the Archbishop of York

I am pleased to present the eighth annual report of the Archbishops' Council.

At the time of writing, staff of the Council have been back in Church House for three months, having spent the whole of 2006 in temporary accommodation in Waterloo. The Council is indebted to the Corporation of the Church House for ensuring that the work was completed on time and that the Council now has fresh new offices from which to conduct its business. It is a tribute to the planners and the staff that the move was achieved with the minimum of disruption.

The Church Commissioners’ move from No.1 Millbank into Church House means that the three main NCIs are now located in one building for the first time. It is our hope that this will bring about the ever-closer working envisaged in the Turnbull Report. Close collaboration has brought substantial benefits for the Church in the past and this is likely to be increasingly true over the years to come as we face the challenges of the future together.

The pages which follow give a clear overview of the main activities of the Council and its staff during 2006 towards meeting the Council’s object to ‘co-ordinate, promote, aid and further the work and mission of the Church of England’. But there is much more work carried out by the Council’s staff on a daily basis to resource the Church and its engagement with the world which does not feature in this annual report: over £30m was re-distributed in 2006 to support the Church’s dioceses and parishes; essential networks were maintained within and outside the Church; work was co-ordinated with sister Churches and other faiths; the Council itself, its Boards, Councils and Committees, the General Synod and the House of Bishops were staffed and resourced. We are, as always, immensely grateful for the quality and quantity of work which is done on our behalf.

I commend this annual report and seek the continuing prayers and support of the Church for the members of the Archbishops’ Council as we endeavour to discharge the duties and responsibilities entrusted to us.

X SENTAMU EBOR:

Church House, Westminster

5 June 2007

Mission Statement

The Archbishops’ Council’s Mission is to support the Church in her worship of God and in her participation in:

- proclaiming the Good News of the Kingdom

- teaching, baptising and nurturing new believers

- responding to human need by loving service

- seeking to transform unjust structures in society

- striving to safeguard the integrity of creation and sustaining and renewing the life of the earth

The Archbishops’ Council in 2006

Review of activities

1. The Archbishops’ Council is the body charged with the responsibility at national level to co-ordinate, promote, aid and further the mission and work of the Church of England. This involves overseeing the delivery of services and support to parishes and dioceses, bringing together issues of policy and resource for the General Synod, representing the Church to Parliament and Government and much else besides. The 19 members of the Council are supported by a staff team led by the Secretary-General and are indebted to them for their professionalism and hard work.

2. For the whole of 2006, the Council continued to work in temporary accommodation at Elizabeth House in Waterloo during a major refurbishment project at Church House in preparation for reoccupation in March 2007. With the sale of the Church Commissioners’ building at No.1 Millbank, the staff of the Council, Commissioners and Pensions Board will at last benefit from collocation at Church House.

3. The Council completed the second phase of its service reviews in the autumn and agreed that the third, and final, phase should be set in train. Following the recommendations of the first phase of the review, the Legal Office has been restructured, with the Church Commissioners’ and Pensions Board’s property transactional work being outsourced (resulting in seven members of staff of the Legal Office whose managing employer was the Archbishops’ Council being transferred to new employers). The Ministry Division has undertaken a review of its committee structure and the Council has agreed a reduction in the number of committees with the aim of rationalising and strengthening co-ordination in the Division’s area of work. The changes will be implemented during 2007 and 2008.

4. As part of its continuing review of internal procedures, the Council introduced a new accounts system in November, which was used successfully to produce the 2006 year-end financial statements. Work is now being planned to replace most of the financial and accounting systems within the Church Commissioners and the Church of England Pensions Board with the new system. This is a phased project, managed by the Council and scheduled to be completed during 2008.

5. On the wider Church front, work continued on the Dioceses, Pastoral and Mission Measure. The draft Measure passed through its Revision Stage in Synod in July and received Final Approval at the February 2007 Group of Sessions.

6. The process of producing legislation in respect of clergy terms of service also continued and the draft Ecclesiastical Offices (Terms of Service) Measure and related legislation were introduced for First Consideration at the February 2007 Group of Sessions.

Objectives and achievements

7. The five-year work programme for the main National Church Institutions (NCIs) – the Archbishops’ Council, the Church Commissioners and the Church of England Pensions Board – and the General Synod is set out in the document Into the New Quinquennium, published as GS 1607 (available on request or on the Church of England website – www.cofe.anglican.org. uk).

