den making, whilst encouraging them to reflect upon the real meaning of Christmas

‘Growing Hope’: Daffodil Bulb Planting by local school children in Cathedral Square. ‘Growing Hope’ is a project exploring hope, one of the themes of the Easter story, organised by Birmingham Cathedral and the Church of England - Birmingham. Children planted daffodil bulbs in Cathedral Square in mid-October, and will then return in the spring to see them bloom in the shape of a cross.

The Advent pilgrimages, which start from St Martin’s in the Bullring, allow children from Church of England Primary schools the opportunity to reflect upon the season of Advent from a Christian perspective. The pilgrimage enables the children to consider the increasingly secular portrayal of Christmas, as they travel through the city centre. They end their journey at the Cathedral, where they are able to stop and reflect on what they have seen

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

School visits The Education team have enjoyed welcoming a large number of schools to visit the Cathedral, The visits provide children with the opportunity to learn about what it means to be a Christian. They also learn about what makes the Cathedral a special Christian place of worship and find out about the significance and symbolism of the windows.

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Relationships

During 2016, the Cathedral deepened relationships in a number of key areas:

• Education; the appointment of a Cathedral Education Officer has allowed for increased partnership working with Diocesan education team, collaboration and learning with other Cathedral education Departments and increasing provision for working with schools within the Diocese • Security and Public Space; the appointment of a Cathedral Facilities Manager has allowed for effective day to day management of Cathedral Square through partnership working with West Midlands Police; Colmore BID; Anti-terrorism officers and HOST car team. • Civic Life; the Cathedral continues to host key civic events, offer chaplaincy to the High Sheriff, and work closely with the City Council on delivery of key high profile events (such as Commemoration of the Battle of the Somme).

Volunteers

Birmingham Cathedral operates thanks only to the significant input of volunteers in terms of energy and time. Thousands of hours of committed ministry across the spectrum of Cathedral life are volunteered regularly. In 2016 we added capacity with additional volunteers leading Heritage tours and offering support with cleaning the Cathedral.

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Inventory

There were no additions to the Cathedral inventory during 2016. Chapter disposed of two noticeboards, a pew and a disused altar rail.

Fabric Repairs

In 2016 we completed Phase 2 if the Internal works project, which encompassed the long- awaited updates to the SW entrance porch. Following the failure of both Cathedral boilers in December 2015, three replacement boilers were fitted in February 2016. Cathedral burglar and fire alarm systems were updated and upgraded to offer a full comprehensive system.

Fundraising In 2016 Birmingham Cathedral did not actively fundraise for a particular project. Following a period of extensive fundraising in 2014/2015, from both external funders and Cathedral congregations, Chapter took the decision to delay the appointment of a Cathedral Fundraiser, preferring to prioritise ‘project fundraising’. 2016 was a year of consolidation in terms of relationships, staff team and governance. The unrestricted income of the Cathedral was sustained by continued support by way of planned giving.

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Future Plans In 2017 Birmingham Cathedral will seek to continue to work towards the current 5 year strategic plan. Significant priorities for 2017 include;

• Appointment of a new Dean, following the resignation of Dean Catherine Ogle. • The launch of ‘Divine Beauty’ a project to restore and clean the Burne Jones and Hardmann Cathedral windows. • Embedding a Planned Preventative Maintenance Plan covering all regular servicing and contractors • Appointment of a Cathedral Architect • Increasing the Capacity for working space for staff in the Cathedral and upgrading the facilities in Matthew Room. Review of Archive Room and undercroft facilities and storage • Undertake a Music review to reflect on and inform the Cathedral’s ongoing music strategy. • Appointment of new Cathedral Investment Managers following a thorough tender process • Tender process to appoint new Cathedral auditors. (having had a very successful three year relationship with Dains LLP, a potential conflict of interest forces a retender).

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Structure, Governance & Management

• Birmingham Cathedral’s governing document is the Constitution and Statutes, incorporating the Cathedral Measure Act 1999. The most recent review and update of the statutes took place in 2015. • Birmingham Cathedral is an ecclesiastical corporation. The Cathedral has a charitable purpose as defined in the Cathedrals Measure 1999. As an ecclesiastical corporation the Cathedral is excluded from the Charities Act 2011 and not regulated by the Charity Commissioners. However the Cathedral does qualify as a charity for taxation purposes. Whilst not being registered with the Charity Commission, Chapter has due regard for the guidance set down by the Commission. • The Cathedral is Mother Church to the Diocese of Birmingham, a Diocese of nearly 200 parish churches. Cathedral staff share office space at One Colmore Row with Diocesan colleagues, and share some administrative functions. This makes for effective and dynamic working relationships, and the Cathedral maintaining a strong presence in the Diocese. • ‘Body Corporate’ of the Cathedral consists of Cathedral Chapter, Cathedral Council and Cathedral College of Canons. Cathedral Chapter also has a Finance & Risk Sub-Committee. Cathedrals are run by their Chapters, which have the task of administering the affairs of the Cathedral: • Birmingham Cathedral Chapter is formed of both clergy and lay people, who act as fiduciaries and manage the cathedrals’ affairs. The Dean and both Residentiary Canons are members, along with four members nominated by the Cathedral Congregation and appointed at APCM and two Bishop’s appointments (Chapter currently carries a vacancy for a third Bishop’s appointment). The Chapter is chaired by the Dean or Acting Dean in Interregnum. o Chapter have chosen to send all new Chapter appointments on a residential training course specifically for Chapter members run by the Association of English Cathedrals. o Chapter’s Schemes of Delegation; Delegated Authority from Chapter to Director of Resources (Cathedral Administrator); and Delegated Authority from the Director of Resources to other budget holders, are reviewed annually.

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

• Birmingham Cathedral Council meets three times a year to further and support the work of the cathedral and advise the Chapter. Membership of Cathedral Council consists of; The Dean, two nominated Chapter Members, two members of the College of Canons, three lay members representing the interests of the Cathedral congregations, one area dean from a deanery within the diocese, two lay people appointed by Bishop’s Council, one person appointed by Birmingham Churches Together, a maximum of six people appointed by the Bishop. The Council is chaired by Andrew Lancaster, a lay member of Council appointed by the Bishop David. Bishop David can attend and speak at the Council although he is not a member. • The College of Canons consists of the Dean and Residentiary Canons, Bishop Anne, The Venerable Hayward Osborne (Archdeacon of Birmingham), The Venerable Simon Heathfield (Archdeacon of Aston) and honorary and lay canons. The College meets once a year to consider cathedral affairs. It also has the task of electing a new bishop in accordance with the Appointment of Bishops Act 1533. • During 2016 there were two clergy resignations. In July 2016, Canon Janet Chapman (Canon Liturgist) left the Cathedral to take the role of Rector of Northfield (Birmingham Diocese). In September 2016 Dean Catherine Ogle announced her resignation (effective from February 2017) to take the role of Dean of Winchester Cathedral.

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Financial Review 2016 was always planned to be a year of quiet consolidation and this has been reflected in our finances, A 2016 headline income figure of £821,807, showing a fall of £799,989 year on year reflects the contrast between 2016 and the prior financial year. The prior year (2015) was a year of exceptional activity with the Tercentenary celebrations and major investment in the Internal Works project - all funded by one off restricted use grants, which can distort the underlying financial picture. The 2016 finances reflect a year of stability, despite an emergency replacement of our boiler in January 2016 at the cost of some £58,000. Our single largest source of income is from our investment and property portfolio. Against a backdrop of global economic uncertainty, post both the Brexit and US Presidential elections, the investment income returns from this portfolio have marginally fallen year on year. However, our core income from congregational giving, donations from visitors, fees for special services and other trading activities has been pleasingly consolidated at £237,000 compared to £216,000 in 2015. This reflects the ongoing commitment to stewardship and sacrificial giving amongst the congregation; together with the investment in a Cathedral Facilities Manager supporting the day to day function, visitor experience and service delivery of the Cathedral. The Church Commissioners provide for the stipends of the Dean and the two Residentiary Canons and the Cathedral also receives a grant towards the cost of the lay salaries. We are immensely grateful to the Church Commissioners, All Churches Trust, and the many grant making trusts and individual donors who share our mission vision. The major single areas of expenditure in 2016 relate to the completion of the Internal Works Project at £XXXX and the boiler replacement of £58,000. The small growth in the Commented [MC1]: Amanda insert figure cathedral staff team as reported in the Cathedral Administrator’s report has been supported in part by designated and restricted income funds given specifically for the purposes of the Cathedral’s day to day music and education operations. The Cathedral furthers its missional outreach by careful stewardship of restricted donations– with a careful “balancing act” between activities now and in the future. The net overall deficit of £90,287 for the year, before taking into account the net gains on the revaluation of the investment portfolio at 31 December 2016, reflects the use of donations/ grants generated in the prior year to complete the Tercentenary activities and internal works projects. Taking into account the investment gains, we finished 2016 with a net increase in funds of £281,195. It was also pleasing to note that our “in-year trading position” on our unrestricted fund was £4,466 – this is the fifth consecutive year we have done so and after absorbing the cost of the replacement boiler. Balance Sheet position Chapter consider that the balance sheet , together with the notes to the financial statements show broadly that the restricted and endowment funds are held in an appropriate mix of investment and current assets given the purposes for which the funds are held. While the net assets at the balance sheet date totalled £6,668,887 (2015:£ BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

