The Church of England Commissioners have been forced to provide even more money to help struggling Peterborough Cathedral pay bills and staff.
Protect debt-ridden cathedrals from liquidation, report urges
Measures must be taken to stop cash-strapped cathedrals being sold off, members of the Church of England's governing body will be told.
A new report shall urge General Synod to pass a new law stipulating that a landmark facing insolvency should not be put up for sale.
The document says the legislation should clarify that a cathedral unable to pay its debts can enter into a Company Voluntary Arrangement (CVA).
A CVA is an agreement where a party agrees to pay creditors all or some of the cash owed during a set time period.
In its findings, the Cathedrals Working Group said: "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 is not available, the insolvency of a cathedral would be exceptionally difficult to manage.
"We therefore recommend that legislation should be developed to clarify that the CVA regime will apply to cathedrals, should the need arise.
"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.
Attention was drawn to the financial sustainability of the Church's 42 cathedrals when Peterborough Cathedral became engulfed by a cash-flow crisis.
The report cites "anecdotal evidence" that "other cathedrals" are also "in a weak financial position".
It warns: "Whenever cathedrals get into debt and serious financial difficulties, this presents a reputational risk for the entire Church, especially where a cathedral is unable to pay its creditors in full
"More work needs to be done on the financial sustainability of cathedrals.
"In the face of increasing demands on cathedrals, there is a level of systemic under- funding that needs addressing by church and state.
"Every cathedral needs financial staff of sufficient quality and seniority."
The report will be presented to the almost 500 members of General Synod - including bishops, clergy and lay people - meeting on York for five days.
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