8. The Council’s agreed objectives to progress that work during 2006 are:

§ to enhance the Church’s mission and unity through promoting growth and engaging with spiritual, social, political, ecumenical and environmental issues;

§ to advance the Church’s role in education and lifelong learning;

§ to enable the Church to select, train and resource the right people, both ordained and lay, to carry out its ministry; and

§ to encourage the maintenance and development of the inherited fabric of Church buildings, enabling the furtherance of the Church’s mission in worship and service to the community.

Enhancing the Church’s mission and unity through promoting growth and engaging with spiritual, social, political, ecumenical and environmental issues

9. A significant amount of the Council’s time is spent considering how to respond to Government consultations and draft legislation. During 2006, the Council and its staff considered issues arising from proposals in respect of the Equality Act, the Racial and Religious Hatred Act, the Civil Partnership Act, the Education Act 2005, the Education and Inspections Bill, the Joffe Bill on Assisted Dying for the Terminally Ill, the Terrorism Act, the Serious Organised Crime and Police Act, the Charities Act and on the continuation of the ‘ecclesiastical exemption’ amongst others. It has also considered issues relating to Sunday trading, mental health and cohabitation. All of this involves detailed engagement with Government departments and other agencies and demands a great deal of the staff of the Legal Office and the Divisions into whose remit these pieces of legislation fall.

10. Much work is also involved in preparing briefs for bishops to enable them to speak for the Church and other faith communities in debates in the House of Lords.

11. The Commission on Urban Life and Faith, chaired by Baroness Richardson of Calow, published its report Faithful Cities in May. The Commission was established in 2003 to consider the significant features of life in urban communities and the Church’s engagement with them twenty years on from the landmark report Faith in the City. A major strand of the report encourages faith groups and others to initiate What makes a good city? debates in the towns, cities and communities where they live. Churches, Government and other bodies are being encouraged to look at the report and its recommendations to consider how they might respond to the challenges faced by those who live in urban communities. The Commission’s website – www.culf.org.uk – contains a great deal of useful material for use in urban communities. The appointment by the Archbishops of the Rt Revd Stephen Lowe, Bishop of Hulme, as bishop for urban life and faith is a further plank in raising awareness of the Church’s commitment to urban communities.

12. A resource book entitled Seeds in Holy Ground (GS 1606) was published to assist rural communities. It considers the role of the Church in rural communities and explores ways of helping England’s 10,000 churches in the countryside meet the needs of the 78.8% of the rural population who classify themselves as Christian – as well as the remaining 21% who do not. The resource book has so far sold around 5,500 copies.

13. The Youth Evangelism Fund marked its first full year of operation in 2006. The YEF gives small pump-priming grants (up to £3,000) in response to ideas from young Christians so that they can share their faith with their friends in ways that make sense to them. This funding is only given if young people themselves apply for it, and a very simple application process has been developed. In 2006 the Fund supported 199 projects, disbursing almost £190,000 to young people in eight dioceses. Future years will focus on different dioceses. Including the Council’s own commitment of £100,000, £195,000 has already been raised for 2007. A full report of the first year’s operation will be published in mid-2007.

14. The Church of England's most recent statement on the environment is set out in the report Sharing God's Planet (produced by the Council’s Mission and Public Affairs Council) which was debated by the General Synod in February 2005. The Synod commended the report and challenged itself and wider Church organizations to act upon it. On World Environment Day (5 June) the Church took a further step in the challenge by launching the Shrinking the Footprint campaign (www.shrinkingthefootprint.cofe.anglican.org). The campaign invites all parish churches to carry out an audit of current energy use so that a benchmark can be established. Once the size of the current 'carbon footprint' of the Church has been assessed, the campaign will roll out initiatives to shrink that footprint.

15. A further development under the Anglican-Methodist Covenant occurred in September with the appointment of the Revd Pearl Luxon as Safeguarding Adviser for the Church of England and the Methodist Church. The Council takes the issue of safeguarding very seriously and took the opportunity to extend the remit of the post beyond children also to include vulnerable adults. In 2006, the document Promoting a Safe Church, was issued under the authority of the House of Bishops. It includes a policy for the Church of England on safeguarding vulnerable adults, examples of good practice and procedures to follow. It is a companion volume to Protecting all God’s Children, which gives guidance in respect of safeguarding children.

16. Responding to domestic abuse (GS Misc 838), which establishes guidelines for those with pastoral responsibilities, was published in October. The intention of the guidelines is to inform, direct and equip those working at local level to offer the most appropriate care and support for the victims of domestic abuse as well as those who may have been taken into their confidence.

17. Discussions continued on many fronts throughout the year with ecumenical partners to further unity between the various Churches. This work is focussed through the Council for Christian Unity. A report on the Anglican-Baptist conversations was discussed by Synod in February and commended for further study in the dioceses and parishes. A study guide will be published during the course of 2007.

