If the churchyard has been closed through the formal procedure, walls become the responsibility of the PC. The price sounds high, but obviously, I don't know the scale of the job. With no listing or conservation restrictions, you could seek a cheaper alternative solution.
The power to accept gifts of money is contained in Section 139 of the LGA 1972 which states:
139 Acceptance of gifts of property.
(1) Subject to the provisions of this section a local authority may accept, hold and administer—
(a) for the purpose of discharging any of their functions, gifts of property, whether real or personal, made for that purpose; or
(b) for the benefit of the inhabitants of their area or of some part of it, gifts made for that purpose;
and may execute any work (including works of maintenance or improvement) incidental to or consequential on the exercise of the powers conferred by this section.