Information

Scottish Government Consolidated Accounts: year ended 31 March 2021

Annual report of the consolidated financial results of the Scottish Government, its Executive Agencies and the Crown Office, prepared in accordance with International Financial Reporting Standards (IFRS). The Audit Scotland report on the accounts is also linked and is unqualified.


Report of the Auditor General for Scotland to the Scottish Parliament

Reporting on the audit of the financial statements

Opinion on financial statements

I have audited the financial statements in the Scottish Government Consolidated Accounts for the year ended 31 March 2021 under the Public Finance and Accountability (Scotland) Act 2000. The financial statements comprise the Summary of Total Outturn, the Summary of Resource Outturn, the Summary of Capital Outturn, the twelve Portfolio Outturn Statements, the Consolidated Statement of Financial Position, the Statement of Comprehensive Net Expenditure and Changes in Taxpayers' Equity, the Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union, and as interpreted and adapted by the 2020/21 Government Financial Reporting Manual (the 2020/21 FReM).

In my opinion the accompanying financial statements:

  • give a true and fair view in accordance with the Public Finance and Accountability (Scotland) Act 2000 and directions made thereunder by the Scottish Ministers of the state of affairs of the Scottish Government and the consolidation of the entities within the departmental accounting boundary as at 31 March 2021 and of the net resource outturn and resources applied to objectives for the year then ended;
  • have been properly prepared in accordance with IFRSs as adopted by the European Union, as interpreted and adapted by the 2020/21 FReM; and
  • have been prepared in accordance with the requirements of the Public Finance and Accountability (Scotland) Act 2000 and directions made thereunder by the Scottish Ministers.

Basis for opinion

I conducted my audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)). My responsibilities under those standards are further described in the auditor's responsibilities for the audit of the financial statements section of my report. I am independent of the Scottish Government in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK including the Financial Reporting Council's Ethical Standard, and I have fulfilled my other ethical responsibilities in accordance with these requirements. Non-audit services prohibited by the Ethical Standard were not provided. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Conclusions relating to going concern basis of accounting

I have concluded that the use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work I have performed, I have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the body's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from when the financial statements are authorised for issue.

Risks of material misstatement

I have reported in a separate Annual Audit Report, which is available from the Audit Scotland website[125], the most significant assessed risks of material misstatement that I identified and my judgements thereon.

Responsibilities of the Principal Accountable Officer for the financial statements

As explained more fully in the Statement of the Accountable Officer's Responsibilities, the Principal Accountable Officer is responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the Principal Accountable Officer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Principal Accountable Officer is responsible for using the going concern basis of accounting unless deemed inappropriate.

Auditor's responsibilities for the audit of the financial statements

My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. I design procedures in line with my responsibilities outlined above to detect material misstatements in respect of irregularities, including fraud. Procedures include:

  • obtaining an understanding of the applicable legal and regulatory framework and how the Scottish Government is complying with that framework;
  • identifying which laws and regulations are significant;
  • assessing the susceptibility of the financial statements to material misstatement, including how fraud might occur; and
  • considering whether the audit team collectively has the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations.

The extent to which my procedures are capable of detecting irregularities, including fraud, is affected by the inherent difficulty in detecting irregularities, the effectiveness of the Scottish Government's controls, and the nature, timing and extent of the audit procedures performed.

Irregularities that result from fraud are inherently more difficult to detect than irregularities that result from error as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skilfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved.

A further description of my responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website[126]. This description forms part of my auditor's report.

Reporting on regularity of expenditure and income

Opinion on regularity

In my opinion in all material respects:

  • the expenditure and income in the financial statements were incurred or applied in accordance with any applicable enactments and guidance issued by the Scottish Ministers, the Budget (Scotland) Act covering the financial year and sections 4 to 7 of the Public Finance and Accountability (Scotland) Act 2000; and
  • the sums paid out of the Scottish Consolidated Fund for the purpose of meeting the expenditure shown in the financial statements were applied in accordance with section 65 of the Scotland Act 1998.

Responsibilities for regularity

The Principal Accountable Officer is responsible for ensuring the regularity of expenditure and income. In addition to my responsibilities to detect material misstatements in the financial statements in respect of irregularities, I am responsible for expressing an opinion on the regularity of expenditure and income in accordance with the Public Finance and Accountability (Scotland) Act 2000.

Reporting on other requirements

Opinions on audited part of the Remuneration and Staff Report

I have audited the parts of the Remuneration and Staff Report described as audited. In my opinion, the audited part of the Remuneration and Staff Report has been properly prepared in accordance with the Public Finance and Accountability (Scotland) Act 2000 and directions made thereunder by the Scottish Ministers.

Statutory other information

The Principal Accountable Officer is responsible for the statutory other information in the Scottish Government Consolidated Accounts. The statutory other information comprises the Performance Report and the Accountability Report excluding the audited part of the Remuneration and Staff Report.

My responsibility is to read all the statutory other information and, in doing so, consider whether the statutory other information is materially inconsistent with the financial statements or my knowledge obtained in the audit or otherwise appears to be materially misstated. If I identify such material inconsistencies or apparent material misstatements, I am required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work I have performed, I conclude that there is a material misstatement of this statutory other information, I am required to report that fact. I have nothing to report in this regard.

My opinion on the financial statements does not cover the statutory other information and I do not express any form of assurance conclusion thereon except on the Performance Report and Governance Statement to the extent explicitly stated in the following opinions.