Advancing the Church’s role in education and lifelong learning

18. One of the Church of England’s biggest success stories of recent years continued during 2006 with the establishment of a further 28 opened or expanded schools, plans for a further 10 schools and discussions underway for another 32. Five new academies were opened in 2006 with plans for another 14 and discussions in hand for 40 more.

19. In February 2006, Synod discussed a report by the Board of Education on the mutual expectations of the Church and the Church Colleges of Higher Education and, increasingly, Universities (GS 1601). Maintaining a Church of England identity and ethos in a fiercely secular environment is not an easy task, but all of the institutions expressed their willingness to do so and the Synod expressed its support for them and for the Board of Education in its relationship with them.

20. In July, Synod considered another report by the Board of Education – Pushing Further (GS 1628) – and approved an ambitious programme of growth in the provision of chaplaincies in Further Education colleges, providing a major opportunity for the Church to engage, alongside ecumenical and multi-faith partners, with more young people.

Enabling the Church to select, train and resource the right people, both ordained and lay, to carry out its ministry

21. A major concern during 2006, following the introduction of new pensions regulations, was the issue of clergy pensions and the future shape of the clergy pension scheme. Cross-NCI work was set in train and a consultation process initiated to assess the options. The working group reported to Synod in February 2007 and a consultation is now taking place of all the Scheme’s beneficiaries in order to be able to implement the agreed changes.

22. In 2006, the Ministry Division ran 50 selection panels. These were attended by 715 candidates, of whom 594 were selected for ordination training (an increase of nearly 3% on 2005) either in Colleges or on Courses, the majority for stipendiary ministry. Almost half were women. The trend towards younger candidates continued with 90 of the candidates selected for training in 2006 being under 30 (15%). Following the lead set in Mission-shaped Church, 19 were selected to train to become ‘pioneer ministers’ to work in fresh expressions of Church (6 in 2005).

23. Twenty-four of those selected, or 4% of the total, were from minority ethnic backgrounds. The Committee for Minority Ethic Anglican Concerns has been working with the Ministry Division to improve the figures for minority ethnic candidates and held two very successful conferences during 2006 to encourage vocations to the ordained ministry and to youth work.

24. Shaping the Future (January) provided more detailed guidelines for lay training, reader training and ordination training, including learning outcomes for the training of ordinands and the newly ordained. Guidance was issued (October 2006) on Governance Issues in Regional Partnerships.

25. The work of the drafting group preparing new legislation for clergy terms of service continued and presented draft legislation to Synod for First Consideration in February 2007.

Encouraging the maintenance and development of the inherited fabric of Church buildings, enabling the furtherance of the Church’s mission in worship and service to the community

26. Church buildings are a major feature of the rural, urban and suburban landscape. They are, in many cases, a focus of the local community and yet it is a constant struggle to maintain them and make them more widely available for service to the community.

27. A major focus for the Cathedral and Church Buildings Division during 2006 continued to be the agenda outlined in the report Building Faith in our Future (published by the Church Heritage Forum in October 2004) and progressing the Church of England’s agenda with Government and other agencies. Synod debated the report The Church’s Built Heritage in February, supported its recommendations and called on Government to increase financial support for the care, maintenance and repair of church buildings, and to continue the Listed Places of Worship Grant Scheme beyond March 2008 (now extended to 2011).

New faces

28. The Council welcomed Professor John Craven, Vice Chancellor of the University of Portsmouth, and Mr Philip Fletcher, Chair of OFWAT, to it membership and said farewell to Professor Peter Toyne, a member of the Council since its establishment. The Council owes a heavy debt of gratitude to Peter for his work especially in laying the foundations for the Dioceses, Pastoral and Mission Measure and with the Publishing Board.

29. Following the retirement of Gordon Kuhrt, the Council welcomed the Ven Christopher Lowson as Director of Ministry in February. The Council also welcomed Jackie Bliss as the new NCI Finance Director. Her role across the three largest NCIs is another example of the ever-closer working of the three organisations.

30. In November, the Council bade farewell to Canon (now the Very Revd) John Hall on his appointment as Dean of Westminster Abbey. His contribution to the work of the Council through his post as Chief Education Officer was enormous and he will be missed. The Council wishes him well in this new phase of his ministry.

Getting the message out

31. Getting the message out about the Council’s activities and achievements is handled by the Communications Office. The Communications Office provides media relations and internal and website communications services not only to the Council, but also to the Synod, the House of Bishops, the Church Commissioners, the Pensions Board and the dioceses. It leads the Church’s representations on broadcasting policy (and has been closely involved in the discussions about the BBC’s Charter renewal) and answers enquiries from the public.

