The Church of England is 'heading for financial disaster' because of its Net Zero targets and the £100million slavery reparations fund, a report has warned.
Social justice projects were cited by academics as 'costly' and 'extravagant' initiatives which are contributing to financial issues and a decline in churchgoers.
They are seen as 'unrealistic, extravagant, unsustainable and deeply depressing' by congregations, according to a study by Canon Robin Gill and Professor John Craven.
The CofE wants to cut carbon emissions to net zero by 2030 and has a £190million fund for eco-friendly renovations – but has admitted it will not meet the deadline.
Leaders also have a £100million fund called 'Project Spire', which is a reparative justice initiative to address its historical links to the transatlantic slave trade.
But this has faced a backlash from Conservative MPs and peers who branded it a 'legally dubious vanity project' with some claiming it is based on poor evidence.
Now, the new report 'Wasted Money in a Diminishing Church' has urged the CofE to take 'ruthless' action by cutting bureaucracy and make parishes its 'first priority'.
Canon Gill and Professor Craven also called for the number of diocesan bishops to be cut by a third to improve morale among 'deeply dispirited' parishioners and clergy.
The Church of England is 'heading for financial disaster', a report has warned (file picture)
The authors cited a 'crisis' of falling attendance, donations and ordinations, with the number of dioceses with financial deficits now at 37 out of 42 - up from 18 in 2019.
Excessive bureaucracy was also branded an issue - given dioceses now employ 80 per cent more staff than in 2005, with the total having risen from 1,300 to 2,300.
New roles include net zero officers, racial justice leads and safeguarding experts - with some dioceses now said to have the same number of staff and ministers.
'Wasted Money in a Diminishing Church': All 12 recommendations from report's authors
The priority areas for action are:
1. A thorough examination of the necessity for and location of administrative activities;
2. A reduction in the number of dioceses and diocesan bishops to around 30;
3. Within these remaining dioceses, a considerable reduction in the numbers of managers and administrators;
4. A reduction of at least three-quarters in the money allocated nationally to strategic investments;
5. The design of a structure in which deaneries are the primary budget holders;
6. The design of a workable budget that allocates funding from historic resources to deaneries on the basis of their relative deprivation.
From these we also recommend that:
7. All remaining suffragan bishops and archdeacons have a part-time role in parish ministry;
8. Regular and independently verified reports are required about the financing and outcomes of all projects;
9. Further moves are made to make a career as a parish priest attractive financially and professionally;
10. The responsibility for parsonages moves to deaneries.
Finally, and crucially, there must be:
11. An explicit recognition that every proposal for spending income from historic assets eventually requires greater contributions from parishioners;
12. A clear demonstration that church leaders are hearing and responding to enormous frustrations in parishes.
The report said: 'We want to break this silence because we are convinced that the Church of England is heading for financial disaster.
'More and more of its funds are being spent on administration in every diocese while churchgoing continues to decline, and less and less is spent on supporting parish clergy.
'As clergy are spread ever more thinly in urban and rural areas, services are less frequent, congregations are getting smaller, and less money can be raised in church collections from people who wonder what they are getting for their money.'
They claim that the CofE is 'becoming unsustainable in terms of both its finances and attendances' – pointing out that churchgoing hit a peak in the early Victorian period.
But they said the CofE 'now has four times as many bishops as the Victorians had and less than a quarter of their churchgoers'.
The report continued: 'Overall, there is a serious cycle of decline. The Church of England must reduce the numbers of dioceses, bishops, archdeacons and diocesan administrators, improve the morale of parish priests and the many retired clergy - and take action to enhance parish ministry.
'The Church of England has always been rich in money and skills. It has been ruthless at times in redirecting that wealth towards the needs of a changing society. That ruthlessness will be needed again.'
A CofE spokesman told the Daily Mail: 'This wide-ranging and thoughtful report is a welcome contribution to ongoing conversations within the Church of England about the challenges and pressures we face.
'It rightly acknowledges that the world has changed 'fundamentally' since the Reformation and that we are living through a period of rapid change.
'As the report notes, there are already good examples of successful sharing of resources at a national level. Dioceses have also made strides in sharing roles and services regionally in recent years.
'As seen with the reorganisation which brought three dioceses together into a new diocese earlier this century, structures are regularly kept under review. Larger scale restructurings, even within a shared region, are a major undertaking.
'The report singles out the growth in safeguarding staff in dioceses as its primary example of an apparent growth of 'administrators'.
Archbishop of Canterbury Dame Sarah Mullally, pictured delivering a sermon in Rome in April
'These new posts – bringing expertise in child protection and policing – are vital in helping ensure the most vulnerable people within our communities are safe.'
The CofE said in May that church attendance had risen for the fifth year in a row – with an estimated 1.02million people regularly worshipping at CofE churches in 2025, up 1.4 per cent on the year before.
Average Sunday attendance rose to 590,000 and weekly attendance was up to 707,000.
But despite the increase, attendance was still below pre-pandemic levels.
In 2019, the worshipping community was at 1.11million, with average Sunday attendance at 690,000 and weekly attendance at 854,000.
Last month the CofE was embroiled in a major row when the Archbishop of Canterbury handed an award to a Muslim cleric who previously pledged to bestow an honorary title on Osama bin Laden.
Hafiz Muhammad Tahir Mehmood Ashrafi was given the award on September 11, the 25th anniversary of 9/11, by Dame Sarah Mullally for reconciliation and interfaith co-operation.
But in 2007, as head of the Pakistan Ulema Council group of Islamic clerics and scholars, the imam said he would give bin Laden the title Saifullah, which means 'Sword of God', for 'serving Muslims by waging jihad against infidels'.
The Archbishop's office later withdrew the award.