REPORT AND ACCOUNTS YEAR ENDED 31ST MARCH … · REPORT AND ACCOUNTS YEAR ENDED 31ST MARCH 2017 CONTENTS ... Salisbury Cathedral Constitution and Statutes dated 1st July 2001

REPORT AND ACCOUNTS

YEAR ENDED 31ST MARCH 2017

SALISBURY CATHEDRAL REPORT AND ACCOUNTS

YEAR ENDED 31ST MARCH 2017 CONTENTS Page 1-2 Legal and administrative information 3-11 Report of the Chapter 12 Statement of Chapter's responsibilities 13-14 Auditor’s report 15-16 Principal accounting policies 17 Consolidated statement of financial activities 18 Consolidated balance sheet 19 Cathedral balance sheet 20 Consolidated cash flow statement 21-34 Notes to the accounts

SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2017

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LEGAL AND ADMINISTRATIVE INFORMATION Full name: The Cathedral Church of the Blessed Virgin Mary Address: 6 The Close, Salisbury, Wiltshire, SP1 2EF Governing statutes: Salisbury Cathedral Constitution and Statutes dated 1st July 2001 Members of Chapter: Dean: The Very Reverend June Osborne Canons Residentiary: Canon T Clammer (Precentor) Canon E Probert (Chancellor) Canon R Titley (Treasurer) Canons in Holy Orders: The Venerable A Jeans Canon T Woodhouse Lay Canons Mrs J Barker Mr C Hurford – Jones Mr L March Mrs E Turton Executive Director/ Mrs J Molnar Chapter Clerk:

Members of Council: Lord Sharman (Chairman) The Bishop of Salisbury The Dean of Salisbury Canon T Clammer (Precentor) Canon E Probert (Chancellor) Canon R Titley (Treasurer) Mrs J Barker Mrs K Beckett Lady Madeleine Bessborough Mr R Fleck (retired October 2016) Mr R Key (retired October 2016) Canon B Cave Dame Rosemary Spencer Mrs E Turton Mrs S Woolley Judge K Cutler Mrs S Denniston Lady L Phillips Rev Dr D Coulter


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LEGAL AND ADMINISTRATIVE INFORMATION (Continued) Finance Advisory Group: Mrs J Barker (Chairman) The Dean Mr R Creswell Mrs B Hollond Mr L March Mrs E Osborne Fabric Advisory Committee: Sir Hayden Phillips (Chairman) Dr J Crook (term ended June 2016) Mr P Dean Dr J Goodall The Very Reverend G Smith The Very Reverend V Stock Mrs W James (appointed June 2016)

Lay managers: Ms J Morgan, Director of Communications and Development Mr D Halls, Director of Music Mrs S Rickett, Director of Learning and Outreach Mr R Gurd, Director of Finance Ms N Stafford, Human Resources Manager (appointed October 2016) Website address: http://www.salisburycathedral.org.uk Professional advisers: Bankers: Lloyds plc, 38 Blue Boar Row, Salisbury, SP1 1DB Solicitors: Parker Bullen, 45 Castle Street, Salisbury, SP2 7JR Auditors: Fletcher & Partners, Crown Chambers, Bridge Street, Salisbury, SP1 2LZ Investment managers: Schroders, 12 Moorgate, London, EC2R 6DA Land agent: Strutt & Parker, 41 Milford Street, Salisbury, SP1 2BP Architect: Izaak Hudson, dittrichhudsonvasetti architects, Studios 12-13, 9 Bath Buildings, Montpelier, Bristol, BS6 5PT Archaeologist: Graham Keevil, 85 Kynaston Road, Didcot, Oxon, OX11 8HA

http://www.salisburycathedral.org.uk/


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THE GOVERNANCE OF THE CATHEDRAL The governance of the Cathedral is regulated by statute, the principal of which is the Cathedrals Measure 1999. This establishes the basic principles with which all cathedrals must comply and a structural framework to inform governance mechanisms. The Cathedrals Measure requires each Cathedral to produce its own separate statutes. These statutes interpret the dictates of the Measure according to local or historic use, and in particular specify the functions and responsibilities of individuals, both clerical and lay, and establish the administrative framework. Cathedral Chapter Salisbury’s statutes were issued on 1 July 2001. They determine that the governing body of the Cathedral is the Chapter, consisting of the Dean, the three Residentiary Canons (Precentor, Chancellor and Treasurer), two non-residentiary canons elected by the clerical members of the College of Canons, two lay members elected by the lay canons of the College and two co-opted members appointed by Chapter. With the exception of the Dean and Residentiary Canons members hold office for three years but are eligible for re-election or re-appointment. Induction and training of new members is the responsibility of the Chapter Clerk who produces a programme of briefings and visits to ensure familiarity with the administration, management and finances of the Cathedral. Chapter undertook a comprehensive review of governance in 2013 following consultation with the Cathedral Council, and adopted a new code of good governance which is still in use and has been used as an example of good practice by the Association of English Cathedrals (AEC). It has also adopted, and undertaken, the self-evaluation framework supported by the AEC, this is designed as a tool to help Chapters identify areas of strength, areas for improvement and development of action plans. Chapter meets on a monthly basis; there is an established schedule of reports and matters for consideration - decision making is formed by reports and information provided by the Chapter Clerk, executive and advisory committees. Cathedral Council The Cathedral Council was established under the Cathedrals Measure to “further and support the work of the Cathedral, spiritual and temporal, pastoral, evangelistic, social and ecumenical, reviewing and advising upon the direction and oversight of that work by the Chapter”. It met twice during the year under the chairmanship of Lord Sharman, taking reports on the regulation of Cathedrals, the Strategy and Programme, the Cathedral’s strategic risk register and the Cathedral’s Annual Report. College of Canons The Cathedrals Measure requires the Cathedral to establish a College of Canons consisting of every canon of the Cathedral, including the Bishop, the Dean, the suffragan bishops and every archdeacon in the Diocese. In its membership the College expresses the close relationship between the Cathedral and the rest of the diocese of Salisbury. The College met twice during the year and installed 7 non-residentiary canons, 3 lay canons and 1 Sarum canon and bade farewell to 4 members. Executive Chapter is supported by a full team of Executive Directors and staff who undertake the operational administration of the Cathedral. The Executive work in partnership with the Residentiary Canons who provide oversight and, as appropriate, managerial expertise. The Dean chairs both Chapter and the Executive which ensures that Chapter leads and directs and the Executive implements the Cathedral’s objectives. Principal risks and uncertainties The risk register records the principal risks to which the Cathedral’s strategic plan is exposed. These are assessed under a number of risk categories; financial failure, visitor numbers, people, Cathedral development, regulatory compliance, major physical disaster, IT and operations, reputation and standing. The risks are reviewed regularly by Chapter and the Executive and systems are in place to mitigate risks as they are identified. In the 2016/2017 year the Cathedral’s masterplan was endorsed by Wiltshire Council following significant consultation.


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An area of particular risk related to IT and operations, this was managed by improving IT infrastructure and establishing a project to review software and data management requirements. The level and extent of the Cathedral’s insurance cover is reviewed at least annually to ensure that it is appropriate and Chapter’s actions are considered carefully in the light of potential reputational risk. Controls are well established to ensure the Cathedral’s financial activities are properly managed. These include budgetary control, authority levels, monthly management account reports to Executive and Chapter as well as meetings with the Finance Advisory Group. The Cathedral has an established Health and Safety Committee together with an embedded fire and evacuation policy and procedures. This is reviewed annually by the Committee, operational oversight is provided by the Chapter Clerk and strategic oversight by the Canon Treasurer. The Cathedral’s safeguarding policy and procedures were reviewed in July 2016, this is an annual review, along with the safeguarding checklist for cathedrals introduced in 2015. During the 2016/2017 year the Cathedral established an Independent Safeguarding Advisory Group which has an independent Chairman. Its members include representatives from the Diocesan Management Safeguarding Group, the Cathedral School and congregation as well as Cathedral staff. The Cathedral works closely with the Diocesan Safeguarding Advisor and Training Officer to ensure compliance with new Church of England practice guidance and policies.

PLANS FOR FUTURE PERIODS STRATEGY 2013 -17 AND PROGRAMME FOR 2016/17 Our Purpose is: Making a difference for God through exceptional worship and outreach. Our values are: Integrity, reflected in transparent, fair and consistent actions; Generosity, which generates a warm open welcome to all; Compassion, which promotes social justice, equality, diversity, dignity, consideration and respect for all. And our ambition is to be a beacon of confident, open Christianity with a reputation for warmth of welcome and willingness to engage with others. Our purpose, values and ambition are set out in full in our strategy for 2013-17 and Programme for 2016/17, which also articulates the main goals and priority actions we proposed to take to achieve measurable progress. During 2016/2017 the Executive and Chapter worked together to develop a new 5 year Strategic Plan which has come into effect from April 2017 through to 2022. PUBLIC BENEFIT Although the Cathedral is not regulated by the Charity Commission, Chapter confirms that it has had regard to the Charity Commission in determining the activities of the Cathedral. The Cathedral is recognised as a charity for tax purposes. The Cathedral not only serves the community daily in its religious and charitable work, but is an active resource of national importance in the promotion of religion, music, education, history and architecture. It has an active outreach programme through which it seeks to make a tangible difference. In 2016/17 this included work with Erlestoke Prison, community groups meeting the needs of those with learning disabilities and also residential care homes. The Cathedral’s annual review along with this annual report describes the activities that deliver these core benefits.


