DURHAM CATHEDRAL ANNUAL REVIEW AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2020 Durham Cathedral, Accounts for the year ended 31 March 2020

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 Michael Hampel The Revd. Canon Charloe Allen The Revd. Canon Michael Everi Canon Pastor, installed 22 September 2019 Canon Catherine Barnes The Revd. Canon Sophie Jelley Le 25 March 2020 to be consecrated as Bishop of Doncaster The Revd. Canon Professor Simon Oliver Canon Ivor Stolliday Canon Treasurer, rered 9 April 2019 Canon Andrew Thurston Canon Treasurer, installed 10 March 2019 Canon Simon Wood

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

Senior Office Holders Ms. Amanda Anderson Chapter Clerk & Chief Operang Officer

Senior Office Holders (connued)

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) 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 Mr. Roger Kelly (deceased 12 April 2019) Co-opted Members Mr. Simon Sll Co-opted Members

Ms. Amanda Anderson Secretary

The College of Canons The members during the year were:

The Very Revd. Andrew Tremle The Dean The Revd. Canon Charloe Allen Canon Catherine Barnes The Revd. Canon Michael Everi Canon Pastor, installed 22 September 2019 The Revd. Canon Michael Hampel The Revd. Canon Sophie Jelley Le 25 March 2020 to be consecrated as Bishop of Doncaster The Revd. Canon Professor Simon Oliver Canon Ivor Stolliday Resigned 9 April 2019 Canon Andrew Thurston Canon Simon Wood The Revd. Canon Stuart Bain The Revd. Canon Sheila Bamber

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The Revd. Canon Dr Alan Bartle The Revd. Canon Janet Burbury The Revd. Canon Graeme Buery Canon Paul Chandler The Right Revd. Sarah Clark Bishop of Jarrow The Venerable Robert Cooper Archdeacon of Sunderland 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 College of Canons (connued)

The Revd. Canon Judith Hirst The Revd. Canon Marilyn Jamieson The Revd. Canon Colin Jay Canon Susan Marshall Canon Dr Margaret Masson The Revd. Canon Heather Murray Canon Andrew Rogers The Revd. Canon John Ruscoe The Revd. Canon Valerie Shedden The Revd. Canon Dr Norman Shave 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 Elizabeth Wilkinson Installed 23 June 2019 The Revd. Canon Keith Woodhouse The Revd. Canon Caroline Worsfold

Ms. Amanda Anderson Secretary

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 Canon Andrew Thurston Chairman, Appointed 3 September 2019

The Very Revd. Andrew Tremle The Dean The Revd. Canon Charloe Allen Ms. Amanda Anderson Chapter Clerk & Chief Operang Officer The Revd. Canon Michael Everi Appointed 31 October 2019 The Revd. Canon Michael Hampel Mr. Ian Hunter Head of HR and OD Mrs. Jayne Manns Director of Finance Mr. Ian Wicks

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Miss Faye Dufferwiel Secretary

Fabric Advisory Commiee The members during the year were:

Mr. Humphrey Welfare Chairman Mr. Andrew Boyce Dr. Mary Brooks Ms. Sarah Brown 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 Mr. Garry Haynes Secretary, appointed 24 July 2019 Audit and Risk Commiee The members during the year were:

Canon Paul Chandler Chairman Canon Catherine Barnes Dr Maria Cockerill Resigned June 2020 The Revd. Canon Michael Everi Appointed 31 October 2020 Mr. Simon Sll Canon Andrew Thurston

Miss Faye Dufferwiel Secretary

Investment Commiee The members during the year were:

Mr. Simon Sll Chairman The Very Revd. Andrew Tremle The Dean Amanda Anderson The Hon James Ramsbotham Canon Ivor Stolliday Resigned 9 April 2019 Mr. Harry Swan Canon Andrew Thurston Mr. Luke Busbridge Mr. John Newlands

Mrs. Jayne Manns Secretary

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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 – 18

- Financial review 19 – 23

- Statement of the Chapter’s responsibilies 23 - 24

Report of the Auditors 25 – 27

Consolidated statement of financial acvies 28 - 29

Consolidated balance sheet 30 - 31

Charity balance sheet 32 - 33

Consolidated statement of cashflows 34

Notes to the accounts 35 - 68

Definions

DCT Durham Cathedral Trading Limited

DCOT Durham Cathedral Open Treasure Limited

FY19 Financial year ended 31 March 2019 FY20 Financial year ended 31 March 2020

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 2020.

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.

Governance The membership of the main commiees in the governance structure are listed on pages 3 to 6 of this document. An internal governance review has been started to examine the sufficiency, efficiency and effecveness of Durham Cathedral’s governance structure. It will incorporate the proposed changes in the new Cathedrals Measure.

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.

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The Chapter Clerk’s Office The past twelve months have been an exceponally busy and evenul me in the Chapter Clerk’s Office. In July 2019, we bid a fond farewell to Katharine Smith, Chapter Steward & Governance Manager as she moved on to pastures new aer eight years in post. We also welcomed Garry Haynes, Governance and Compliance Manager & Deputy Chapter Clerk into the team, who has seled in very well. Garry is working on a Governance Review, leading compliance maers in relaon to GDPR and risk management, and performing secretariat responsibilies to our statutory Fabric Advisory Commiee and the Chapter.

For the first me, the Cathedral has appointed a dedicated Cathedral Safeguarding Officer, Andy Bond (a recently-rered police officer) to give focus and energy to this important aspect of Cathedral operaons. In 2021, Durham will be taking part in a naonal audit process run by the Social Care Instute for Excellence.

Highlights also include the organising of appeals in aid of County Durham Foodbank; an Easter Egg appeal, with over 30 chocolate eggs donated by generous staff and volunteers, and, as a team, a ‘reverse advent calendar’ in Advent 2019. The end of the reporng period saw the Chapter Clerk’s Office lead the safe and effecve closedown of the Cathedral site and the furloughing of the majority of Cathedral and Chorister School staff.

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 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 neighbour.

Highlights of our work this year have been the introducon of celebraons of the Eucharist for the Chorister School and the inauguraon of a weekly school assemble in church; a once termly Roman Catholic mass for the University Catholic Chaplaincy; the interment of the ashes of Bishop David and Molly Jenkins and the celebraon of their lives which accompanied it on St Benedict’s Day; the Miners Fesval Service and a special celebraon for the 150th anniversary of the Durham Miners Associaon; two jusce services – one in its convenonal posion in July 2019 and the other brought forward to the beginning of the shrieval year in March 2020 to include the swearing in of the new High Sheriff and hospitality in church aerwards; a special service to mark the 200th anniversary of HM Prison Durham which iniated a new ongoing relaonship with Durham Prison; a slightly reimagined Commemoraon of Founders and Benefactors pending further change this year to encapsulate a greater sense of celebrang ‘all things Durham’; an enhanced colleges Evensong with massed college choirs and good aendance by heads of houses; and the other big annuals including a rich and well-aended Advent and Christmas programme. Generally, we have connued to improve the pace of the regular worship, sought good quality speakers of note for the sermon or address at special services, and simplified the process of invitaons and ckeng for special services.

Music The Music Department has connued to flourish this year, and the level of performance is now much more consistent. We have connued to develop strategies to aid recruitment, and the Choir numbers just under 35 boys and girls. Of course, their training and performance have been severely curtailed because of the corona virus crisis but we have maintained good contact with them throughout the lock down and we have rolled out a much more regular programme of online singing rehearsals from 1 June. We hope very much to be able to resume singing for the liturgy as soon as possible and have robust proposals as to how this can be managed in a safe but effecve way. Chorister Experience events are now aracng around 30 children each me, and averaging around 90 children per academic year.

In September 2019 we welcomed two new Choral Scholars and the return of one Choral Scholar who had been on his academic year abroad, all of whom have made a posive impact on our acvies, both within the Cathedral and externally. James Draper progressed from Choral Scholar to Lay Clerk and we were delighted to welcome Joseph Beech as the new Sub- Organist, having come here from a similar role at St Mary’s Cathedral, Edinburgh. He is already making an excellent

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contribuon to the musical life of the place and we are pleased that the Sub-Organist is now required to live in the College again.

In November, we celebrated the tenth anniversary of the introducon of girl choristers to the Choir with a weekend of acvity which included a performances of Handel’s Messiah and a special service of Evensong as well as a major contribuon to Founders and Benefactors. The weekend also saw the pre-launch of the new fund-raising iniave Raising a Voice for chorister-ships and bursaries which has already raised approximately £330,000. Other concerts in the year included the St John Passion by J.S. Bach and the Monteverdi Vespers both in collaboraon with the Avison Ensemble. These events have served to embellish our liturgical life, as well as developing the breadth and range of the choirs’ abilies, especially as soloists. Much aenon has been given to the organ recently, and we look forward to progress on the report from Harrison and Harrison which arrived just over a year ago.

An album of Advent music has been recorded by the Choir which will be released in due course. It will be the first choir album under the direcon of the current Organist. The Organist has also released an album of organ music by William Harris connuing his long associaon with Priory Records.

