Bishop apologises for build-up of unpayable debts

Shock as Lancaster diocese plunges £10 million into the red
BY MARK GREAVES
A CATHOLIC bishop has apologised to his flock after admitting that his diocese is more than £10 million in the red.
Bishop Patrick O'Donoghue of Lancaster said the money was borrowed to pay for diocesan bureaucracy from money earmarked for use by parishes.
In a letter read out on Sunday across the churches of the diocese the bishop conceded that the debt, accumulated over 15 years, might never be repaid.
The diocese, which covers part of Lancashire and the whole of Cumbria, has made five employees redundant in response to the discovery, and imposed a spending freeze on all building projects.
A parish levy will also be introduced. "I share your anger and frustration that monies accumulated in your deposit and current accounts have been borrowed largely to shore up central administration," the bishop told his parishioners. "What is even more frustrating is that it is highly unlikely that the central diocesan administration will ever be able to pay them back in full."
Bishop O'Donoghue, who was appointed in 2001, admitted that he had always sensed the diocese was living beyond its means. "Every so often I questioned if we could afford certain structures, only to be told there was no problem because we were 'asset rich'." The bishop then commissioned a series of reviews which provided a more accurate picture of the diocesan finances.
Confusion between civil law, in which the diocese and the parishes are one distinct unit, and canon law, in which the parish is a separate body within the diocese, meant that money deposited in parish accounts was used as if it belonged to the central administration. Bishop O'Donoghue said: "I am sorry that this should have happened over many years, leaving us with a debt to the parishes and restricted funds of more than £10 million. As your bishop I sincerely apologise for this." A range of measures will be introduced, he wrote in his letter, to ensure parish funds are not misused in the future. The diocese has already made a third of its workforce redundant, and plans to reduce the number of services it provides. The remaining services will be funded by a levy on the parishes. The administration will be "leaner", and more focused.
"The strength and generosity of the parishes is the single mos(consoling feature of all of this," the bishop wrote. "It is gratifying to know that our diocese is a family of parishes where the less welloff can count on the support of richer ones.
"We should not allow our financial difficulties to dampen our zeal for the Gospel."