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WORSHIP Offering exceptional worship means both cherishing the tradition and being ready to innovate within it. During the year we have continued to sustain the daily and weekly round of worship which is our core purpose, while also working to our programme goals. These focus on developing the range and accessibility of our worship, enhancing the environment in which we worship, and building the links between worship and outreach.

During the last year we have made significant progress towards the reordering of the Trinity Chapel, removing the stone dais and moving the central grave slab to the nave. This has created space for the experiments we have conducted with seating and with the position, size and configuration of the altar. Circumstances have prompted adjustments to enable better and fuller access for worshippers and ministers, by use of removable ramps on steps and thresholds. These will inform our thinking about permanent adjustments. We again successfully recruited the required number of boys and girls to the cathedral choir, in what is a competitive environment. The choir continued its regular programme of diocesan concerts, which are crucial to our outreach, and played its full part in the Southern Cathedrals Festival, hosted in summer 2016 in Chichester. The year saw the growth of one musical outreach initiative - our new Youth Choir – and the creation of another, Evening Songs, a special service devised jointly with Exeter House special school and the music charity La Folia. This was one of most impressive and moving services of this or of any year. Fundraising and preparation for the choir tour to California in Lent 2017 was a central part of our partnership working between the Cathedral School, Liturgy and Music, and Development. A new approach to one of our major fundraising concerts, essentially investing more in its production and promotion yielded unexpectedly good results and provided a good model to follow. John Challenger, our Assistant Director of Music, was seconded for a term to St John’s College, Cambridge, and Ian Wicks, Director of Music at the Cathedral School, covered his cathedral duties. Around all of this, and within the transcendent space of an Early English cathedral, there continued the daily pulse of worship, the chief means by which we seek to make a difference for God. FUNDRAISING This year has been steady and successful for fundraising. We are, as ever, grateful to all our supporters and those who give their time and energy in helping us. It takes a team to raise money and we are very appreciative. Our priority remains the Major Repair Programme and we have had several grants this year from trusts towards the repair work on the east face of the Cathedral. This area has deteriorated more than was originally anticipated and the task of replacing over 1,000 stones, as well as extensive conservation is a challenge. We received a grant of £20k from the Headley Trust towards the conservation of the Moses window in the Trinity chapel; Allchurches Trust Ltd granted us £22k towards the repair programme and we received £191k from the First World War Centenary Fund (from their pledge of £500k). We also received a generous legacy towards the conservation work. The legacies we receive provide an important means of securing the long-term future of the Cathedral and its mission. We acknowledge all legacies in a commemorative ledger held in St Michael’s chapel. The Development team and our Clerk of Works took part in the Historic Churches’ Trust Ride and Stride fundraiser in September and raised £1k for the Major Repair Programme. This was a first for the Cathedral and it provided a visible boost for the repair campaign, as did the £8k from Meg Goulding’s London Marathon run in April 2016. The restoration of medieval window S11 is now almost complete. We received funding from the Dulverton Trust for this project last year and the donation point in the South Transept that we dedicated to the window has received approximately £2k.


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We launched a new phase of the Sponsor a Stone scheme in February and this way of supporting the conservation continues to be popular. Our guiding and stewarding teams are each collectively sponsoring a stone within this phase. To date, 13 stones in this area have been sponsored, raising £9,200k (excluding Gift Aid) and there is also a pledge in hand for a pinnacle in this area. In September we held the Topping Out ceremony to mark the completion of the last area on the south side (MRA5). The topping out stone was a finial carved by Christian Sullivan, who has just come to the end of his apprenticeship. We have received all the pledges for this project and sent a final report to all the donors involved. In September we had a further donation of £4,300 from the Worshipful Company of Constructors towards Christian’s continuing study. Music donations this year included £10k from the Inlight Trust, a grant from the Thompson Education Charity, the Saddlers’ Trust and generous individual donations towards chorister bursaries. The medallion scheme continues to be popular as a way of acknowledging support from music supporters. The Girl Choristers celebrated their 25th anniversary in 2016 with a garden party and a visit from their Patron, Dame Kiri te Kanawa. At the Boy Choristers’ Admission service in September the Friends of Cathedral Music formally presented the Dean with their cheque for £20k for the Boy Choristers’ Endowment Fund and we celebrated a generous grant of £10k from the Adrian Swire Charitable Trust. The Requiem concert in November resulted in a contribution of over £4.5k. The reception in the Refectory following was sponsored by Co-Op Funeralcare and very well supported. We received £1.5k sponsorship from three companies towards the art installation ‘Reflection’ in September. The popular production of A Winter’s Trail in December was enabled by a £15k grant from the Arts Council. Other donations of note this year included £20k for new benches around the Close and £10k towards the restoration of the Father Willis organ, due to take place over 2019. OUTREACH A major achievement of the year was the Queen’s Award for Voluntary Service given to our entire volunteering body who number c650. This is the highest accolade a voluntary group can receive and is equivalent to an MBE. The Lord Lieutenant of Wiltshire, Mrs Sarah Troughton, presented the award to the two longest-serving volunteers at a special celebratory Evensong. The year was very busy with a range of art exhibitions and art opportunities which attracted a wide range of national and international press coverage and interest. Two major large-scale exhibitions were Sophie Ryder’s ‘Relationships’ followed by ‘Reflection’, an exhibition of nine national and international artists each working differently with glass. This latter gave us the opportunity to showcase our own glazing team and their work in addition to offering a supporting programme of lectures and workshops on glass. Art and outreach met in the form of Susan Francis’ video installation ‘The Word on the Streets’ where the film entitled ‘Do I Know You’ charted our faces as we heard the words of a homeless man, all the more moving for being shown during the annual fundraising sleep-out in the cloisters. The crossover between art and liturgy was explored with the laser art of Jayson Haebich in his interactive piece ‘Star of Bethlehem’ seen through the Advent season. The 100th anniversary of the Somme was marked in many ways including commemorative services, the reading out of names of those who fell from Dorset and Wiltshire and a WWI themed day for schools and the public. The WWI community art project ‘100 Hearts’ was organised with SSAFA engaging a wide variety of community groups in making replicas of the sweethearts created by recuperating soldiers in WWI. During the exhibition of these hearts, a programme of WWI lectures on the Somme by a range of eminent speakers and ‘the Sewing Soldier’ attracted new audiences. Key events included the third successful Salisbury Contemporary Craft and Heritage Festival, the Ageas Salisbury International Arts Festival performances, performances of Henry V, an EU Referendum panel event, a family day for the Queen’s 90th birthday, all of which engaged a wide range of ages and extended our place as a venue for high quality events and opportunities.


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The schools programme continued successfully with their education programmes. The Cathedral was filled with 1500 schoolchildren for the annual Leavers’ Celebrations and families flocked to the regular holiday activities. New large scale puppets were commissioned for the Christmas Eve Family Service to increase their visibility. Leading up to Christmas, the Cathedral embarked on an innovative new video project: Vlogmas ‘Christmas in the Making’. Through 25 informal short films, behind-the scenes footage showed what it takes to make Christmas happen at Salisbury Cathedral. The films were shared on social media and helped to communicate the realities of cathedral life in an engaging way and to extend our reach. Targeted engagement work included a second Question Time event at HMP Erlestoke to sustain the relationship developed in 2015. Another significant outreach project was the Arts Council funded project ‘A Winter’s Trail’. This involved residents of care homes sharing their memories, around which an all-age family performance was constructed, producing a magical immersive piece through which the Cathedral reached new audiences and engaged them in new ways with live theatre and within the Cathedral space. Alongside continuous improvements to the storage, conservation and in the cataloguing of the collections, access to our Library and Archive collections was widened through an increased number of talks, blogs and a new opportunity via specialist Library tours, all supported by an extended volunteering programme.