Volunteering Durham Cathedral is bolstered by an extensive team of volunteers, providing vital support to members of staff and Chapter in sustaining the mission, values and acvies of the Cathedral. In excess of 750 volunteers undertake more than 100 different roles which cover every facet of the Cathedral’s community. Senior volunteers coordinate teams of volunteers with both specialist and non-specialist responsibilies. Roles include welcome stewards, guides, educaon volunteers, flower arrangers, broderers, listeners, bell ringers, interns (including supported internships), administrave and recepon volunteers, servers, and those supporng conservaon, the foodbank, library, Open Treasure, woodlands and riverbanks etc. The members of most of the Cathedral’s governance commiees are volunteers and give valuable me and experience to assist Cathedral management.

The Cathedral’s voluntary community contributes substanally through in-kind support in terms of me, talents and skills as well as the generaon of cash income, parcularly through guides and tower stewards. They frequent the café and restaurant, are oen patrons and donors and give talks outside the organisaon, being some of our greatest ambassadors and advocates covering a wide geographical region.

In return, as a voluntary organisaon, the Cathedral plays a major part in offering benefits to individuals in terms of social interacon and sense of community, mental health and wellbeing and skills development.

Without enrely accurate records, the annual contribuon in me is esmated as in excess of 150,000 volunteer hours per annum (somewhere in the region of an addional 83 FTE people per week). In addion to adding value and supplemenng exisng work, direct income is around £90,000 per annum from tours, talks, tower trips etc. (this doesn’t, of course, include the substanal support generated by The Friends or auxiliary income from volunteers as patrons, donors and supporng the shop and café etc.).

This year has been a year of significant change for the department. In line with a new management structure within the Cathedral, line management responsibility for the role of Volunteers Manager was transferred from the Chapter Clerk & COO to the Head of HR&OD on 7th October 2019. The department connues to retain its individual identy which gives a clear message to both volunteers and external bodies that the Cathedral values its responsibilies and commitment to being one of the largest voluntary organisaons in County Durham, acknowledging the idiosyncrasies of volunteer management as different from HR. Whilst closer strategic working between the departments is an opportunity to develop work on valuing the Cathedral’s responsibilies to its ‘people’ as a whole: sharing knowledge, skills and resources to support the importance of both staff and volunteers working as a team within a wider Cathedral community.

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The Listening Service had, since 1999, been a project under the umbrella of Durham Chrisan Partnership. In 2019 the Listeners requested that they become part of the Cathedral volunteer community in full and aer a democrac vote in favour by all members, full management and responsibility of the Service was transferred to the Cathedral in January 2020. The Service was originally created to meet an idenfied need within the community and that need is sll as strong today. It was clear however that the service needed to evolve and adapt to meet the changing needs of this society. As a result the new Coordinators alongside the Volunteers Manager have embarked on a strategic review of the service as a whole, including: training; emoonal support for members; safeguarding; recruitment; funding; and publicity.

Building on the focus last year around health and wellbeing, the department has connued to offer training sessions including securing the first Mental Health First Aid training which was delivered to both staff and volunteers. It is hoped that this will also be connued as the situaon allows so that we can promote Mental Health First Aid alongside physical First Aid.

A posive repercussion of the mental health training over the past two years has been the growing success of supported internships. The Welcome Steward and Open Treasure teams have embraced a small number of more vulnerable volunteers who aend with a mentor. Although this has been a learning curve for all involved, it has made a difference in the skills and confidence of both our staff and fellow volunteers, helping also to address potenal misunderstandings and prejudices. It has not always been an easy journey, but this is testament to the willingness of our staff and volunteers to embrace something different. It has also contributed greatly to the internees’ skills, confidence and social integraon. Extremely posive feedback has been received from the internees and a supporve and mutually beneficial relaonship with the college is developing. The demand for this sort of volunteering connues to grow and the department is working towards being able to offer addional places. This in turn helps towards our commitment to the wider community and the need to diversify our volunteer demographic.

The department connues to look outward, networking and implemenng best pracce in order to support the Cathedral’s founding mission, ethos and strategic objecves as well as raising our profile and reputaon as a voluntary organisaon. The Volunteers Manager is a member of a number of local and naonal networks but significantly this year: the steering group for the region’s Blue Badge Guide training programme; the Naonal Project Group, led by Reverend Dee Dyas of York University, tasked with producing naonal guidelines and training for staff for working with volunteers in cathedrals; and the tesng group for County Durham’s first volunteer recruitment website, developed by Durham Community Acon, the volunteer brokering and advocacy organisaon for the county.

Visitor Services The Visitor Services team have achieved great things in FY20. Donaons were about to hit £500,000 at March 31st but unfortunately we were overtaken by the impact of the Coronavirus and shutdown from 23rd March 2020. Nevertheless to generate just short of this was an astounding achievement (122% ahead of budget) Congratulaons to the team in making the ‘ask’ so effecvely. This has not been without its challenges but with connuing refinement and modificaon of the messaging and the level of giving achieved, this demonstrates the public response is largely understanding, supporve and posive.

Funding from the Cathedral Sustainability Fund allowed not only for recruitment of 2 posts working a combined total of 37.5 hours but facilitated some excellent training from Insight 6. Mac Eddy’s collaborave approach produced some immediate results, not only for the Visitor Desk but across the whole visitor journey through the Cathedral linking Open Treasure, the shop and the restaurant. This training, devised for the staff and volunteers with facilitaon from Insight 6, really helped to focus those trained on how to ensure we deliver the best visitor experience while maximising income generaon. The Central Tower reopened in June 2019 and generated £104,616 up to the year-end which included a period of 6 weeks closure in January / February.

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Cathedral Shop The shop performed well in spite of the protracted closure of the north and south doors during much of the year returning a healthy net profit up to the end of February, but was impacted at the end of the year by Covid19.

We were proud to act as host to the Cathedral and Church Shops Annual Conference and Trade Fair in September 2019 as well as hosng the Chamber Dinner in the Cathedral at the same me. It gave vising shop managers the opportunity to see how space can be used within the church sympathecally, while generang significant income in the process. It was also a great opportunity to showcase the Cathedral Shop and its retail offer.

Undercro Restaurant The restaurant performed well throughout the year in spite of the closure of the north and south doors. The food offer has been improved and refined. External catering has taken some me to establish itself, but we have experienced considerable success with aernoon teas in the Chapter House on the theme of Harry Poer. The second NEECC dinner for almost 800 guests was again a resounding success both in fundraising terms but also in promong the profile of the Cathedral. Once again, Baxter Storey were a key part in delivering this success. Unfortunately sales performance was impacted at the end of the year by Covid19. Plans for a mid-term review of the catering operaon have been delayed due to this.

Development Thanks to the wonderful generosity of our supporters, the £1 million target set for the Foundaon 2020 public appeal was reached at the end of March. The campaign to match a grant of £1 million from the Naonal Loery Heritage Fund for an endowment to support the Cathedral’s annual programme of repair and maintenance received support both locally and naonally, for which we want to say a massive thank you.

Highlights from the campaign in 2019/20 included the Friends of Durham Cathedral raising a wonderful £46,000 through their Moment in Time appeal. In September, we hosted the second Annual Chamber Dinner in the Nave of the Cathedral, in partnership with North East England Chamber of Commerce, raising a further £77,000. We also held our very first stone aucon in October, at which auconeers Anderson and Garland sold stones taken from the Cathedral Tower during its recent restoraon to raise an incredible £63,000.

Thank you to everyone who made donaons, became Foundaon 2020 Patrons and Club members, and took part in fundraising acvies to help us reach our £1 million target. Your support will help us to care for our beauful Cathedral long into the future.

In November, the Cathedral partnered with Durham Miners Associaon (DMA) to celebrate and remember the men and women of the Durham Coalfield. A special service took place in the Cathedral on 20 November marking the 150 years to the day of the founding of the DMA. Joining us at the service were many of those who had donated to the Lights of the North appeal, which raised a total of £4,000 for the Cathedral and DMA. Candles were lit at the service for loved ones, lodges and collieries remembered by donors to the appeal and a special commemorave programme listed their names alongside messages from their friends and family.

In February, we saw the compleon of the final phase of the Open Treasure project. The new glazed lobbies at the Cathedral’s north and south doors; part of the original project supported by the Naonal Loery Heritage Fund; have transformed visitor access into and around the Cathedral, enabling people to see the Cloister and claustral buildings beyond the Nave, and enjoy the wonderful architecture of the Norman arches which are now beaufully illuminated within the new lobbies.

Property During the year the department completed a number of projects including the Illuminaon Window, the Lobbies, and the Belfry remedial work. Work was also on target to be completed on the pre-development phase of the Cloister project before it was interrupted by Covid-19. A significant amount of development work for repair projects was also completed during the

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year, including the South Transept Cross, stonework repairs to 6-8 The College, repairs to the boundary wall for the Galilee and Monks Garden, fire separaon to Priors Hall and Song School and re-roofing and external masonry repairs to 16/16a The College. The appointment of a new Contracts Manager and other works yard staff during the year as well as making improvements in the works yard management enabled the provision of mely contractual services to all of these projects whilst also compleng ongoing repairs across the Cathedral site.

The Quinquennial Inspecon was commissioned and received during the year. Although the report didn’t highlight any surprises, it emphasized the connuing need for regular and ongoing maintenance. All of the recommendaons arising from the report have been scheduled and budgeted for where appropriate in FY21. In addion, surveys and specificaons for other projects, including St Helen’s Chapel and direconal signage, were started, and fire risk assessments for all Cathedral buildings were completed. Fire wardens were trained, upgrades to fire detecon systems where required were installed, and provisions with emergency services were successfully reviewed following the fire at Notre Dame, Paris. Improvements in security across the site were also implemented.

