Peterborough Cathedral's finances explained: Why has the £2m a year Cathedral run into financial difficulties

Peterborough Cathedral has launched an urgent appeal to find £300,000 to plug its financial shortfall for the year amid mounting cost pressures such as staff costs and energy bills.

This has left the Cathedral, which has only just paid off millions of pound in debt, having to ask local businesses and individuals for help in order to stave off drastic cost cutting measures such as partial closures and introducing charging, which some Cathedrals in the country already have.

Below, the Peterborough Telegraph explains the Cathedral’s current finances and how the situation reaches this point.

How have we got here?

Seven years ago, Peterborough Cathedral was in a deeply serious financial plight with around £3.5m of debt. Since then, major leaps and bounds have been made to improve the financial situation and much of this debt has now been repaid. The Cathedral has moved onto a much more secure and sustainable financial footing, however, rising costs dating back to Covid, the cost of living crisis, increasing employment costs as well as sky high energy and heating bills, have pushed the finances to almost breaking point again by creating a shortfall. The Cathedral has limited reserves to plug this gap.

How much does it cost to run Peterborough Cathedral?

The annual running cost of Peterborough Cathedral is close to £2m, which works out a roughly £5,500 a day.

Around 50% of the costs are staff, with the other half being taken up by building administration. This includes sustaining the Cathedral itself as well as the building across the Precincts, insurance, ensuring the safety of all of the buildings, as well as heating them- which is vital to allow visitors to be able to come into the Cathedral.

Costs are also incurred by hosting events and the Cathedral’s own groups such as its choir etc.

How is Peterborough Cathedral funded?

The Cathedral receives no direct funding from central government or local authorities. Therefore largely relies on donations, legacies and grants as well as the income it can generate for itself.

Grants can be applied for, if available, which is an avenue the Cathedral is going to strongly investigate.

The Cathedral’s diverse range of events, such as the Monsters of the Sea exhibition, Luxmuralis and concerts cover around 20% of the building’s costs.

15% of costs is covered by grants from the historic reserves of the Church of England. This pays for key lay staff, such as the Dean of Peterborough himself and other key members of the clergy.

Other key income sources for the Cathedral include, visitor income, donations as well as rent from its various properties and assets on its estates. Among the recent efforts to generate funds has been the creation of the St Oswald’s Conference Centre within its grounds.

All of the rest must be found by the Cathedral is which ever way it chooses but despite its best efforts, a shortfall of £300,000 remains.

How far would the £300k go?

If the Cathedral was to raise its target of £300,000, that would cover the costs throughout the coming year and ensure that there was no cashflow crisis.

The Cathedral also hopes to use the process to build stronger connections with local people and businesses to create more income streams in both the short term and long term to prevent future issues such as this arising.

What could happen if the money is not found?

If the money is not found, the Cathedral would have to undertake a serious re-evaluation of every pound that it spends.

Early measures that could be considered include no longer opening the building for seven days a week and not doing so for free either.

The Cathedral would also have to reassess and perhaps cut some of the important support programmes in the city that it currently supports.

When quizzed about the Cathedral’s finances by the Peterborough Telegraph, the Dean, the Very Reverend Chris Dalliston said: “We believe that the long term support of friends of the Cathedral, companies, businesses and individuals is absolutely critical to sustain us in the long term and the short term.

“The amount of people from such a wide variety of fields, gives us hope and heart that we can get through this particular blip again move forward to the future with confidence.”