The History of the Stipend

The manifesto of the Save the Parish movement, for example, registers their concern that:

“The appropriation of parochial assets and endowments by Diocesan Funds and the Church Commissioners from 1976 has not been matched by wise stewardship nor have the commitments to fund stipends and pensions out of those assets been fulfilled.”

The history of the stipend, clergy housing and pensions is altogether more complicated and fascinating than many appreciate. In Victorian times once inducted into a living a priest owned the parsonage and was responsible for its maintenance out of his stipend. This led to numerous law cases by incumbents taken out against their predecessors for the cost of ‘dilapidations’ alleging neglect in their duty to maintain the house. Such cases brought disrepute on the Church and eventually in a Measure of 1923, Diocesan Dilapidation Boards were established to ensure fair play and the proper maintenance of vicarages. Our modern-day Property Committee is the successor to the Dilapidation Board.

There was no pension scheme and if an incumbent wanted to retire, he would negotiate with his successor to be paid a pension for life out of the income of the Living. David Pain our Diocesan Secretary tells the story of his grandfather’s appointment letter to the parish Gerrards Cross in 1931 which included the requirement to pay pensions to three of the immediate past rectors. This was not uncommon and must have made it hard to pray for the good health of your predecessors! The first somewhat limited clergy pension scheme was started in 1907, and a Clergy Pensions Measure in 1926 established the Clergy Pensions Board and a requirement for serving clergy to pay 3% of their income into the scheme.

In those days the stipend was paid out of a variety of sources which accrued to a Living. These included income from glebe land and endowments, agricultural tithes, fees for taking funerals and weddings, and collections - with the Easter collection going straight to the incumbent. Agricultural tithes were a significant part of a rural priest’s income, which is partly why the Church had so many priests in the countryside and relatively few in the towns. The vicar of Tolpuddle was less than supportive of the Tolpuddle Martyrs because so much of his income came from tithes paid by the large landowners who were oppressing the labourers! Although tithes were gradually phased out, they remained in existence in some form until their final abolition in 1936.

The variety sources of income led to huge variations in the size of stipends enjoyed by individual clergy. Some parishes had substantial endowments others (often urban parishes created in the 19th Century) very little, those with glebe land swallowed up by urban expansion (especially near central London) enjoyed a massive windfall. The richest benefices tended to go to clergy with the right connections. When the parish of Oakdale was carved out of the parish of Longfleet in Poole in the 1940s there was lengthy dispute over the boundary proposed by the then Rector of Longfleet. It was the most extraordinarily convoluted line until it emerged he was trying to keep all the wealthy roads in Longfleet parish and give all the poor roads to Oakdale! With the growing emphasis on greater equality in the 20th Century this disparity in income became less and less acceptable. In 1953 a Diocesan Stipends Fund Measure was

passed permitting the creation of Diocesan Stipends Funds to hold investments for the purpose of augmenting the stipends of poorer clergy. However, it wasn’t until the Endowment and Glebe Measure of 1976 (which took effect in 1978) that parish endowments went to the care of the Church Commissioners (with the income forming a distinct part of that incumbent’s stipend and listed separately on their payslip) and the glebe land was vested in the Diocese. This was the point that stipends were finally equalised across the Church of England. Incumbents already in post had the choice whether to opt into the standard stipend or not and apocryphal tales tell of the vicar of Old Alresford (one of the richest benefices in England) driving around in a Rolls Royce long after the measure was introduced!

The transfer of glebe land to Dioceses is now being presented as a ‘land grab’ but in fact was a sensible measure to protect and enhance the returns from glebe. During the 1960s developers had cottoned onto the fact that clergy had parcels of land vested in them and which they could sell, and some clergy were not averse to making a once off ‘windfall’ to the detriment of their successors. Nobody knows how much historic wealth was lost as unscrupulous developers fleeced unworldly vicars of the true value of this land, but a recent estimate suggests billions (in today’s value). Bringing glebe together under Diocesan control stopped this haemorrhaging of assets and meant that the land could be managed in a more strategic manner to maximise returns.

With the introduction of the standard stipend, clergy were asked to either assign their fees for weddings and funerals to the Diocese, or if they decided to keep them, declare the amount so it could be deducted from the stipend they were paid. This arrangement was ended with the introduction of Common Tenure, now all fees have to be assigned. What the Save the Parish campaign have failed to recognise is the dramatic loss of fee income from weddings and funerals that has occurred because of changes in society. Before the marriage laws were relaxed to permit the use of other venues some 80% of weddings took place in church, now only about 20% of weddings are in church. When I was a curate in the early 1990s, I took somewhere between 50 and 60 funerals a year, the fee income for these paid nearly half my stipend. In the last 20 years, secularisation, the commercialisation of the funeral business and rise of ‘civil celebrants’ has seen a steady decline in the number of funerals taken by clergy. When I finished in my last parish in 2015, I was taking about 12 funerals a year.

During the 1980s the Church Commissioners invested unwisely in property and in 1992 it was revealed they had lost £800m so that their funds were reduced to £2.4bn. This was a massive shock and led to further fundamental reforms leading to a cap on the Church Commissioners liability to pay pensions for service prior to 1998 and a new pension scheme being opened for service from 1st January 1998. This new scheme has had to have a high rate of contribution to achieve an asset base sufficient to cover its liabilities, but thankfully that point has been reached and we look forward to reductions in the contribution rate in the near future. Meanwhile the Church Commissioners have enjoyed much greater success in their investments in the last 3 decades and currently their funds stand at £9.2bn. This is against a backdrop of large increases in investment portfolios generally, but the Commissioners have outperformed the market and recovered much of the losses made in the 1980s. It is frequently said the Church Commissioners should use their vast wealth to fund the Church. Their free reserves are less than £6bn and it costs about £2bn a year to run the Church of England, so they could fund the Church for about three years. In reality there is little alternative but for today’s church to be largely funded by today’s worshippers.

When it comes to disbursements, the Church Commissioners think in terms of generations not decades but in 2020 they did increase their support to Dioceses and parishes from £59m to £99m recognising the difficulties of the current times. They aim to maintain the real value of the fund after taking account of inflation and typically pay out 3 - 4% above inflation. As a Diocese we applied for hardship funding, but they refused us on the grounds that our population is one of the wealthiest in socio-economic terms whilst our giving rate is one of the lowest in the country. They have agreed to help fund our new giving advisor to help us ‘up our game’.

The way clergy are housed, remunerated, and pensioned has undergone more change in the last 100 years than the several hundred years preceding it. Thankfully clergy are better housed and enjoy a more secure income and pension than their predecessors, but as traditional sources of income have dried up (first tithes and then fees) so contributions from congregations have had to pick up more of the burden.

The scale of this challenge is considerable but meeting it depends (among other things) upon local trust in the Diocesan stewardship of funds, without which our ability to retain clergy in parishes is profoundly weakened. To grow this trust, parishes need likewise to know that the Church of England believes in validity and vitality of parish ministry. A restoration of confidence in the institutional church from those who identify as Anglican could revolutionise the funding of local ministry and mission. Recent research uncovered the startling fact that nearly a third of Anglicans do not give to the Church of England. Imagine how different the future would look if they were to give at the average rate of the other 70%?

With thanks to The Ven. A. Macrow-Wood for writing this piece.