The property team also assisted other departments in the successful delivery of the Dinner in the Nave in September 2019, Lumiere in November 2019, and the Stone Aucon which was held to raise funds for the Foundaon 2020 campaign. One of the teams mason’s was also successful in applying to the Cathedral Workshop Fellowship. As the year ended, the team started to prepare for the handover of the Mainsforth Estate which had been bequeathed to the Cathedral in the prior year, as well as planning the development of strategic land sale opportunies within the Cathedral’s porolio.

Human Resource and Organisaonal Development During the year HR&OD has undertaken 34 recruitment exercises, including the key recruitment acvies of Canon Pastor; Member of Chapter & Lay Canon; Sub Organist; Relaonship & Development Manager; Contracts Manager (Clerk of Works); Cathedral Safeguarding Officer and posts within the Finance Department. HR&OD has also assisted in the governance of staffing proposals, which have included the Markeng and Events, Precentors, Property and Visitor Services Departments.

HR&OD has sought to deliver the following goals:

• To introduce a fair and equitable pay and grading structure across the Cathedral. • Significant acvity has been undertaken toward undertaking a job evaluaon exercise that will deliver a fair and equitable pay and grading structure with compeve and bias free terms and condions of employment. • To conduct an Employee Engagement survey to provide an understanding of how our people perceive their working environment. • An Employee Engagement survey has been prepared and approved for distribuon. It was due to be circulated to all staff in early April 2020, however deferred due to the COVID-19 pandemic. • To develop and implement a training and development plan for the workforce to ensure that staff are provided access to appropriate training and development that addresses relevant idenfied training needs. • Training has been provided to respond to Cathedral-wide needs, including safeguarding; GDPR; Fire Safety; First Aid; Manual Handling, COSHH and Departmental needs, such as Legionella; Asbestos; Scaffolding Inspecon; Harness; SMSTSS; Employment Law; etc. The development of an 18 month training plan is ongoing and discussions have been held with partners and suppliers in supporng the Cathedral to meet its training needs effecvely and economically. • To develop and implement a health, safety & well-being acon plan that promotes, with the aim of improving, the physical and emoonal well-being of staff whilst ensuring that the Cathedral is compliant with its statutory responsibilies. • The H&S Handbook has been further developed – the H&S Policy Statement (Part 1); and the H&S Policy (Part 2) are in place. Five H&S related policies have been idenfied for development and review; and acon is being undertaken to review exisng procedures (Part 3). Departmental H&S Risk Assessments have been received and assessed and acon is being taken to respond to cross department idenfied H&S training needs. The Commiee and Sub-Commiees are operang effecvely and the Chapter is advised of key areas of compliance. • The Beer Health at Work re-assessment has been deferred unl September 2020.

15 Durham Cathedral, Accounts for the year ended 31 March 2020

Significant work has also been undertaken in other areas including embedding GDPR through awareness training; implemenng a simplified appraisal process; modernising the HR/payroll documentaon flow; policy development (including H&S; Safeguarding; Safer Recruitment); and data management (including data cleanse and analysis).

Library and Collecons Open Treasure, the museum of Durham Cathedral, connued to deliver an excing programme of temporary exhibions, drawing on the collecons of the Cathedral and enhanced by loans from regional and naonal partners. Our summer exhibion, ‘The Vikings in Northumbria’, was parcularly aimed at aracng a family audience and increasing the acvies available to them at the Cathedral. Themed events and workshops were held over the holiday period, together with self-led trails and acvies within the exhibion spaces. The Educaon team also worked with arst Wendy Stoker in local schools to produce a linked exhibion, displayed within the Community Gallery space at the Cathedral.

Mapping the World (October 2019-January 2020) highlighted the art and science of cartography using the Cathedral’s exceponal collecons of maps and atlases.

Restoraon, Redesign and Renovaon (January 2020 - onwards) concentrated on the 19th-century developments which revived the Cathedral and created the building we know today. We connue to refine and improve our offer to the public. For example, this winter we experimented with curator-led guided tours in Open Treasure. Visitors clearly enjoyed the chance to learn from our experienced and enthusiasc team so it was decided to make this a permanent part of the offer.

Further visitors had the chance to see Treasures of the Refectory Library. We offered two themes this year: Languages, showcasing the huge range of languages represented in our library books, and Banned Books, books banned for all kinds of reasons. Jeremy Vine appeared at one of these sessions and live streamed us on Facebook. Open Treasure is now “Working Towards” museum accreditaon. This will help improve our management of collecons and public access and open up new sources of funding and support.

Our valued collaboraons with Durham University connued to thrive. The Durham Priory Project has now digised and made available online 216 of the medieval manuscripts which survive in Durham. Funding for the Hensley Henson diaries project has been extended to 2021: this year in addion to managing transcripon and digisaon, we hosted an exhibion about the project featuring Bishop Henson’s top hat, and ran a show-and-tell event about Henson for Durham Book Fesval.

The Residenal Research Library ran its inaugural conference in September 2019, featuring several research projects based on our collecons and a visit to the Library. It was good to see so many scholars benefing from the collecons available in Durham. The @bedesbooks Twier account connues to aract new audiences, reaching 5,400 followers and significant engagement via retweets, likes and messaging, complemenng and extending the reach of the main Cathedral social media accounts.

Educaon Since April 2019 the Educaon team has connued its work with schools, colleges and other educaon providers, as well as families. The academic years 2018/19 and 2019/20 have seen a lot of compeon in the learning outside the classroom sector and we’ve seen that challenge and stepped up our offer yet again. We’ve carved a regional and naonal reputaon for excellent quality delivery and repeat visitors. For the FY 2019/20 we had a 97% good to excellent feedback rate from teachers and in total we engaged with over 15,000 school children before closing due to Covid-19.

We’ve got a cohort of wonderful new Educaon Volunteers who are undergoing training with the team at the moment and will each benefit the team with their individual experse. We have also been developing our connuous professional development (CPD) offer for the team (both for staff and volunteers) to ensure we are current in our outlook and offer.

Over the last year we’ve improved the differenaon in some of our acvies, especially those sessions involving Open Treasure and around me periods of Vikings and Anglo Saxons. We’re even looking further at making authenc food to

16 Durham Cathedral, Accounts for the year ended 31 March 2020

really diversify the offer, this will include Anglo Saxon, Viking and Medieval recipes! We are also changing some sessions to allow teachers to pick and choose which aspects of a session they want, a bit like a ‘Pick and Mix’!- this allows the teachers to pick the aspects of the session that will best fit their students.

We have also started working with the Educaon department at Durham University. We’ve been spending a day with Newly Qualified Teachers (NQTs) and showing them what we have to offer to supplement the Naonal Curriculum as well as the Local Agreed Syllabus for Religious Educaon.

The Chorister School The Chorister School has enjoyed another full and demanding year, with the children engaged not only in their learning but also in a wide range of extra-curricular acvies. As you would expect, Music has featured significantly, not only among the Choristers but as a strength for the whole school. The programme of Music Recitals has connued with recitals at lunchmes as well as in the evening. We have been delighted to hold some of these in the Prior’s Hall. All pupils in the 1st, 2nd and 3rd form have aended a concert given by the Senior Ensemble and then had a chance to explore the range of instruments that they could learn in school. In January parents of children in Year 1 and 2 were invited to come into Middle School to meet the staff, hear about the transion from Pre-Prep and have an opportunity to ask any quesons that they might have had. In February we focused acvies on learning about how to keep ourselves safe online (e-Safety Day). This supported the work that is ongoing in school in both ICT and PSHCE lessons, with informaon being shared with parents.

The Pre-School and Pre-Prep have formed an Eco group and are looking at ways in which the school can be more green in its approach to reducing our carbon footprint. This also dovetails with another Eco Commiee run by Mrs. Barber in the prep school. Together they are encouraging us to recycle more and to turn off lights when we leave a room as well as asking about the use of disposable plascs that they see around the school; nothing is escaping their eagle eyes!

World Heritage Site The WHS Visitor Centre welcomed over 91,400 visitors (an increase of 22% on last year), enjoying an opportunity to learn more about what makes us a World Heritage Site, see a programme of monthly changing exhibions and join the WH Lecture Series. We completed the third year of our WHS Management Plan Acon Plan and are now half way through the current Plan. The WHS boundary extension proposal went out to public consultaon, has been signed off by the main WHS stakeholders and submied to UNESCO for approval at WH Commiee Meeng July 2020.

The WHS Coordinator submied comments on planning and development plans, including the new County Durham and Neighbourhood Plans and proposals for the new Durham University Business School. We also hosted a field trip to Durham as part of the Town and Country Planning Associaon’s annual conference. We hosted World Heritage UK’s three-day annual summer workshop on the theme of sustainability, welcoming over 60 delegates from across the UK’s World Heritage Sites and from abroad.

Highlights of our Visitor Engagement strategy included North East Tourism Awards Visitor Informaon Provider of the Year silver award for the WHS Visitor Centre. World Heritage Day Weekend acvies on theme of World Heritage and natural heritage, included an exhibion in the WHS Visitor Centre of artworks by the WH Young Heritage Ambassadors Group (YAMs) and Cathedral Young Curators and guided tours of the Site planned and delivered by the YAMs. The WHS Lecture series 2019 “The wider range of UNESCO designaons – beyond World Heritage” saw 6 free public lectures given by vising speakers from across a range of UNESCO designaons including Creave Cies, Memories of the World, Biospheres, World Heritage UK and the UK Naonal Commission for UNESCO. Exhibions in the WHS Visitor Centre included “Look at me” – celebrang diversity through portraits of young people with Downs Syndrome, by Downs Syndrome North East and the WHS YAMs and Cathedral Young Curators, celebrang heritage through young eyes. 2019/20 also saw a major refurbishment of the WHS Visitor Centre, led by Durham University and including a room dedicated to Pilgrimage.