Opinions on Performance Report and Governance Statement

In my opinion, based on the work undertaken in the course of the audit:

  • the information given in the Performance Report for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Public Finance and Accountability (Scotland) Act 2000 and directions made thereunder by the Scottish Ministers; and
  • the information given in the Governance Statement for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Public Finance and Accountability (Scotland) Act 2000 and directions made thereunder by the Scottish Ministers.

Matters on which I report by exception

I report to you if, in my opinion:

  • adequate accounting records have not been kept; or
  • the financial statements and the audited part of the Remuneration and Staff Report are not in agreement with the accounting records; or
  • I have not received all the information and explanations I require for my audit.

I have nothing to report in respect of these matters.

Conclusions on wider scope responsibilities

In addition to my responsibilities for the annual report and accounts, my conclusions on the wider scope responsibilities specified in the Code of Audit Practice are set out in my Annual Audit Report.

Use of my report

This report is made solely to the parties to whom it is addressed in accordance with the Public Finance and Accountability (Scotland) Act 2000 and for no other purpose. In accordance with paragraph 120 of the Code of Audit Practice, I do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties.

Stephen Boyle,
Auditor General for Scotland,
102 West Port, Edinburgh, EH3 9DN

Summary of Total Outturn

For the year ended 31 March 2021

Restated 2019-20 Outturn £m Programme Resources Resource Outturn £m Capital Outturn £m Total Outturn £m Budget £m Variance £m
14,565 Health and Sport 17,270 528 17,798 18,090 (292)
12,556 Communities and Local Government 12,799 297 13,096 13,050 46
142 Finance 204 24 228 231 (3)
4,328 Education and Skills 4,477 507 4,984 4,950 34
2,786 Justice 2,803 41 2,844 2,885 (41)
2,729 Transport, Infrastructure and Connectivity 3,531 283 3,814 4,135 (321)
765 Rural Economy and Tourism 1,104 (159) 945 998 (53)
162 Environment, Climate Change and Land Reform 216 259 475 502 (27)
647 Economy, Fair Work and Culture 1,983 50 2,033 1,980 53
525 Social Security and Older People 3,604 82 3,686 3,660 26
34 Constitution, Europe and External Affairs 46 - 46 50 (4)
146 Crown Office and Procurator Fiscal Service 163 9 172 170 2
39,385 Total Outturn  48,200 1,921 50,121 50,701 (580)

Summary of Resource Outturn

For the year ended 31 March 2021

Restated 2019-20 Outturn £m Programme Resources Outturn £m Budget £m Variance £m
14,271 Health and Sport 17,270 17,588 (318)
12,352 Communities and Local Government 12,799 12,730 69
120 Finance 204 206 (2)
3,731 Education and Skills 4,477 4,350 127
2,775 Justice 2,803 2,834 (31)
2,472 Transport, Infrastructure and Connectivity 3,531 3,759 (228)
500 Environment, Climate Change and Land Reform 216 232 (16)
214 Rural Economy and Tourism 1,104 1,156 (52)
621 Economy, Fair Work and Culture 1,983 1,936 47
466 Social Security and Older People 3,604 3,570 34
34 Constitution, Europe and External Affairs 46 50 (4)
139 Crown Office and Procurator Fiscal Service 163 162 1
37,695 Total Resource Outturn  48,200 48,573 (373)
Of which Operating Costs 1

Summary of Capital Outturn

For the year ended 31 March 2021

Restated 2019-20 Outturn £m Programme Resources Outturn £m Budget £m Variance £m
294 Health and Sport 528 502 26
204 Communities and Local Government 297 320 (23)
22 Finance 24 25 (1)
597 Education and Skills 507 600 (93)
11 Justice 41 51 (10)
257 Transport, Infrastructure and Connectivity 283 376 (93)
265 Environment, Climate Change and Land Reform 259 270 (11)
(52) Rural Economy and Tourism (159) (158) (1)
26 Economy, Fair Work and Culture 50 44 6
59 Social Security and Older People 82 90 (8)
- Constitution, Europe and External Affairs - - -
7 Crown Office and Procurator Fiscal Service 9 8 1
1,690 Total Capital Outturn  1,921 2,128 (207)

Health and Sport

Portfolio Outturn Statement for the Year Ended 31 March 2021

Restated2019-20 Outturn £m Programme Variance Note Gross Expenditure £m Income Applied £m Outturn £m Budget £m Variance £m
  Expenditure Limit            
14,135 Health and Sport 1 17,848 663 17,185 17,475 (290)
14,135 Total Expenditure Limit 17,848 663 17,185 17,475 (290)
UK Funded Annually Managed Expenditure
92 Health 2 62 - 62 66 (4)
92 Total AME 62 - 62 66 (4)
Other Expenditure
44 Health - Revenue-financed infrastructure 3 67 44 23 47 (24)
44 Total Other Expenditure 67 44 23 47 (24)
14,271 Total Resources 17,977 707 17,270 17,588 (318)
280 Capital - Additions 4 515 - 515 466 49
(27) Capital - Disposals 4 - 22 (22) - (22)
41 Capital (Other Expenditure) - Additions 35 - 35 36 (1)
294 Total Capital 550 22 528 502 26
14,565 Total Outturn 18,527 729 17,798 18,090 (292)

With effect from 2017-18, gross income and expenditure for the portfolio excludes income received from Integration Authorities on the basis that this presentation better reflects the funding relationship between Integration Authorities and NHS Boards.  This adjustment has no impact on the portfolio’s net outturn position.
Income of £7,034m was received by Boards in 2020-21 (2019-20: £6,353m) for provision of healthcare services commissioned by Integration Authorities. NHS funding to Integration Authorities for 2020-21 totalled £7,328m (2019-20: £6,435m).

