The Church of England's Diocese of Lichfield, which covers Staffordshire, the northern half of Shropshire and much of the Black Country, has recovered from a "serious threat to the financial viability of the diocese", following a "painful and bruising" five-year financial strategy.
In 2002 the Lichfield Diocesan Synod was warned of an ever-increasing gap between the contribution that parishes had been asked to make to diocesan expenditure and the amount they were actually paying; and that the diocese had been filling the gap by borrowing from the Church Commissioners and using up financial reserves.
Synod was told that the diocese was rapidly approaching the end of available cash reserves and that unless the cost base was reduced and liquidity made there would be a "serious threat to the financial viability of the diocese".
The strategy agreed by synod resulted in the diocese cutting £835,000 from its annual expenditure - including the loss of 50 stipendiary posts. The diocese also announced that its parishes had to repay their arrears.
The diocese is now entering the final half of the last year of the financial strategy and the Chair of the Diocesan Board of Finance, Peter Sharpe, is very up-beat about the future.
He said: "Diocesan finances are now at the stage where, although under some strain, income and expenditure are generally in balance. There are too many unknowns to be too specific about exact annual outcomes, but over a six year strategy and given prudent management, one year's deficit should be balanced by another year's surplus and vice versa. If we can now pick up the call to build a sustainable strategy underpinned by determining clear priorities, the pain of the past five years will have been worthwhile.