17 Durham Cathedral, Accounts for the year ended 31 March 2020

Markeng and Events The last year has been busy for the Markeng and Events Team, as it promotes the enrety of the work of the Cathedral and organises non-Liturgical events, oen working in partnership with other organisaons and agencies.

Regulars to the Cathedral have included the Sixteen, Durham Choral Society, various University Sociees, Durham Singers, ABF The Soldier’s Charity, Orchestra North East, Durham Markets, Durham Vocal Fesval, Durham Brass Fesval and Durham Book Fesval including an evening with Jeremy Vine. Concerts showcasing the Cathedral Choir and the Avison Ensemble have become a regular fixture, and the Cathedral Choir was joined by the Reg Vardy Band for a sell-out Christmas concert. The Cricket World Cup trophy visited on its pre-tournament tour of the UK. Other concerts and events saw the first ever Durham Jazz fesval events at the Cathedral, the Singing Children of Africa (part of a UK tour), Collabro, G4 and Opera North. There were study days, family events, photography events, outdoor walks, aernoon teas in the Chapter House, a General Elecon husngs, a graduaon ceremony for Bishop Auckland College in addion to the annual Durham University graduaons and matriculaon ceremonies, and Durham Photographic Society’s annual summer exhibion. Lumiere, the biennial Durham City light fesval returned, commissioned by Durham County Council and produced by Artchoke, with the Cathedral central to the event, welcoming tens of thousands of visitors.

High points included the reopening of the Cathedral Tower following its restoraon with BBC Breakfast broadcasng its weather forecasts live from the top of the tower. The Cathedral gardeners and the Cathedral flower arrangers were in the spotlight later in the summer, with BBC Gardeners World vising the allotment garden in August. This was broadcast the week before the garden was open to the public as part of Heritage Open Days in September which as always proved very popular.

The year has been busy with the producon and distribuon of markeng materials, both print and online, regular posngs on social media / twier and media releases regarding numerous subjects and occasions. Of note is partnership working with Visit County Durham on the Northern Saints Trails which were due to be launched on St Cuthbert’s Day, but as the Coronavirus situaon evolved, were postponed. The trails will be launched at a later day and will provide a permanent focus for pilgrimage and walking tourism across the north east. The coronavirus situaon has also seen the postponement of the launch of the Cathedral’s visual arts programme.

The coronavirus situaon has seen the team members who are working funcon in a different way, with an emphasis on the cathedral’s digital channels and social media. There has been much live-streaming, and producon of videos and audio packages both liturgical and non-liturgical. A huge thank you goes to Hi-Lights audio visual company who lit the cathedral blue showing support of the NHS, photographed by professional photographers Graeme Peacock, David Wood and Tom Banks.

18 Durham Cathedral, Accounts for the year ended 31 March 2020

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 £1.65m compared to £7.19m in FY19.This substanal decrease was due to the recognion in the previous year of a large legacy totalling £5.8m. Income from donaons connued to increase significantly 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 increased from £1.03m in FY19 to £1.47m in FY20. Included within this income is £412k for the compleon of the lobbies project commenced in FY19, and a further £793k of HLF revenue grants for the Foundaon 2020 endowment fund.

Income from the Cathedral’s trading subsidiary, Durham Cathedral Trading Limited (DCT), is shown under the heading “Trading and chargeable events” and totalled £594k, up 1% compared with the prior year, despite 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 improved on the previous year, despite the effects of the worldwide pandemic. Commentary on returns from the investment and property porolios are given on pages 20 and 21.

Total income is £7.98m, 38% lower than the prior year. Of this decrease in overall income, unrestricted income showed a 2.9% decrease, restricted income showed a 90% decrease, and endowment income showed a 424% increase, highlighng the volality of the Cathedrals income streams.

Expenditure Expenditure on raising funds increased by 138% to £9.73m and accounts for 66% of total expenditure. This was mainly due to the exceponal costs arising from an impairment review of the tangible fixed assets in Durham Cathedral Open Treasure Limited (DCOT) which resulted in an addional £5.63m of depreciaon charges to the Statement of Financial Acvies (SOFA).

Educaon and outreach costs increased slightly by 7% to £1.27m.

Cathedral and precincts upkeep costs showed an increase of £343k, accounng for 18% of total expenditure compared to 27% in FY19. Major repairs and restoraon also included further costs on the Lobbies project which was completed aer the year- end. 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.

Total expenditure is £14.73m, 71.7% higher than the prior year, most of this being accounted for by the “one-off” write down of tangible fixed assets in DCOT.

Net losses on property and investments are £7.9m (FY19: £5.8m gain), reflecng the impact of Covid-19 upon world financial markets and property values. However, since the year end stock market values have recovered to almost pre-pandemic levels. Details of the latest valuaons as at 31st August 2020 are given in note 6b. During the year the non-investment property held by the Cathedral was revalued, which resulted in a downwards valuaon of £5.36 million (see note 7a). It should be noted that in the previous financial year the majority of the investment property porolio was revalued, resulng in a £5.8million upli last year.

19 Durham Cathedral, Accounts for the year ended 31 March 2020

Going Concern

The Cathedral connues to face significant cashflow pressures. The consolidated cashflow statement shows a net cash oulow of £1.93m, compared to a net cash oulow of £1.37m for FY19.

The Cathedral currently meets its day-to-day working capital requirements through an overdra facility that is in the process of being renewed. The current economic condions create uncertainty parcularly over the level of income expected from ongoing acvies, in parcular visitors to the Cathedral, and the availability of bank finance in the foreseeable future. The Cathedral’s forecasts and projecons are currently being updated as part of a strategic review which sets out plans to eliminate the current operang deficit over the coming three years. In addion, the adopon of a total return investment policy will allow unapplied total return to be used to eliminate historical debts and cover the costs of transion that cannot be covered from external grant funding. Once this has been achieved, the total return investment policy will be used to support the conservaon of the cathedral on a sustainable basis, balancing the interests of current and future generaons. As a result, the Cathedral should be able to operate within the level of its current overdra facility and expects to pay down the current overdra over coming months as the total return policy is put into effect.

Chapter have considered the current posion of the Cathedral and, given the changes implemented with the introducon of the total return policy for investments, are sasfied that the Cathedral will connue to be able to meet its liabilies as they fall due. Further detail is given in the accounng policy on p30.

Financial strategy

The net FY20 surplus for unrestricted funds is £4.6m (FY19: £950k deficit), aer the adopon of a total return policy and the transfer of £5.7m of previously unapplied total return gains. However, FY20 was another challenging financial year, with property repairs and maintenance spend, a fall in visitor numbers, a reducon in some non-recurring income streams and the impact of Covid-19 all combining to increase pressure on the cashflow of the Cathedral.

Steps connue to be taken by Chapter to reduce and, within the medium term, eliminate the ongoing unrestricted deficits.

The strategic plan outlined in earlier paragraphs set out key acons for 2018-2020 which included growing the Cathedral’s endowment through property transacons and matched fundraising on both naonal and internaonal levels. Along with a combinaon of fundraising, realised proceeds from property deals (invested in the expendable endowment), growing pupil numbers at the Chorister School and increasing voluntary donaons to the Cathedral, the Chapter ancipates that the unrestricted fund will generate an annual surplus within the next five to 10 years.

A new strategic plan will be produced which will build on the work done so far with the aim of ensuring long term financial sustainability.

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.

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.

At 31 March 2020, following a transfer from the historic unapplied total return on the Cathedral’s investments, the unrestricted funds of the Cathedral amount to £868k, and its free reserves (i.e. those not ed up in fixed assets) amount to (£870k). Chapter will connue to work towards building free reserves to the levels required, which Chapter consider to be 3-6 months’ worth of running costs. In addion, at 31 March, the unapplied total return available amounted to £32.18m. These

20 Durham Cathedral, Accounts for the year ended 31 March 2020

funds are available to Chapter to meet specific needs of the Cathedral and will be transferred as required, in line with the Cathedral’s governance arrangements.

During the 2020/21 Financial Year Chapter’s policy is to maintain a minimum of £500K of cash reserves and Chapter will connue to work towards this level to fund ongoing operaonal cash requirements, reserving the use of its overdra facility for exceponal circumstances.

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.

Total return investment policy

Following a review by the Resources Commiee, Audit Commiee and Chapter during 2019 of the risks with respect to adopng a total return approach to permanent endowment funds, a resoluon was passed at the meeng of Chapter in March 2020 adopng a total return approach to investments.

The Church of England (Miscellaneous Provisions) Measure 2014 received Royal Assent on 14th May 2014. This enabled Cathedrals to adopt a total return approach to investment. Chapter duly passed a total return resoluon in accordance with the Measure.