Explanation of Major Variances greater than £3m:

Note 1

The variance is driven primarily by the timing of consequentials received from the UK Government at the end of the financial year. The Spring Budget Revision included those consequentials with arrangements in place for their deployment against 2021-22 budgetary commitments via the Scotland Reserve. As such the available budget has been aligned with actual spend and utilised in full.

 

There is a difference between the budgeting and accounting reporting requirements for Personal Protective Equipment (PPE).  The treatment of PPE has been agreed with HM Treasury for budgeting and final outturn purposes, and is in line with the approach taken by the Department of Health and Social Care.  The budget provided for the expenditure on PPE; these accounts report the stock of PPE held at the balance sheet date as a current asset in the Statement of Financial Position as at 31 March 2021.  The available budget has been utilised in full.

Note 2

Lower than anticipated levels of provisions.

Note 3

Higher than anticipated levels of donated assets income.

Note 4

Variance mainly due to additional purchases of Covid-related equipment by NHS National Services Scotland acting on behalf of the Scottish Government, also including £4m of additional loans provided to sports clubs in Scotland.

Communities and Local Government

Portfolio Outturn Statement for the Year Ended 31 March 2021

Restated 2019-10 £m Programme Variance Note Gross Expenditure £m Income Applied £m Outturn £m Budget £m Variance £m
  Expenditure Limit            
7,653 Local Government 1 10,827 - 10,827 10,686 141
11 Planning 11 - 11 12 (1)
691 Housing 2 642 7 635 658 (23)
57 Social Justice and Regeneration 3 169 - 169 199 (30)
- Connected Communities 4 - 4 4 -
22 Third Sector 4 108 - 108 102 6
6 Governance and Reform 5 - 5 5 -
123 Central Government Grants to Local Authorities 100 - 100 100 -
8,563 Total  Expenditure Limit 11,866 7 11,859 11,766 93
UK Funded Annually Managed Expenditure
2,853 Non-Domestic Rates 1,868 - 1,868 1,868 -
912 Small Business Grant Fund and Retail, Hospitality and Leisure Grant Fund (912) - (912) (912) -
24 Housing 5 (16) - (16) 8 (24)
3,789 Total AME 940 - 940 964 (24)
12,352 Total Resources 12,806 7 12,799 12,730 69
282 Capital - Additions/Advances 6 398 - 398 320 78
(78) Capital - Disposals/Repayments 6 - 101 (101) - (101)
204 Total Capital 398 101 297 320 (23)
12,556 Total Outtrun 13,204 108 13,096 13,050 46

Explanation of Major Variances greater than £3m:

Note 1

Over-spend relates to funding awarded to Local Authorities as part of the General Revenue Grant to enable Covid-19 responses. Funding was awarded after the Spring Budget Revision resulting in a misalignment in expenditure and budget allocation and subsequently the over-spend reported.

Note 2

Under-spend mainly due to lower than anticipated demand in Better Homes schemes due to Covid-19 restrictions, cost reductions in the delivery of the Scottish Household Survey due to Covid-19 and marginally lower than expected spend on Affordable Housing Supply Programme due to restrictions on construction due to Covid-19 restrictions.

Note 3

Under-spend resulting from Covid-19 expenditure being incurred by other business areas (see Notes 1 and 4) creating a subsequent budget/expenditure misalignment (£27m). Other under-spends reported in demand led schemes including Access to Sanitary Products (£2m) and Empowering Communities Fund (£2m) in addition to extra EU European Social Fund Tackling Poverty Fund receipts (£1m).

Note 4

Covid-19 Winter Package expenditure incurred whilst budget allocated elsewhere (see Note 3).

Note 5

Relates to the year end loan adjustments where loans are discounted in year 1 (depending on the interest rate charged on loans), and the discount is unwound in subsequent years. The significant adjustments are Shared Equity schemes £(34m), Charitable Bonds net £10m, other schemes £8m.

Note 6

Net under-spend of £23m mainly due to:

Housing - Lower than anticipated demand in the House Builder Loan fund (provision of support to House Builders through Covid restrictions (£82m), reduced demand for Help to Buy and Open Market Shared Equity investments due to Covid restrictions (£26m), lower than anticipated demand on Private Rented Sector (PRS) Emergency and Energy Saving Trust (EST) Tenant Hardship Loans (£13m) and additional Registered Social Landlord (RSL) Fire Safety Loan Receipts (£3m) offset by increased demand in First Home Fund investments (£99m) and an increase in expected shared equity receipts (£15m).

Also, £9m income in relation to Scottish Partnership for Regeneration in Urban Centres (SPRUCE).