2016/17 was expected to see a decrease in visitor numbers when compared to the previous year of Magna Carta celebrations and the Cathedral budget was based on a projection of a 10% fall. At the beginning of the year, the income figures were significantly lower – down by 18% in June for example – but by the end of the year, they rallied strongly, with February and March showing 13% and 12% increases respectively. The year ended with a 7% drop in visitor numbers over the year and, as expected, a 10% drop in visitor income. However, when compared to the 2014/15 financial year, the Cathedral achieved an 11% increase in income from a 2% drop in visitor numbers. The donation per head dropped slightly from £5.45 to £5.28 but largely maintained the per head increase in comparison to 2014/15, possibly because the suggested donation amount remained at the higher level. The final total was £1,301k. The Bell Tower tearooms operated for its first full year and served over 38,000 visitors. Spend per head in the Refectory increased from £4.95 to £5.27 and total income across the two sites slightly exceeded the previous year. The Shop had a challenging start to the year. Proactive management ensured that stock purchases were tightly managed to reflect the drop in retail sales and by the end of the period, both February and March saw increases in income against the same period in 2015/16. Spend per head increased from £7.58 to £8.11, suggesting that the stock range is right for our customers. THE CATHEDRAL SCHOOL In accounting terms the School is financially independent of the Cathedral and its results are not included within these consolidated accounts. In practice, however, the relationship between the Cathedral and the School is both longstanding and profound, and extends beyond the mere provision of choristers. The School has occupied the Bishop’s Palace since 1947 and its current aspirations to improve its buildings are closely associated with the Cathedral’s own aspirations for the Cathedral Close. Chapter and the School’s governors have co-operated closely throughout the year on a range of matters including rent, leases chorister costs and similar matters. The 2016/2017 year was the first full academic year following the Cathedral School’s merger with Leaden Hall School. A significant achievement during the year was the Cathedral Choir Tour to the USA in March 2017 which involved choristers, school staff and members of Chapter.


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THE CATHEDRAL AND THE CLOSE The Close environment includes the Churchyard, Choristers’ Green and Marsh and Rack Closes. It contains one school, the Cathedral, Sarum College, two museums and two further properties open to the public. Management of this environment includes the upkeep and maintenance of the Cathedral precincts. The Cathedral bears the entire cost of maintaining the Close, aided to a modest extent by income from car-parking. The Close environment, including its Grade 1 listed wall, has continued to require attention which has to be accommodated alongside the ongoing Major Repair Programme. During 2016/2017 a review of the Major Repair Programme was undertaken when it was found that the condition of the stones in the remaining areas of work was significantly worse than anticipated. This resulted in the work programme having to be extended into 2019. In support of achieving this additional, fixed term contracts were committed to for an additional three stone masons. Property development has continued; 2016/2017 saw the first full year of operation for the holiday flat. Renovation and improvements to a number of properties have been completed and the Cathedral ended the year with three properties being available as investment residential properties on short leases. Chapter agreed a Property Portfolio Strategy to maximise use of the commercial and residential property within its remit. HUMAN RESOURCES In secular management terms the Cathedral equates to a medium-sized, not-for-profit business and carries all the human resource responsibilities incumbent upon an employer of both industrial and administrative staff as well as over 650 volunteers. Throughout the 2016/2017 year the senior management team has remained unchanged, with the Canon Treasurer, Executive Director and Chapter Clerk and Director of Communications and Development completing their first full year and becoming embedded in the organisation. A new Human Resources Manager was appointed in October 2016 with a greater focus being placed on communication and staff engagement. The outcomes of the self-evaluation process and staff surveys consistently highlighted areas for further work, including greater collaboration and communication. In support of the Major Repair Programme three additional, fixed term stone masons were recruited. There have been changes within the Vestry team which is now running at full strength having carried vacancies for a number of months which was challenging. The Development Team was reviewed and vacant posts filled, providing stability and enabling future plans to be progressed. The Cathedral’s Human Resources and Remuneration Committee (Rem Com) considers any proposed changes to job descriptions and salaries. An established process requires such changes to be considered by the Chapter Clerk and Director of Finance who present recommendations to RemCom for consideration. Senior manager’s roles are discussed by the Chapter Clerk and Rem Com with reference to sector rates. Staff development and training has continued; the Leadership and Management programme was completed and consideration has been given to ongoing and future requirements across the organisation. CATHEDRAL COMMUNITY FORUM The Statutes provide for the establishment of the Salisbury Cathedral Community Forum, its membership comprising people associated with the Cathedral in the broadest sense, with particular emphasis upon congregation, staff and volunteers. The tasks of the Forum are

1. to support the mission of the Cathedral in consultation and cooperation with Chapter 2. to represent to Chapter the views of those who regularly worship or work in the Cathedral 3. to elect two lay members to the Cathedral Council in accordance with Articles 5.2(5) of the

Constitution of the Council, as provided for in Article 18 of the Constitution and Statutes of Salisbury Cathedral, 2001.

Chapter has agreed that 5% of the moneys given in collections at Advent and Christmas carol services, at normal Sunday and weekday services and by those who are members of the planned giving scheme, will be available for charitable giving. The Forum makes proposals to Chapter each year for the disbursement of these moneys to appropriate charities, having regard to international, national and local causes. This year the Forum supported us in the development of our Strategic Plan, began an initiative to boost participation in the planned giving scheme and continued to co-ordinate collections for Salisbury Foodbanks.


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FINANCIAL REVIEW RESULTS The accounts on page 16 record a surplus of income over expenditure of £517k (2016:£754k), before recognising gains on investment properties and investments. Surpluses such as these are most welcome and arise from significant, specific donations and grants for the Major Repair Programme in each year. This year the Cathedral has been in receipt of a substantial legacy of £177k for restricted funds and a legacy totalling £25k for unrestricted funds. These gifts have to be recorded in the year in which they are received and cannot be carried forward to be matched with the expenditure in future years which they are intended to fund. The accounting treatment gives rise to swings in income and expenditure. The Cathedral finances also benefited from a significant reduction in staff costs with some vacant posts, along with a reduction in expenditure on fees budgeted for consultants and on utilities. Investment income also remained strong, making a substantial contribution to the year end result. The continuing annual commitment to an average spend of £560k on the Major Repair Programme requires donations of equivalent amounts each year to fund it. We are most grateful for the donations received in the year towards these costs. They included a successful application to the WW1 Centenary Cathedral’s Repair Fund for £191k, grants from trusts, gifts through the Sponsor a Stone initiative and donations totalling £220k, from the Ivor Read Charity, Salisbury Cathedral Trust and Headley Trust. INVESTMENTS The Statement of Financial Activities discloses that the Cathedral made unrealised gains of £2,127k on its investments in the year. These gains are "unrealised" because they reflect the change in the market valuation of the Cathedral's investment portfolio between 31st March 2016 and 31st March 2017. Details of the movements in investments in the year are shown in note 8 to the accounts. The primary purpose of the investment portfolio is to generate income to support the Cathedral's activities. The stated investment objective is ‘to maximise total return whilst adopting a moderate approach to risk’. There is a requirement for a relatively high level of income. These objectives should be achieved through an income-biased balanced portfolio of equities, property and cash. Given the long-term time horizon of the Cathedral, the investments are mainly concentrated in equity funds with a bias towards higher yielding equities. A fluctuation in the capital value of the equity fund holdings may lead to unrealised gains or losses but not necessarily change their ability to generate income. Our portfolio is managed by professional investment managers and their performance is monitored on behalf of Chapter by the Cathedral's Finance Advisory Group. The Cathedral has set an ethical investment policy (which draws on guidance given by the Church Commissioners) During the year the Finance Advisory Group have started an investment review with Portfolio Review Services. RESERVES AND INVESTMENT POLICIES The Consolidated Accounts have been prepared in compliance with the Accounting and Reporting Regulations for English Anglican Cathedrals as promulgated by the Association of English Cathedrals. It is important to note that

the majority of investments are held on endowment and the capital cannot be realised to meet ordinary expenditure

the greater part of the endowment consists of the Close properties, a number of which are let on long repairing leases

the majority of the increase in funds includes net unrealised gains of £2,127k (2016: £3,668k) on the revaluation of property and investments.

Endowed capital cannot be used to repair the Cathedral or Close properties.


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Under The Cathedrals Measure 1999 Chapter may invest the Cathedral’s funds in any of the following:

land

investments in which trustees may invest under the general power of investments in the Trustee Act 2000

the improvement or development of property belonging to the Cathedral, except that endowed funds may not be used to improve or develop the Cathedral itself or its ancillary buildings without the express authority of the Church Commissioners.

