Church of England may be forced to sell some of its ancient cathedrals to cover their overwhelming debts

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Church of England may be forced to sell some of its ancient cathedrals to cover their overwhelming debts

The Church of England may be forced to sell one or more of its ancient cathedrals because of their overwhelming debts, its leaders warned yesterday.

They fear bankruptcy courts will order the firesale of a cathedral if its dean and chapter reach the point where they cannot pay their bills.

Now bishops are to ask the Church’s parliament, the General Synod, to approve a new law to prevent any judge from responding to the financial crash of a cathedral by ordering a sell-off.

A high-level report to be presented to a meeting of the Synod on Tuesday said ‘serious fault lines’ have been found at Exeter and Peterborough cathedrals.

The Church of England may be forced to sell one or more of its ancient cathedrals because of their overwhelming debts, its leaders warned yesterday. Pictured, Peterborough Cathedral

Bradford was close to entering an agreement with its creditors in 2000 and that there are ‘a large number of cathedrals under significant financial pressure’.

The CofE has 42 cathedrals, many of them of the first historic, architectural and cultural importance. Nine charge entrance fees, including £7.50 at Exeter.

But the money is not enough to cover the running costs of the building and staff. A Church inquiry said in 2016 the cathedral needed £1.5million a year and its finances were ‘parlous’.

The forced sale of a cathedral would be a nightmare for the CofE and the Archbishop of Canterbury, Justin Welby.

It could lead to a much-loved cathedral being used in the same way as some cast-off churches – as a concert venue, conference centre, hotel, bar or restaurant.

Cathedrals in the heart of popular cities with expensive property prices might also be converted into upmarket housing, with flats for which developers could demand millions.

An even more embarrassing possibility for Church authorities is the prospect that a notable cathedral could be bought by followers of another faith.

The report by a Cathedrals Working Group led by the Bishop of Stepney Adrian Newman, and which included former Labour home secretary Jack Straw, called for the CofE to start talks with the Government about state funding for cathedrals.

It said: ‘Whenever cathedrals get into debt and serious financial difficulty, this presents a reputational risk for the entire Church, especially where a cathedral is unable to pay its creditors in full.

‘It is currently not clear how the statutory insolvency regime applies to cathedrals. If the provisions of insolvency legislation which enable an insolvent corporation’s debts to be dealt with in an orderly way are not available, the insolvency of a cathedral would be exceptionally difficult to manage.’

It said that when Bradford Cathedral ran into difficulties, a court allowed its dean and chapter to draw up a company voluntary arrangement (CVA) with creditors.

Such schemes allow bankrupt companies to pay back creditors on agreed terms. ‘We recommend that legislation should be developed to clarify that the CVA regime will apply to cathedrals, should the need arise,’ the report said.

‘The legislation should be drafted to make clear that winding-up provisions should not allow the sale of the cathedral to meet a chapter’s debts.’

The Synod, which meets in York, will be asked to approve the recommendation for a legal ban on the firesale of cathedrals.

Church laws passed in the Synod and approved by Parliament then become laws which must be applied by all courts.

The initiative to prevent the sale of a cathedral came in a report that presented a scathing view of the way cathedrals are run and which made 150 recommendations.

No cathedral should be able to borrow more than £1million – or 10 per cent of its income if that is less – without permission from the diocesan bishop and Church authorities, it said.

It stressed: ‘The significant number of cathedrals at severe financial risk means that doing nothing is no longer an option.’