Finance

Portfolio Outturn Statement for the Year Ended 31 March 2021

Restated2019-20£m Programme Variance Note Gross Expenditure £m Income Applied £m Outturn £m Budget £m Variance £m
  Expenditure Limit            
18 Scottish Public Pensions Agency 1 20 - 20 23 (3)
78 Other Finance 114 3 111 111 -
24 Digital Strategy 77 5 72 71 1
2 Accountant in Bankruptcy 8 7 1 1 -
122 Total  Expenditure Limit 219 15 204 206 (2)
UK Funded Annually Managed Expenditure
(2) Other Finance - - - - -
(2) Total AME - - - - -
120 Total Resources 219 15 204 206 (2)
22 Capital - Additions/Advances 24 24 25 (1)
22 Total Capital 24 - 24 25 (1)
142 Total Outturn 243 15 228 231 (3)

Explanation of Major Variances greater than £3m:

Note 1

Under-spend due to lower than expected staffing levels and susbsequently lower spend on staff associated costs due to Covid-19 impacts.

Education and Skills

Portfolio Outturn Statement for the Year Ended 31 March 2021

Restated 2019-20 Outturn £m Programme Variance Note Gross Expenditure £m Income Applied £m Outturn £m Budget £m Variance £m
  Expenditure Limit            
277 Learning 1 368 2 366 355 11
138 Children and Families 2 176 10 166 179 (13)
7 Early Learning and Childcare Programme 3 28 - 28 32 (4)
662 Higher Education Student Support 4 830 2 828 817 11
1,883 Scottish Funding Council 2,143 - 2,143 2,143 -
12 Advanced Learning and Science 15 - 15 16 (1)
269 Skills and Training 5 279 - 279 261 18
589 Central Government Grants to Local Authorities 737 - 737 737 -
3,837 Total  Expenditure Limit 4,576 14 4,562 4,540 22
UK Funded Annually Managed Expenditure
- Learning 1 - 1 2 (1)
(106) Higher Education Student Support 6 (16) 70 (86) (192) 106
(106) Total  AME (15) 70 (85) (190) 105
3,731 Total Resources 4,561 84 4,477 4,350 127
12 Capital - Additions 7 10 - 10 33 (23)
758 Capital (AME) - Advances 8 701 701 567 134
(173) Capital (AME) - Repayments 8 - 204 (204) - (204)
597 Total Capital 711 204 507 600 (93)
4,328 Total Outturn 5,272 288 4,984 4,950 34

Explanation of Major Variances greater than £3m:

Note 1

Scottish Qualifications Authority (SQA) underspend due to a reduction in expenditure incurred in year on the development of the Alternative Certification Model and the anticipated quality assurance work that SQA have been able to carry out (£9m). Agreed £5m overspend on Free School Meal. Non Profit Distributing (NPD) Unitary Charge underspend due to lower Operational Insurance costs than estimated (£2m). Technologies for Learning capital expenditure incurred whilst budget allocated elsewhere £21m (see note 7).

Note 2

Lower spend on the Scottish Child Abuse enquiry (due to Covid-19 restrictions creating temporary delays to hearings), delays to the Promise Fund, lower applications for Advanced Redress payments (combined total £7m); planned under-spend in Disclosure Scotland to compensate for loss of income due to Covid-19 (£2m); under-spends across Creating Positive Futures (£2m) and Childrens Hearing Work (£1m).

Note 3

The underspend reflects lower than anticipated uptake in demand led Covid-19 schemes, in particular the Temporary Restrictions Fund which provided grant support to childcare services (all day care of children services and to childminding services registered for 12 or more children) during the period of temporary restrictions in place from Boxing Day 2020. 

Note 4

Variance predominantly due to movement in student loan impairment as a result of updated macroeconomic forecasts from the Office of Budgetary Responsibility covering a 30 year time window.

Note 5

Due to delays in claims of European Social Funding in 2020-21, Skills Development Scotland were provided with additional cashflow support to continue to pay training providers at the request of Scottish Ministers (£10m). Flexible Workforce Development Fund £4m overspend and Developing the Young Workforce £4m overspend with corresponding underspends in Economy, Fair Work and Culture portfolio.

Note 6

This non-cash variance is predominantly due to movement in the fair value calculation in relation to Student Loans.

Note 7

Technologies for Learning underspend (£22m) as the budget is allocated here whilst the expenditure was recorded elsewhere (See note 1).

Note 8

Variance due to greater repayment receipts and lower student loan issue than had been predicted. These forecasts had been amended to impact covid, furlough and job losses, but these impacts did not crystallise.

Justice

Portfolio Outturn Statement for the Year Ended 31 March 2021

Restated 2019-20 Outturn £m Programme Variance Note Gross Expenditure £m Income Applied £m Outturn £m Budget £m Variance £m
  Expenditure Limit            
33 Community Justice Services 1 39 - 39 42 (3)
1 Judiciary 1 - 1 1 -
15 Criminal Injuries Compensation  21 - 21 22 (1)
143 Legal Aid   113 - 113 113 -
64 Police Central Government 2 78 2 76 82 (6)
11 Safer and Stronger Communities 16 5 11 12 (1)
493 Police and Fire Pensions 459 - 459 458 1
285 Scottish Prison Service  3 303 8 295 301 (6)
42 Miscellaneous 4 46 1 45 58 (13)
1,212 Scottish Police Authority 1,267 - 1,267 1,267 -
306 Scottish Fire and Rescue Service 308 - 308 308 -
87 Central Government Grants to Local Authorities 85 - 85 86 (1)
2,692 Total  Expenditure Limit 2,736 16 2,720 2,750 (30)
UK Funded Annually Managed Expenditure
1 Scottish Prison Service  1 - 1 1 -
1 Total AME 1 - 1 1 -
Other Expenditure
78 Scottish Prison Service 78 - 78 79 (1)
4 Scottish Police Authority Loan Charges 4 - 4 4 -
82 Total Other Expenditure 82 - 82 83 (1)
2,775 Total Resources 2,819 16 2,803 2,834 (31)
11 Capital - Additions 5 41 - 41 51 (10)
11 Total Capital 41 - 41 51 (10)
2,786 Total Outturn 2,860 16 2,844 2,885 (41)

Explanation of Major Variances greater than £3m:

Note 1

Underspend mainly due to significant drop in the volume of electronic monitoring orders as a result of Covid-19.