6,287,492), it must be remembered that included in this total are property and investments that are held within the endowment fund, the capital of which cannot be spent. The endowment fund’s value amounted to £6,592,610 (2015:£6,235,497). Much of the remainder of the assets shown in the balance sheet are held in restricted funds and cannot be used for the general purposes of the cathedral. There is currently a historical deficit on the cumulative unrestricted fund. Chapter have in place robust systems for financial governance and monitoring to guard against any future scenario which may result in increased deficit on the unrestricted fund. Chapter are pleased to note that the generation of an unrestricted fund surplus of £4,466 in the year has aided the reduction of the deficit to £254,810 as at 31 December 2016 Factors that may impact on future financial performance There are a number of factors which can impact on the Cathedrals’ ability to meet its objectives which are outside its direct control. As is the case for all charities with historical endowment, the Cathedral is vulnerable to changes on the value and returns upon its investments. This is mitigated by employing specialist fund managers and advisors to help develop an appropriate investment policy- the Cathedral is in the process of re tendering for investment management and advice services for implementation during 2017. The ability of the Cathedral to generate other regular income sources such as event/ special service hires and congregation giving and donations has a significant impact on the delivery of the Cathedral’s missional objectives. These factors are managed by building close partnerships with both Cathedral users and the congregation itself as lifelong disciplines of Christ. Reserves policy Free reserves are maintained for the following purposes:

• To avoid bank borrowing if there is a temporary shortfall in income/ or a surge in expenditure • To provide for emergencies

The reserves policy of the Cathedral is formulated in line with recommendations of the Charity Commission of England and Wales. The basic policy statement is as follows: “The Cathedral Chapter aims to maintain the equivalent of at least 3 months operating expenditure in cash and readily liquid assets in the general unrestricted fund. This excludes all designated funds and loans. The policy is to be reviewed on an annual basis” The Cathedral Chapter recognises that due to difficult past economic conditions, the Cathedral continues to fund itself with a historical net deficit on its unrestricted funds. This position is being actively remedied by Chapter by robust monitoring of unrestricted expenditure. Chapter, in conjunction with the Church Commissioners is also planning to undertake a forensic review of its endowment fund origin and historical record keeping during 2017 to ascertain whether all such funds that are “currently classified” as permanent endowment funds do indeed meet that definition. BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Designated funds The Cathedral may with the approval of Chapter, designate additional unrestricted reserves to be retained for an agreed purpose where this is considered prudent. Such designated reserves are reviewed on an annual basis and returned to the general fund in the event that the purpose of their destination is no longer considered adequate for their retention. A description of each reserve with the intended use of the reserve is set out in note 14. The most significant designated reserve is the Maintenance Fund which amounts to £10,000 as at 31 December 2016. This is part of a planned saving programme towards future major maintenance expenditure. Restricted and endowment funds As set out in note 14 the Cathedral holds and administers a number of restricted and endowment funds. As at 31 December 2016 restricted funds totalled £310,173 (2015: £335,556) and endowment funds totalled £6,592,610 (2014:£ 6,235,497). Neither are available for the general purposes of the Cathedral Investments powers and policy Under the Cathedrals Measure 1999 the Chapter may invest the Cathedral’s funds in any of the following:

• Land;

• Funds administered for the Central Board of Finance of the Church of England by CCLA Investment Management Ltd;

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

• 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. The Cathedral’s non-property investments are held with Harris Allday and CCLA. Harris Allday manages a portfolio on a discretionary basis, with the remaining funds within CCLA on a self- managed basis. Management of the Cathedral’s investments is overseen by the Chapter’s Finance & Risk Committee, which includes members appointed for their relevant expertise and experience. The relationship with the Cathedral’s investment advisors is governed by a Statement of Investment Principles. The agreed investment objective is the creation of sufficient income to enable the Cathedral to carry out its purposes effectively and without interruption, the level of income to be agreed from time to time with the Chapter on the advice of the Finance & Risk Committee. A further objective is the maintenance and long-term enhancement of the capital, and the income derived from this in real terms. In October 2011 the Chapter resolved that to the extent that the Cathedrals Measure of 1999 requires it, the Chapter's policy will be to repay any borrowings from endowment funds as soon as it is prudently possible to do so. BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Principal Risks and Uncertainties Chapter reviews the Cathedral Risk Register on a quarterly basis. Reporting to Chapter by the Finance & Risk Committee will include a consideration of risks (financial/operational/ reputational damage) which could impact seriously on the cathedral’s operation and development. The Finance & Risk subcommittee oversees the implementation of the recommendations arising out of this review process. The risk register is populated with five areas where the risk of either failure to act or the impact of the events could be ‘high’; Operational Risk, Financial Risk; Governance/Compliance Risk; Reputational Risk; Legal/ Regulatory Risk. Area Mitigation strategies Operational Risk: Unidentified Maintenance • Implementation of Cathedral 20yr Issue resulting in unbudgeted expenditure Planned Preventative Maintenance Scheme • Implementation of Annual Maintenance fund (Designated Fund) • Cathedral Facilities Manager reviewing Contractors and Service agreements to ensure thorough and robust scheme of inspections and reporting. Financial Risk: Fraud/Error leading to • Delegated Authority and controls in financial losses place • Rigorous cash handling procedure in place • Regular review of management accounts

Operational Risk: Threat to Staff and • Working with local Counter-Terrorism Building from a Terrorist attack Officers – training for all staff • Requirement for a Disaster Recovery Plan

Legal & Regulatory Risk: Safe Storage of • New Cathedral Database Data. Leaked personal financial information • New Diocesan CRM Database leading to reputational damage • Close working with PC Support to move all Cathedral records to cloud based storage and Drop Box sharing

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Remuneration of key management personnel Emoluments of higher paid lay employees are determined by Chapter with reference to remuneration and salary benchmarking and consequent recommendation of changes. Chapter undertook a thorough review of lay salaries during 2016, and adopted clear plans to bring all lay salaries in line with market rates. The emoluments of Cathedral clergy are set by and funded by the Church Commissioners on a national basis.

Going concern After making enquires, Chapter are satisfied that the Cathedral has adequate resources to continue to operate as a going concern for the foreseeable future and have prepared the financial statements on that basis. Statement of Responsibilities of the Chapter Chapter have overall responsibility for ensuring that the cathedral has an appropriate system of controls, financial and otherwise. The systems of internal control are designed to provide reasonable, but not absolute assurance against material misstatement or loss. They include:

• An annual budget approved by Chapter; • Regular consideration of both financial results and other performance indicators; • Delegation of authority and segregation of duties.

Statements as to disclosure of information to auditors Chapter have taken all the necessary steps to make sure that they are aware of any relevant audit information and to establish that the auditors are aware of that information. As far as Chapter are aware, there is no relevant audit information of the auditors are unware.