On behalf of the Archbishops’ Council

X SENTAMU EBOR:

Joint President

Church House

Westminster

5 June 2007

Organisational information

32. The Archbishops’ Council is established under the National Institutions Measure 1998. Its purpose is to ‘co-ordinate, promote aid and further the work and mission of the Church of England’.

33. Supported by its Boards, Councils and Divisions, the Archbishops’ Council aims to hold together issues of policy and resources by co-ordinating and taking an overview of the work already being done on its own behalf and on behalf of the wider Church by planning a forward programme of work and by responding to impulses from within and outside the Church.

34. The following values underpin the work undertaken by the Council and its supporting bodies: openness to God; worship; service; promoting growth; unity; partnership; integrity and transparency. The Council carries out its work in compliance with relevant legislation and best practice.

Boards, Councils and Committees

35. The following bodies undertake work on behalf of the Archbishops’ Council:

§ Audit Committee of the Archbishops’ Council (chair: Tony Hesselwood)

§ Board of Education (chair: the Bishop of Portsmouth)

§ Committee for Minority Ethnic Anglican Concerns (chair: the Revd Rose Hudson-Wilkin)

§ Council for Christian Unity (chair: the Bishop of Peterborough)

§ Council for the Care of Churches (chair: the Bishop of Sodor & Man)

§ Finance Committee (chair: Michael Chamberlain)

§ Committees of the Ministry Division (chair: the Bishop of Norwich)

- Committee for Ministry of and among Deaf and Disabled People (chair: the Bishop of Sheffield)

- Deployment, Recruitment and Conditions of Service Committee (chair: the Bishop of Ripon & Leeds)

- Theological Education and Training Committee (chair: the Revd Canon Dr Judith Maltby)

- Vocation, Recruitment and Selection Committee (chair: the Bishop of Tewkesbury)

§ Mission and Public Affairs Council (including the Hospital Chaplaincies Council)(chair: Dr Philip Giddings)

Other bodies

36. The Archbishops’ Council and the General Synod have a number of other committees, commissions and similar bodies which report to them. Details are available in a number of publications, including the Church of England Yearbook, or on request.

National Church Institutions

37. The Archbishops’ Council works in close partnership with the other National Church Institutions: the Church Commissioners, the Church of England Pensions Board and the offices of the Archbishops of Canterbury and York.

Staff

38. The Council’s Human Resources Panel exists to review progress of its Human Resources strategy. It meets annually with representatives of the Council’s staff to discuss matters affecting the staff; acts for the employer on occasions (e.g. provides members for disciplinary appeal panels) and provides advice and guidance to the HR Director when necessary.

39. The Joint Employment and Common Services Board (JECSB) was established specifically to take operational responsibility for the joint employment relationship between the NCIs and to manage common services. It exercises powers delegated to it by each of the NCIs. The First Church Estates Commissioner, the Chair of the Pensions Board, the Chair of the Council’s Finance Committee and the Chief Executives of the Archbishops’ Council and the other main National Church Institutions make up its membership.

40. The JECSB has one sub-group – the Remuneration Committee – which sets senior pay levels and mandates the management side of the Joint Staff Council for negotiations and consultation with the trade unions.

41. The average number of staff employed by the Council during 2006 was 252, roughly half male and half female. Around 12% of the staff were from a Black or other minority ethnic background.

Equal opportunities

42. The National Church Institutions (which include the Archbishops’ Council) are committed to equal opportunities in employment.

43. The NCIs have agreed diversity targets in accordance with the recommendations of the Stephen Lawrence follow-up report – Called to Act Justly. The Equality for All Group monitors progress and is involved in designing proactive initiatives to help achieve these.

44. Equality Advisers are in post to support staff who may feel harassed or bullied and there is an established complaints procedure for dealing with claims of discrimination. All staff are required to undergo training in equal opportunities awareness and all appointing managers must undertake ‘Fair Selection’ training before being permitted to interview for staff.

Environment

45. The Archbishops’ Council is fully committed to an active environmentally aware policy. In addition to the Archbishops’ Council’s policy, individual departments are encouraged by the Environmental Working Group to produce their own policies for their specific areas of work.

Health and safety

46. Together with the other National Church Institutions, with whom the Archbishops’ Council is a common employer, the Council has duties under the Health and Safety at Work etc. Act 1974 and associated legislation to protect the wellbeing of its staff and others affected by its work. During 2006, the NCIs further developed and implemented a comprehensive occupational health, safety and welfare system to reduce the risks of accidents and work related ill health and to promote a healthier work/life balance.