Note 2

Underspend mainly due to a reduction in the Scottish Government contribution to the UK Government led Emergency Services Mobile Communication Programme.

Note 3

Underspend mainly due to delays in estate maintenance programmes and recruitment due to Covid-19 in addition to lower than expected legal costs.  

Note 4

The Legal Aid Resilience Fund was underspent by £7m as several payments were not made until 2021/22.  Underspends due to lower than anticipated applications to various funding streams and projects due to Covid-19, including Victim/Witness Support (£2m) and Justice Analytical Services (£1m) in addition to other minor operating cost variances. 

Note 5

Underspends due to slippage in the Women's Estate Project (National Facility and Community Custody Units) within Scottish Prison Service.  

Transport, Infrastructure and Connectivity

Portfolio Outturn Statement for the Year Ended 31 March 2021

Restated 2019-20 Outturn £m Programme Variance Note Gross Expenditure £m Income Applied £m Outturn £m Budget £m Variance £m
  Expenditure Limit            
997 Rail Services 1 1,586 - 1,586 1,598 (12)
275 Concessionary Fares and Bus Services 2 403 1 402 482 (80)
160 Active Travel, Low Carbon and Other Transport 3 252 1 251 281 (30)
412 Motorways and Trunk Roads 4 332 - 332 391 (59)
215 Ferry Services 5 269 12 257 265 (8)
59 Air Services 6 74 1 73 101 (28)
14 Digital Connectivity 7 31 - 31 42 (11)
45 Energy 8 155 4 151 194 (43)
115 Cities Investment and Strategy 9 218 - 218 195 23
17 Ferguson Marine 10 51 - 51 28 23
42 Central Government Grants to Local Authorities 49 - 49 51 (2)
2,351 Total Expenditure Limit 3,420 19 3,401 3,628 (227)
Other Expenditure 
121 Motorways and Trunk Roads PPP/PFI 130 130 131 (1)
121 Total Other Expenditure  130 - 130 131 (1)
2,472 Total Resources 3,550 19 3,531 3,759 (228)
302 Capital - Additions/Advances 11 280 - 280 341 (61)
- Capital - Additions Ferguson Marine 12 23 - 23 35 (12)
(21) Capital - Disposals/Repayments 13 - 9 (9) - (9)
(21) Capital (AME) - Capital Provision 14 - 11 (11) - (11)
(3) Capital ODEL - Disposals/Repayments - - - - -
257 Total Capital 303 20 283 376 (93)
2,729 Total Outturn 3,853 39 3,814 4,135 (321)

Explanation of Major Variances greater than £3m:

Note 1

Under-spends mainly due to delays in Network Rail, joint Abellio ScotRail/Transport Scotland and other projects, in addition to lower than anticipated staffing levels due to Covid-19 impacts.

Note 2

Under-spends mainly due to lower than budgeted demand for Covid related Support Grants and mobilisation costs from Bus Operators (£72m) and lower demand for concessionary schemes, including Young Persons due to Covid-19 impacts (£3m) and other minor variances across the programme.

Note 3

Under-spend mainly due to reprofiling of grant award to Strathclyde Partnership for Transport (£36m), reduced demand for Bus Rapid Priority  Deployment Fund (£8m) offset by repurposing of funding to support increased investment in ultra-low emission buses (£9m), increased staffing costs and other minor variances across the programme.

Note 4

Lower than anticipated non-cash depreciation costs (£60m), underspend in road maintenance due to COVID restrictions and other re-profiling (£10m), partially offset by £11m of additional spend to fund BEAR 3 bus retro-fitting scheme carried over from last year and increased programme staff costs.

Note 5

Net under-spends on Clyde & Hebrides and Northern Isles Ferry Services operations maintenance and contract costs (£22m), slippage in Skye Triangle programme costs due to Covid-19 restrictions (£11m), and net Ardrossan/Troon programme under-spend (£5m) and other minor variances across the programme (£3m), offset by a CalMac Pension Deficit Repayment £33m.

Note 6

Under-spend mainly due to lower than anticipated Covid-19 pressures and works slippage within Highlands & Islands Airports Ltd (£23m) and a (£4m) under-spend in the Air Discount Scheme due to Covid-19 restrictions.

Note 7

Under-spend mainly due to the re-profiling R100 rollout costs across financial years (£7m), lower than anticipated uptake on the Scottish Broadband Voucher Scheme (£3m) and delays to 5G implementation strategy and associated projects.