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Chapter Members

The Very Revd Catherine Ogle The Revd Canon Janet Chapman (until July 2017) The Revd Canon Nigel Hand Sandra Bailey Helen Blundell Judith Whalley Richard Brooks Andrew Harrison *Chair of Finance & Risk Committee Sue Davis

Members of Finance & Risk Committee

Andrew Harrison *Chair The Very Revd Catherine Ogle The Revd Canon Janet Chapman (until July 2017) Sue Davis Melanie Crooks Anna Pitt

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Members of Fabric Advisory Committee

The Very Revd Catherine Ogle Canon Dr Terry Slater *Chair Robert Kilgour Richard Morriss Dr Paul Spencer-Longhurst Kristina Williamson Rita McLean (from April 2016) John Somers (from April 2016) James Whiteman (until February 2016) Clive England (Cathedral Architect in attendance) Mary Trumper (Secretary, not voting)

Cathedral Administrator (Director of Resources)

Anna Pitt

Director of Music

Canon Marcus Huxley

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Auditors Dains LLP 15 Colmore Row Birmingham B3 2BH

Bankers The Royal Bank of Scotland PLC 79/83 Colmore Row Birmingham B3 2AP Relationship Manager: Chris Richards

Investment Managers

• EFG Harris Allday Church Mews Ombersley Worcestershire WR9 0EW

• CCLA Investment Management Ltd Senator House 85 Queen Victoria Street London EC2V 6DZ

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Legal Advisors • Shakespeare Martineau No 1 Colmore Square Birmingham B4 6AA

• Keelys LLP 28 Dam Street Lichfield WS13 6AA

Cathedral Architect Clive England Thomas Ford & Partners 177 Kirkdale London SE26 4QH

Archaeologist Richard Morriss & Associates Bromlow House Upper Bromlow Minsterley Shropshire SY5 0EA

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Commercial Property Management CBRE 55 Temple Row Birmingham B2 5LS

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Birmingham Cathedral

Chapter 2016 Accounts BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

2016 Accounts

Unrestricted Funds Restricte Endowme Total Total d nt Not General Designat Funds Funds 2016 2015 es ed £ £ £ £ £ £ Income & Endowments From: Donations & Legacies 146,620 - 7,413 - 154,033 163,529 Grants in support of mission 21,795 - 386,428 - 408,223 1,122,68 4 Charges and fees arising in the course of mission 9,314 1,000 1,073 - 11,387 9,677 Trading & fundraising 45,521 - 4,352 - 49,873 37,474 Income from property & investments 191,042 - 6,981 - 198,023 213,037 Other income 268 - - - 268 75,395 ______Total Income 2 414,560 1,000 406,247 - 821,807 1,621,79 6 ______

Expenditure On: Raising Funds 59,383 6,539 18,299 - 84,221 76,353 Ministry 191,575 345 204,121 - 396,041 431,846 Cathedral & precincts upkeep 123,942 - 171,597 - 295,539 1,111,64 2 Education & outreach - 4,344 1,804 - 6,148 - Community, parish & 45,221 - 74,922 - 120,143 281,903 congregation Other Expenditure 10,002 - - - 10,002 4,121 ______Total Expenditure 4 430,123 11,228 470,743 - 912,094 1,905.86 5

Net incoming/(outgoing) resources before (15,563) (10,228) (64,496) - (90,287) (284,06 investment gains 9)

Net gains/(losses) on 5,6,7 - - 5,586 365,896 371,482 (4,202) investments ______BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2016

Net Income/(Expenditure) (15,563) (10,228) (58,910) 365,896 281,195 (288,27 1)

Gross transfers between 14 20,029 (44,774) 33,527 (8,782) - - funds

Actuarial gains/(losses) on defined benefit pensions - - - - - 6,000 schemes Other gains/(losses) ------______6,000

Net movement in funds: 4,466 (55,002) (25,383) 357,114 281,195 (282,27 1)

Funds brought forward (259,276) 75,716 335,556 6,235,496 6,387,49 6,669,76 2 3 ______Funds carried forward (254,810) 20,714 310,173 6,592,610 6,668,68 6,387,49 7 2 ======

BIRMINGHAM CATHEDRAL CHAPTER BALANCE SHEET For the year ended 31 December 2016

Unrestricted Funds Restricted Endowment Total Total Notes General Designated Funds Funds 2016 2015 £ £ £ £ £ £ FIXED ASSETS INVESTMENT ASSETS Property 6 - - - 1,100,000 1,100,000 1,100,000 Investments 7 - - 141,531 3,770,196 3,911,727 3,554,046 ______- - 141,531 4,870,196 5,011,727 4,654,046 ______

NON-INVESTMENT ASSETS Property 8 - - - 1,165,000 1,165,000 1,165,000 Equipment 9 1,979 - 7,771 - 9,750 8,817 ______1,979 - 7,771 1,165,000 1,174,750 1,173,817 ______TOTAL FIXED ASSETS 5,827,863

CURRENT ASSETS Stock - - - - - 1,810 Debtors 11 42,049 - 275 - 42,324 155,042 Cash at bank and in hand 159,297 20,714 160,596 411,549 752,156 692,182 ______201,346 20,714 160,871 411,549 794,480 849,034 LIABILITIES DUE WITHIN ONE YEAR Creditors 12 (152,270) - - - (152,270) (109,405) ______NET CURRENT ASSETS 49,076 20,714 160,872 411,549 642,210 739,629 Interfund transfer (145,865) - - 145,865 - - ______TOTAL ASSETS LESS CURRENT LIABILITES (94,810) 20,714 310,173 6,592,610 6,828,687 6,567,492

LIABILITIES DUE AFTER ONE YEAR Loans 13 (160,000) - - - (160,000) (180,000) ______Net assets excluding pension liability 6,287,492 Defined benefit scheme liability - ______TOTAL NET ASSETS (254,810) 20,714 310,173 6,592,610 6,668,687 6,387,492 ======

THE FUNDS OF THE CATHEDRAL Endowment Funds 6,592,610 6,592,610 6,235,496 General Funds (254,810) (254,810) (259,276) Designated Funds 14 20,714 20,714 75,716 Restricted Funds 14 310,173 310,173 335,556 ______TOTAL CATHEDRAL FUNDS (254,810) 20,714 310,173 6,592,610 6,668,887 6,387,492 ======

These financial statements were approved by the Chapter and signed on their behalf on ______2017

The Rev’d Canon Nigel Hand Andrew Harrison Acting Dean Chair of Finance and Risk Committee BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

Total Total 2016 2015 £ £ Cash flows from operating activities: Net cash provided by/(used in) operating activities (103,210) (730,265)

Cash flows from investing activities: Rents received 24,946 52,000 Investment income received 146,023 161,662 Interest & charges paid - (149) Proceeds from the sale of property, plant & equipment - - Purchase of property, plant & equipment (1,587) (1,006) Proceeds from the sale of investments 587,302 807,537 Purchase of investments (573,500) (628,641) ______Net cash provided by/(used in) investing activities 183,184 391,403

Cash flows from financing activities: Repayments of borrowing (20,000) - Cash inflows from new borrowing - 200,000 Receipt of endowment - - ______Net cash provided by/(used in) financing activities (20,000) 200,000

Change in cash & cash equivalents in the reporting period 59,974 (138,862)

Cash & cash equivalents at the beginning of the reporting period 692,182 831,044

Cash & cash equivalents at the end of the reporting period 752,156 692,182

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

Reconciliation of net income/(expenditure) to net cash flow from operating activities

Total Total 2016 2015 £ £ Net income/(expenditure) for the reporting period (90,287) (284,069)

Adjustments for: Depreciation charges 654 599 Income added to endowment capital - - Income from property & investments (198,023) (213,038) Interest payable 7,340 149 Loss/(profit) on the sale of fixed assets - - (Increase)/decrease in stocks 1,810 901 (Increase)/decrease in debtors 139,771 (103,436) Increase/(decrease) in creditors 35,525 (88,746) Non-cash movement - (46,625) ______(12,923) (446,196) ______Net cash used in operating activities (103,210) (730,265) ======

Analysis of cash & cash equivalents Total Total 2016 2015 £ £

Cash in hand/at bank 19,496 18,933 Cash held on deposit 732,660 673,249 Notice deposits (less than 3 months) - - Overdraft facility repayable on demand - - ______Total cash & cash equivalents 752,156 692,182 ======

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

1. ACCOUNTING POLICIES

Basis of accounting

The financial statements are prepared in accordance with the provision of the February 2015 Regulations on Accounting and Reporting by English Anglican Cathedrals prepared for the Association of English Cathedrals and specified by the Church Commissioners under Section 27 of the Cathedrals Measure 1999. The 2015 Regulations take in to consideration the requirements of the Statement of Recommended Practices for Charities (SORP 2015) and applicable accounting standards (FRS102).

