Southwark Report Internals final single

ANNUAL
ACCOUNTS
• Continued to implement changes in Safeguarding, including being a pilot for the new national audit
regime.
• Implemented our fundraising strategy, including the launch of an Archbishop’s Appeal, while building
upon the digital delivery successes of 2021.
• Implemented the Curial Archdiocesan property strategy including to continue with the disposal of
surplus properties and to embed new Health & Safety arrangements.
• Continued with the phased implementation of the Education Strategy, which included the creation of
new Multi Academy Trusts (MATs) and the opening of a new school in Chatham.
• Strengthened financial management and governance across the organisation.
• Continued to develop and refine the Archdiocesan risk management policy
FINANCIAL REVIEW OF THE YEAR ENDED 31 DECEMBER 2021
Financial Performance
We refer to the statement of financial activities in the financial statements that follow and cover the year ended 31
December 2021. The comparatives are for the period from the 1 January 2020 to 31 December 2020.
Collections and donations were up on the previous year from £16.5m to £17.9m. Legacies, which were mainly
credited to parishes, were £1.6m (2020 £1.0m).
Expenditure was £26.3m for the year (2020 £25.1) and the main areas of expenditure are church repairs and
supporting sick and retired priests. Before investment gains there was a deficit on unrestricted funds of £3.0m
(2020 deficit £4.0m); restricted funds had a deficit of £0.7m (2020 deficit of £1.5m); and parish funds showed a
surplus of £3.7m (2020 £4.8m). Overall, before investments, the Archdiocese had a surplus of £4,500 (2020 deficit
of £0.7m).
Reserves Policy
The reserves policy of the Archdiocese is based around the level of free reserves.
Definition of free reserves
The diocese’s free reserves are those funds which can be freely spent on the Archdiocese’s charitable purposes.
Free reserves will therefore normally exclude tangible fixed assets because these assets are used by the charity to
deliver their activities and as such cannot be sold to meet a funding deficit. Amounts already set aside for essential
future spending (designated funds) are also excluded from free reserves. Free reserves therefore are defined as
total net assets less restricted funds less tangible fixed assets.
Definition of unrestricted expenditure
Unrestricted expenditure is defined as expenditure which is made by the Charity to further its objects, to be spent
as the trustees see fit, i.e., where the application of funds is not restricted by the donor.
Reserves Policy
The policy adopted by the Trustees is that the level of free reserves across the Charity should represent 12 to
24 months of unrestricted expenditure. At the 31 December 2021, the level of free reserves was £55.0 m which
represents 48 months unrestricted expenditure. However, this is made up of positive parochial free reserves of
£56m and negative curia reserves of £1m. This negative level of free reserves in the curia is being addressed.
The policy will be subject to annual review.
For further detail on the Archdiocese’s reserves see notes 12 to 15 of the Accounts.
The Archdiocese has a number of restricted funds to be used for specified purposes totalling £12.0m (2020 £13.3m)
which include:
Priests Training Fund (formerly Ecclesiastical Education Fund)
This fund meets the costs of students at Seminaries training to be priests for the Archdiocese and ongoing training
for Clergy. Its income derives from investments.
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