Note 8

Under-spend mainly due to lower than expected uptake in demand led schemes including Energy Efficient Scotland, Energy Efficiency, Low Carbon Infrastructure, Energy Industries and Renewable Energy due to Covid-19 restrictions. The demand and support for new programmes prevented a number of projects from starting and lockdown restricted progress with projects already underway (£42m). Also additional Energy Consents charging receipts due to higher than anticipated applications made (£1m).

Note 9

Over-spend due to a change in policy resulting in the acceleration of Glasgow City Deal funding to cover expenditure incurred to date.

Note 10

Over-spend due to an increase in the write-off of Voted Loans carrying values following a change in the funding mechanism used.

Note 11

Net under-spends mainly due to:
Energy - lower than anticipated in loan applications to the Energy Efficient Scotland scheme as projects/work supported was unable to be carried out due to Covid-19 restrictions (£19m) and the cessation of funding to BiFab as a result of the entity entering administration (£15m).
Transport Scotland - Net (£65m) reduction in major roads projects, (£14)m underspend on road maintenance due to COVID restrictions and re-profiling, (£32)m underspend due to reprofiling of vessel voted loans.

Note 12

The underspend of £12m is a direct result of Covid-19 delays with significant spells of closure for the shipyard on two occasions (Spring 2020 and January 2021). Furthermore, there is ongoing difficulty in securing the skilled workforce required to progress the capital works of the vessels. 

Note 13

Vessel Voted loan repayments received in year from CMAL (£8m) and repayments to the Low Carbon Transport Loan Fund reflected in net budget for capital additions above.

Note 14

Utilisation of historic provisions for land compensation.

Environment, Climate Change and Land Reform

Portfolio Outturn Statement for the Year Ended 31 March 2021

Restated 2019-20 Outturn £m Programme Variance Note Gross Expenditure £m Income Applied £m Outturn £m Budget £m Variance £m
  Expenditure Limit            
73 Marine 86 12 74 76 (2)
67 Research, Analysis and Other Services 1 72 6 66 69 (3)
144 Environmental Services 2 131 - 131 145 (14)
16 Climate Change & Land Managers Renewables Fund 3 21 - 21 26 (5)
12 Land Reform 13 - 13 14 (1)
(100) Scottish Water 4 15 105 (90) (99) 9
212 Total Expenditure Limit 338 123 215 231 (16)
UK Funded Annually Managed Expenditure
2 Marine 1 - 1 1 -
2 Total AME 1 - 1 1 -
214 Total Resources 339 123 216 232 (16)
256 Capital - Voted Loans 4 357 - 357 267 90
4 Capital - Additions/Advances 4 - 4 3 1
5 Capital - Additions - - - - -
- Capital - Disposals 4 - 102 (102) - (102)
265 Total Capital 361 102 259 270 (11)
479 Total Outturn 700 225 475 502 (27)

Explanation of Major Variances greater than £3m:

Note 1

Profit on sale of property assets £1.2m; unclaimed grant, reprioritisation and cancellation of work due to Covid-19 impact on Research Institutes' and policy areas.

Note 2

Lower than anticipated Scottish Environment Protection Agency working capital £6m, due to the timing of payments at the financial year; and reduced spend on programmes such as Peatland Restoration (£4m) and Environmental Quality (£3.4m) for noise and air quality action due to the impact Covid-19 restrictions.

Note 3

Lower than anticipated COP26 expenditure and delayed project spend due to the postponing of COP26 to November 2021.

Note 4

There is a net underspend of £3m within the Scottish Water budgets. £2m resource underspend mainly due to low uptake of Private Water Supply grants by owners and users due to Covid-19 - works to be carried out have been delayed by lockdowns.
The £11m budget for the Return to Work programme is reflected within Capital - Voted Loans,  the outturn is reflected within Scottish Water Gross Expenditure.

Rural Economy & Tourism

Portfolio Outturn Statement for the Year Ended 31 March 2021

Restated 2019-20 Outturn £m Programme Variance Note Gross Expenditure £m Income Applied £m Outturn £m Budget £m Variance £m
  Expenditure Limit            
162 EU Support and Related Services 1 840 117 723 754 (31)
123 Rural Services 2 51 - 51 57 (6)
6 Fisheries and Aquaculture Grants 3 27 5 22 25 (3)
77 Rural Economy Enterprise 4 104 - 104 101 3
54 Scottish Forestry 5 59 15 44 57 (13)
19 Forestry and Land Scotland 23 - 23 22 1
59 Tourism 6 136 - 136 139 (3)
500 Total Expenditure Limit 1,240 137 1,103 1,155 (52)
UK Funded Annually Managed Expenditure
- EU Support and Related Services 1 - 1 1 -
- Total AME 1 - 1 1 -
500 Total Resources 1,241 137 1,104 1,156 (52)
393 Capital - Additions/Advances 354 - 354 - 354
(445) Capital - Disposals/Repayments - 513 (513) (158) (355)
(52) Total Capital 354 513 (159) (158) (1)
448 Total Outturn 1,595 650 945 998 (53)

Explanation of Major Variances greater than £3m:

Note 1

There are under-spends relating to the release of ring-fenced farm funding relating to Bew monies (£27m) and Pillar 1 support (£9m); Covid-19 restrictions led to supply issues faced by stakeholders in obtaining capital equipment in the Agricultural Transformation Fund (£7m).
Over-spends: Financial Disallowance and other items £9m; Higher than anticipated depreciation charge for Agriculture & Rural Economy directorate £3m.