The financial statements are prepared under the historical cost convention as modified by the revaluation of investments and certain properties.

Following transition to FRS 102 for the first time in 2015, all of the accounting policies have been aligned with the new accounting standard as it applies to Cathedrals. The principle accounting policies and estimation techniques are as follows:

Fund accounting:

The Chapter maintains various types of funds as follows:

Endowment funds:

Endowment funds represent grants, donations and legacies received where the donor has stipulated that the income may be used for general purposes but the capital must be retained.

Restricted funds:

Restricted funds represent grants, donations and legacies received which are allocated by the donor for specific purposes.

Unrestricted funds:

Designated funds are amounts which have been put aside out of unrestricted funds at the discretion of the Chapter for specific purposes.

Undesignated funds represent unrestricted income which is expendable at the discretion of the Chapter in the furtherance of the objects of the Cathedral Chapter. Such funds may be held in order to finance both working capital and capital investment.

Tangible fixed assets:

In accordance with FRS 102 investments properties are carried at their fair value and this is considered by Chapter annually and the aggregate surplus or deficit is recognised in the Endowment Fund. The investment property was last professionally valued as at December 2015, the next professional valuation of the property is due at December 2020. No depreciation is provided on investment properties.

Non-investment properties relate to clergy housing. Previously these were carried at market value based on an external professional valuation every 5 years. In the interim period Chapter reviewed the carrying valuation of the properties for impairment by reference to the Nationwide House Prices Indices. Depreciation is not charged on the grounds of immateriality. Upon adoption of SORP 2015 (FRS 102) Chapter elected under the transitional rules to adopt the previous valuation of the properties as deemed cost. The properties are subject to a quinquennial maintenance programme and maintain a high residual value.

Depreciation has been provided on office equipment in the first year. Larger items will be depreciated over the life of the asset, as assess by Chapter members.

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

The Cathedral building and the inventory as heritage assets

Under S13(1) of the Care of Cathedrals Measure 1990, Cathedrals are required to keep an inventory of items owned by the Cathedral that are of architectural , archaeological, artistic or historic interest. The Measure also issues strict guidelines about the acquisition and disposal of such assets.

No value is attributed to these assets on the balance sheet in accordance with section 7.2.2 of the Accounting and reporting Regulations for English Anglican Cathedrals. The Chapter have further considered the requirements of FRS 102, which postdates the Regulations and are of the opinion that the policy is compliant with this standard on the basis that information on cost or valuation of the assets is not available and could not be obtained at reasonable cost.

The Cathedral churchyard

The historic churchyard of St Philip’s is the Cathedral precinct under the Care of Cathedrals Measure 1990, and like the Cathedral building is of archaeological and historic interest. No value has been attributed in the balance sheet to the churchyard or any of the items that form part of it.

No value is attributed to these assets on the balance sheet in accordance with section 7.2.2 of the Accounting and reporting Regulations for English Anglican Cathedrals. The Chapter have further considered the requirements of FRS 102, which postdates the Regulations and are of the opinion that the policy is compliant with this standard on the basis that information on cost or valuation of the assets is not available and could not be obtained at reasonable cost.

Investments

Investments are stated at market value. Realised gains or losses are recognised in the Statement of Financial Activities when investments are sold. Unrealised gains and losses are accounted for on revaluation of investments at the year end.

Stocks

Stocks are stated at the lower of cost and net realisable value and represent goods held for resale in the Cathedral shop.

Income

All income is recognised in the Statement of Financial Activities when the Cathedral is legally entitled to them as income or capital respectively, ultimate receipt is probable and the amount to be recognised can be quantified with reasonable accuracy. Where a claim for repayment of income tax has or will be made, such income is grossed up for the tax recoverable.

Grant income is accounted for when the amount can be measured reliably and there is clear entitlement and certainty of receipt. Grants received which are subject to pre-conditions for entitlement or use specified by the donor which have not been met at year end are included in creditors.

Donations:

Donations and all other receipts from fundraising are reported gross and the related fundraising costs are reported in other expenditure.

Rent and Investment income:

Rent and investment income is accounted for when receivable. Tax recoverable relating to investment income is accounted for in the same period as the related income.

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

Expenditure

Liabilities are recognised as soon as there is a legal or constructive obligation committing the Cathedral pay out resources. Expenditure is included on the accruals basis under the following headings, all costs are allocated to a specific category.

Cost of Raising Funds:

These are the costs of managing the Endowment and Restricted funds in investments and properties.

Charitable Activities:

Ministry – these are the direct costs to order the worship and promote the mission of the Cathedral. These include the costs for the clergy employed by the Chapter, the costs of supporting their work across the city and diocese of Birmingham and the costs related to services, music and other Cathedral activities.

Cathedral and precincts upkeep – these are the costs required to ensure the ongoing maintenance and upkeep of the Cathedral building and fabric.

Education and outreach – these are payments to other local organisations and charities

Community, parish and congregation – these are the costs associated with arts projects, the heritage project and the annual contribution to Birmingham Diocese.

Other expenditure – this includes the interest on the Chapter’s borrowings, provisions against slow moving stocks or trade debtors as deemed necessary in the normal course of business.

Support Costs – these consist of central management, administration and governance costs. These are costs which are incurred directly in the support of charitable activities. These are costs which are directly attributable to a specific activity.

Value added tax

The Cathedral recovers 45% of all VAT paid, subject to the current partial exemption rules, apart from that on purchases from the gift shop where 100% is recovered. VAT is charged at full rate on all vatable sales.

Pensions

The Cathedral contributes to the Church Workers Pension Fund for lay staff. Contributions to the Church of England Funded Pension Scheme for the Cathedral clergy are fully funded by the (Section 21) grant receivable from the Church Commissioners. Both these schemes are multi-employer pension schemes,

The pension costs charges as resources expended represent the Cathedral’s contributions payable in respect of the accounting period, in accordance with FRS 102. Deficit funding for the lay worker pension scheme to which the Cathedral participates is accrued at current value in creditors distinguishing between contributions falling due within one year and after more than one year. Details of the scheme is given in note 18 to the financial statements.

Deficit funding in respect of the clergy in the Church of England Funded Pension Scheme is fully met by the Church Commissioners and hence the deficit funding liability is included in the financial statements of the Church Commissioners who have responsibility for this liability.

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

2. INCOME AND ENDOWMENTS FROM:

Unrestricted Funds Restricte Endowme Total Total d nt General Designat Funds Funds 2016 2015 ed £ £ £ £ £ £ Donations & Legacies Congregational collections and 85,401 - - - 85,401 83,196 giving Donations 42,505 - 5,625 - 48,130 40,928 Income from - - - - - 15,604 appeals Tax recoverable under gift aid 18,714 - 1,788 - 20,502 19,601 Income from Friends and local - - - - - 3,100 trusts Legacies - - - - - 1,100 ______146,620 - 7,413 - 154,033 163,529 ======

Grants in support of mission Church - - 280,509 - 280,509 276,261 Commissioners All Churches 21,795 - - - 21,795 21,263 Trust World War 1 - - 9,730 - 9,730 489,198 Grant Heritage Lottery - - 9,800 - 9,800 39,200 Grant Other grants - - 86,389 - 86,389 296,762 ______21,795 - 386,428 - 430,573 1,122,684 ======

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

Charges & fees arising in the course of mission Facility and other 9,314 1,000 1,073 - 11,387 9,677 fees ======

Trading & fundraising activities Income from lettings of 42,555 - - - 42,555 23,923 Cathedral/church yard Gross income of the shop and 2,966 - 4,352 - 7,319 13,551 other activities ______45,521 - 4,352 - 49,873 37,474 ======

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

INCOME CONTINUED:

Unrestricted Funds Restricted Endowmen Total Total t General Designate Funds Funds 2016 2015 d £ £ £ £ £ £ Income from property and investmen ts Property 52,000 - - - 52,000 52,000 Investments 138,402 - 6,903 - 145,305 160,418 Interest receivable 640 - 78 - 718 619 on short term deposits ______191,042 - 6,981 - 198,023 213,037 ======

Other income Insurance - - - - - 3,117 recoveries Other items 268 - - - 268 72,277 ______268 - - - 268 75,395 ======

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

3. PROPERTY INCOME

St Philip’s Total Total House 2016 2015 £ £ £ Rents and service charges 52,000 52,000 52,000 Less: interest & charges (3,009) (3,009) (1,222) ______Net income 48,991 48,991 50,778 ======

The freehold of St Philip’s House, St Philip’s Place is subject to a lease for one hundred and twenty-five years from 25 December 1979 at a calculated rental of £52,000 per annum, subject to a review every five years.

