There have been two recent major developments for the management and governance structures of diocesan boards of education and our great cathedrals. In this article, Frances Godden considers the changes and the legislatorial framework.
Diocesan Boards of Education Measure 2021
At the time of writing, approximately one million children attend nearly 4,700 Church of England schools, each of which will be supported by their Diocesan Board of Education (DBE), a statutory body operating currently under legislation which is 30 years old.
Further to Royal Assent being given to the new Diocesan Boards of Education Measure 2021 (DBE Measure) on 29 April 2021, the governance arrangements for each of the 42 Anglican DBEs are now subject to long-overdue revision and, in some cases, are free to embrace an entirely new legal form.
What are the changes?
The new DBE Measure presents dioceses with five options, namely:
- a single incorporated DBE;
- a joint incorporated DBE;
- a single unincorporated DBE;
- a joint Unincorporated DBE; and
- a DBE which is a statutory committee of the relevant Diocesan Board of Finance (DBF).
Template schemes for diocesan synods to designate one of these bodies as a DBE have been helpfully produced by the Church of England Education Office, further to consultation with the Charity Commission and the Department for Education, and have been circulated with accompanying guidance. Each diocese will need to consider their own operational context and working practices in order to determine which form will be in its own best interests to adopt.
How are the changes implemented?
There is a specific process which must be followed, involving diocesan synod and referral to the Archbishop’s Council for certification, before their new schemes are ready to come into operation, with a longstop date of 23 January 2021. There is also a requirement to ensure that any existing governing documents – such as articles of association, for example – are amended, so as to bring them in line, and in full compliance, with their new scheme and the DBE Measure.
A great deal of debate and discussion at general synod formed the content of the new Measure, and therefore the various structural options available to each DBE. Not all of these were welcome, or fit comfortably within either the diocesan framework (where there may be historic and/or existing tensions between the operation of the DBE and the DBF), or indeed within the Charity Commission’s preferred corporate model for institutions enjoying oversight and management of public and private funds and property. The complexities of process and drafting will need to be carefully navigated in each case.
With our longstanding expertise on ecclesiastical education matters, Birketts is well-placed to advise dioceses on the form, structure, interplay and drafting of the new constitutional documents, and the various processes required in order to bring them into effect. We would encourage any diocese wishing to discuss these challenges to contact Frances Godden in the first instance, who will be happy to advise.
Cathedrals Measure 2021
The new Cathedrals Measure 2021 (Cathedrals Measure) also received Royal Assent on 29 April 2021, having received overwhelming support from general synod with no votes cast against it in November 2021. This presents an exciting yet seismic change in the managerial framework and operational structure of one of our nation’s most important institutions, which bring together faith, community, heritage and commerce in often spectacular architectural settings.
Why is there a need for change?
Cathedrals are ecclesiastical corporations, established for spiritual purposes. Whilst they are defined as having charitable purposes in the existing Cathedrals Measure 1999, they are currently excluded from the Charities Act 2011, and, whilst HMRC does recognise them as charities for taxation purposes, they are not regulated by the Charity Commission, being neither ‘exempt’ nor ‘excepted’ charities. Instead, they are regulated by their diocesan bishop in their capacity as ‘visitor’.
Cathedrals play a key role in our national life, attracting some 10m adult visitors annually in pre-COVID times, and contribute approximately £200m to the UK economy through their commercial enterprises and employment opportunities. They are the ‘mother church’ of their diocese, and are important focal points in their communities, providing space for solace and prayer, awe and wonder, as well as, more recently, centres for mass vaccinations and charitable outreach.
Governance of cathedrals came under close scrutiny following the episcopal visitation at Peterborough in 2016, and the establishment of the Cathedrals Working Group the following year. What emerged was a worrying pattern of outdated governance and operational practices no longer fit for purpose in the 21st century in terms of financial management, major building projects, safeguarding, accountability, oversight and scrutiny. The governance, structure and regulation of cathedrals needed a major overhaul, and that is what the Cathedrals Measure now seeks to enable.
What are the changes?
The new Cathedrals Measure provides for a more robust and streamlined framework within which cathedral chapters become a board of registered, accountable charity trustees. There will no longer be a requirement to have a council undertaking certain statutory functions separate from the cathedral chapter; instead, the council or such other advisory bodies as the chapter feels appropriate to establish will sit outside of the chapter, which will undertake all trustee functions.
Through this separation of management from governance, and by bringing cathedrals under the regulatory remit of the Charity Commission as well as the Church Commissioners, the new constitutions and statutes required for each cathedral by the Measure will provide clarity as to the roles and responsibilities of those involved. It should also result in more professional control of finance, risk and audit, with the majority of board members required to be non-executive, whilst lead by the cathedral’s dean as Chair.
How are the changes implemented?
Again, there is a strict process required for cathedrals to follow as they draw up their new governing documents, with extensive consultation and timing requirements to ensure the whole process is carefully managed.
Cathedral property will need to be carefully identified and categorised. Dovetailed with this is the requirement to then apply for registration with the Charity Commission. Whilst the regulator has been consulted on the draft templates, each application will still require individual scrutiny before a charity registration number is issued.
Throughout and beyond the transitional period, chapters will need to ensure that they understand both the implications of their new role as charity trustees and the new structures within which they must operate.
The House of Lords broadly welcomed the Bishop of Durham’s motion to present the Measure for Royal Assent, at which he commented that it “is vital to provide cathedrals the governance structures that they need to support effective safeguarding, healthy finances and increased accountability going forward.”
With the implementation of these changes comes a welcome opportunity for cathedrals to adopt best practice in charity governance, safeguarding and heritage stewardship in a manner fit for purpose in the 21st century, all the while ensuring that their central function as a local place for prayer, worship, thanksgiving and remembrance continues to flourish.