At the me of the resoluon, the trust for investment was determined at £20.63m based on the 1996 book value of endowed assets, adjusted for inflaon and new capital received since that date to 31 March 2020. No allocaon has been made to the trust for investment during the year because of the proximity of the year end to the date of resoluon, as inflaon for the year had already been included in arriving at the value of inial trust for investment. The unapplied total return as at 31 March 2020 prior to any allocaons amounted to £37.88m

The income from the endowment’s investments has been recognised as unrestricted and restricted income in the year, again reflecng the circumstances during the year given the date of adopon of the policy. In future years, income from the endowment’s investments will be allocated to the endowment fund.

No income for the year has been allocated out of the unapplied total return in view of the treatment of income recognised in the year outlined above. In future years, Chapter intend to make an allocaon of income from the unapplied total return to support the work of the Cathedral. Following adopon of this policy, Chapter made an allocaon of £5.7m from unapplied total return to cover historic deficits within the unrestricted funds of the Cathedral. Chapter consider that this is a prudent distribuon of available endowment funds, given the level of accumulated capital gains represented in the unapplied total return upon adopon of the policy. This amount is shown as a transfer between funds within the statement of financial acvies.

Other realised and unrealised gains and losses on the disposal and revaluaons of investments and property amounted to a loss of £7.96m (2019: gain of £5.81m) in the year. The endowed element of this loss, £7.96m (2019: £5.87m) was transferred to the endowment funds and does not affect the surplus for the year under the Cathedrals Measure 1999.

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 FY20 by two investment managers: Cazenove Capital Management (now part of Schroder & Co Limited) and Rathbone Investment Management Limited. A medium to low risk profile is taken on investments and performance is measured against composite benchmark indices for each fund manager.

UK equies connue to be the main investment class, accounng for 40.81% of the total porolio (FY 19 – 45.41%). Investment levels are within ranges specified by the Cathedral’s Investment Commiee.

Gross investment income for FY20 was £766k (FY19: £646k), represenng a yield of 3.82% (FY19: 3.57%) 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.

21 Durham Cathedral, Accounts for the year ended 31 March 2020

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 income return on the property porolio is as follows:

FY20 FY19 £'000 £'000

Gross rental income 1,069 841 less non-recurring income (10) (34)

Adjusted income 1,059 807

Repairs & maintenance costs (156) (146)

Net income 903 661

Weighted average capital value of investment properes - Note 1 27,913 23,561 Return on capital value 3.23% 2.89%

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

The return of 3.23% in FY20 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.

Plans for future periods In March 2020 when the naonal lockdown was announced due to Covid-19, the Cathedral responded by closing its doors to worshippers, staff, Chorister School children, and the general public as a whole. The financial impact of this acon was minimal in FY20, but the impact upon FY21 has been significant, as all visitor income streams stopped instantly. Steps were taken to minimize the financial impact of Covid-19 by placing staff on furlough where possible, and taking advantage of the variety of financial packages available, including the Coronavirus Job Retenon Scheme, deferment of VAT payments, and the various grants available at a local, regional and naonal level.

The Cathedral connued to worship via digital means, and aer following Church of England and Government guidance, it re- opened its doors for private prayer on 22nd June 2020. This was quickly followed by congregaonal worship starng in early July, along with more pupils aending the Chorister School to supplement those being taught online. In the ensuing weeks, steps have gradually been taken to welcome more visitors back to the Cathedral in a safe and controlled manner, with the first Volunteers returning in August to assist staff.

22 Durham Cathedral, Accounts for the year ended 31 March 2020

Budgets for FY21, originally approved in March 2020, were revised and approved by Chapter in August. The assumpons underlying the projecons are prudent, assuming a slow and steady increase in visitors and corresponding income streams. Nonetheless, it is expected that pressure upon cashflow for the Cathedral will connue to be significant for the foreseeable future, so efforts connue to idenfy new ways of working and take the best parts of the lessons learned during the lockdown. A change management programme was launched to reshape the Cathedral so that it can face the future on a more financially sustainable foong whilst connuing to meet its purpose of worshipping God, sharing the gospel of Jesus Christ, and welcoming all who visit 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.

23 Durham Cathedral, Accounts for the year ended 31 March 2020

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: 8 September 2020

24 Durham Cathedral, Accounts for the year ended 31 March 2020

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 2020 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 2020 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

25 Durham Cathedral, Accounts for the year ended 31 March 2020

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.

26 Durham Cathedral, Accounts for the year ended 31 March 2020

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

27 Durham Cathedral, Accounts for the year ended 31 March 2020

Consolidated Statement of Financial Acvies for the year ended 31 March 2020

Note Unrestricted Restricted Endowment Total Total 2019 funds funds funds 2020

£'000 £'000 £'000 £'000 £'000

Income and endowments from: 4

Donaons and legacies 836 152 666 1,654 7,191

Grants in support of mission 221 459 793 1,473 1,030

Charges and fees in the course of 1,794 12 - 1,806 2,069 mission

Trading and chargeable events 1,093 - 81 1,174 1,047

Investments 1,811 25 - 1,836 1,491

Other income 44 - - 44 44

Total income 5,799 648 1,540 7,987 12,872

Expenditure on: 5

Raising funds (3,452) (6,283) - (9,735) (4,076)

Ministry (943) (93) - (1,036) (965)

Educaon and outreach (1,236) (33) - (1,269) (1,188)

Cathedral and precincts upkeep (1,267) (1,426) - (2,693) (2,350)

Total expenditure (6,898) (7,835) - (14,733) (8,579)

Net (outgoing)/incoming resources before investment gains/(losses) (1,099) (7,187) 1,540 (6,746) 4,293

Net (losses)/gains on investments - - (7,963) (7,963) 5,805

Net (expenditure)/income (1,099) (7,187) (6,423) (14,709) 10,098

Transfer between funds 5,699 (7,436) 1,737 - -

Net movement in funds 4,600 (14,623) (4,686) (14,709) 10,098

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

Funds carried forward 16 868 7,523 52,807 61,198 75,907

28 Durham Cathedral, Accounts for the year ended 31 March 2020

The consolidated SOFA for the year ended 31 March 2019 (by fund type) is included as Note 18.

The notes on pages 30 to 53 and the Special Trust accounts on page 54 form part of these Financial Statements.

29 Durham Cathedral, Accounts for the year ended 31 March 2020

Consolidated Balance Sheet as at 31 March 2020

Note Unrestricted Restricted Endowment Total Total funds funds funds funds funds 2020 2019

£'000 £'000 £'000 £'000 £'000

Fixed assets

Investment assets Property 6a - 1,909 27,224 29,133 26,958

Listed Investments 6b 2,151 1,012 16,518 19,681 20,381

2,151 2,921 43,742 48,814 47,339

Non-investment assets Property 7a - 654 9,065 9,719 21,317

Inventory 7b 116 600 - 716 116

Tangible fixed assets 7c 1,424 69 - 1,493 1,620

1,540 1,323 9,065 11,928 23,053

Total fixed assets 3,691 4,244 52,807 60,742 70,392

Current assets Stocks 9 109 - - 109 100

Debtors 10 1,071 2,000 - 3,071 6,286

Short term deposits 488 118 - 606 752

Cash at bank and in hand - - - - 231

1,668 2,118 - 3,786 7,369

Liabilies due within one year Creditors 11 (4,286) 1,361 - (2,925) (1,242)

Net current (liabilies)/assets (2,618) 3,479 - 861 6,127

Total assets less current liabilies 1,073 7,723 52,807 61,603 76,519

Liabilies due aer more than one year

Creditors 12 (205) (200) - (405) (612)

30 Durham Cathedral, Accounts for the year ended 31 March 2020

Net assets 868 7,523 52,807 61,198 75,907

Funds Unrestricted 868 - - 868 (3,732)

Restricted - 7,523 - 7,523 22,146

Endowment - - 52,807 52,807 57,493

Total funds 16.1 868 7,523 52,807 61,198 75,907

The financial statements were approved by the Chapter on 8 September 2020 and signed on their behalf by:

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

Dean Treasurer

The notes on pages 30 to 53 and the Special Trust accounts on page 54 form part of these Financial Statements.

31 Durham Cathedral, Accounts for the year ended 31 March 2020

Durham Cathedral Balance Sheet as at 31 March 2020

Note Unrestricted Restricted Endowment Total Total funds funds funds funds funds 2020 2019

£'000 £'000 £'000 £'000 £'000

Fixed assets

Investment assets Property 6a - 1,909 27,224 29,133 26,958

Listed Investments 6b 2,151 1,012 16,518 19,681 20,381

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

2,151 2,921 43,742 48,814 50,339

Non-investment assets Property 7a - - 9,065 9,065 14,429

Inventory 7b 116 600 - 716 116

Tangible fixed assets 7c 274 51 - 325 376

390 651 9,065 10,106 14,921

Total fixed assets 2,541 3,572 52,807 58,920 65,260

Current assets Stocks 9 2 - - 2 5

Debtors 10 1,977 2,000 - 3,977 7,161

Short term deposits 488 118 - 606 752

Cash at bank and in hand - - - - 171

2,467 2,118 - 4,585 8,089

Liabilies due within one year Creditors 11 (4,305) 1,361 - (2,944) (1,134)

Net current (liabilies)/assets (1,838) 3,479 - 1,641 6,955

Total assets less current liabilies 703 7,051 52,807 60,561 72,215

Liabilies due aer more than one year

32 Durham Cathedral, Accounts for the year ended 31 March 2020

Creditors 12 (205) (200) - (405) (612)

Net assets 498 6,851 52,807 60,156 71,603

Funds Unrestricted 498 - - 498 (4,123)

Restricted - 6,851 - 6,851 18,233

Endowment - - 52,807 52,807 57,493

Total funds 16.2 498 6,851 52,807 60,156 71,603

The financial statements were approved by the Chapter on 8 September 2020 and signed on their behalf by:

…………………………………………………………. ……………………………………………………………. Dean Treasurer The notes on pages 30 to 53 and the Special Trust accounts on page 54 form part of these Financial Statements.

