This week, a spokesperson for the diocese said that while its commitment to maintaining the maximum possible number of stipendiary clergy remained unchanged, “it’s highly unlikely this number will remain static”.
A letter from the Area Bishop of Kingston, Dr Martin Gainsborough, to clergy, lay ministers, and parish officers in his episcopal area says that, in places, “it may be time to try something different or reshape ministry provision to be more sustainable.”
The warning of “challenging financial realities” that may necessitate “reshaping ministry provision to be more sustainable” comes less than a year after the national Triennium Funding Working Group announced a relief package designed to help dioceses to avoid “short-term non-optimal decisions”.
The letter, sent on 16 March, announces an “intentional piece of work around planning our diocesan and parish finances in a way that will be sustainable for the longer-term”, during which archdeacons will be working to “examine parish costs and clergy posts” while the diocesan secretary looks at central costs. Archdeacons will be convening meetings with parishes over the coming weeks. The diocese must “seek to live according to our means”, it says.
The Bishop lists as challenges — shared by other dioceses — parish-share income having fallen “dramatically” during the pandemic, and inflation. In 2019, parish share stood at £16.4 million, and fell to £15.6 million in 2021. Although recovery has been achieved, the parish-share fund increased by just 1.5 per cent since 2019, against inflation of 29 per cent.
While parish share made up two-thirds of Southwark diocesan income in 2019, it represented 57 per cent in 2024. The letter notes that reductions in grants from external organisations are set to continue, and that “stipend increases and changes to the way the Church Commissioners fund dioceses mean that now is the time for us to get ahead of likely future financial challenges.”
Last year, the Archbishops’ Council recommended a 10.7-per-cent rise in clergy stipends, to come into effect this month. This was to be funded by a national package for dioceses which included the abolition of apportionment and £200 million of “time-limited additional support” set to taper down over nine years and prevent “short-term non-optimal decisions”.
In the General Synod last July, the chair of the Archbishops’ Council’s Finance Committee, Carl Hughes, said that dioceses as a whole would be £12 million better off, but that this level varied from diocese to diocese, and seven would be “slightly worse off”. Julie Dziegiel, vice-chair of Oxford’s board of finance, warned that the stipend increase would mean diocesan costs would increase “substantially”, and that the package left dioceses “dependent on central funding over which they have no control”.
In Southwark, the stipend will increase from £31,686 to £35,000 — rises projected to increase annual expenditure by £1.2 million. The diocese is not a recipient of Lowest Income Communities Funding.
The Church-wide review of diocesan finances, published in 2024, found that diocesan deficits were set to reach £62 million in 2024, and that 23 held less than three months’ cash reserves. The latest annual report records that Southwark diocese ended 2024 with a surplus of £0.4 million, after a number of property sales took place (the deficit stood at £3 million in 2023).
Setting out the 2026 budget at the December 2025 meeting of the diocesan synod, the Vice Chair of the Diocesan Board of Finance reported that parish share was expected to increase by 2.5 per cent rather than the 5.7 per cent sought — generating £15.8 million rather than £16.7 million. The diocese “cannot move away from our reliance on the gains from property sales as soon as we would like”.
Like other dioceses, Southwark has less than the target of three months’ unrestricted expenditure in reserves: £3 million rather than £7.5 million. The budget report to the diocesan synod warns that without “significant increases” in parish share or “significant cost reductions” the deficit could grow to £3.7 million by 2030, “which is clearly not sustainable”.
The latest budget is predicated on keeping incumbent-status posts the same, with an occupancy rate of 240, in addition to 50 stipended curates. The diocese’s “indicative costs” for one priest total £94,400. As of 2024, the diocese employed 77.6 full-time equivalent employees, up from 66 the previous year, and employee costs totalled £3.3 million.
Goals in the current diocesan strategy covering 2024 to 2035 include surpassing pre-pandemic levels of church attendance in the next five years and growth of a further ten per cent by 2035. In 2024, all-age average weekly attendance was 11 per cent below the 2019 level. The diocesan spokesperson said that “Worshipping Community” figures had “almost recovered to 2019 figures” and that the average weekly attendance figure for children and young people has seen “one of the largest increases in the Church of England for 2024, resulting in us being about 10 per cent below 2019 figures”.
In recent years, Southwark has been a major recipient of funding from the Strategic Mission and Ministry Investment Board. It was awarded £6.5 million in 2023 for four resourcing churches and three “Hub Churches” and to develop 25 new worshipping communities serving estates. The following year, it was awarded £29 million for a “whole-diocese transformation programme” over nine years with a focus on “extensive renewal and development for parishes of all traditions”.
A diocesan spokesperson said this week that the diocese was “enormously grateful” for the funds, which had been “invested to generate sustainable growth across our diocese”, supporting more than 150 parishes already. More than 1000 people were “engaging in worshipping communities where this investment has been focussed”. But “it has always been clear that this funding is for innovative work and mission in our diocese — and could not be used to fund ‘business as usual’ operational costs or the funding of establishment posts.”