Note 2

Under-spend due to lower than anticipated demand in the Food and Drink Recovery Plan and delays in related programmes, including the Nextportl project due to Covid-19.

Note 3

Projects have not progressed as anticipated, reduced grant claims due to impact of Covid-19.

Note 4

The overspend is due to acceleration of projects in Highland and Islands Enterprise previously profiled for 21/22. 

Note 5

There was an under-spend of £24m as a result of the Forestry Grant Scheme due to frozen ground during the middle of the planting season, Covid-19 and the EU Exit which all reduced the number of hectares planted. This was offset by the resultant decrease in the EU co-financing element of the Forestry Grant Scheme payments (£13m).

Economy, Fair Work & Culture

Portfolio Outturn Statement for the Year Ended 31 March 2021

Restated 2019-20 Outturn £m Programme Variance Note Gross Expenditure £m Income Applied £m Outturn £m Budget £m Variance £m
  Expenditure Limit            
17 Economic Advice 13 - 13 15 (2)
286 Enterprise, Trade and Investment 1 1,356 6 1,350 1,329 21
50 Central Government Grants to LA - - - - -
164 Culture and Major Events 2 266 - 266 269 (3)
48 Employability & Training 3 87 - 87 134 (47)
14 Scottish National Investment Bank 4 24 (5) 29 101 (72)
- ESF 14-20 Programmes 5 9 (8) 17 - 17
- ERDF 14-20 Programmes 11 11 - - -
- ESF & ERDF Closed Schemes 6 - 5 (5) - (5)
39 Historic Environment Scotland 79 - 79 80 (1)
618 Total Expenditure Limit 1,845 9 1,836 1,928 (92)
UK Funded Annually Managed Expenditure
- Scottish National Investment Bank 7 (4) - (4) 8 (12)
- ESF/ERDF 8 26 - 26 - 26
3 Enterprise, Trade and Investment 9 124 - 124 - 124
- Culture and Major Events 1 - 1 - 1
3 Total AME 147 - 147 8 139
621 Total Resources 1,992 9 1,983 1,936 47
27 Capital - Additions/Advances 10 52 - 52 44 8
(1) Capital - Disposals/Repayments - 2 (2) - (2)
26 Total Capital 52 2 50 44 6
647 Total Outturn 2,044 11 2,033 1,980 53

Explanation of Major Variances greater than £3m:

Note 1

Over-spend mainly due to the award of additional Covid-19 Business Support Grants (£40m - including expenditure incurred where budget held in other areas) offset by additional funding from centre that was no longer required following the Clyde Mission avoiding slippage, and due to income from Scottish Enterprise in respect of FanDual.

Note 2

Under-spend is due to support for the events sector coming from VisitScotland’s budget, and an underspend at National Museums Scotland, partly offset by additional support for COVID recovery in the heritage sector.

Note 3

Underspend mainly due to lower uptake with demand led funding schemes due to Covid-19 including the National Transition Training Fund (£16m), Pathways to Apprenticeships Fund (£10m), Developing Young Workforce (£8m), Parental Employment Support (£5m), Flexible Workforce Development Fund (£4m) and other minor variances.

Note 4

Under-spend is largely due to a number of proposed investments not being completed by the end of the Financial Year

Note 5

Accrued EC Income write-off (£17m) and the creation of a provision (£28.7m AME) for future potential under-recovery of European Social Fund Income. 

Note 6

EC Creditor released relating to 07-13 ESF/ERDF Programme closure.

Note 7

Under-spend relates to the non-utilisation of a budgeted provision in relation to EU funding risk. No EU funding was claimed and therefore the uptake of the provision was not required

Note 8

Additional spend in year in relation to a provision for future potential under-recovery of European Social Fund Income (£28m) offset by recognition of exchange rate differences (£2m). Remaining £1m consists of minor variances within the portfolio.

Note 9

The Government's potential exposure to the 25-year guarantee relating to the hydro plant and aluminium smelter at Lochaber and it's valuation under accounting standards has been reviewed in year. This has resulted in an increase of £124m in the provision valuation - for more information see Note 14 Provisions.

Note 10

Net over-spend mainly due to:
Innovation and Industries - Provider has over-performed against expected profile resulting in an overspend against exepcted profile (£3.5m)
Scottish National Investment Bank - under-spend is the result of delays in the timing of investments due to Covid-19 and the general uncertainty the timing of investments causing slippages aginast the expected investment profile.

Social Security and Older People

Portfolio Outturn Statement for the Year Ended 31 March 2021

Restated 2019-20 Outturn £m Programme Variance Note Gross Expenditure £m Income Applied £m Outturn £m Budget £m Variance £m
  Expenditure Limit            
90 Social Security 213 1 212 213 (1)
342 Social Security Assistance 1 3,359 - 3,359 3,320 39
29 Equalities 31 - 31 32 (1)
461 Total Expenditure Limit 3,603 1 3,602 3,565 37
UK Funded Annually Managed Expenditure
5 Social Security Assistance 2 2 - 2 5 (3)
5 Total AME 2 - 2 5 (3)
466 Total Resources 3,605 1 3,604 3,570 34
59 Capital - Additions/Advances 3 83 - 83 90 (7)
- Capital - Disposals/Repayments - 1 (1) - (1)
59 Total Capital 83 1 82 90 (8)
525 Total Outturn 3,688 2 3,686 3,660 26

