The Scottish Government Consolidated Accounts for the year ended 31 March 2018

Annual report of consolidated financial results of the Scottish Government, its Executive Agencies and the Crown Office, prepared in accordance with IFRS


16. Other Financial Commitments

16a. Other Commitments

The payments to which the Scottish Government is committed analysed by the period during which the commitment expires are as follows:

  2017-18 2016-17
£m £m
Payable in 1 year 780 741
Payable between 2 - 5 years 4,366 3,994
Payable in more than 5 years - -
Total 5,146 4,735

Other financial commitments payable within one year include £336m (2016-17: £425m) as a committed income stream to Network Rail in accordance with the Deed of Grant; £381m (2016-17: £291m) to Abellio ScotRail and £27m (2016-17: £23m) to Serco Caledonian Sleeper under the Franchise Agreements; and £8m (2016-17: £7m) for vehicles within Scottish Ambulance Services. There is also £32m (2016-17: £nil) to fund Scotland's successful bid to co-host the 2018 European Championships and host the Short Course Swimming and European Athletics Indoor Championships in 2019; £1m (2016-17: £nil) to host Euro 2020, and £2m (2016-17: £nil) to host the Solheim Cup in 2019.

Commitments payable within 2 to 5 years include £2,680m (2016-17: £2,062m) to Network Rail, £1,594m (2016-17: £1,751m) to Abellio; and £79m (2016-17: £106m) to Serco. There is also £0.3m (2016-17: £57m) to fund Scotland's successful bid to co-host the 2018 European Championships and host the Short Course Swimming and European Athletics Indoor Championships in 2019; £0.5m (2016-17: £2m) to host Euro 2020; and £12m (2016-17: £16m) to host the Solheim Cup in 2019.

16b. Guarantees, Indemnities and Letters of Comfort

The Scottish Government entered into the following guarantees, indemnities or provided letters of comfort. None of these is a contingent liability within the meaning of IAS 37, Provisions, Contingent Liabilities and Contingent Assets, since the likelihood of a transfer of economic benefit in settlement is too remote. They therefore fall to be measured following the requirements of IAS 39, Financial Instruments: Recognition and Measurement. They are included for parliamentary reporting and accountability purposes. A number of these arrangements cannot reliably be quantified; where values can be determined these have been provided.

Guarantees

Health and Sport

Guarantee to underwrite a figure equivalent to 50% of previous year's donation from The Robertson Trust to the Scottish Charity Air Ambulance of £0.1m (2016-17: £0.1m).

Economy, Jobs and Fair Work

In 2016-17, the Scottish Government entered into a guarantee contract in respect of a power purchase agreement between the hydro plant and aluminium smelter at Lochaber (owned by SIMEC and Liberty House respectively). The total discounted value of premiums due to the Scottish Government in respect of this guarantee is £18.7m (2016-17 discounted value: £21.4m), and is included in the Statement of Financial Position and in Note 9 (Financial Instruments) within the Other Funds balance.

Communities, Social Security and Equalities

Guarantee of a £0.15m (2016-17: £0.15m) loan between Social Investment Scotland and Glencraft (Aberdeen) Ltd following the restructuring of the business, and guarantees to the Lothian Pension Fund in relation to the admission of the Scottish Homes Pension Fund and Scottish Futures Trust.

Rural Economy and Connectivity

The Scottish Government has underwritten the Abellio ScotRail and Serco Caledonian Sleeper pension funds, in line with guarantees provided to other train operators by the Department for Transport.

Guarantee to Lothian Pension Fund in relation to the admission of The Scottish Agricultural College.

Guarantee to Fife Council in relation to the admission of The Scottish Agricultural College to the Local Government Pension Fund.

Guarantee to Dumfries and Galloway Council in relation to the admission of The Scottish Agricultural College to the Local Government Pension Fund.

Section 54 guarantees issued as part of the rail rolling stock procurement process.

Guarantee to Highlands and Islands Enterprise in relation to their pension scheme.

Justice

Guarantee to Lothian Pension Fund in relation to the admission of The Scottish Legal Complaints Commission.

Indemnities

Culture, Tourism and External Affairs

At the beginning of the year there was an existing indemnity relating to objects lent under the National Heritage Act 1980 and the National Heritage (Scotland) Act 1985. The year-end balance depends on new acquisitions and the number of exhibitions that these pieces are included in during the financial year, and at 31 March this was £1,257m (2016-17: £1,165m).

Existing indemnity for local museums and galleries dependent on the number of new acquisitions and number of exhibitions that these pieces were included in during the financial year, valued at £21.8m (2016-17: £22.2m) at 31 March.

Communities, Social Security and Equalities

Mortgage lenders held indemnities by Scottish Homes for £0.503m (2016-17: £0.516m) at 31 March.

Rural Economy and Connectivity

Existing indemnity related to operating agreements in respect of the ScotRail and Caledonian Sleeper Franchise Agreements.

Indemnity clause in roads contracts to compensate Network Rail for any damage or loss of access.

Liability agreement for any issues caused by the Glasgow Airport Rail Link ground investigation work for the next 4 years.

Economy, Jobs and Fair Work

Indemnity cover of up to a total of £0.4m (2016-17: £0.4m) to cover legal costs incurred by the Carbon Trust or Salix in the novation of loans to another party.

Letters of Comfort

None

Contact

Back to top