The Cathedral's Endowed Funds, both income and capital, may be used to improve the freehold properties owned by the Cathedral. During the year, a donation was received from the Friends of Salisbury Cathedral of £74k (£74k) for the Cathedral toilets known as Little Paradise. Expenditure was primarily for improvement works to investment houses in the Close and two staff occupied properties, along with investment management fees which resulted in a deficit of £194k (£277k) for the year before net unrealised gains on property and investments were taken into account. Policy in relation to reserves held in unrestricted funds The Cathedral’s unrestricted funds are those funds that are available to carry out its day to day ministry, education and outreach activities together with the basic upkeep of its buildings and precincts. Income is principally derived from visitors, property rents, investments and trading activities. Given the fluctuations in its income streams that are largely outside of its control, Chapter has agreed a policy of retaining in unrestricted reserves an amount at least equivalent to six months’ annual expenditure in order to maintain these necessary activities in times of income shortfall. The Cathedral has met this target over the last three years with careful financial management At 31 March 2017, the Cathedral had £3,564k in unrestricted General Fund reserves, which is equivalent to 77% of total annual expenditure. While this is higher than the Reserves Policy of six months total expenditure, the 2017/18 budget aims to support the start of the implementation of the new 5 year Strategic Plan 2017-2022. Continued careful financial management will allow us to maintain and develop the many and varied activities actively planned by the Cathedral over this period. Further investment will be made on the Cathedral’s property portfolio and in organisational infrastructure, along with providing funds for legal & professional fees related to making progress on projects within the Cathedral’s Master Plan. We will also continue the process of self-evaluation started in 2016. A designated fund of £550k exists for the repair of the Willis Organ work due in the calendar year 2019. In addition, the Cathedral needs to ensure MRP funding is continued to completion and beyond, with further development planned of a new enterprise model for our glazing and works department. All our planned activity will be supported through continued investment in staff and in digital and information technology to ensure we develop our understanding, responsiveness and engagement with people in ways that reflect our values while also increasing our resilience as an organisation. This work will build on the new robustness of our internet provision which will allow increased dependence on web based technologies The Cathedral is immensely grateful for the faithful financial provision of its congregation and longstanding supporters, both personal and corporate. It continues to widen that circle of support through its fundraising initiatives, and through an attractive and compelling set of goals. CONCLUSION This report, as always, describes the rich and varied nature of the life and work of this Cathedral Church. It describes the period which followed our celebrations of the 800th anniversary of Magna Carta in 2015/16 which was an exceptionally busy and successful year. That historic occasion drew many people to the Cathedral as well as engaging significant numbers in a fantastic array of events, exhibitions, services and other celebratory occasions. It further enhanced our reputation as being a place of high professionalism and deep spirituality. Our quest is to combine commercial wisdom with our given purpose of being a house of God and place of prayer, and we are renowned for remaining true to both as we seek to make a difference through exceptional outreach and worship.


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Thus in 2016/17 we returned to business as usual which is never a settled state for us. There are new challenges and opportunities in every department of our life and part of our resilience comes from anticipating and preparing for such changes. So much of what we do and achieve is due to the unfailing and unstinting commitment of our dedicated staff and volunteers who, as always, deserve special mention and our grateful thanks. For instance, the thousands of visitors who come here each year are welcomed by our volunteer guides. Independent research shows not only that our visitors rate their experience highly, but that more and more return for a repeat visit. We have been delighted this year to be Highly Commended in the Visit England Awards and to be winner of the Large Attraction of the Year in the South West Tourism Excellence Awards. Even more thrilling was the extraordinary accolade to all our volunteers in being given The Queen’s Golden Jubilee Award for ‘outstanding work in the community’. The Major Repair Programme continues to be the Cathedral’s first call on fundraising and the focus of attention for the Cathedral’s Works Department of skilled craftsmen and women. We have increased the momentum of fund-raising and continue to be on track for completion of that ambitious work of conservation at the end of 2019. This has allowed us to anticipate an exciting new phase in the Cathedral’s long life by the development of a Master Plan, the first draft of which we consulted on in 2015 which led to endorsement by Wiltshire Council at the beginning of 2017. This is complemented by the development during 2016/2017 of a new Strategic Plan. Chapter and the Executive have spent considerable time thinking about what the Cathedral should focus on in the next five years. The overwhelming view, shared by staff and others within our life, is that we should continue to be outward-facing and making a tangible difference in the lives of all who come to us. This template of the way ahead for the Cathedral will shape our improvements for many years to come but under new leadership. I now take my leave of the Cathedral with enormous gratitude for the privilege of having been Dean for thirteen years, and as I step into a new role in the Church in Wales as Bishop of Llandaff. As I do so a review of Cathedrals, their governance and business models, has recently been commissioned by the Archbishops’ Council of the Church of England. There is much concern about particularly smaller Cathedrals and how the Church and nation can better support them in all they seek to be and do for their communities. Salisbury will play a full part in that work confident that our experience will be valuable, and in due time welcome a new Dean who will move forward this exceptional Church and sacred space. They will be truly blessed.

The Very Reverend June Osborne Dean of Salisbury July 2017


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STATEMENT OF CHAPTER'S RESPONSIBILITIES FOR THE PREPARATION OF THE ACCOUNTS Members of Chapter are responsible for preparing the annual report and accounts in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice. Under the provisions of the Cathedrals Measure 1999 and the Constitution of Salisbury Cathedral Chapter is required to prepare accounts, for each financial year, which give a true and fair view of the state of the Cathedral's affairs and of its financial activities during the year. In preparing those accounts members of Chapter are required to:

select suitable accounting policies and then apply them consistently;

make judgements and estimates that are reasonable and prudent;

comply with applicable accounting standards and, in particular, prepare the accounts in accordance with the Accounting and Reporting Guidelines for English Anglican Cathedrals prepared by the Association of English Cathedrals, subject to any departures disclosed and explained in the accounts;

state whether the accounting standards and Guidelines referred to above have been followed; and

prepare the accounts on the going concern basis unless it is inappropriate to presume that the Cathedral will continue to be financially viable.

Members of Chapter are responsible for ensuring that the Cathedral keeps proper accounting records which disclose with reasonable accuracy the financial position of the Cathedral and which enable them to ensure that the accounts comply with the provisions of the Cathedrals Measure 1999 and the “Guidelines on English Anglican Cathedrals Accounts”. Members of Chapter are also responsible for safeguarding the assets of the Cathedral and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.


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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SALISBURY CATHEDRAL COUNCIL

We have audited the financial statements of Salisbury Cathedral for the year ended 31 March 2016 which comprise the Consolidated Statement of Financial Activities, the Consolidated Balance Sheet, the Entity Only Balance Sheet, the Consolidated Cash Flow Statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law, Section 27 of the Cathedrals Measure 1999 and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the Chapter's members as a body, in accordance with Section 27 of the Cathedrals Measure 1999. Our audit work has been undertaken so that we might state to the members those matters we are required to state to them in the auditor’s 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 Chapter and the Chapter’s members as a body for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of the Chapter and auditor As explained more fully in the Statement of Responsibilities of the Chapter set out on page 11, the Chapter members are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of:

whether the accounting policies are appropriate to the Cathedral’s circumstances and have been

consistently and adequately disclosed;

the reasonableness of significant accounting estimates made by the Chapter members; and

the overall presentation of the financial statements.

In addition, we read all the financial and non-financial statements in the Annual Report of the Chapter to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implication for our report. Opinion on the financial statements In our opinion the financial statements:

give a true and fair view of the state of the affairs of the Cathedral and its subsidiaries as at 31

March 2016 and of the net movement in funds for the year then ended.

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting

Practice and under Section 27 of the Cathedrals Measure 1999.


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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SALISBURY CATHEDRAL COUNCIL (CONTINUED) Matters on which we are required to report by exception We have nothing to report in respect of the following matters where we are required to report to you if, in our opinion:

the information given in the Annual Report of the Chapter is inconsistent in any material respect

with the financial statements; or

sufficient accounting records have not been kept; or

the financial statements are not in agreement with the accounting records and returns; or

we have not received all the information and explanations we require for our audit.

FLETCHER & PARTNERS Chartered Accountants and Statutory Auditor Salisbury


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PRINCIPAL ACCOUNTING POLICIES Basis of accounting The accounts have been prepared under the historical cost convention, modified for the revaluation of properties and investments, and in accordance with applicable accounting standards and the Accounting and Reporting Guidelines for English Anglican Cathedrals prepared by the Association of English Cathedrals, as revised in February 2015. Properties Properties used for the Cathedral's own activities, apart from the Cathedral itself, are shown at existing use value, and investment properties are shown at open market value. Following the changes to the accounting regulations in February 2015 Chapter has elected to use the valuation as shown in the accounts as at 31st March 2015 as the deemed cost for the non- investment properties.

Depreciation is not charged on the properties used by the Cathedral because Chapter has adopted the previous revaluation dated 31st March 2015 on transition to the revised accounting regulations dated February 2015. No depreciation is charged on investment properties because their values are adjusted by means of the revaluation.

Other tangible fixed assets Other tangible fixed assets are capitalised and depreciated over their anticipated useful economic lives. The following annual rates of depreciation are used:

Property improvements 2% - 10% straight line basis Cathedral furniture and equipment 10% straight line basis Works department equipment and vehicles 20% straight line basis Office, shop, refectory and computer equipment 20% - 33% straight line basis

Heritage assets The Chapter is responsible for the care and maintenance of the Cathedral Church and its various furniture, ornaments, vestments and vessels. They consider that owing to their incomparable nature conventional valuation approaches lack sufficient reliability and that, even if valuations could be obtained, the costs would be onerous compared with the additional benefits derived by the Cathedral and users of the accounts. As a result, no value is reported for those assets in the Cathedral’s balance sheet. The cost of associated major repairs to the Cathedral Church is reported in the Statement of Financial Activities. Further information is given in Note 10 to the accounts. Investments Investments are carried at mid-market values quoted by the respective fund managers. Realised and unrealised gains and losses in the year are shown on the Statement of Financial Activities. Income from investments is accounted for on a receivable basis. Stock Stock consists of materials held by the works and glazing departments and goods for resale held by Salisbury Cathedral Enterprises Ltd. Work in progress relates to outside contracts. These are all valued at the lower of cost and net realisable value. Allocation of Support and Governance Costs The apportionment of support costs for 2017 has been allocated by the full time equivalent of staff in the relevant cost centres of the Cathedral. Governance costs include audit fees and relevant expenditure relating to specific meetings. These are now included in the support cost allocation.