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

4. EXPENDITURE ON:

Unrestricted Funds Restricted Endowmen Total Total t General Designate Funds Funds 2016 2015 d £ £ £ £ £ £ Raising Funds Cost of services 8,772 - - - 8,772 4,593 directly recoverabl e Gross cost of shop 78 - - - 78 1,784 and other activities General 2,545 - - - 2,545 1,991 marketing costs Cost of 4,375 - 9,263 - 13,638 15,745 fundraising Investment 3,009 - - - 3009 1.222 property costs Investment manageme 8,782 - - - 8,782 7,176 nt costs Support 31,822 6,539 9,036 - 47,397 43,842 costs ______59,383 6,539 18,299 - 84,221 76,353 ======

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

Ministry Costs Clergy stipends 3,975 - 117,001 - 120,976 128,990 and working expenses Clergy 9,365 - - - 9,365 18,843 housing costs Clergy 22,148 - 22,975 - 45,123 30,177 support costs Service 17,987 - 26,778 - 44,765 41,879 costs Music costs 106,278 345 28,331 - 134,954 168,115 Support 31,822 - 9,036 - 40,858 43,842 costs ______191,575 345 204,121 - 396,041 431,846 ======

Cathedral & precincts upkeep Major repairs & - - 133.809 - 133,809 979,690 restoration Maintenanc e & 100,593 - 28,752 - 129,345 96,330 interior upkeep Cathedral 19,472 - - - 19,472 18,927 insurance Support 3,877 - 9,036 - 12,913 16,695 costs ______123,942 - 171,597 - 295,539 1,111,642 ======

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

Education and Outreach Educational - 4,344 1,804 - 6,148 - activities Charitable ------& other giving ______- 4,344 1,804 - 6,148 ======

EXPENDITURE CONTINED:

Unrestricted Funds Restricted Endowmen Total Total t General Designate Funds Funds 2016 2015 d £ £ £ £ £ £ Communit y, parish & congregati on Tercentenary - - 1,668 - 1,668 181,283 events Arts Events - - 30,582 30,582 - Heritage - - 30,698 - 30,698 39,746 events Diocese 39,996 - - - 39,996 39,996 Dean’s (15) - - - (15) 291 awards Support costs 5,240 - 11,974 - 17,214 20,587 ______45,221 - 74,922 - 120,143 281,903 ======

Other Expenditur e Interest & similar 10,002 - - - 10,002 4,121 charges payable ______10,002 - - - 10,002 4,121 ======

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

ANALYSIS OF SUPPORT COSTS IS:

Unrestricted Funds Restricted Endowmen Total Total t General Designate Funds Funds 2016 2015 d £ £ £ £ £ £ Support Costs Raising 31,822 - 9,036 - 40,858 43,842 funds Ministry 31,822 - 9,036 - 40,858 43,842 Cathedral & precincts 3,877 - 9,036 - 12,913 16,695 upkeep Community , parish & 5,240 - 11,974 - 17,214 20,587 congregatio n ______72,761 - 39,082 - 111,843 12,944 ======

Analysis Office rent 23,250 - - - 23,250 23,250 Office 24,978 - - - 24,978 21,242 running costs Staffing 16,872 - 39,082 - 55,954 70,669 costs Governanc 7,661 - - - 7,661 9,081 e – Audit - - - - - 724 – Non - audit ______72,761 - 39,082 - 111,843 124,966 ======

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

5. INVESTMENT INCOME AND GAINS

Unrestricted Funds Restricted Endowmen Total Total t General Designate Funds Funds 2016 2015 d £ £ £ £ £ £ Dividends 138,402 - 6,903 - 145,305 160,418 receivable Interest 640 - 78 - 718 619 receivable Property 52,000 - - - 52,000 52,001 income ______191,042 - 6,981 - 198,023 213,038 ======

Realised - - - (4,064) (4,064) (3,154) gains/(losse s) Unrealised - - 5,586 369,960 375,546 (1,048) gains/(losse s) ______- - 5,586 365,896 371,482 (4,202) ______Total 191,042 - 12,567 365,896 569,505 208,835 income & gains ======

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

6. INVESTMENT PROPERTY

Unrestricted Restricted Endowment Total Funds Funds Funds Funds £ £ £ £ At valuation: 1 January 2016 - - 1,100,000 1,100,000 Additions - - - - Revaluation - - - - ______At valuation 31 December 2016 - - 1,100,000 1,100,000 ======

Disclosed within: Investment assets – St Philip’s 1,100,000 House ======

The Endowment Fund represents the freehold of St Philip’s House, St Philip’s Place which is subject to a lease of one hundred and twenty-five years from 25 December 1979. The investment property was professionally valued by Richard Connolly BSc MRICS and Michael Stephens MRICS of CBRE Ltd as at 31 December 2015.

7. INVESTMENTS

Unrestricted Restricted Endowment Total Funds Funds Funds Funds £ £ £ £ Investments at market value at 1 - 135,945 3,418,102 3,554,046 January 2016 Additions - - 573,500 573,500 Disposals at opening value - - (591,366) (591,366) Net change in market value - 5,586 369,960 375,546 ______Investment at market value at 31 - 141,531 3,770,196 3,911,727 December 2016 ======

The investment transactional costs for the year were £8,782 (2015: £7,176)

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

8. NON INVESTMENT PROPERTIES

Unrestrict Restricte Endowme Total Total ed d Funds nt Funds Funds Funds Funds 2016 2015 £ £ £ £ At deemed costs 1 January 2016 and 31 December 2016 - - 1,165,000 1,165,000 1,165,000 Additions - - - - ======

All non-investment properties are freehold and used as follows:

Deemed Deemed Cost Cost 2016 2015 £ £ For Cathedral use:

38 Goodby Road 575,000 575,000 4 Nursey Drive 295,000 295,000 12 Nursery Drive 295,000 295,000 ______1,165,000 1,165,000 ======

The properties are for the use of the clergy of the Cathedral. The occupiers are provided with this accommodation rent free in order to enable them to perform their duties. Cathedral policy is that properties which are vacant for short periods are let. The Cathedral shop is within the Cathedral.

These properties were previously included in the financial statements based on formal open market valuation as determined by Robert Aston and Co Chartered Surveyors as at 31 December 2011.

Following adoption of SORP 2015 Chapter has elected, under the transitional rules, to adopt the previous valuation of the properties as deemed cost.

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

9. EQUIPMENT Unrestricted Restricted Endowment Total Funds Funds Funds Funds £ £ £ £ COST At 1 January 2016 1,006 8,995 - 8,995 Additions 1,587 - - 1,587 ______As 31 December 2016 2,593 8,595 - 11,588 ======

ACCUMULATED DEPRECIATION At 1 January 2016 280 904 - 1,184 Depreciation charge for the year 334 320 - 654 ______At 31 December 2016 614 1,224 - 1,838 ======

NET BOOK VALUE At 31 December 2016 1,979 7,771 - 9,750 ======

As 31 December 2015 726 8,091 - 8,817 ======

10. STAFF COSTS

The average monthly number of employees during the year was as follows:

2016 2015

Clergy 3 3 Vergers 4 4 Music & services 5 6 Administration 5 4 ______17 17 ======

Average number of full time equivalent staff:

2016 2015

Clergy 3 3 Vergers 3.5 2.5 Music & services 2 2 Administration 4 3.5 ______12.5 11 ======

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

Staff costs during the year were as follows:

2016 2015 £ £ Salaries & Stipends 339,016 344,770 Employer’s National Insurance 26,603 24,967 Employer’s Pension Contributions 48,287 74,974 Compensation for loss of office - 25,000 ______Total Costs 413,906 469,711 ======

No-one received emoluments above £60,000 during the year.

