The Church of England is taking steps to ban “ash cash” payments to clergy for taking funerals at churches and crematoria.

Instead, the money will go direct to dioceses. The move will stamp out the “crematoria cowboys”, clergy who supplement meagre or non-existent incomes by conducting dozens of crematorium funerals at £96 a time.

At its meeting next month in Westminster, the General Synod will debate switching the “incumbent’s fee” for pastoral services to a fee payable direct to the diocesan board of finance.

The Church will also set fees for the first time for other services that have grown sharply in recent years, such as memorial services and the “service of blessing” that often follows a civil marriage. Fees for funerals for children under the age of 16 are to be abolished, as are the £34 fees for the reading of wedding banns in church.

The proposals are set out in a report, Four Funerals and a Wedding, which takes its title from statistics showing that in 2005, Church of England ministers conducted 207,200 funerals and 57,200 weddings. The fees that clergy can charge for weddings and funerals are fixed by the Archbishops’ Council, the Church’s policy body. Every person in England is legally entitled to a wedding and funeral in the parish in which they live. Clergy can charge £120 for a weddding, £36 for a burial of remains, £51 for a funeral and £96 for a service at a crematorium.

In 2002, the most recent year for which full figures are available, fees raised more than £37 million for the Church. Of this, £14 million went towards paying stipends — about one twelfth of the total stipend bill of £180 million — and the remainder went to parishes. The new fees for “ministry”, as they will be styled, will be higher because they will contribute towards training for clergy as well as stipends.

More than nine in ten serving clergy donate their fees direct to their diocese. The few who keep them have the amount deducted from the following year’s stipend.

With declining clergy numbers, dioceses depend on retired clergy to keep pace with the number of funerals. Most dioceses have allowed retired clergy to keep a proportion, such as two thirds, of the fees.

The report says that there is evidence of “leakage” of fees that should be used to contribute to stipends. Most clergy set up good systems to manage the fees, but there have been cases of clergy getting into “financial difficulty” through failing to pass on the fees.

Tax inspectors are known to be unhappy about funeral directors who make cash payments direct to individual clergy, according to the report.

It says: “Tales abound, usually anecdotal and some certainly apocryphal, about ministers who operate outside the system and allegedly make a fortune as freelance purveyors of funeral and other services while apparently ministering under the auspices of the Church of England.”

Retired and non-stipendiary clergy will, under the new rules, be able to apply for a “retainer” based on how many funerals and weddings they conduct: a priest who carried out 71 to 80 a year could be granted a stipend of £5,500. Up to ten weddings and funerals would net a mere £600. The report says these services represent “some of the Church of England’s main opportunities for pastoral mission.”

The Ven Norman Russell, Archdeacon of Berkshire and the prolocuter of the Synod’s House of Clergy for Canterbury province, said that some would see the moves as a further step in breaking down the concept of clergy freehold, where the incumbent priest “owns” the benefice.

There would be concerns that the parish priest would be cut out of the process and the pastoral needs of families overlooked were undertakers dealing directly with dioceses, he said, adding: “Most retired clergy behave responsibly. It could be that there is the occasional person — what is known as a crematorium cowboy — who might have his wings clipped by this.”

— “They’ve got a nerve,” said the Rev Chris Horseman when The Times told him that funeral fees would be paid direct to dioceses.

Mr Horseman, who conducts 250 funerals a year, recently set up Rent-a-Rev, a business specialising in funeral and wedding services.

This month he resigned his licence to minister as a priest in the Church after he was told he was in breach of Canon Law for services that did not conform with church liturgy. He said the new rules would not affect him. “The Church does not have the right to dictate who should be paid for a funeral,” he said.