This being notice of the book at reference 1, first noticed as a result of a chance encounter at reference 2. A book about the Church of England’s disastrous adventures in the property market in the second half of the 20th century.
The author, Terry Lovell, was a journalist, but he seems to be more or less invisible on the Internet. Perhaps he valued his privacy. From a northern obituary: ‘… formerly an investigative reporter and northern news editor of ‘The People’…’.
A book which is not very well written; an avalanche of names and facts, all a bit breathless, all a bit hard to follow. I did not make it all the way to the end and it would have been improved had it been edited a bit more thoroughly – and pruned. But interesting nonetheless.
Digging in the online archive
It took a little while, perhaps half an hour or so, to dig up the original, whistle blowing article in 1992 in the Financial Times, reference 3, with the Financial Times online archive only going back to 2000. But Bing – or perhaps Google – did turn up a successor article at reference 4. And from which I learn that the Church, thirty years after the events in question, looks to have put its investment arm at least, back into good order.
A bit more digging and I get to the Internet Archive at reference 5, which offers me a facsimile of the newspaper for the day in question and a slightly garbled version of the text, presumably derived by computer from the facsimile. The first page of the facsimile is included above.
The next page is headed the ‘Unholy saga of the church’s missing millions’.
Finding out about the church and about debates about same in the House of Commons – with the late Frank Field taking a leading interest – was much easier. Field was, inter alia, a committed and active member of the Church of England.
Some background on the church
Much of the business of the Church of England used to be devolved onto the Church Commissioners who used to operate out of rather grand premises on Millbank, No.1 Millbank, now sold off. Front door, bottom left in the snap above. Sloping windows illuminating a grand staircase?
I learn that the name of this road is taken, rather appropriately, from a mill which once belonged to Westminster Abbey, demolished to build a fancy house in the early part of the 18th century. The present, rather exuberant building mostly went up around the beginning of the 20th century.
The establishment of the established church was expressed in various acts of Parliament from mid-19th century to mid-20th century, including one called the Enabling Act of 1919, which more or less empowered the church to do its own thing, without much need to consult Parliament. That said, the doings of the church were thoroughly mixed up with those of the state at large, a mixing up which was reflected in the presence of a lot of former civil servants, some retired permanent secretaries and the like - few of whom had any prior experience of managing investments, never mind property. Sitting ducks for the sharks of the outside world. As it were.
You can read all about this enabling act in the centenary piece at reference 6. Where, in the snap of the Church Assembly included above, I liked the way that the chairman, the Archbishop of Canterbury, is busy with his papers rather than with whatever it is that the speaker, the doyen of the assembly, might be saying.
At the time of the present story, the management structure of the church was pretty hopeless, not at all well-suited to managing anything much, never mind a rather risky foray into the property market. Things have got a good deal better since.
And at the beginning of the story, the church depended on its endowments to provide much of its income, managed centrally by the Church Commissioners (of whom there were far too many). The root problem was that there were very few if any new endowments and the income was not matching need. The church was tempted to be more adventurous with its endowments, to try and stretch things out a bit. More adventurous with its financing generally…
To jump ahead, it is all looking much healthier now, near thirty years later, with a healthy return on a total which has grown perhaps by as much as a factor of ten. The snap above being taken from reference 7.
Some background on pensions
Adapting the truth a little, the church, having thought to introduce pensions rather than having their parsons die in harness, then thought to pay them from the income generated by endowment fund, a fund which had been built up over the centuries, a lot of it in land, but which was attracting little if any new money. A closed fund. Participants in the pension scheme did not contribute, either through their employers’ wage bill or their own wages.
The civil service used to pay its pension bill out of current income. A proportion of current income is thus used to meet the costs which had been accumulated in the past. No contributions and no big fund – apart from the Consolidated Fund that is.
Most modern pension schemes are funded by putting aside a suitable amount of current income, which might be described as employers’ contributions, employees’ contributions or as a mixture of both.
Generally speaking, it is thought best these days that accumulating pension rights are held by the prospective pensioner himself in one form or another. Private pension pots; private property. This avoids the problem of trust – the prospective pensioner no longer has to trust his employer to do the right thing – which some of them can’t or don’t – and makes it easier for the pensioner to move around. But also reflects a shift from the defined benefit sort of pension (which I have) to the rather less attractive but much less expensive defined contribution sort of pension.
In the first and the last instances, large sums of money are tied up in investment funds. Investment funds which might be constrained to not to pay attention to the ethical concerns of the day and not to speculate in risky ventures, to play it safe. Which last, from the point of view of the economy as a whole, might result in not enough money being available for said risky ventures. You have to speculate if you want to accumulate.
All this would probably less important in a world where the number of employees and the number of pensioners were not changing through time. In a static world.
Some further thoughts
Two hundred years ago, the wealth of the church was probably a lot more in relative terms than it is now. A big institution, perhaps the biggest employer, perhaps the biggest holder of land in the land, perhaps after the Crown. But the church is now in decline, and as a business, smaller than plenty of big companies and corporations.
In the olden days, if you were a successful baker, you might branch out and open a few branches in neighbouring villages. In time, you might grow to be a substantial chain of bakers. But continued growth would depend on continued success, success which paid for the organic growth.
However, in a society where there is surplus value, where wealth accumulates & concentrates and where there is money, it is open to the holders of said pots of gold to use some of that gold to fund the expansion of a promising baker. A speculation which might be based more on appearances than on sustained performance in a growing business. I have, for example, read that plenty of fine dining experiences have foundered after the founders sold out and when the money men piled in.