33 Durham Cathedral, Accounts for the year ended 31 March 2020

Consolidated statement of cashflows for the year ended 31 March 2020

Note 2020 2019

£'000 £'000 £'000 £'000

Net cash oulow from operang acvies 17.1 (1,542) (2,167)

Returns on investments

Rents received net of costs 903 661

Interest and dividends received net of costs 766 646 ______

1,669 1,307

Capital expenditure & financial investment

Purchase of investments (6,226) (6,693)

Sales and transfers of investments 4,061 2,336

Sales of investment property & freehold land - 4,278

Addions to tangible fixed assets (41) (125)

(2,206) (204)

______Cash oulow before management of liquid resources and financing (2,079) (1,064)

Management of liquid resources

Net decrease in short term deposits 146 107

Financing

Repayment of loan - (200) ______

Decrease in cash 17.3 (1,933) (1,371)

The notes on pages 30 to 53 and the Special Trust accounts on page 54 form part of these Financial Statements.

34 Durham Cathedral, Accounts for the year ended 31 March 2020

Notes to the accounts for the year ended 31 March 2020

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 Cathedral’s financial sustainability and addressing the unrestricted fund deficit, the Chapter adopted a total return policy. Due to the current economic condions, there is uncertainty over the level of income expected from ongoing acvies and from visitors to the Cathedral, and so forecasts and projecons are currently being updated as part of a strategic review which will set out plans to eliminate the current operang deficit over the next three years by realigning operaons to the Cathedral’s key purposes, and restructuring the cost base. Unapplied total return has been used to eliminate historical old debt, and in future will be used to support the conservaon of the Cathedral on a sustainable basis. 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 will have sufficient levels of liquid reserves 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. 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 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.

35 Durham Cathedral, Accounts for the year ended 31 March 2020

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.

Total return approach to investment The Chapter passed a resoluon on 23 March 2020 to adopt a total return policy in respect of permanently endowed funds. The Church of England (Miscellaneous Provisions) Measure 2014 received Royal Assent on 14 May 2014. This enabled Cathedrals to adopt a total return approach to investment.

This approach allows any increase in the value of an investment to be used as income. The decision was taken to ensure that Chapter invests in a way that has appropriate regard to the furtherance of its aims both now and in the future.

Chapter idenfied the relevant funds and apporoned it into the value of the original endowment (which forms the Investment Fund) and the unapplied investment return (which forms the unapplied total return). The calculaon of the value of the investment fund on the date of adopon was based upon the book value of assets in 1996, adjusted for inflaon and addions since that date. Chapter used their best endeavor to arrive at the value of the original endowment but acknowledge the inherent uncertainty caused by lack of records documenng ancient endowments.

All endowed investment returns are designated as unapplied total return unl Chapter decide how it is to be used. At the discreon of Chapter, some of the total unapplied return may be allocated to the income fund to be spent on its aims.

Chapter may allocate an amount of the unapplied total return to the investment funds. The amount that can be allocated to the investment fund is capped. The cap is calculated by using the rise in inflaon from a parcular date, being either the date of resoluon if no previous allocaon has been made or date of the last allocaon to the investment fund.

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 2020 are given in Notes 6a and 7a.

36 Durham Cathedral, Accounts for the year ended 31 March 2020

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.

37 Durham Cathedral, Accounts for the year ended 31 March 2020

Depreciaon rates

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

Land and buildings 2% to 6.67% pa straight line Plant and equipment 5% to 33% pa straight line Fixtures and 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.

Chapter has adopted a total return approach to investments, the permanent endowment. Assets are invested to produce an investment return without regard to whether that return is in the form of income or capital appreciaon. An allocaon is made each year from unapplied total return to trust for investment to ensure that the capital value of assets in trust are not eroded over me.

Gains and losses on the sale of properes and investments and changes in the value of properes and investments, together with any related costs, are transferred to the Endowment Fund which has been designated as a separate fund not available for allocaon as part of the surplus for the year. Chapter may, however, determine which part of the unapplied total return may be applied for the purposes of the Cathedral and which part should be available for accumulaon as part of investments.

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. As part of the process for adopng total return, these restricted

38 Durham Cathedral, Accounts for the year ended 31 March 2020

properes have been transferred back into endowment funds as at 31 March 2020. In addion, funds previously idenfied as Expendable endowment, with greater flexibility than the historic permanent endowments of the Cathedral have now been combined into one endowment 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.

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 property valuaons, accounng for grant income, and provisions for stocks and debtors.

Desktop property valuaons were carried out at the year-end by Savills (UK) Limited. Due to the impact of the Covid-19 pandemic, it was considered that less weight could be aached to previous market evidence for comparison purposes to fully inform opinions of value.

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.

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.

3. Employees

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

Full me equivalent 2020 2019 Number Number

Dean and Chapter 79 75 Durham Cathedral Trading Limited 7 7

39 Durham Cathedral, Accounts for the year ended 31 March 2020

Durham Cathedral Open Treasure Limited 12 11 Chorister School 38 38

Total 136 131

Headcount 2020 2019 Number Number

Dean and Chapter 88 86 Durham Cathedral Trading Limited 11 13 Durham Cathedral Open Treasure Limited 16 16 Chorister School 44 44

Total 159 159

The total cost of all paid staff of the Cathedral was: 2020 2019 £'000 £'000

Salaries and spends 3,781 3,666 Employer's Naonal Insurance costs 306 295 Employer's pension costs - teachers' pensions 168 129 Employer's pension costs - stakeholder pensions 103 100

Total 4,358 4,190

There was one employee who received remuneraon between £60,000 and £70,000 in FY20 (FY19: 1).

Members of Chapter received the following remuneraon for the year ended 31 March 2020:

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

The Very Revd Andrew Tremle 37 4 12 53

40 Durham Cathedral, Accounts for the year ended 31 March 2020

The Revd Canon Charloe Allen 31 3 10 44 The Revd Canon Michael Hampel 31 3 11 45 The Revd Canon David Kennedy - - (2) (2) The Revd Canon Professor Simon Oliver 21 2 3 26 The Revd Canon Michael Everi 20 2 - 22 The Revd Canon Sophie Jelley 3 - - 3

Total 143 14 34 191

Comparave figures for the year ended 31 March 2019 are as follows:

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

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 (FY19: four) of the Chapter were reimbursed a total of £3,881 (FY19: £5,337) in respect of travel and subsistence whilst carrying out the business of the Chapter.

41 Durham Cathedral, Accounts for the year ended 31 March 2020

4. Income Unrestricted Restricted Endowment Total Total funds funds funds 2020 2019 £'000 £'000 £'000 £'000 £'000

Donaons and legacies Congregaonal collecons and giving 137 - - 137 216 Donaons 585 29 610 1,224 481 Income from appeals and fundraising 8 - - 8 4 Tax recoverable under gi aid on 82 - - 82 45 voluntary donaons Income from Friends and local trusts 12 52 46 110 68 Income from AllChurches Trust - 36 - 36 27 Legacies 12 35 10 57 6,350

836 152 666 1,654 7,191

Grants in support of mission Church Commissioners 170 - - 170 170 Heritage Loery Grants - 387 793 1,180 190 Other revenue grants 51 72 - 123 670

221 459 793 1,473 1,030

Charges and fees in the course of mission Facility and other fees 105 - - 105 216 Income of the Chorister School 1,689 12 - 1,701 1,853

1,794 12 - 1,806 2,069

Trading and chargeable events Charges to visitors 264 - 81 345 155 Income from shop, restaurant and other trading acvies 829 - - 829 892

42 Durham Cathedral, Accounts for the year ended 31 March 2020

1,093 - 81 1,174 1,047

Investments Investment property 1,069 - - 1,069 841 Investments 742 24 - 766 646 Interest receivable on short term deposits - 1 - 1 4

1,811 25 - 1,836 1,491

Other sundry income 44 - - 44 44

Total income 5,799 648 1,540 7,987 12,872

Please refer to Note 18 for the FY19 SOFA analysed by fund type.

43 Durham Cathedral, Accounts for the year ended 31 March 2020

5. Expenditure Unrestricted Restricted Endowment Total Total funds funds funds 2020 2019 £'000 £'000 £'000 £'000 £'000

Raising funds Shop, restaurant and other trading 969 6,259 - 7,228 1,602 costs Chorister School teaching costs 1,429 11 - 1,440 1,398 Markeng and development 442 - - 442 496 Investment property 397 13 - 410 391 Allocated support costs 215 - - 215 189

3,452 6,283 - 9,735 4,076

Ministry Clergy spends and working expenses 176 - - 176 153 Clergy housing costs 18 - - 18 17 Services, music and congregaonal 502 93 - 595 579 costs Allocated support costs 247 - - 247 216

943 93 - 1,036 965

Educaon and outreach Chorister School costs 877 7 - 884 834 Educaonal acvies 123 11 - 134 126 Archives and library 128 10 - 138 124 Charitable and other giving - 5 - 5 10 Allocated support costs 108 - - 108 94

1,236 33 - 1,269 1,188

Cathedral and precincts upkeep Major repairs and restoraon 18 912 - 930 776 Maintenance and interior upkeep 331 312 - 643 672 Ulies 147 64 - 211 119

44 Durham Cathedral, Accounts for the year ended 31 March 2020

Cathedral insurance 80 78 - 158 156 Precincts, security and gardens 251 8 - 259 196 upkeep Allocated support costs 440 52 - 492 431

1,267 1,426 - 2,693 2,350

Total expenditure 6,898 7,835 - 14,733 8,579

Please refer to Note 18 for the FY19 SOFA analysed by fund type.