Remuneration of key management personnel

Key management personnel are deemed to be those having authority and responsibility delegated to them by Chapter for planning, directing and controlling the activities of the Cathedral. During 2016 they were:

The Dean The Very Reverend Catherine Ogle Canon Liturgist The Revd Canon Janet Chapman – until Canon Missioner The Revd Canon Nigel Hand Director of Resources Anna Pitt

Remuneration, pensions and expenses for these four people amounted to £169,344 (2015: £164,809)

The clergy are also members of Chapter, details of their remuneration is given below:

Salaries & Employer’s Employer’s Stipends National Pension Insurance Contributions £ £ £ Remuneration of members of the Chapter The Very Revd Catherine Ogle 34,850 3,462 11,539 The Revd Canon Nigel Hand 26,872 2,334 9,231 The Revd Canon Janet Chapman 17,879 1,603 9231 ======

The Revd Canon Nigel Hand, the Revd Canon Janet Chapman and the Very Revd Catherine Ogle were also provided with the use of a Cathedral house free of rent and rates in furtherance of their duties.

The remuneration of and pension provided for clerical members of Chapter is paid in accordance with scales lais down annually by the Church Commissioners, the Archbishops’ Council and the Church of England Pensions Board. No remuneration was paid to lay members of Chapter in their capacity as Chapter members

Reimbursement of expenses incurred totalling £488 (2015: £371) were paid in total to two members of Chapter during the year. Reimbursement expenses comprised refreshments, bar stock etc.

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

11. CURRENT ASSETS – DEBTORS 2016 2015 £ £ Trade debtors 1,409 4,021 Other debtors 33,665 135,158 Prepayments 7,250 6,574 Other taxation _ 9,289 ______42,324 155,042 ======

12. LIABILITES DUE WTHIN ONE YEAR – CREDITORS 2016 2015 £ £ Birmingham Diocesan Board of Finance Loan 20,000 20,000 Trade creditors 20,318 21,473 Other creditors (including Social Security and other taxes) 20,511 16,654 Pension deficit liability - 11,000 Accruals 91,441 40,278 ______152,270 109,405 ======

13. LIABILITIES DUE AFTER ONE YEAR – CREDITIORS

2016 2015 £ £ Birmingham Diocesan Board of Finance Loan 180,000 200,000 ______Total borrowings 180,000 200,000 Less: due within one year (20,000) (20,000) ______160,000 180,000 ======

An unsecured loan of £200,000 was advanced by Birmingham Diocesan Board of Finance during 2015 to facilitate delivery of the interior restoration project. In order for the Cathedral to access grant funding of £489,189 under the government’s World War 1 Cathedral grants, this work had to be completed during 2015.

The loan from Birmingham Diocesan Board of Finance is repayable on a quarterly basis over a term of 10 years with interest payable at the average rate declared by The CBF Church of England Deposit Fund plus 3.45%. This equated to an interest rate of % during 2016 (2015: 4.1%)

Included in the above are the following: 2016 2015 £ £ Amounts repayable by instalments: Between 1 – 2 years 20,000 20,000 Between 2 – 5 years 60,000 60,000 After 5 years 80,000 100,000 ______160,000 180,000 ======BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

14. ANALYSIS OF FUNDS

Unrealised Actual Balance Gain/(Loss Transfe Profit/(Los Balance c/f b/f At ) r s) At 1 Jan Income Expenditur 0n betwee On 31 Dec 2016 e Revaluatio n Funds Disposal 2016 n £ £ £ £ £ £ Restricted Funds Mission & Development Fund 9,421 44 (581) - - - 8,884 Belliss Fund 1,049 12 - - - - 1,061 Choir Tours Fund 2,666 1,960 - - - - 4,626 Music Fund 2,611 20,662 - - (20,611) - 2,662 St Philip’s Singers 1,096 - (55) - - - 1,041 Fund FCM Song School 16,494 687 - 653 (687) - 17,147 Ouseley Trust Fund 5,000 - - - (2,500) - 2,500 Flower Fund 2,825 3,386 (2,762) - - - 3,449 Harridine Bequest 17,212 - - - - - 17,212 St Philip’s Education (Christchurch) Fund 81,899 1,999 (1,804) 6,268 - - 88,362 Bishop of Birmingham’s Centenary Appeal Fund 9,508 - - - (9,508) - - Tercentenary Arts Fund - - (1,480) - 1,480 - - Tercentenary Something to Share Fund 347 28 (261) - (114) - - Tercentenary Festival of Voices Fund 2,140 966 (1,335) - (1,770) - - Internal Works Fund - 2,136 - - (2,136) - - Tercentenary Pilgrimages Fund 1,500 - (72) - - - 1,428 Tercentenary Heritage Fund 34,612 11,001 (30,698) - - - 14,915 The Provost’s Book 3,891 18 - - - - 3,909 Fund FCM Music Trust 22,531 - - - - - 22,531 Fund Howlett Bequest 15,866 - - - (11,866) - 4,000 Altar Linen Fund - 300 - - - - 300 Boiler Fund - 100 - - (100) - - Chorister Hardship Fund - - (320) - 8,000 - 7,680 Arts – Measure of Us - 30,889 (27,102) - - - 3,787 Arts – Something Good - 2,500 (2,000) - - - 500 Administrative Support Role Fund - - - - 7,364 - 7,364 Clergy Moving Costs - - - - 5,000 - 5,000 Church Commissioners Stipends - 139,351 (139,531) - - - - Church Commissioners Section 23 - 163,508 (151,144) - (12,364) - -

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

Fundraising campaign: Campaign Other 48,222 12,246 (133,809) - 73,339 - - Mission Fund 11,952 - - - - - 11,952 Music Fund 5,334 1,803 (319) - - - 6,818 Music Endowment 39,380 35,000 - (1,335) - - 73,045 ______335,556 428,597 (493,093) 5,586 33,527 - 310,173 ======

ANALYSIS OF FUNDS CONTINUED

Unrealised Actual Balance Gain/(Loss Transfe Profit/(Los Balance c/f b/f At ) r s) At 1 Jan Income Expenditur 0n betwee On 31 Dec 2016 e Revaluatio n Funds Disposal 2016 n £ £ £ £ £ £ Designated Funds Development fund 46,702 - - - (46,702) - - Education Fund 4,344 (4,344) - - - - Tercentenary, Merchandise, 14,598 (6,539) - - - 8,059 Marketing fund

Fabric Fund 9,072 - - - (9,072) - - St Philip’s Singers 1,000 - - - - - 1,000 fund Vacancy Repair Contingency - - - - 1,000 - 1,000 Maintenance Fund - - - - 10,000 - 10,000 Special Music Fund - 1,000 (345) - - - 655

______75,716 1,000 (11,228) - (44,774) - 20,714 ======

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

Unrestricted Funds General unrestricted fund (259,276) 414,560 430,123 - 20,029 - (254,810)

______(259,276) 414,560 430,123 - 20,029 - (254,810) ======

Endowment Funds General Endowment Fund 6,235,497 - - 369,960 (8,782) (4,065) 6,592,610 ______6,235,497 - - 369,960 (8,782) (4,065) 6,592,610 ======

Due to difficult past economic conditions the Cathedral continues to find itself with an historical net deficit on its unrestricted funds. This position is being actively remedied by Chapter by robust monitoring of unrestricted expenditure and generation of unrestricted income.

