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The Diocese of Leeds has cut £800,000 from its central expenditure and put a freeze on parish building projects in order to balance its books.
The dramatic measures mean that for the first time in almost a decade the diocese will break even when the tax year ends next month. Accounts for the last tax year, filed last Friday with the Charity Commission, show the diocese’s expenditure exceeded its income by more than £2.7 million. They also record that the diocese has a £7.5 million loan with HSBC, along with a £3.75 million overdraft, and another loan with the Co-operative Bank for £3.2 million. Leeds says that from the beginning of this year the capital on the loans is being repaid “with the intention of reducing the total indebtedness of the diocese”.
The diocese has been without a bishop since June 2012 following the departure of Archbishop Roche to become under-secretary of the Congregation for Divine Worship in Rome. While Leeds has been governed by a diocesan administrator, Mgr John Wilson, the longer-term strategic decisions can only be taken by a bishop.
The annual report accompanying the accounts says that funding retired clergy, training priests, Catholic schools and maintaining parish properties are all putting pressure on funds. During Archbishop Roche’s time the cathedral underwent a £1.5 million refurbishment and a renovation of its organ. The debt this incurred shows up in the accounts as part of the diocese’s deficit.
When asked about the diocese’s financial challenges Edmund Whittaker, secretary to the trustees, said: “Things haven’t adapted to change and we need to cut our cloth accordingly. We need to start repaying debt and in order to repay debt you have to cut costs.”
He said that in the last year the diocese had cut around £800,000 from its central administration, achieved in part by making its justice and peace coordinator redundant and a number of staff agreeing to reduce their working hours. “There has been a lot of pain associated with that which we would rather have not inflicted on people but regrettably it was necessary,” he said.
Mr Whittaker said that every diocesan department had been asked to make savings while a temporary freeze had been put on all parish building projects. As a result, he said, the diocese had “reversed a budget deficit” which he described as a “major achievement.” He added: “It’s a great start and now we need to continue.”
While parishes and dioceses are separate entities in canon law, they are brought together for accounting purposes. This means that the income and expenditure of parishes is included in the diocese’s annual accounts.