16

Funds The funds of the Cathedral are classified according to their permitted usage as follows:

Endowment funds, whose capital cannot be spent, but the income from which may be used for either general or specific purposes

Restricted funds, whose capital and income are available for spending on specific purposes imposed by the original donor

Unrestricted funds, which are available for the general purposes of the Cathedral. These include amounts which have been designated for particular purposes by the Chapter but where the designation may be varied or removed in the future.

Incoming resources

Voluntary income and grants receivable, including donations, gifts and legacies are recognised when there is entitlement, certainty of receipt and the amount can be measured with sufficient reliability.

Charges in the course of mission and activities for generating funds are recognised as and when the related goods or services are provided.

Property and investment income is recognised on a receivable basis.

Lease premiums The majority of investment properties are subject to long-term leases for which a premium is charged on the grant of the lease. In accordance with the provisions of the Cathedrals Measure 1999 the lease premiums, less associated costs, are credited to endowed capital on receipt. The net proceeds are therefore shown as realised gains of the endowment funds in the year in which the lease premiums are received. Third party receipts and payments and donated goods and services When a third party pays for goods or services on behalf of the Cathedral the cost is shown as both income and expenditure in the Statement of Financial Activities. Similarly, donated goods and services are valued on an arm's length basis and shown as income and either capital or revenue expenditure as appropriate. No monetary value, however, is placed on the services provided by the many Cathedral volunteers. Legacies Legacies are included as income when it becomes reasonably certain that they will be received and the amount to which the Cathedral is entitled can be reliably ascertained. Where they are for specific purposes they are credited to the corresponding restricted fund. Repairs, restoration and maintenance of the Cathedral Expenditure on Cathedral repairs is charged in the Statement of Financial Activities as it is incurred. The costs of routine maintenance and work on the major repair programme are identified separately in notes to the accounts. Pension costs Pension scheme arrangements are operated on the basis of a defined contribution pension scheme on behalf of certain employees and one employee is a member of a defined benefit scheme. The assets of both schemes are held independently of the Cathedral. Contributions are charged to the Statement of Financial Activities in the period for which they are payable for both schemes. Taxation No corporation tax is chargeable as the Cathedral is a charity and its subsidiary companies surrender their profits to the Cathedral under Gift Aid. Income tax recoverable on donations and investment income is added to the corresponding net income. Value added tax Under the special rules applied by HM Customs and Excise the Cathedral is able to recover some of the VAT borne on its expenditure. Irrecoverable VAT is included within the support costs of the cost heading to which it relates.


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CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES

Note Unrestricted Restricted Endowment Total Total Funds Funds Funds 2017 2016 £000 £000 £000 £000 £000 ______ ______ ______ ______ ______

INCOME AND ENDOWMENTS FROM: 1 Donations and legacies 1,616 672 94 2,382 2,613 Grants in support of mission 12 376 - 388 801 Charges and fees arising in the 147 16 - 163 188 course of mission Trading and fundraising 1,163 - - 1,163 1,422 Investments 848 141 - 989 994 Other income 3 26 - 29 34

______ ______ ______ ______ ______ Total Income 3,789 1,231 94 5,114 6,052

______ ______ ______ ______ ______

EXPENDITURE ON: 2 ______ ______ ______ ______ ______ Raising funds 1,442 3 260 1,705 1,793 Ministry 767 476 - 1,243 1,090 Cathedral and precincts upkeep 776 484 28 1,288 1,861 Education and outreach 237 97 - 334 253 Other Expenditure 3 27 - - 27 301

______ ______ ______ ______ ______ Total expenditure 3,249 1,060 288 4,597 5,298

______ ______ ______ ______ ______

NET INCOMING/(OUTGOING) RESOURCES 540 171 (194) 517 754

OTHER RECOGNISED GAINS AND LOSSES

Investment properties:realised - - - - 46 Investment properties:unrealised 7 - - - 4,669 Other properties: unrealised 9 - - - - - Investments:realised - - 47 47 - Investments:unrealised 8 - 23 2,104 2,127 (1,001) Transfer Between Funds 15 - - - - -

______ ______ ______ ______ ______ Net movement in funds 540 194 1,957 2,691 4,468 Reconciliation of Funds Brought Forward at 1st April 2016 3,977 2,762 44,255 50,994 46,526 _____ ______ ______ ______ ______

BALANCES AT 31ST MARCH 2017 4,517 2,956 46,212 53,685 50,994

______ ______ ______ ______ ______


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CONSOLIDATED BALANCE SHEET Note Unrestricted Restricted Endowment Total Total Funds Funds Funds 2017 2016 £000 £000 £000 £000 £000 ______ ______ ______ ______ ______ FIXED ASSETS Investment assets Property 7 - - 16,633 16,633 16,633 Investments 8 2,631 1,992 16,830 21,453 18,812 ______ ______ ______ ______ ______ 2,631 1,992 33,463 38,086 35,445 Non-investment assets Property 9 - - 12,517 12,517 12,545 Other tangible assets 10 26 - - 26 40 ______ ______ ______ ______ ______ Total fixed assets 2,657 1,992 45,980 50,629 48,030 CURRENT ASSETS Stock 11 178 - - 178 181 Debtors 12 600 - - 600 530 Cash at bank and in hand 1,696 964 232 2,892 3,208 ______ ____ ______ ______ ______ 2,474 964 232 3,670 3,919 CREDITORS: Amounts falling due within one year 13 (567) - - (567) (924) ______ ______ ______ ______ ______ NET CURRENT ASSETS 1,907 964 232 3,103 2,995 ______ ______ ______ ______ ______ CREDITORS: Amounts falling

due after one year 14 (47) - - (47) (31)

______ ______ ______ ______ ______ NET ASSETS 4,517 2,956 46,212 53,685 50,994 ______ ______ ______ ______ ______ FUNDS Endowment funds 15 - - 46,212 46,212 44,255 Restricted funds 16 - 2,956 - 2,956 2,762 Designated funds 17 953 - - 953 258 General funds 17 3,564 - - 3,564 3,719 ______ ______ ______ ______ ______ 4,517 2,956 46,212 53,685 50,994 ______ ______ ______ ______ ______ Signed on behalf of Chapter: The Reverend Edward Probert Jane Barker Acting Dean Chairman, Finance Advisory Group Approved by Chapter: 14th July 2017


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CATHEDRAL BALANCE SHEET Unrestricted Restricted Endowment Total Total Funds Funds Funds 2017 2016 £000 £000 £000 £000 £000 ______ ______ ______ ______ ______ FIXED ASSETS Investment assets Property - - 15,623 15,623 15,623 Other investments 2,631 1,848 14,924 19,403 16,997 ______ ______ ______ ______ ______ 2,631 1,848 30,547 35,026 32,620 Non-investment assets Property - - 12,517 12,517 12,545 Other tangible assets 23 - - 23 34 ______ ______ ______ ______ ______ Total fixed assets 2,654 1,848 43,064 47,566 45,199 CURRENT ASSETS Stock 24 - - 24 23 Debtors 1,109 - - 1,109 988 Cash at bank and in hand 1,270 658 196 2,124 2,487 ______ ______ ______ ______ ______ 2,403 658 196 3,257 3,498 CREDITORS: Amounts falling due within one year (493) - - (493) (823) ______ ______ ______ ______ ______ NET CURRENT ASSETS 1,910 658 196 2,764 2,675 ______ ______ ______ ______ ______ CREDITORS: Amounts falling

due after one year (47) - - (47) (31)

______ ______ ______ ______ ______ NET ASSETS 4,517 2,506 43,260 50,283 47,843 ______ ______ ______ ______ ______ FUNDS Endowment funds - - 43,260 43,260 41.536 Restricted funds - 2,506 - 2,506 2,329 Designated funds 953 - - 953 258 Common account 3,564 - - 3,564 3,720 ______ ______ ______ ______ ______ 4,517 2,506 43,260 50,283 47,843 ______ ______ ______ ______ ______ Signed on behalf of Chapter: The Reverend Edward Probert Jane Barker Acting Dean Chairman, Finance Advisory Group Approved by Chapter: 14th July 2017


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CONSOLIDATED CASH FLOW STATEMENT Note 2017 2017 2016 2016 £000 £000 £000 £000 _____________________ _______________________ Net cash flow from operating activities 18 (478) 740 Returns on investments Rents received net of expenses 28 (59) Interest and dividends received 625 594 ______ ______ 653 535 ______ ______ 175 1,275 Capital expenditure and financial investment Purchase of investments (1,338) (685) Sales of investments 1,002 - Additions to non investment property - (748) Sales of investment properties - 244 Purchase of plant and equipment (11) (16) Loan repaid - - ______ ______ (347) (1,205) ______ ______ Increase /(Decrease) in cash 18 (172) 70 ______ ______


