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Shane Phelan: Archdiocese facing uphill struggle to turn financial woes around

THE case taken by three staff against the Dublin Archdiocese has done much to flesh out the emerging financial crisis facing the Catholic Church in Ireland.

The archdiocese is the largest in the country, covering 198 parishes in Dublin, most of Wicklow, and parts of Kildare, Carlow, Wexford and Laois.

Its fortunes are crucial to the well-being of the church here, and if the details revealed as part of the pay case are anything to go by, the future is not looking bright.

It is well known that clerical abuse claims have taken their toll on the archdiocese's coffers, with over €13.5m paid out in settlements and legal costs.

But the overall financial well-being of the archdiocese has never been quite clear, as detailed accounts are not widely distributed. A set of financial statements for 2010/11 reveal a €9.3m deficit. Only €55.98m was taken in, with €65.3m paid out – a situation that, if allowed to continue unfettered, would see the archdiocese's cash reserves obliterated by 2016.

Drastic measures were implemented in response, with even the lowest paid staff hit by pay cuts. The three staff members at the centre of the case didn't agree to their salaries being hit, but the archdiocese cut them anyway, and in doing so breached the 1991 Payment of Wages Act.

The root of the archdiocese's woes is that its lifeblood, the money donated by Mass-goers every Sunday, has gone into freefall.

In its submission to the rights commissioner as part of the pay case, the archdiocese acknowledged its key problem – the faithful are dying and no one is taking their place.

"The primary contributors are over 65 years of age. As these people pass away, they are not being replaced by new contributors," it said.

Two collections are taken each Sunday and these make up a large proportion of the archdiocese's income.

The first goes into the Common Fund. This is used to pay an income to priests, provide nursing homes for sick and retired clerics, and pay for health insurance.

A diocesan report, seen by the Irish Independent, shows income coming into this fund has been on the slide for years.

Between 2008/09 and 2010/11 alone, income from church collections, Christmas and Easter dues and 'stole fees' paid to a priest for administering a sacrament, slumped from €20.6m to just over €17m.

At the same time, spending on retired priests and insurance has had to increase.

The second collection goes into what is called Share.

The salaries of the three women at the centre of the case are almost 100pc dependent on this fund.

According to the rights commissioner submission, the original purpose of Share was to pay for the setting up of new parishes, to assist parishes that can't raise enough income, and to contribute towards central administration costs.

But the fallout from the abuse scandals and the drop in the number of priests has placed increased pressure on this collection.

Administrative work once carried out by priests is now being done by lay people and there are now around 55 staff employed in the archdiocese's Central Pastoral and Administrative Services section.

According to the archdiocese, 15 years ago, just one-third of Share collection money went on funding diocesan offices. Now the running of these offices accounts for over two-thirds of the Share fund.

At the same time, Share collection revenue dropped by almost 13pc between 2009 and 2012 – slipping from €8m to under the €7m mark.

In a letter last year to priests and parishioners outlining a fall in donations, Archbishop Diarmuid Martin acknowledged: "The challenge is great. The call on your generosity is great."

Time will tell if the challenge is in fact too great for Dr Martin to turn things around.

Irish Independent