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

ANALYSIS OF FUNDS CONTINUED:

Details of inter-fund transfers in the year are as follows:

Unrestricted Funds Restricted Endowment Total General Designated Funds Funds 2016 £ £ £ £ £ Development Fund to 1 (46,702) 46,702 - Campaign Other Fund Fabric Fund to 2 (9,072) 9,072 - Campaign Other Fund General Fund to 3 (1,000) 1,000 - Vacancy Repair Contingency Fund General Fund to 4 (10,000) 10,000 - Maintenance Fund Music Fund to General 5 10,000 (10,000) - Fund Music Fund to General 6 2,611 (2,611) - Fund Music Fund to 7 (8,000) - Chorister Hardship Fund 8,000 FCM Song Scholl Fund 8 687 (687) - to General Fund Ousley Trust Fund to 9 2,500 (2,500) - General Fund Bishop of Birmingham Centenary Appeal Fund 10 (9,508) - to Campaign Other Fund 9,508 General Fund to Tercentenary Arts 11 (1,480) 1,480 - Strand Something to Share 12 114 (114) - Fund to General Fund Tercentenary Festival of Voices Fund to 13 1,770 (1,770) - General Fund Internal Works to 14 (2,136) Campaign Other Fund 2,136 Howlett Bequest Fund 15 11,866 (11,866) - to General Fund Boiler Fund to General 16 100 (100) - Fund Church Commissioners (7,364) - Section 23 Fund to 17 7,364 Administration Support Fund Church Commissioners (5,000) Section 23 Fund to 18 5,000 - Clergy Moving Costs Fund

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

Endowment Fund to 19 8,782 (8,782) - General Fund General Fund to 20 (5,921) 5,921 Campaign other Fund

______20,029 (44,774) 33,527 (8,782) ======

ANALYSIS OF FUNDS CONTINUED:

1. This represents the release of designated funds in respect of the internal restoration works which expenditure has been charged to the Campaign-Other fund. 2. This represents the release of designated funds in respect of the internal restoration works which expenditure has been charged to the Campaign-Other fund. 3. This represents the release of general funds to a vacancy contingency fund to cover future costs to the repair/redecoration of clergy housing upon vacation. 4. This represents the release of general funds to create a maintenance fund for future maintenance costs. 5. This represents a donation received from the Friends of Cathedral Music towards the music costs of the Cathedral. 6. This represents donations received towards the music costs of the Cathedral. 7. This represents a donation from the Friends of Cathedral Music towards music costs. 8. This represents income from the investments towards the costs of Choral Scholars 9. This represents part of the grant previously received from the Ouseley Trust towards the cost of Choral Scholars. 10. This represents the release of restricted funds in respect of the internal restoration works which expenditure has been charged to the Campaign-Other fund and in particular the costs associated with improving the Cathedral entrance. 11. This represents the release of general funds towards the balance of costs associated with the Tercentenary Arts Fund. 12. This represents donations towards the Tercentenary Something to Share Fund whose donations were split between the Malawi Partnership, St Basil’s, Growing younger initiative run by Birmingham Diocese and the Cathedral 13. This represents administration costs for the Festival of Voices events. 14. This represents donations received in respect of the internal restoration works which expenditure has been charged to the Campaign-Other fund. 15. This represents the release of restricted funds towards the music costs of the Cathedral. 16. This represents a donation received towards the costs of replacing the boiler, the expenditure of which has been charged to general funds. 17. This represents part of the additional grant received from Church Commissioners 18. This represents part of the additional grant received from Church Commissioners 19. This represents the costs relating to the purchase and selling of investments during 2016 20. This represents the release of general funds in respect of the internal restoration works which expenditure has been charged to the Campaign-Other fund.

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

ANALYSIS OF FUNDS CONTINUED:

Designated Fund Purpose Development Fund This fund is to support future developments and improvements in the Cathedral and Churchyard Education Fund The education department’s income and expenditure raised by school visits and other works. Tercentenary This fund was created for the purchase of merchandise and Merchandise/Marketing/Literature marketing material for the Cathedral’s tercentenary and the Fund continued support of the Marketing Manager’s post Fabric Fund This fund is for the upkeep of the Cathedral’s fabric St Philips Singers Fund This fund was created from a legacy received from a member of the St Philip’s Singers Vacancy Repair Fund This fund is to be used for the re-decoration and any works required to clergy houses upon vacation. Maintenance Fund This fund is to be used for rolling maintenance costs Special Music Fund This fund is used by the Director of Music for special events requiring additional musicians Admin Support Role Fund This fund is to be used to pay for the Administration Support Role Clergy Moving Costs Fund This fund is to be used for moving costs incurred on the appointment of the new Canon Liturgist and Dean

Restricted Fund Mission & Development Fund This fund consists of donations made by the friends and family of Simon Richmond. It is intended to be used for evangelism and /or development of the Cathedral in memory of Simon Richmond. Belliss Fund This fund was provided on the understanding that the Cathedral would keep the Belliss monument in good order Choir Tours Fund The Choir raises money from sales of compact discs, tapes, raffles, donations and other sources to fund their tours. Music Fund This fund consists of funds raised or donated in support of the Cathedral’s choirs and music. St Philips’s Singers Fund This fund comprises money raised by the St Philip’s Singers that will be used for their needs. FCM Song School These funds represent grants from Friends of the Cathedral Music which are devoted to these purposes. Ouseley Trust Fund Grant received towards choral scholarships. Flower Fund Funds received specifically towards the provision of flowers in the Cathedral. Harridine Bequest Fund A bequest received towards the cost of building a new Cathedral St Philip’s Education This fund is to support the Cathedral’s education work (Christchurch) Trust Bishop of Birmingham’s This fund contains donations raised during the Centenary Appeal Centenary Appeal Fund towards improving access and welcome for visitors. Tercentenary Arts Strand Grants received in connection with arts events to do with celebrating the Cathedral’s tercentenary Something to Share Fund During its Tercentenary year the Cathedral is asking people to donate to its Something to Share Fund which at the end of 2015 will be divided equally between the Malawi Partnership, St Basil’s, rowing Younger initiative run by Birmingham Diocese and the Cathedral Tercentenary Festival of Voices Grants and sponsorship received in connection with the three concerts celebrating the life of the Cathedral over 300 years BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

Internal Works Donations and grants received towards the internal refurbishment of the Cathedral Tercentenary Pilgrimages Grants received to help towards the cost of arranging pilgrimages from all Birmingham Deanery’s to their Mother Church, Tercentenary Heritage Fund Grants received in connection with heritage projects for the Cathedral The Provost’s Book Fund The Provost’s book fund represents funds provided to aid the former Provost with his research FCM Music Trust Fund This fund represents a grant from the Friends of Cathedral Music to support the proposed Birmingham Cathedral Music Trust.

ANALYSIS OF FUNDS CONTINUED:

Restricted Funds Purpose Continued Howlett Bequest Fund This fund is to provide maintenance and cleaning for the Howlett family grave in Birmingham; to establish the “Seraphim” award used to promote music in the Cathedral; and to encourage links with Eastern Europe, Germany and Russia. Having discharged all our responsibilities with regard to the will the Cathedral’s only remaining duty is to keep the family grave at Yardley Cemetery in good order. Therefore £4,000 is to be kept in this fund for this purpose with the remaining funds being used towards the Cathedral music. Altar Linen Fund This comprises of a donation toward new altar linen. Chorister Hardship Fund This comprises grant received from the Friends of Cathedral Music Arts – Measure of Grants received towards the cost of further arts projects Us/Something Good Funds

Fundraising Campaign Campaign Other Campaign donations received to support the fabric objectives of the campaign Mission fund Campaign donations made to support the mission objectives of the campaign Music Fund Campaign donations made to support music in the Cathedral Music Endowment Fund Capital fund for income to be used towards the music of the Cathedral

Endowment Fund General endowment fund These are historic permanent endowment funds. The Chapter can utilise the income generated from these funds towards its general charitable activites.

15. CONTINGENT LIABILITES There are no known contingent liabilities at the balance sheet date

16. CAPITAL COMMITMENTS There are no capital commitments which are contracted for but not provided in the financial statements as at 31 December 2016 (2015: £nil)

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

17. OPERATING LEASE COMMITMENTS At 31 December 2016 the Chapter had annual commitments under un-cancellable operating leases as follows:

2016 2015 £ £ Expire date Within 1 year 416 - Between 2 to 5 years 5276 6,935

18. PENSION COSTS

During the year Birmingham Cathedral participated in the Church Workers Pension Fund (“CWPF”) for lay staff. The Scheme is administered by the Church of England Pensions Board which holds the assets of the schemes separately from those of the Employer and the other participating employers.

The Church Workers Pension Fund has a section known as the Defined Benefits Scheme, a deferred annuity section known as Pension Builder Classic and a cash balance section known as Pension Builder 2014. Birmingham Cathedral during 2016 participated in both the Defined Benefits Section and the Pension Builder 2014 section.

It was agreed from 1 July 2015 to make all future lay worker pension arrangements through the Pension Builder 2014 section of the Church Workers Pension Fund. Membership of the Defined Benefits Section became “frozen” or deferred t that date and all eligible lay workers are now active members of the Pension Builder 2014 section. Information with regards to both sections of the scheme is given below.

Defined Benefits Scheme

The Defined Benefits Scheme (“DBS”) section of the Church Workers Pension Fund provides benefits for lay staff based on final pensionable salaries.