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NOTES TO THE CONSOLIDATED ACCOUNTS Unrestricted Restricted Endowment Total Total Funds Funds Funds 2017 2016 £000 £000 £000 £000 £000 1. INCOMING RESOURCES Donations and legacies Congregational collections 220 2 - 222 231 Visitors 1,301 - - 1,301 1,453 Other donations 70 233 20 323 293 Friends of the Cathedral - 5 74 79 104 Cathedral Trust - 80 - 80 10 Ivor Read Charity - 120 - 120 180 Legacies 25 232 - 257 342 ______ ______ ______ ______ ______ 1,616 672 94 2,382 2,613 ______ ______ ______ ______ ______ Grants in support of mission Church Commissioners - 139 - 139 138 Heritage Lottery Fund - - - - 99 Other grants 12 237 - 249 564 ______ ______ ______ ______ ______ 12 376 - 388 801 ______ ______ ______ ______ ______ Charges and fees arising in the course of mission Facilities and other fees 123 16 - 139 151 Education centre 24 - - 24 37 ______ ______ ______ ______ ______ 147 16 - 163 188 ______ ______ ______ ______ ______ Trading and fundraising Charges to visitors 118 - - 118 113 Flower Festival - - - - 210 Shop, refectory and car park 856 - - 856 927 Masonry and glazing contracts 189 - - 189 172 ______ ______ ______ ______ ______ 1,163 - - 1,163 1,422 ______ ______ ______ ______ ______ Investments Property 292 56 - 348 327 Investments 519 80 - 599 616 Interest on short-term deposits 37 5 42 51 ______ ______ ______ ______ ______ 848 141 - 989 994 ______ ______ ______ ______ ______ Other income Other income 3 26 - 29 34 ______ ______ ______ ______ ______ 3 26 - 29 34 ______ ______ ______ ______ ______ Total incoming resources 3,789 1,231 94 5,114 6,052 ______ ______ ______ ______ ______


22

NOTES TO THE CONSOLIDATED ACCOUNTS (continued) For Comparative Information Unrestricted Restricted Endowment Total Funds Funds Funds 2016 £000 £000 £000 £000 1. INCOMING RESOURCES Donations and Legacies Congregational collections 229 2 - 231 Visitors 1,453 - - 1,453 Other donations 77 216 - 293 Friends of the Cathedral - 30 74 104 Cathedral Trust - 10 - 10 Ivor Read Charity - 180 - 180 Legacies 142 200 - 342 ______ ______ ______ ______ 1,901 638 74 2,613 ______ ______ ______ ______ Grants in support of mission Church Commissioners - 138 - 138 Heritage Lottery Fund - 99 - 99 Other grants 28 536 - 564 ______ ______ ______ ______ 28 773 - 801 ______ ______ ______ ______ Charges and fees arising in the course of mission Facilities and other fees 130 21 - 151 Education centre 37 - - 37 ______ ______ ______ ______ 167 21 - 188 ______ ______ ______ ______ Trading and fundraising Charges to visitors 113 - - 113 Flower Festival - 210 - 210 Shop, refectory and car park 927 - - 927 Masonry and glazing contracts 172 - - 172 ______ ______ ______ ______ 1,212 210 - 1,422 ______ ______ ______ ______ Investments Property 272 55 - 327 Investments 536 80 - 616 Interest on short-term deposits 42 9 - 51 ______ ______ ______ ______ 850 144 - 994 ______ ______ ______ ______ Other income Other income 5 29 - 34 ______ ______ ______ ______ 5 29 - 34 ______ ______ ______ ______ Total incoming resources 4,163 1,815 74 6,052 ______ ______ ______ ______


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NOTES TO THE CONSOLIDATED ACCOUNTS (continued) Unrestricted Restricted Endowment Total Total Funds Funds Funds 2017 2016 £000 £000 £000 £000 £000 2. Raising funds Cost of facilities for visitors 277 - - 277 275 General marketing costs 79 - - 79 95 Appeals and fundraising expenses 80 2 - 82 59 Shop, refectory and car park 560 - - 560 584 Masonry and glazing contracts 167 - - 167 173 Property expenses 159 - 161 320 386 Investment management costs 4 - 99 103 106 Support costs 116 1 - 117 115 ______ ______ ______ ______ ______ 1,442 3 260 1,705 1,793 ______ ______ ______ ______ ______ 3. Ministry Ministry Clergy stipends and expenses 43 142 - 185 155 Clergy housing costs 27 - - 27 27 Clergy support costs 46 - - 46 47 Services and music 479 334 - 813 683 Support costs 172 - - 172 178 ______ ______ ______ ______ ______ 767 476 - 1,243 1,090 ______ ______ ______ ______ ______ Cathedral and precincts upkeep Major repairs and restoration - 445 - 445 538 Maintenance and interior upkeep 471 35 - 506 580 Cathedral insurance 61 1 - 62 57 Little Paradise Development - - 28 28 28 Magna Carta: funded by Heritage Lottery Fund - - - - 99 funded by Cathedral and Others - - 27 Magna Carta Projects - - - - 137 Flower Festival - - - 98 Precincts security and garden upkeep 62 3 - 65 87 Support costs 182 - - 182 210 ______ ______ ______ ______ ______ 776 484 28 1,288 1,861 ______ ______ ______ ______ ______ Education and outreach Educational activities 175 19 - 194 140 Archives and library - 66 - 66 37 Charitable and other giving 26 12 - 38 39 Support costs 36 - - 36 37 ______ ______ ______ ______ ______ 237 97 - 334 253 ______ ______ ______ ______ ______ Other expenditure Strategic planning and restructuring 27 - - 27 301 ______ ______ ______ ______ ______ 27 - - 27 301 ______ ______ ______ ______ ______ Total expenditure 3,249 1,060 288 4,597 5,298 ______ ______ ______ ______ ______


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NOTES TO THE CONSOLIDATED ACCOUNTS (continued) For Comparative Information Unrestricted Restricted Endowment Total Funds Funds Funds 2016 £000 £000 £000 £000 2. Raising funds Cost of facilities for visitors 275 - - 275 General marketing costs 95 - - 95 Appeals and fundraising expenses 59 - - 59 Shop, refectory and car park 584 - - 584 Masonry and glazing contracts 173 - - 173 Property expenses 163 - 223 386 Investment management costs 6 - 100 106 Support costs 113 2 - 115 ______ ______ ______ ______ 1,468 2 323 1,793 ______ ______ ______ ______ 3. Ministry Ministry Clergy stipends and expenses 14 141 - 163 Clergy housing costs 27 - - 27 Clergy support costs 47 - - 47 Services and music 458 225 - 683 Support costs 178 - - 178 ______ ______ ______ ______ 724 366 - 1,090 ______ ______ ______ ______ Cathedral and precincts upkeep Major repairs and restoration - 538 - 538 Maintenance and interior upkeep 545 35 - 580 Cathedral insurance 56 1 - 57 Little Paradise Development - - 28 28 Magna Carta: funded by Heritage Lottery Fund - 99 - 99 funded by Cathedral and Others 27 27 Magna Carta Projects - 137 - 137 Flower Festival - 98 - 98 Precincts security and garden upkeep 66 21 - 87 Support costs 210 - - 210 ______ ______ ______ ______ 877 956 28 1,861 ______ ______ ______ ______ Education and outreach Educational activities 139 1 - 140 Archives and library - 37 - 37 Charitable and other giving 27 12 - 39 Support costs 37 - - 37 ______ ______ ______ ______ 203 50 - 253 ______ ______ ______ ______ Other Expenditure Strategic planning and restructuring 301 - - 301 _____ ______ ______ ______ 301 - - 301 _____ ______ ______ ______ Total expenditure 3,573 1,374 351 5,298 _____ ______ ______ ______


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NOTES TO THE CONSOLIDATED ACCOUNTS (continued) Direct Support Total Cost Cost 2016 £000 £000 £000 4. APPORTIONMENT OF SUPPORT COSTS Raising funds 1,588 117 1,705 Ministry 1,071 172 1,243 Cathedral and precincts upkeep 1,106 182 1,288 Education and outreach 298 36 334 Other expenditure 27 - 27 ________ ________ ________ 4,090 507 4,597 ________ ________ ________ 5. STAFF NUMBERS AND COSTS The average weekly number of paid staff of all the entities included in the consolidated accounts was as follows: 2017 total 2016 total No’s FTE No’s FTE Cathedral and precincts 38 26 42 26 Visitors and education 35 19 43 19 Works and glazing departments 24 21 23 21 Administration 17 13 18 12 __ __ ___ __ 114 79 126 78 __ __ ___ __ The total staff costs of these persons were as follows: 2017 2016 £000 £000 Wages, salaries and stipends 1,964 1,894 166 Employer's national insurance 151 146 Employer’s pension contributions 91 86 _________ _________ 2,206 2,126 _________ _________ One member (2016:0) of staff received emoluments (excluding employer's pension contributions) of more than £60,000 during the year ended 31st March 2017. The Dean and the three Canons Residentiary were paid stipends (including the related pension provision) in accordance with scales set annually by the Church Commissioners, the Archbishop's Council and the Church of England Pensions Board. The stipends of the Dean and two Canons Residentiary are funded by the Church Commissioners. The amounts paid including employer national insurance during the year ended 31st March 2017 were as follows: Pension Stipend Contribution £ £ The Very Reverend June Osborne (Dean) 37,402 11,596 Canon E Probert (Chancellor) 31,398 9,277 Canon T Clammer ( Precentor) 28,880 9,277 Canon R Titley (Treasurer) 29,880 8,165 These pension contributions are paid to the Church of England Funded Pensions Scheme. Full details of the Scheme are shown in note 19.