The sorry story
Against all this background there is not much story to tell.
But it starts in the 1960s when the church was still holding lots of agricultural and residential land, some of which holdings dated back to the Middle Ages. Some of the residential land was in the form of a large and rundown estate in Maida Vale, near Paddington in London, and the Church attracted no little opprobrium for the way it ran down this estate in favour of higher paying property. This at a time when Rachman was operating, on a rather smaller scale, in nearby Paddington, on property of much the same sort.
The church decided to move into commercial property and had some early successes with shopping centres and other ventures. It then piled into shopping centres, here and in the US, some of this with borrowed money, with rather mixed results.
This included an expensive and well publicised speculation in a large parcel of agricultural land to the southeast of Ashford in Kent, around Mersham, to the southeast of the southern by-pass, with the idea that, with the arrival of the channel tunnel, this land would suddenly become very valuable. Unfortunately, the relevant council refused planning permission for some years and the project collapsed. The only people who got rich were the professional property people who had battened onto the church and as far as I can see the land remains agricultural land.
Clearly a big railway junction, well before the tunnel was thought of.
In parallel with all this, there was a big row about the Church investing in shares in companies with links to South Africa, a row which went as far as one bit of the church going to law with another bit. With the point at issue being the extent to which a pension fund should take into account ethical considerations.
The upshot being that the lawyers upheld the church investment people who did not want to disengage from all the companies, some very large, with involvement in South Africa. Many people in the church found this very unsatisfactory: an organisation like a church with holy ends ought to be able to be more holy in its behaviour than appeared to be the case.
All this while the church was moving into creative accounting of a sort which would be illegal in a public company and into speculating with borrowed money – to the tune of £500m. A downturn in the market caught them, as it were, with their pants down and they took big losses on forced sales.
This prompted a flurry of reports and a major reorganisation, it having become clear that management arrangements were woefully inadequate to the needs of the day. The good news is that this reorganisation appears to have worked, and the church’s finances are in much better shape – in part because the centre has delegated to the periphery. And with the periphery making a much bigger contribution to the pot than it had been previously. Being a little careless with the truth, the men and women in the pews ended up paying the fancy bills run up at HQ by the church’s professional advisors.
Trivia
In the eighties, I may have organised a conference at Church House, the Westminster HQ of the Church of England, possibly to do with something which was then called SSADM. At that time, Church House had one of the bigger venues available for hire in central London. I remember that the young ladies with whom one had to deal were very nicely spoken, probably the product of very nice girls’ schools.
Then in the early nineties, I was acquainted with an economist at the Treasury who had been seconded to Church House. She reported that it was a regular hotbed of intrigue and goings-on, not very holy at all.
While in the early noughties, I was taken to lunch in a fancy place in Millbank a couple of times, a place which I remember as having been carved out of a very fancy atrium. Lots of space, pillars and fancy detailing. Sadly, this now appears to have been No.4 rather than the No.1 Millbank of present interest.
And then, while composing this post, I was in bed trying to get to sleep and the toy boat problem drifted into mind: perhaps a rather grand term, but a problem which my mother had introduced to me as a child. The problem being to say ‘toy boat’ several times in rapid succession and one almost invariably ends up with ‘boyt’ to rhyme (as it were) with ‘toy’. With practise it can be done properly, at least up to a point, but one does have to concentrate. I learned later that the vocal apparatus has great trouble with switching back and forth between the two vowel sounds. The present point being that I was trying this out silently, under the bed covers - and it was still a problem, even though my lips were sealed. So at least part of the problem starts with the part of the motor apparatus which lives in the brain. While ‘toy coat’ did not seem to present a problem; one seemed to need the intervening ‘b’ as a catalyst.
Gemini correctly identifies 11th July 1992 as a Saturday. Which agrees with the Internet Archive and a number of other sources. I suppose I could have used the Microsoft Excel function which does the calculation, but I have not yet bothered to turn it up.
Conclusions
Yet another interesting digression, albeit one which took a good bit out of quality time, something of a scarce resource these days.
With one take-away being the reminder that it is hard to be ethical when large sums of money are involved. Or even decent: think of all the unpleasantness that can be generated in families by unwanted or unexpected provisions in wills.
References
Reference 1: Number One Millbank: The financial collapse of the Church of England – Terry Lovell – 1997.
Reference 2: https://psmv5.blogspot.com/2025/01/piano-98.html.
Reference 3: Unholy Saga of the Church's Missing Millions – John Plender, Financial Times – 1992. 11th July 1992.
Reference 4: Church of England delivers divine returns: John Plender analyses the remarkable investment success of the religious endowment – John Plender, Financial Times – 2017. May 21st 2017.
Reference 5: https://archive.org/.
Reference 6: The cry for self-government: 100 years of the Enabling Act - Jeremy Morris, Church Times - 2019. December 6th 2019. To be found at https://www.churchtimes.co.uk/articles/2019/6-december/features/features/the-cry-for-self-government-100-years-of-the-enabling-act.
Reference 7: Enabling Christ's Thriving Church: The Church Commissioners for England Annual Report 2023 – The Church Commissioners – 2023. Presented to Parliament pursuant to section 12(2) of the Church Commissioners Measure 1947. Looks very like the sort of (usually anodyne) annual report you might get from a government department. I note that the size of this report has inflated from 1.4Mb in 2016 – admittedly a weak year – to 11.7Mb now.
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