For funding purposes, the DBS is divided into sub-pools in respect of each participating employer as well as a Further sub-pool, known as the Life Risk Pool. The Life Risk Pool exists to share certain risks between employers, including those relating to mortality and post-retirement investment returns.

The division of the DBS into sub-pools is notional and is for the purpose of calculating ongoing contributions. They do not alter the fact that the assets of the DBS are held as a single trust fund out of which all the benefits are to be provided. From time to time, a notional premium is transferred from employers’ sub- pools to the Life Risk Pool and all pensions and death benefits are paid from the Life Risk Pool.

It is not possible to attribute the scheme’s assets and liabilities to specific employers, since each employer, through the Life Risk Pool, is exposed to actuarial risks associated with the current and former employees of other entities participating in the DBS. The scheme is considered to be a multi-employer scheme as described in Section 28 of FRS 102 and as such contributions are accounted for as if the Scheme were a defined contribution scheme. The pensions costs charged to the SoFA in the year contributions are payable towards benefits and expenses accrued in that year (2016: £11,000, 2015: £15,000), plus any impact of deficit contributions (see below), giving a total charge of £11,000for 2016 (2015: £21,000).

If, following an actuarial valuation of the Life Risk Pool, there is a surplus or deficit in the pool and the Actuary so recommends, further transfers may be made from the Life Risk Pool to the employers’ sub- pools, or vice versa. The amounts to be transferred (and their allocation between the sub-pools) will be settled by the Church of England Pensions Board on the advice of the Actuary.

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

A valuation of the DBS is carried out once every three years, the most recent having been carried out as at 31 December 2013. In this valuation, the Life Risk Section was shown to be in deficit by £4.9m and £4.3m was notionally transferred from the employers’ sub-pools to the Life Risk Pool. This increased the Employer contributions that would otherwise have been payable. The overall deficit in the DBS was £12.9m.

Following the valuation, the Employer has entered into an agreement with the Church Workers Pension Fund to pay a contribution rate of 24% of pensionable salary and expenses of £2,400 per year. In addition deficit payments of £14,685 per year have been agreed for 1.50 years from 1 April 2015 in respect of the shortfall in the Employer sub-pool. This obligation has been recognised as a liability within the Employer’s financial statements.

Section 28.11A of FRS 102 requires agreed deficit recovery payments to be recognised as a liability. The movement in the provision is set out below:

2016 2015 £ £ Balance sheet liability at 1 January 11,000 32,000 Deficit contribution paid (11,000) (15,000) Interest cost (recognised in SoFA - - Remaining change to the balance sheet liability* (recognised in SoFA - (6,000)

Balance sheet liability at 31 December - 11,000

* Comprises change in agreed deficit recovery plan and change in discount rate between year-ends

This liability represents the present value of the deficit contributions agreed as at the accounting date and has been valued using the following assumptions, set by reference to the duration of the deficit recovery payments:

December 2016 December 2015 December 2014

Discount Rate 0.00% 0.00% 1.10%

The legal structure of the scheme is such that if another employer fails, the employer could become responsible for paying a share of that employer’s pension liabilities.

The next valuation of the scheme is being carried out as at December 2016.

Pension Builder Scheme

The Pension Builder Scheme of the Church Workers Pension Fund is made up of two sections, Pension Builder Classic and Pension Builder 2014, both of which are classed as defined benefit schemes.

Pension Builder Classic provides a pension for members for payment from retirement, accumulated from contributions paid and converted into a deferred annuity during employment based on terms set and reviewed by the Church of England Pensions Board from time to time. Bonuses may also be declared, depending upon the investment returns and other factors.

Pension Builder 2014 is a cash balance scheme that provides a lump sum that members use to provide benefits at retirement. Pension contributions are recorded in an account for each member. This account may have bonuses added by the Board before retirement. The bonuses depend on investment experience and other factors. There is no requirement for the Board to grant any bonuses. The account, plus any bonuses declared, is payable from members’ Normal Pension Age.

There is no sub-division of assets between employers in each section of the Pension Builder Scheme.

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

The scheme is considered to be a multi-employer scheme as described in Section 28 of FRS 102. This is because it is not possible to attribute the Pension Builder Scheme’s assets and liabilities to specific employers and that contributions are accounted for as if the Scheme were a defined contribution scheme. The pensions costs charged to the SoFA in the year are contributions payable (2016: £18,304, 2015: £43,528).

A valuation of the scheme is carried out once every three years. The most recent scheme valuation completed was carried out as at 31 December 2013. This revealed, on the ongoing assumptions used, a surplus of £0.5m. There is no requirement for deficit payments at the current time.

Pension Builder 2014 will be valued in relation to the lump sum payable to members at normal pension age. There are no annual pension benefits. Pension Builder 2014 commenced in February 2014 so the first full valuation of that section will be carried out at the next CWPF valuation date, 31 December 2016.

19. RELATED PARTY TRANSACTION

The Cathedral shares office space with the Birmingham Diocesan Board of Finance and paid an amount of £23,250 (2015: £23,250) in respect of this.

Common fund paid to Birmingham Diocesan Board of Finance for the year ending 31 December 2016 was £40,000 (2015: £40,000)

An unsecured loan of £200,000 was advanced by Birmingham Diocesan Board of Finance during 2015 to facilitate the delivery of the interior restoration project. In order for the Cathedral to access grant funding of £489,198 under the government’s World War 1 Commemoration Fund for Cathedrals, this work had to be completed during 2015. The loan form the Birmingham Board of Finance is repayable on a quarterly basis over a term of 10 years with interest payable at the average rate declared by The CBF Church of England Deposit Fund plus 3.45%, This equated to an interest of 3.91% during 2016 (2015: 4.1%), the amount of interest due for 2016 is £7,340

20. CONNECTED ENTITY

The Friends of Birmingham Cathedral is a registered charity that exists wholly for the benefit of the Cathedral, but is not under its control. Only income received from the entity is included in the financial statements. Relevant information about its income and assets is:

2016 2015 £ £ Gross income 182 1,520 Expenditure - 52 Amount paid to the Cathedral - 8,242 Funds b/fwd 13,875 20,649 Funds C/fwd 14,057 13,875

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016

21. PRIOR YEAR COMPARATIVE STATEMENT OF FINANCIAL ACTIVITIES

Unrestricted Funds Restricted Endowment Total Notes General Designated Funds Funds 2015 £ £ £ £ £ Income & Endowments From: Donations & Legacies 134,699 1,703 27,127 - 163,529 Grants in support of mission 21,263 - 1,101,421 - 1,122,684 Charges and fees arising in the course of mission 9,677 - - - 9,677 Trading & fundraising 29,492 9 7,973 - 37,474 Income from property & investments 201,988 - 11,049 - 213,037 Other income 3,170 - 23,602 48,623 75,395 ______Total Income 2 400,289 1,712 1,171,172 48,623 1,621,796 ______

Expenditure On: Raising Funds 55,344 - 21,009 - 76,353 Ministry 195,590 - 236,256 - 431,846 Cathedral & precincts upkeep 87,188 - 1,024,454 - 1,111,642 Education & outreach - - - - - Community, parish & congregation 47,008 22,612 212,283 - 281,903 Other Expenditure 3,972 - 149 - 4,121 ______Total Expenditure 4 389,102 22,612 1,494,151 - 1,905.865

Net incoming/(outgoing) resources before investment 11,187 (20,900) (322,979) 48,623 (284,069) gains

Net gains/(losses) on investments 5,6,7 - - 302 (4,504) (4,202) ______Net Income/(Expenditure) 11,187 (20,900) (322,677) 44,119 (288,271)

Gross transfers between funds 14 10,805 (34,810) 31,181 (7,176) -

Actuarial gains/(losses) on defined benefit pensions schemes 6,000 - - - 6,000 Other gains/(losses) - ______6,000 - - - 6,000

Net movement in funds: 27,992 (55,710) (291,496) 36,943 (282,271)

Funds brought forward (287,268) 131,426 627,052 6,198,553 6,669,763 ______Funds carried forward (259,276) 75,716 335,556 6,235,496 6,387,492 ======

BIRMINGHAM CATHEDRAL CHAPTER STATEMENT OF CASH FLOWS For the year ended 31 December 2016