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NOTES TO THE CONSOLIDATED ACCOUNTS (continued) 6. AUDITORS' REMUNERATION The total remuneration of the auditors of all the entities included in the consolidated accounts was: 2017 2016 £000 £000 Audit services 15 15 ______ ______ 7. INVESTMENT PROPERTIES General Choristers' Endowment Endowment Fund Fund Total £000 £000 £000 Valuation at 1st April 2016 15,623 1,010 16,633 Additions - - - Disposals - - - Transfers from /(to) non-investment properties - - - Revaluation - - - ______ ______ ______ Valuation at 31st March 2017 15,623 1,010 16,633 ______ ______ ______ The properties which are currently held for investment purposes include 27 houses and 2 offices within The Close. All are held freehold and the majority are let on long tenant-repairing leases. The General Endowment Fund properties were valued at 31st March 2016 by Strutt & Parker LLP, Chartered Surveyors, on the basis of open market value. The Choristers Endowment Fund property, comprising the Cathedral School boarding house and Wren Hall was valued by Strutt & Parker at 31st March 2016.

8. INVESTMENTS Unrestricted Restricted Endowment Total Funds Funds Funds £000 £000 £000 £000 MARKET VALUE At 1st April 2016 2,025 1,967 14,820 18,812 Additions 605 3 730 1,338 Disposals - (3) (952) (955) Increase/(decrease) in cash 1 2 128 131 Revaluation - 23 2,104 2,127 ______ ______ ______ ______ At 31st March 2017 2,631 1,992 16,830 21,453 ______ ______ ______ ______ COST At 31st March 2017 2,605 1,926 11,964 16,495 At 31st March 2016 2,000 1,926 11,964 15,890 The market values comprise: Collective Cash investments on deposit Total £000 £000 £000 At 31st March 2017 16,617 4,836 21,453 At 31st March 2016 14,107 4,705 18,812


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NOTES TO THE CONSOLIDATED ACCOUNTS (continued) 9. NON-INVESTMENT PROPERTIES Little Shop and Staff Paradise refectory Offices Houses Total £000 £000 £000 £000 £000 COST OR VALUATION Valuation at 1st April 2016 1,391 877 1,020 10,202 13,490 Additions - - - - - Disposals - - - - - Transfers from /(to) investment properties - - - - - Revaluation - - - - - ______ ______ ______ ______ ______ Valuation at 31st March 2017 1,391 877 1,020 10,202 13,490 ______ ______ ______ ______ ______ DEPRECIATION At 1st April 2016 68 877 - - 945 Charge for the year 28 - - - 28 ______ ______ ______ ______ ______ At 31st March 2017 96 877 - - 973 ______ ______ ______ ______ ______ NET BOOK VALUE At 31st March 2017 1,295 - 1,020 10,202 12,517 At 31st March 2016 1,323 - 1,020 10,202 12,545 The offices and staff houses were valued at 31st March 2010 by Strutt & Parker LLP, Chartered Surveyors, on the basis of existing use value. The Chapter have obtained advice from Strutt & Parker on market conditions and reflected this as a revaluation in the accounts year ended 31st March 2015. Following the changes to the accounting regulations as at February 2015, Chapter has elected to use the

previous valuation as at 31 March 2015 as the deemed cost on transition to the new accounting

regulations and therefore are no longer required to revalue the non – investment properties in the

future.

10. OTHER TANGIBLE FIXED ASSETS Workshop Shop and Building equipment Office refectory Cathedral improvements and vehicles equipment equipment inventory Total £000 £000 £000 £000 £000 £000 COST At 1st April 2016 102 194 381 64 276 1,017 Additions - 3 8 - - 11 - - Disposals - - - - - - - - - - ______ ______ ______ ______ ______ ______ At 31st March 2017 102 197 389 64 276 1,028 ______ ______ ______ ______ ______ ______ DEPRECIATION At 1st April 2016 102 187 353 61 274 977 Charge for the year - 4 18 2 1 25 On disposals - - - - - - ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ At 31st March 2017 102 191 371 63 275 1,002 ______ ______ ______ ______ ______ ______ NET BOOK VALUE At 31st March 2017 - 6 18 1 1 26 At 31st March 2016 - 7 28 3 2 40


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NOTES TO THE CONSOLIDATED ACCOUNTS (continued) 10. OTHER TANGIBLE FIXED ASSETS (continued) HERITAGE ASSETS NOT RECOGNISED IN THE BALANCE SHEET Construction of the Cathedral Church started in 1220 and it was dedicated in 1258. The spire and tower were added in c1330. The current Constitution of the Cathedral, drawn up under the terms of the Cathedrals Measure 1999, states that it is the responsibility of the Chapter to ensure that necessary repairs and maintenance in respect of the fabric of the Cathedral and its contents and monuments are carried out. The current major repair programme started in the 1980s and now approaching completion, is the latest in a series of repair programmes undertaken over the centuries. As a result of continuing repair and conservation of the Cathedral it has been possible for Christian worship to be maintained in it since 1258. The Cathedrals Fabric Commission for England (CFCE) was established by the Care of Cathedrals Measure 1990 to advise the administrative body of a cathedral church on the care, conservation, repair or development of the cathedral church, and also to consider and determine any application made to it by the Chapter. Under the same Measure all cathedrals appoint an architect to carry out certain statutory duties on behalf of the Chapter, in particular making an annual and quinquennial report on the condition of the fabric. CFCE require that an inventory of the Cathedral’s furniture, ornaments, vestments and vessels be maintained. This inventory contains no cost or valuation information. Particular items of note recorded are the Cathedral’s copy of the original 1215 Magna Carta; the oldest working mediaeval clock in the world; a glass prism by Lawrence Whistler; and a font designed by William Pye and installed in 2008, which was funded by donations. Acquisitions of heritage assets are made through purchase and donation and are intended to complement existing collections or enhance the liturgical life of the Cathedral. 2017 2016 £000 £000 11. STOCK Raw materials 42 44 Goods for resale 106 123 Work in progress 30 14 ______ ______ 178 181 ______ ______ 12. DEBTORS Trade debtors 146 142 Income tax recoverable 37 43 VAT recoverable - 10 Investment income receivable 153 179 Grant receivable 191 99 Other debtors 25 10 Prepayments 48 47 ______ ______ 600 530 ______ ______


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NOTES TO THE CONSOLIDATED ACCOUNTS (continued) 2017 2016 13. CREDITORS: amounts falling due within one year £000 £000 Bank overdraft 85 98 Trade creditors 179 289 Other creditors 15 12 VAT payable 5 - Amounts due to the Friends of Salisbury Cathedral 15 15 PAYE and NIC 46 48 Accruals 127 380 Deferred income 95 82 _______ _______ 567 924 _______ _______ 14. CREDITORS: amounts falling due after one year Provision 47 31 - - (40) (50) _______ _______ 47 31 _______ _______ 15. ENDOWMENT FUNDS Balance Transfers, gains Balance 1st April 2016 Income Expenditure and losses 31stMarch 2017 £000 £000 £000 £000 £000 Endowed capital 41,535 74 (284) 1,934 43,259 Prebendal Fund 35 - - 5 40 Choristers' Endowment Fund 2,313 20 (3) 164 2,494 Choral Foundation 372 - (1) 48 419 ______ ______ ______ ______ ______ 44,255 94 (288) 2,151 46,212 ______ ______ ______ ______ ______ 16. RESTRICTED FUNDS Balance Transfers, gains Balance 1st April 2016 Income Expenditure and losses 31stMarch 2017 £000 £000 £000 £000 £000 Specific funds: General fabric legacy fund 1,881 677 (445) - 2,113 Specific legacy fund 308 286 (342) 5 257 Willis organ fund 140 22 (26) - 136 Prebendal fund 80 5 (2) 11 94 Choristers' Endowment 167 113 (82) - 198 Choral Foundation 185 128 (163) 7 157 Magna Carta Trust - - - - - Specific grants 1 - - - 1 ______ ______ ______ ______ ______ 2,762 1,231 (1,060) 23 2,956