Trustee recruitment and appointment

47. Members of the Archbishops’ Council have the same responsibilities as trustees. They hold office in a variety of ways: ex officio (the two Archbishops, the officers of the General Synod, the First Church Estates Commissioner); elected (by the Houses of the General Synod – two from each of the Houses of Bishops, Clergy and Laity); or appointed (by the Archbishops, with the approval of the General Synod, after an extensive public recruitment process). See p.21 for details.

48. During 2006, two new appointments were made to the Council – Professor John Craven (from 1 July 2006), replacing the Bishop of Portsmouth, and Mr Philip Fletcher (from 1 January 2007), replacing Professor Peter Toyne. The appointment of Mr Michael Chamberlain (Chair of the Council’s Finance Committee) was extended, with the consent of Synod, by one further year until 31 December 2007.

Trustee training

49. New and existing members of the Archbishops’ Council have the opportunity to meet heads of department and other staff for briefing on the organisation as a whole, on particular areas of work and on their responsibilities as members of the Archbishops’ Council. Members also have the opportunity to learn about the Council and contribute to its development at close hand as members of Boards and Councils and of committees and working parties looking into specific areas of the Council’s work and operation.

Trustee responsibilities

50. Members of the Archbishops’ Council are required to prepare for each financial year consolidated financial statements which give a true and fair view of the state of affairs of the Archbishops’ Council and of the results for the year. In preparing the financial statements, the Archbishops’ Council has:

§ selected suitable accounting policies and applied them consistently;

§ made judgements and estimates that are reasonable and prudent;

§ followed applicable accounting standards without any material departures; and

§ prepared the financial statements on the going concern basis.

51. They are responsible for safeguarding the assets of the Archbishops’ Council, and for taking reasonable steps for the prevention and detection of fraud and other irregularities and providing reasonable assurance that:

§ the organisation is operating efficiently and effectively;

§ its assets are safeguarded against unauthorised use or disposition;

§ proper records are maintained and financial information used internally or for publication is reliable; and that

§ relevant laws and regulations are met.

Internal control

52. The members of the Archbishops’ Council have overall responsibility for ensuring that appropriate systems of control, financial and otherwise, exist. They are also responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Archbishops’ Council and for ensuring that the financial statements comply with the Charities Act 1993 and applicable accounting standards and requirements.

53. The systems of internal financial control are designed to provide reasonable, but not absolute, assurance against material misstatement or loss. They include:

§ a comprehensive annual planning and budgeting process;

§ regular review of management accounts, variances from budget and non-financial management information;

§ delegation of authority and segregation of duties; and

§ identification and management of risks.

Risk Management

54. In line with the recommendations of the Statement of Recommended Practice 2005 for Accounting and Reporting by Charities, the Archbishops’ Council has approved a risk management programme to assess business risk and implement risk management strategies. A process of identifying risks and implementing a continuous programme of activities to monitor and mitigate risks has been undertaken and is regularly reviewed by the senior management team and the Finance Committee and considered at least annually by the Archbishops’ Council. This work entails:

§ clarifying management responsibility for the risks in each activity;

§ prioritising risks in terms of potential likelihood of occurrence and impact;

§ adopting suitable counter measures to mitigate the risks; and

§ monitoring the management of risk, with regular reports to the Archbishops’ Council.

Internal Audit

55. The Internal Audit department carries out a programme of risk-based reviews. Regular reports are given to the Audit Committee and the Joint Employment and Common Services Board. Management action on audit recommendations is regularly monitored.

Audit Committee

56. The Audit Committee is a committee of the Archbishops’ Council, constituted in accordance with the Standing Orders of the General Synod. It is answerable to the Synod through the Archbishops’ Council. Each year a report on the discharge of the Committee’s functions is put before the Archbishops’ Council and the General Synod. Its principal duties are:

§ External audit: to consider all matters relating to the appointment and removal of the external auditors, to discuss with them the nature and the scope of their audit, and to review their management letter to the Council and its response;

§ Annual accounts: to review the annual accounts, looking in particular at changes in accounting policies and practices, compliance with legal requirements and accounting standards, adjustments arising from the audit and significant areas of judgement;

§ Internal controls: to keep under review the effectiveness of the governance, risk management and internal control systems;

§ Other National Church Institutions: to liaise with the Audit Committees of the Church Commissioners and the Church of England Pensions Board on matters of mutual concern;

§ Representations: to consider representations made to it generally.

Finance Committee

57. The Finance Committee is the financial executive of the Archbishops’ Council. It is the focus for work formerly undertaken by the CBF as the financial executive of the General Synod and for work formerly undertaken by the Church Commissioners concerning financial provision for the clergy, including the allocation of monies made available by the Church Commissioners to support the needier dioceses.