45 Durham Cathedral, Accounts for the year ended 31 March 2020

6. Investment assets Consolidated and Charity

6a. Investment property at valuaon Unrestricted Restricted Endowment Total Total funds funds funds 2020 2019 £'000 £'000 £'000 £'000 £'000

At 1 April 2019 - 7,226 19,732 26,958 25,652 Disposals - - - - (4,278) Addions - 1,909 - 1,909 - Transfers - (7,226) 7,226 - - Net increase on revaluaons - - 266 266 5,584

At 31 March 2020 - 1,909 27,224 29,133 26,958

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.

The majority of properes were valued at 31st March 2019 by Savills (UK) Limited. The remaining properes were valued at 31st March 2020, by undertaking desktop valuaons. 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.

6b. Listed Investments

Consolidated and Charity Unrestricted Restricted Endowment Total 2020 Total funds funds funds 2019 £'000 £'000 £'000 £'000 £'000

Investments at market value 1 April - - 20,381 20,381 15,803 2019 Addions - 1,200 5,026 6,226 6,694 Proceeds from disposals - - (4,061) (4,061) (2,749) Transfers 2,151 - (2,151) - - Net increase/(decrease) on revaluaon - (188) (2,677) (2,865) 633

46 Durham Cathedral, Accounts for the year ended 31 March 2020

Investments at market value 31 March 2020 2,151 1,012 16,518 19,681 20,381

Analysed as follows: £'000 £'000

UK equies 8,032 9,255 Overseas equies 5,125 4,204 UK fixed interest 3,255 2,700 Overseas fixed interest 410 436 Other investments 2,431 2,036 Cash at investment managers 428 1,750

Total investments 19,681 20,381

Since the year-end, stock market values have recovered to almost pre-pandemic levels. The value of the investments held at 31st August 2020 was £21.851m.

6c. Subsidiary Undertakings

Charity Unrestricted Restricted Endowment Total 2020 funds funds funds £'000 £'000 £'000 £'000

Investments at 1 April 2019 - 3,000 - 3,000 Net decrease on revaluaon - (2,999) - (2,999)

Investments at market value 31 March 2020 - 1 - 1

47 Durham Cathedral, Accounts for the year ended 31 March 2020

The value of the investment in the Cathedral’s subsidiary company, Durham Cathedral Open Treasure Limited (DCOT), was reviewed at the year-end due to the ongoing losses incurred. An impairment review was carried out resulng in an exceponal impairment charge of £5.63m against the carrying value of the subsidiaries leasehold property, reducing its balance to zero. The associated deferred capital grant creditor of £2.515m was also released to the profit and loss account resulng in net exceponal administrave expenses in the accounts of DCOT of £3.115m. The carrying value of the investment in the Cathedral was subsequently wrien down to £1.

The subsidiary undertakings of the Cathedral comprise:

Enty Company Percentage Net assets Profit/(loss) registered shareholding as at 31 for year number March 2020 ended 31 March 2020

£'000 £'000

Durham Cathedral Trading Limited 06366806 100 320 38 Durham Cathedral Open Treasure Limited 08009824 100 422 (3,503)

48 Durham Cathedral, Accounts for the year ended 31 March 2020

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

Consolidated

At cost/valuaon 1 April 2019 - 9,978 14,429 24,407 Addions - - - - Net decrease on revaluaon - - (5,364) (5,364)

At cost/valuaon 31 March 2020 - 9,978 9,065 19,043

Depreciaon

At 1 April 2019 - 3,090 - 3,090

Impairment - 5,630 - 5,630

Charge for the year - 604 - 604

At 31 March 2020 - 9,324 - 9,324

Net Book Value

At 31 March 2020 - 654 9,065 9,719

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

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

49 Durham Cathedral, Accounts for the year ended 31 March 2020

Charity

At cost/valuaon 1 April 2019 - 1,493 14,429 15,922 Addions - - - - Net decrease on revaluaon - - (5,364) (5,364)

At cost/valuaon 31 March 2020 - 1,493 9,065 10,558

Depreciaon

At 1 April 2019 - 1,493 - 1,493 Charge for the year - - - -

At 31 March 2020 - 1,493 - 1,493

Net Book Value

At 31 March 2020 - - 9,065 9,065

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

The Endowment properes are occupied as follows: 2020 2019 £'000 £'000

Clergy and staff housing 5,070 9,130 Chorister School 2,900 3,429 Cathedral acvies 1,095 1,870

Total 9,065 14,429

All non-investment properes are freehold and most relate to Endowment funds. The properes were valued at fair value as defined in FRS 102 as at 31 March 2020 by Savills (UK) Limited.

50 Durham Cathedral, Accounts for the year ended 31 March 2020

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

Consolidated and Charity Net book value at 1 April 2019 116 - - 116 Addions - 600 - 600 Net book value at 31st March 2020 116 600 - 716

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

51 Durham Cathedral, Accounts for the year ended 31 March 2020

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 2019 1,127 539 986 47 2,699 Addions - 18 23 - 41 Disposals - (1) - - (1)

At 31 March 2020 1,127 556 1,009 47 2,739

Depreciaon At 1 April 2019 202 336 496 45 1,079 Charge for the year 26 50 90 2 168 Disposals - (1) - - (1)

At 31 March 2020 228 385 586 47 1,246

Net book value At 31 March 2020 899 171 423 - 1,493

At 31 March 2019 925 203 490 2 1,620

Charity

Cost At 1 April 2019 237 427 412 47 1,123 Addions - 7 22 - 29 Disposals - (1) - - (1)

At 31 March 2020 237 433 434 47 1,151

52 Durham Cathedral, Accounts for the year ended 31 March 2020

Depreciaon At 1 April 2019 88 295 320 44 747 Charge for the year 9 42 26 3 80 Disposals - (1) - - (1)

At 31 March 2020 97 336 346 47 826

Net book value At 31 March 2020 140 97 88 - 325

At 31 March 2019 149 132 92 3 376

53 Durham Cathedral, Accounts for the year ended 31 March 2020

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.

During FY20, a chalk drawing of Marianna by Dante Gabriel Rosse which was bequeathed to the Cathedral in the previous year, was received. The value of the drawing was £600k.

54 Durham Cathedral, Accounts for the year ended 31 March 2020

9. Stocks Charity Consolidated Charity Consolidated 2020 2020 2019 2019 £'000 £'000 £'000 £'000

Goods for resale 2 109 5 100

10. Debtors

Debtors-amounts due within one year Charity Consolidated Charity Consolidated 2020 2020 2019 2019 £'000 £'000 £'000 £'000

Trade debtors 160 144 283 292 Amounts owed by group companies 930 - 916 - Other debtors 226 255 120 120 Prepayments and accrued income 2,661 2,672 5,842 5,874

3,977 3,071 7,161 6,286

11. Creditors - amounts falling due within one year

Charity Consolidated Charity Consolidated 2020 2020 2019 2019 £'000 £'000 £'000 £'000

Bank overdra 1,716 1,702 - - Loans due within one year 400 400 200 200 Trade creditors 488 444 21 316 Amounts owed to group companies 4 - 3 - Taxes and social security 68 77 81 111

55 Durham Cathedral, Accounts for the year ended 31 March 2020

Other creditors 134 138 145 145 Accruals and deferred income 134 164 454 470

2,944 2,925 1,134 1,242

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

Charity Consolidated Charity Consolidated 2020 2020 2019 2019 £'000 £'000 £'000 £'000

Loan 200 200 400 400 Final term deposits 25 25 22 22 Other creditors 180 180 190 190

405 405 612 612

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. The payment which was due in March 2020 was paid aer the year end in April due to the Cathedral office being in lockdown due to Covid-19.

13. Future commitments and conngent liabilies

There are no legal claims against the Chapter outstanding at the date of signing the annual accounts.

Capital commitments

There were no capital commitments as at 31st March 2020.

56 Durham Cathedral, Accounts for the year ended 31 March 2020

Commitments under operang leases

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

Computer & Motor 2020 2019 other IT vehicles total total equipment £'000 £'000 £'000 £'000

Total payable within one year 23 5 28 28 Total payable during years 2 to 4 4 - 4 32

27 5 32 60

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 FY20 totaled £103,375 (FY19: £100,344).

