Leeds £1.3m in the red amid planned cuts

A MAJOR diocese in the north of England has posted its fourth annual budget deficit of the past five years after its latest accounts revealed a shortfall of £1.3 million in the last financial year.

The deficit published in the annual return of the Diocese of Leeds comes despite a £1.5m increase in income to just over £11m compared with the year before. Spending, however, also rose to just under £12.5m from £12.1m for 2013.

The diocese regularly runs a budget deficit, but a spokesman said the last year had been “financially good” and “due to measures taken by the finance board over the past few years, this year we expect to break even”.

While central curial expenditure has been cut back, the annual report of the trustees submitted with the accounts says that the diocese will now try to control parish spending as a priority. A  freeze on parish building projects has been in place since last year, when the Bishop of Leeds, Marcus Stock, told The Tablet that he had no plans to spend any money and pledged “frugal” leadership of the diocese.

The report cites the more than two years between the departure of Bishop – now Archbishop – Arthur Roche to be the number two at the Vatican’s liturgy department and the appointment of Bishop Stock at the end of last year as a difficulty. Without a bishop in place, the diocese was run by an administrator who had limited powers and was not able to make decisions such as appointing a new financial secretary.

“The Holy See asked the diocesan administrator not to proceed with a permanent appointment of a financial secretary, which has posed some administrative challenges,” according to the report, written by Mgr Kieran Heskin, a diocesan trustee, adding that “during the period without a bishop, planning for the future is minimal”.

There have been concerns at the level of debt run up by the diocese, which has bank loans totalling £10,575,000. Accounts reveal that Leeds took out a new loan from HSBC, replacing one from Allied Irish Bank (which stands at £6,875,000), has a £3,100,000 loan with the Co-op and another short-term loan of £600,000.

A spokesman for the diocese said decisions had been made over the years to take out long-term loans to enable the diocese to fund necessary projects. These loans, he said, were being paid back quarterly in accordance with agreed schedules of payments.

The accounts show that school costs – the Church is responsible for 10 per cent of building improvements and repairs – rose from £553,000 in the year ending March 2013 to £720,000 in the year to March 2014.?However, clergy allowances were down from £1,012,000 in 2013 to £964,000 the following year, and the costs of the diocesan curia and tribunal fell from £433,000 to £311,000. Curial income, meanwhile, was up from £2.2 million in the year to 2013 to £3.4 million in the year to 2014.

According to the Charity Commission website, Leeds’ annual return for 2014 was received 74 days late, and the year before the diocese submitted both its annual return and accounts 42 days late.