58. The Finance Committee is responsible for the management of the financial business of the Archbishops’ Council. This includes the raising and administration of money voted by the General Synod for the Archbishops’ Council and for other purposes; the apportionment of those costs between dioceses; the preparation of financial statements and the preparation of the annual budget. It is responsible for the provision of accounting services and financial control.

Investment: the CBF Church of England Funds

59. The CBF has the same membership as the Archbishops’ Council.

60. Under the provisions of the Church Funds’ Investment Measure 1958 (as amended), the CBF has previously acted as the trustee of the investment and deposit funds established under that Measure (the CBF Church of England Funds). There are five separate funds with a combined total value at 31 December 2006 of £1,994 million (2005: £1,846 m) invested in cash, equities, bonds and direct property.

61. The CBF delegated the administration and management of the Funds to CCLA Investment Management Limited (CCLA). The CBF Church of England Investment Fund owns 60% of CCLA’s share capital.

62. As trustee, the CBF was ultimately responsible for the CBF Church of England Funds and, through its Executive Committee (whose membership is the same as the Archbishops’ Council’s Finance Committee), appointed an Investment Committee to act on its behalf and to advise and report on all matters relating to the Measure.

63. Following a review of the arrangements for the administration of the CBF Church of England Investment Funds, the CBF resolved in November 2006 to transfer its trustee responsibilities in relation to those funds to a new trustee body specially constituted for the purpose, CBF Funds Trustee Limited. The General Synod approved that resolution in February 2007, from which point the administration of the CBF Church of England Funds passed to the new body.

Ethical investment

64. The Archbishops’ Council supports the work of the Church’s Ethical Investment Advisory Group (EIAG), which develops and co-ordinates ethical investment policy on behalf of the three central Church investment bodies. The EIAG makes recommendations based upon considered research, but responsibility for accepting and implementing these rests with the Archbishops’ Council, the Church Commissioners and the Church of England Pensions Board respectively.

65. The EIAG publishes an annual report of its work and this is available, together with other related publications, from the Socially Responsible Investment Unit at CCLA and is also available on the Church of England website.

Review of the consolidated statement of financial activities for 2006

66. The Consolidated Statement of Financial Activities is shown on page 27 of the financial statements. The overall results were in line with expectations, and the Council is satisfied that they reflect accurately the performance of activities in pursuance of its purpose to co-ordinate, promote, aid and further the work and mission of the Church of England.

67. Income of £31.9 million from the Church Commissioners under the National Institutions Measure 1998 was used to pay £26.9 million of selective allocations to dioceses (including £4.5 million of Parish Mission Funding), with an extra £4.0 million in 2006 for stipend allocations and an extra £0.8 million towards administrative costs of the Church Urban Fund.

68. The Vote 1 spend for ordination training costs of £9.7 million was at the same level as 2005.

69. Vote 3 income of £1.4 million was fully disbursed in payments of grants towards the work of the Anglican Communion office, the national and international ecumenical initiatives, legal aid and £0.2 million towards the administrative costs of the Church Urban Fund.

70. Vote 4 expenditure of £651,000 relates to the pension contributions for clergy who are employed by Church of England members of the Partnership for World Mission.

71. Vote 5 Church Housing Assistance for the Retired Ministry (CHARM) received £3.1 million contributions from dioceses, and incurred lower than expected costs of £2.8 million.

72. Unrestricted income includes diocesan contributions under Vote 2, grants receivable, including those from the National Society for the work of the Education Division and from Quintel towards the aerials work of the Cathedrals and Church Buildings Division, investment income and trading income from publishing and the bookshop.

73. Unrestricted expenditure is largely the Vote 2 budget, the main component of which is the cost of activities in furtherance of the Council’s objectives through the divisions of the Council and a number of common service departments which serve all the NCIs. The allocation of these costs to the charitable activities, after deducting the contributions received from the other NCIs for common service departments is shown in note 9.

74. The costs of generating funds are primarily those relating to the publishing and bookshop trading activities. These are lower than in 2005 mainly due to the sale of Church House Bookshop on 28 April 2006.

75. The governance costs of the Council include the cost of internal audit, external audit fees and company administration.

76. The net reduction of £1.6 million of Unrestricted funds results from utilisation of Designated funds. Of this, £0.9 million relates to the use of the Five Yearly Planned Maintenance fund accumulated at 1 January for Church House, and £0.3 million from the staff retirement fund arising from restructuring.