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NOTES TO THE CONSOLIDATED ACCOUNTS (continued) 16. RESTRICTED FUNDS (continued) Specific funds consist of unexpended donations and legacies for specific purposes, as follows: General fabric legacy fund: the repair and maintenance of the fabric of the Cathedral Specific legacy fund: various specific purposes including maintenance of the Cathedral and Close Willis organ fund: maintenance of the Willis organ in the Cathedral Prebendal fund: to meet expenditure incurred by non-residentiary Canons and Lay Canons Choristers' Endowment: to fund the fees of boy choristers Choral Foundation: to promote and enhance church music in the Cathedral 17. UNRESTRICTED FUNDS Balance Surplus/ Gains/ Balance 1st April 2016 (deficit) (losses) Transfers 31stMarch 2017 £00 £000 £000 £000 £000 Designated funds: Cathedral interior development fund 31 - - - 31 Property repair reserve 15 - - 50 65 General legacy fund 186 25 - - 211 Organ fund - - - 550 550 Safer Environment Fund - - - 70 70 Library fund 26 - - - 26 ______ ______ ______ ______ ______ 258 25 - 670 953 General fund 3,719 515 - (670) 3,564 ______ ______ ______ ______ ______ 3,977 540 - - 4,517 ______ ______ ______ ______ ______ Designated funds consist of income that has been designated for the following purposes: Cathedral interior development fund: for improvements to the interior of the Cathedral Property repair reserve: for repairs to the secular properties General legacy fund: for identifying the capital element of legacies for general purposes Library fund: for the purchase of books for the Cathedral library Organ fund: for the refurbishment of the Willis organ in 2019 Safer Environment fund: for improvements to CCTV. General fund: the general accumulated fund of the Cathedral.


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NOTES TO THE CONSOLIDATED ACCOUNTS (continued) 18. NOTES TO THE CASH FLOW STATEMENT Reconciliation of net changes in resources to operating cash flow 2017 2016 £000 £000 Net change in resources before revaluations 517 754 Depreciation 53 52 Rents received (348) (327) Investment property expenses 320 386 Interest and dividends received (599) (616) Change in stocks 3 (17) Change in debtors (96) 279 Change in creditors (328) 229 __________ __________ Operating cash (outflow) / inflow (478) 740 __________ __________ Reconciliation of net cash flow to movements in net funds (Decrease) / Increase in cash (172) 70 __________ __________ Change in net funds (172) 70 Net funds at 1st April 2016 5,008 4,938 __________ __________ Net funds at 31st March 2017 4,836 5,008 __________ __________ Analysis of net funds Balance Net cash Balance 1st April 2016 flow 31stMarch 2017 £000 £000 £000 Cash at bank and in hand: Unrestricted funds 2,156 (460) 1,696 Restricted funds 795 169 964 Endowment funds 257 (25) 232 ______ ______ ______ 3,208 (316) 2,892 Bank overdrafts (98) 13 (85) Investment deposits: Unrestricted funds 475 1 476 Restricted funds 416 2 418 Endowment funds 1,007 128 1,135 Debt due within one year - - - ______ ______ ______ 5,008 (172) 4,836 ______ ______ ______


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NOTES TO THE CONSOLIDATED ACCOUNTS (continued) 19. COMMITMENTS Capital expenditure There were no capital expenditure commitments at 31st March 2017 (2016: nil). Cathedral repair programme The Cathedral Church is currently undergoing a programme of major repairs which is being funded in part by the Cathedral Trust, other grant-making charities, and donations. The Cathedral's share of these works is funded by the general fabric legacy fund, the reserves of which are shown in note 16, and its common account. FRS17 pension disclosure

Salisbury Cathedral participates in the Church of England Funded Pensions Scheme for stipendiary

clergy. This is administered by the Church of England Pensions Board, which holds the assets of the

schemes separately from those of the Employer and the other participating employers.

Each participating employer in the scheme pays contributions at a common contribution rate applied to pensionable stipends. The scheme is considered to be a multi-employer scheme as described in Section 28 of FRS 102. This means it is not possible to attribute the Scheme’s assets and liabilities to specific employers and that contributions are accounted for as if the Scheme were a defined contribution scheme. The pensions costs charged to the SoFA in the year are contributions payable towards benefits and expenses accrued in that year, plus any impact of deficit contributions.

A valuation of the Scheme is carried out once every three years. The most recent Scheme valuation

completed was carried out at 31 December 2015. The 2015 valuation revealed a deficit of £236m,

based on assets of £1,308m and a funding target of £1,544m

Following the 31 December 2015 valuation, a recovery plan was put in place until 31 December 2025

with a contribution rate of 14.1% as a percentage of pensionable stipend. This has been calculated as

a provision of £47k shown under note 14.

Defined Contribution Pension Scheme. Employees of Salisbury Cathedral may enrol in a group personal pension scheme with Friends Life the assets are held separately from the Cathedral.


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NOTES TO THE CONSOLIDATED ACCOUNTS (continued) 20. SUBSIDIARY COMPANIES The consolidated accounts include the income, expenditure and net assets of the following 2 companies which are wholly owned by the Cathedral. In both cases figures relate to the year ended 31st March 2017. Salisbury Cathedral Salisbury Cathedral Works Department Ltd Enterprises Ltd £000 £000 Turnover 55 1,037 Expenditure 43 717 ________ ________ Net profit 12 320 Payments under Gift Aid Salisbury Cathedral 12 305 The Friends of Salisbury Cathedral - 15 ________ ________ Retained profit/(loss) - - ________ ________ £ £ Gross assets at 31.3.17 22 443 Net assets/(liabilities) at 31.3.17 - - Salisbury Cathedral Works Department Ltd is the trading arm of the Cathedral works department. It carries out outside contracts, principally repairs to historic buildings, on behalf of the works department. Salisbury Cathedral Enterprises Ltd operates the Cathedral shop and the car park, and receives commission from sales in the Cathedral Refectory restaurant which is operated by an independent catering company. It also carries out outside contracts, principally repairs to historic buildings, by the glazing department. 21. CONNECTED CHARITIES For the benefit of the Cathedral There are 4 charities whose objects are primarily or partially to support the work of the Cathedral but which are not controlled by the Chapter and whose accounts are therefore not included in these consolidated accounts. Summaries of their most recent accounts, insofar as they are for the benefit of the Cathedral, are as follows: Salisbury Cathedral The Friends of The Ivor Read Girl Choristers' Trust Salisbury Cathedral Charity Fund £000 £000 £000 £000 Year end: 31.3.17 31.3.17 5.4.17 31.8.16 (draft) (draft) Gross income 134 238 150 99 Net income before grants 133 157 137 94 Grants to or for the Cathedral 80 85 121 82 Gross assets 280 699 4,153 1,723 Net assets 279 654 4,147 1,694


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NOTES TO THE CONSOLIDATED ACCOUNTS (continued) 21. CONNECTED CHARITIES (continued) The grants to the Cathedral shown above do not correspond exactly to the income shown in the Statement of Financial Activities due to timing differences in the recognition of grants. Salisbury Cathedral Trust is an independent charity whose objects are the furtherance of religion and education, in particular by giving priority to the repair and maintenance of Salisbury Cathedral. During the year, 2 of its 4 trustees were members of Chapter. The Friends of Salisbury Cathedral is a members' association whose object is to enhance the fabric, contents, work and worship of the Cathedral. It is an independent charity and is governed by its Executive Council which includes a member of Chapter. The Ivor Read Charity is an independent charity for the maintenance of the fabric of Canterbury and Salisbury Cathedrals in equal shares. During the year, 1 of its 3 trustees was a member of Chapter. The amounts quoted are the Cathedral’s 50% share of the Charity’s income and assets. The Salisbury Cathedral Girl Choristers' Fund is an independent charity whose objects are to pay bursaries for girl choristers at Salisbury Cathedral. During the year 1 of its 7 trustees was a member of Chapter. The grants shown were paid directly to the Cathedral School and are not shown in the Cathedral's accounts. Not for the benefit of the Cathedral The Chapter appoints the Governors of Salisbury Cathedral School, which is a company limited by guarantee of which the Cathedral as a corporation aggregate is the sole member. During the year the Cathedral received rent from the School of £112k under its lease of the School's premises and the Choristers' Endowment Fund received rent of £43k from the School under its lease of 57A The Close which belongs to that Fund. The Cathedral, the Choristers' Endowment Fund and the Choral Foundation paid £136k to the School in respect of choristers' bursaries and the Cathedral paid a further £29k to the School to pay expenses in relation to the choirs. These amounts are included in the cost of services and music. Last year as part of the merger with Leaden Hall School, Chapter committed expenditure of £748K to property purchases and a contribution of £184K was also made towards the transitional operational costs of the merger, which is included in other expenditure under strategic planning and restructuring. 22. OTHER RELATED PARTY TRANSACTIONS The 4 Principal persons were reimbursed with expenses totalling £17,057 (2016: £11,947) and 3 Chapter members were reimbursed with expenses totalling £6,329 (2016: nil).

Documents

REPORT AND ACCOUNTS YEAR ENDED 31ST MARCH … · REPORT AND ACCOUNTS YEAR ENDED 31ST MARCH 2017 CONTENTS ... Salisbury Cathedral Constitution and Statutes dated 1st July 2001