Teachers’ pension scheme

Introducon The Teachers' Pension Scheme (“TPS”) is a statutory, contributory, defined benefit scheme, governed by the Teachers' Pensions Regulaons 2014. . All teachers have the opon to opt-out of the TPS following enrolment. The TPS is an unfunded scheme to which both the member and employer makes contribuons, as a percentage of salary - these contribuons are credited to the Exchequer. Rerement and other pension benefits are paid by public funds provided by Parliament. Valuaon of the Teachers’ Pension Scheme

Valuaon 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 every 4 years. 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. The latest actuarial valuaon of the TPS was carried out as at 31 March 2016. The valuaon report was published by the Department for Educaon on 5 March 2019. The key elements of the valuaon and subsequent consultaon are:

• employer contribuon rates set at 23.68% of pensionable pay (including a 0.08% employer administraon charge • total scheme liabilies (pensions currently in payment and the esmated cost of future benefits) for service to the effecve date of £218,100 million, and noonal assets (esmated future contribuons together with the noonal investments held at the valuaon date) of £196,100 million giving a noonal past service deficit of £22,000 million; • the SCAPE rate, set by HMT, is used to determine the noonal investment return. The current SCAPE rate is 2.4% above the rate of CPI, assumed real rate of return is 2.4% in excess of prices and 2% in excess of earnings. The rate of real earnings growth is assumed to be 2.2%. The assumed nominal rate of return including earnings growth is 4.45%.

The next valuaon result is due to be implemented from 1 April 2023.

57 Durham Cathedral, Accounts for the year ended 31 March 2020

During the year the employer contribuon rate was inially 16.48%. The TPS valuaon for 2016 determined an employer rate of 23.68% from September 2019, which will be payable unl the next valuaon, whereupon the employer contribuon rate is expected to be reassessed.

The pension charge for the year includes employer contribuons payable to the TPS of £168,090 (FY19: £128,753). At the financial year end £Nil (FY19: £11,086) 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 2020 are disclosed below.

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

1. Durham University 58 109 8 51 - 2. St Chad's College - - - 60 - 3. Lord Crewe's Charity - - - - - 4. Durham Diocese Board of Finance - 14 (4) - - 5. Friends of Durham Cathedral 74 - 46 - - 6. Durham School - - - 175 (14) 7. Visit County Durham - 9 - - -

Total 132 132 50 286 (14)

58 Durham Cathedral, Accounts for the year ended 31 March 2020

Comparave figures for the year ended 31 March 2019 are as follows:

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

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

Endowment funds 57,493 1,540 - (6,226) 52,807

57,493 1,540 - (6,226) 52,807

Restricted funds

1. Freehold property fund 7,437 - - (7,437) -

2. Open Treasure restricted fund 6,942 - (6,264) - 678

3. Academic fund (3) 15 (13) - (1)

59 Durham Cathedral, Accounts for the year ended 31 March 2020

4. Chapter copes fund 25 - - - 25

5. Inventory funds 106 - - - 106

6. Library department fund 313 3 (2) (2) 312

7. Cathedral fabric fund 565 37 - - 602

8. Liturgical and Worship fund 5 - - - 5

9.Music fund 157 15 (7) 165

10.Cathedral charitable fund 14 9 - - 23

11.Other restricted funds 195 7 202

12.Educaon funds 10 14 (10) - 14

13.School outreach fund 87 11 (6) 92

14.Special trust funds 116 24 (5) - 135

15.Central Tower - Belfry project 6 11 - - 17

16.North Quire window 16 - (17) 1 -

17.Adopt a book 2 1 (5) 2 -

18. Lobbies 348 412 (825) - (65)

19. Cloister Roof 97 - (43) - 54

20. Surtees legacy fund 5,708 - (553) - 5,155

21. Cathedral Sustainability fund - 19 (18) - 1

22. Arts Programme fund - 70 (64) - 6

23. Banks fund - - (4) - (4)

Total Restricted funds 22,146 648 (7,835) (7,436) 7,523

Unrestricted funds

General fund (3,937) 5,775 (6,867) 5,699 670

Designated funds 205 24 (31) - 198

(3,732) 5,799 (6,898) 5,699 868

Total consolidated funds 75,907 7,987 (14,733) (7,963) 61,198

60 Durham Cathedral, Accounts for the year ended 31 March 2020

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 Endowment funds 57,493 1,540 - (6,226) 52,807

57,493 1,540 - (6,226) 52,807

Restricted funds - as analysed above 22,146 648 (7,835) (7,436) 7,523 Deduct DCOT element of OT Restricted fund (3,913) - 6,241 (3,000) (672)

Total Restricted funds 18,233 648 (1,594) (10,436) 6,851

Unrestricted funds General fund (4,328) 5,094 (6,166) 5,699 300 Designated funds 205 24 (31) - 198

(4,123) 5,119 (6,197) 5,699 498

Total enty funds 71,603 7,307 (7,791) (10,963) 60,156

Endowment funds

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

A total return approach to accounng for all endowment funds was adopted in March 2020. As a result, the amounts previously held as an expendable endowment have been merged with the historic permanent endowment funds of the Cathedral.

61 Durham Cathedral, Accounts for the year ended 31 March 2020

Trust for Unapplied Total Total Investment Return Endowment £’000 £’000 £’000 At the beginning of the reporng period: Gi component of the permanent 57,493 - 57,493 endowment Unapplied total return - - - Total 57,493 - 57,493 Movements during the reporng period: Gis of endowment funds 1,540 - 1,540 Transfers from restricted funds 7,437 - 7,437 Recoupment of trust for investment - - - Investment return: dividends and interest - - - Investment return: realised and unrealised gains and losses (7,963) - (7,963) Less: Investment Manager costs - -- - Total 1.014 - 1,014 Allocaon from trust for investment (on first me applicaon of total return policy) at 31st March 2020 (37,878) 37,878 - Unapplied total return allocated to income in the reporng period - (5,700) (5,700) Net movements in reporng period (36,864) 32,178 (4,686) At the end of the reporng period: Gi component of the permanent 20,629 - 20,629 endowment Unapplied total return - 32,178 32,178 ______Total 20,629 32,178 52,807

On 23rd March 2020 Chapter agreed to adopt a total return approach to accounng for the permanent endowments of the Cathedral. The full details of policies adopted are set out in the accounng policies in note 1. The date of adopon for the purposes of calculang the original value of the Trust for investment was 31 March 1996, with all addional gis since that date added and inflaon at 2.8% included to arrive at the value of the Trust for investment as at 31 March 2020.

On 31 March 2020 a proporon of the resulng unapplied total return was allocated to income for the year, as shown above. In future, the income from investments will be shown as movements within the table above, but given the adopon of the policy took effect at the year end, the accounng treatment throughout the year has been to allocate income to restricted and unrestricted funds under the previous accounng policy.

62 Durham Cathedral, Accounts for the year ended 31 March 2020

Restricted funds

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 was created to separately idenfy properes purchased post-1872, but as part of the adopon of total return, has been transferred back to Endowment.

2. Open Treasure Restricted fund

This was created to ensure that funds (donaons and grants) given specifically for this project were ring-fenced. The fund was fully wrien down in the year following a review of the company’s ongoing trading performance.

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

63 Durham Cathedral, Accounts for the year ended 31 March 2020

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

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 53 of the Financial Statements.

15. Central Tower – Belfry project

This fund was created for donaons to the Belfry renovaons that are took 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.

64 Durham Cathedral, Accounts for the year ended 31 March 2020

19. Cloister Roof

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.

20. Surtees legacy fund

This fund was created in 2019 when a large legacy, which is for the maintenance of the fabric of the Cathedral, and which was received aer the balance sheet date, was recognised.

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 2020 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 85 24 (31) - 78

Total 205 24 (31) - 198

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 2020 2019

£'000 £'000

Net (outgoing)/incoming resources (14,709) 10,098

65 Durham Cathedral, Accounts for the year ended 31 March 2020

Less: income from property - net of costs (903) (661)

Less: investment income - net of costs (766) (646)

Add: unrealised loss on investments 7,963 (5,805)

Add: depreciaon 6,402 760

Less: non-cash addions to fixed assets (2,509) -

(Increase)/decrease in stocks (9) 15

Decrease/(Increase) in debtors 3,215 (5,815)

Decrease in creditors (226) (113)

Net cash oulow from operang acvies (1,542) (2,167)

17.2 Reconciliaon of cash and cash equivalents 2020 2019

£'000 £'000

Cash at bank and in hand (1,702) 231

Short term deposits 606 752

(1,096) 983

Loans (600) (600)

Cash and cash equivalents (1,696) 383

17.3 Analysis of changes in net funds/(debt) As at 1 Cashflow As at 31 April March 2019 2020

66 Durham Cathedral, Accounts for the year ended 31 March 2020

£'000 £'000 £'000

Cash at bank and in hand 231 (1,933) (1,702)

Debt due within one year (200) (200) (400) Debt due aer more than one year (400) 200 (200) Short term deposits held as current assets 752 (146) 606

Net funds 383 (2,079) (1,696)

18. Prior year SOFA analysed by fund type

Unrestricted Restricted Endowment Total funds funds funds 2019

£'000 £'000 £'000 £'000

Income and endowments from: Donaons and legacies 1,126 5,872 193 7,191 Grants in support of mission 247 682 101 1,030 Charges and fees in the course of mission 2,038 31 - 2,069 Trading and chargeable events 1,047 - - 1,047 Investments 1,467 24 - 1,491 Other income 44 - - 44

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

Expenditure on: Raising funds (3,441) (635) - (4,076) Ministry (956) (9) - (965) Educaon and outreach (1,149) (39) - (1,188) Cathedral and precincts upkeep (1,722) (628) - (2,350)

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

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

67 Durham Cathedral, Accounts for the year ended 31 March 2020

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

Net (expenditure)/income (1,299) 5,235 6,162 10,098 Transfer between funds 349 (349) - -

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

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

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

68