77. Restricted funds, which can only be used for the purposes for which they were given, increased by £2.8 million in 2006 to £38.8 million, due principally to a £3.0 million increase in the market value of the investments held. The main restricted fund is the Church and Community Fund (formerly the Central Church Fund), which contributes to the activities of the Archbishops’ Council and also makes grants to parish and diocesan projects, particularly where community needs can be addressed. Full details of restricted funds can be found in note 21 to the financial statements.

Reserves policy

78. The Archbishops’ Council holds funds to enable it to meet its continuing obligations and commitments which span more than one accounting period and to assist cashflow management. For Votes 1 and 2 the reserves policy levels are a minimum of 1.5 and a maximum of 3 times net monthly expenditure (excluding designated funds and the Vote 1 rolling reserve), and for Votes 3, 4 and 5 a maximum of £300,000, £200,000 and £250,000 respectively. Overall, the balances at 31 December 2006 were in keeping with these ranges, although the balance on the Vote 5 reserve at the end of 2006 was higher than this range as indicated in Note 21 to the Financial Statements. The Archbishops' Council will review the level of reserves required to cover the expected future income and expenditure for all Votes, and make recommendations to General Synod in July 2007 in this regard.

Professional advisers

79. The Council’s advisers are listed on page 22. Their performance is critical to the effective operation of the Archbishops’ Council as a charity and the Council has a policy of regularly reviewing all professional adviser appointments.

Administrative information

Archbishops’ Council

The Archbishops’ Council is a charity registered under no. 1074857.

Membership of the Archbishops’ Council from 1 January 2006 and up to the date of this report was as follows:

Joint Presidents

The Most Revd and Rt Hon Dr Rowan Williams, Archbishop of Canterbury (5)

The Most Revd and Rt Hon Dr John Sentamu, Archbishop of York (5)

Prolocutors of the Lower Houses of the Convocations

of Canterbury and York (ex officio)

The Ven Norman Russell (Canterbury) (6)

The Revd Canon Glyn Webster (York) (4)

Officers of the House of Laity (ex officio)

Canon Dr Christina Baxter (Chair, House of Laity) (6)

Dr Philip Giddings (Vice-Chair, House of Laity) (6)

Elected by the House of Bishops

The Rt Revd Graham James (6)

The Rt Revd Timothy Stevens (5)

Elected by the House of Clergy

The Revd Canon Simon Bessant* (5)

The Revd Prebendary Kay Garlick* (5)

Elected by the House of Laity

Paul Boyd-Lee (6)

Christina Rees (6)

Appointed by the Archbishops with the approval of the General Synod

Michael Chamberlain (6)

Professor John Craven (from 1 July 2006) (2)

Philip Fletcher (from 1 January 2007) (-)

Katherine McPherson (4)

Mark Russell (5)

Anne Sloman (6)

Professor Peter Toyne (until 31 December 2006) (4)

A Church Estates Commissioner

Mr Andreas Whittam Smith, First Church Estates Commissioner (5)

(The figures in brackets indicate the number of meetings each member attended in 2006; the Archbishop’s Council met six times in 2006).

* elections to the Council by the House of Clergy took place too late to allow attendance at the first meeting in 2006

Central Board of Finance

The CBF is a charity registered under no. 248711 and a company registered under no. 136413. Its registered office is the same as that of the Archbishops’ Council.

The CBF’s responsibilities are in practice discharged through the Finance Committee.

Membership of the Central Board of Finance of the Church of England is the same as that of the Archbishops’ Council. The CBF met six times during 2006.

Staff Directors of the Archbishops’ Council

William Fittall, Secretary-General to the Council and the General Synod

The Revd Janina Ainsworth, Chief Education Officer (from April 2007)

Jackie Bliss, Director of Finance for the NCIs (from August 2006)

The Revd Dr Malcolm Brown, Director of Mission & Public Affairs (from May 2007)

John Clark, Director of Mission & Public Affairs (until April 2007)

Peter Crumpler, Director of Communications

Paula Griffiths, Head of Cathedral and Church Buildings

The Revd Canon John Hall, Chief Education Officer (until November 2006)

Declan Kelly, Director of Libraries, Archives and Information Services

The Ven Dr Gordon Kuhrt, Director of Ministry (until February 2006)

Gill Laver, Director of Finance and Central Services and CBF Company Secretary (until April 2006)

The Ven Christopher Lowson, Director of Ministry (from February 2006)

Su Morgan, Director of Human Resources

Stephen Slack, Head of Legal Office and Chief Legal Adviser to the General Synod

David Williams, Clerk to the Synod, Director of Central Secretariat and IT/Office Services

Website

The website for the Church of England is at www.cofe.anglican.org

Offices and advisers

Registered office: Church House, Great Smith Street, London SW1P 3NZ

Tel: 020 7898 1000 Fax: 020 7898 1558

Investment managers: CCLA Investment Management Limited, 80 Cheapside, London EC2V 6DZ

Tel: 020 7489 6000 Fax: 020 7489 6126

Bankers: National Westminster Bank plc, City of London Office, 1 Princes Street, London EC2R 8BP

Solicitors: The Head of the Legal Office of the Archbishops’ Council

Auditors: Deloitte & Touche LLP, Hill House, 1 Little New Street,

London EC4A 3TR

		Unrestricted Funds	Restricted Funds	Total
	Notes	(note 20)	(note 20)	2006	2005
		£000	£000	£000	£000
INCOMING RESOURCES
Incoming resources from charitable activities
Church Commissioners	3	-	31,869	31,869	27,080
Diocesan contributions:
- Training for Ministry (Vote 1)	4	-	9,267	9,267	9,177
- National Church Responsibilities (Vote 2)	4	9,919		9,919	9,580
- Grants (Vote 3)	4	-	1,417	1,417	1,273
- Mission Agencies Clergy Pension Contributions (Vote 4)	4	-	740	740	675
- CHARM (Vote 5)	4	-	3,111	3,111	3,058
Voluntary income
Grants receivable	5	265	474	739	1,080
Other income	6	478	297	775	989
Activities for generating funds
Income from activities for generating funds	7	1,937	-	1,937	2,567
Investment income	8	165	1,023	1,188	1,457
Total incoming resources		12,764	48,198	60,962	56,936

RESOURCES EXPENDED
Charitable activities
Grants payable:
- Dioceses	12a	-	31,055	31,055	27,000
- Training for Ministry (Vote 1)	12b	-	9,668	9,668	9,695
- Grants (Vote 3)	12c	-	2,231	2,231	1,272
- Mission Agencies Clergy Pension Contributions (Vote 4)	12d	-	651	651	658
- CHARM (Vote 5)	12e	-	2,817	2,817	2,955
- Other	12f	112	1,509	1,621	775
Other charitable activities	9	16,189	374	16,563	16,018
Less: National Church Institutions’ contributions to costs	9a	(3,817)	-	(3,817)	(4,362)
		12,372	374	12,746	11,656
Costs of generating funds
Other costs of generating funds	10	1,615	-	1,615	2,043
Governance costs	11	288	-	288	214
Total resources expended		14,387	48,305	62,692	56,268

Net (outgoing)/incoming resources before exceptional items and transfers		(1,623)	(107)	(1,730)	668

We have audited the consolidated and charity only financial statements of the Archbishops’ Council for the year ended 31 December 2006 which comprise consolidated statement of financial activities, the consolidated balance sheet and charity balance sheet, the consolidated cash flow statement, the statement of accounting policies and the related notes 1 to 31. These financial statements have been prepared under the accounting policies set out therein.
This report is made solely to the members of the Council, as a body, in accordance with Regulation 7 of The Charities (Accounts and Reports) Regulations 2005. Our audit work has been undertaken so that we might state to the charity’ s trustees those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity and the members of the Council as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of members of the Council and auditors
As described in the statement of responsibilities, the members of the Council are responsible for the preparation of the financial statements, which are required to be prepared in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
We have been appointed as auditors under s43 of the Charities Act 1993 and report in accordance with regulations made under s44 of that Act. Our responsibility is to audit the financial statements in accordance with relevant United Kingdom legal and regulatory requirements and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true and fair view in accordance with the relevant financial reporting framework and are properly prepared in accordance with the Charities Act 1993, Regulation 3 of the Charities (Accounts and Reports) Regulations 2005 and the trust deed.
We read the trustees’ report and the other information contained in the annual report for the above year as described in the contents section and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements.
Basis of opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made in the preparation of the financial statements and of whether the accounting policies are appropriate to the charity’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion, we also evaluated the overall adequacy of the presentation of information in the financial statements.
Opinion
In our opinion:
· the financial statements give a true and fair view of the charity’s state of affairs, in accordance with United Kingdom Generally Accepted Accounting Practice as at 31 December 2006 and of its incoming resources and application of resources in the year then ended;
· the financial statements have been properly prepared in accordance with the Charities Act 1993, Regulation 3 of the Charities (Accounts and Reports) Regulations 2005 and the trust deed.

Deloitte & Touche LLP
Chartered Accountants and Registered Auditors
London

15 June 2007

GS 1668

Annual Report

5 Introduction by the Archbishop of York

7 The Archbishops’ Council in 2006: review of activities

Financial Statements and Accounts:

year ended 31 December 2006