Explanation of Major Variances greater than £3m:

Note 1

Benefit expenditure is demand led and cannot be controlled in the same way as other budgets where spending limits can be set. We believe COVID-19 has had an impact on benefit spend but it has not easy to quantify the extent of these impacts. The 2020-21 financial year was the first year the complete set of benefits under the Scotland Act 2016 were devolved to the Scottish Government and it was anticipated that the spend on these benefits would be higher as a result. Additional funding is likely to be provided to Scotland through the Block Grant reconciliation process, although that takes place in a subsequent year. Further information on benefit spend can be found in the Social Security Scotland accounts for 2020-21 at https://www.socialsecurity.gov.scot/reporting/publications/annual-report-2020-2021

Note 2

This is to account for the impairment of demand led benefits. The Department for Work and Pensions advise this figure at the year end so it cannot be easily forecast.

Note 3

Capital expenditure was lower than anticipated, mainly resulting from delays to the programme of works due to the COVID-19 impact on the construction sector.

Constitution, Europe & External Affairs

Portfolio Outturn Statement for the Year Ended 31 March 2021

Restated 2019-20 Outturn £m Programme Variance Note Gross Expenditure £m Income Applied £m Outturn £m Budget £m Variance £m
  Expenditure Limit            
13 Government Business and Constitutional Relations 25 - 25 27 (2)
21 External Affairs 21 - 21 23 (2)
34 Total Expenditure Limit 46 - 46 50 (4)
UK Funded Annually Managed Expenditure
- Total AME - - - - -
34 Total Resources 46 - 46 50 (4)
- Total Capital - - - - -
34 Total Outturn 46 - 46 50 (4)

Explanation of Variances:

Total £4m consists of minor variances across a number of programmes within the portfolio.

 The Crown Office and Procurator Fiscal Service

Portfolio Outturn Statement for the Year Ended 31 March 2021

2019-20 Outturn £m Programme Variance Note Gross Expenditure £m Income Applied £m Outturn £m Budget £m Variance £m
Expenditure Limit
Staff Costs
89 The Crown Office and Procurator Fiscal Service 100 - 100 100 -
Administration Expenditure
8 Accommodation 9 - 9 9 -
1 Travel/Transport - - - - -
15 Legal 39 - 39 39 -
6 Supplies and Services 7 2 5 4 1
- Non Cash Costs - - - - -
4 Capital Charges 5 - 5 6 (1)
2 Other Office Costs 2 - 2 4 (2)
125 Total Expenditure Limit 162 2 160 162 (2)
UK Funded Annually Managed Expenditure
14 Impairment 1 - 1 - 1
- Provisions 2 - 2 - 2
14 Total  AME 3 - 3 - 3
139 Total Resources 165 2 163 162 1
7 Capital - Additions 9 9 8 1
7 Total Capital 9 - 9 8 1
146 Total Outturn 174 2 172 170 2

Explanation of Variances:

Total £2m consists of minor variances across a number of programmes within the portfolio.

Consolidated Statement of Financial Position

As at 31 March 2021

2019-2 Restated £m Note 2020-21 £m
Non-Current Assets
30,699 Property, Plant and Equipment 6 30,808
237 Intangible Assets 7 290
9,200 Other Financial Assets including Investments due in more than one year 10 9,845
101 Receivables and Other Assets due in more than one year 12 76
40,237 Total Non-Current Assets 41,019
Current Assets
142 Inventories 9 243
1,052 Receivables and Other Current Assets 12 1,118
970 Cash and Cash Equivalents 2 708
521 Other Financial Assets including Investments due within one year 10 351
10 Non-Current Assets Classified as Held for Sale 8 17
2,695 Total Current Assets 2,437
42,932 Total Assets 43,456
Current Liabilities
(3,839) Payables and Other Current Liabilities 13 (5,085)
(35) Other Financial Liabilities due within one year 13 (54)
(1,165) Provisions for Liabilities and Charges due within one year 14 (347)
(5,039) Total Current Liabilities (5,486)
37,893 Total Assets less Current Liabilities 37,970
Non-Current Liabilities
(2,997) Payables and Other Liabilities 13 (2,937)
(581) Other Financial Liabilities due in more than one year 13 (519)
(877) Provisions for Liabilities and Charges due in more than one year 14 (964)
(4,455) Total Non-Current Liabilities (4,420)
33,438 Assets less Liabilities 33,550
Taxpayers' Equity
22,762 General Fund SOCTE 23,041
10,676 Revaluation Reserve SOCTE 10,509
33,438 Total Taxpayers' Equity   33,550
The notes on pages 121 to 175 form part of these accounts.

Leslie Evans
Principal Accountable Officer

Statement of Comprehensive Net Expenditure and Changes in Taxpayers' Equity

For the year ended 31 March 2021

Note General Fund £m Revaluation Reserve £m Total £m
Balance at 1 April 2020 22,762 10,676 33,438
Net operating cost for the year (48,201) - (48,201)
Net gain/(loss) on revaluation/indexation of property, plant and equipment 6 - (63) (63)
Non-Operating gain/(loss) on transfer of property, plant and equipment 6 - - -
Total Comprehensive Expenditure for the year ended 31 March 2020 (48,201) (63) (48,264)
Non Cash Charges
Non cash charges - auditor's remuneration 5e 5 - 5
Non cash charges - NHS adjustment - - -
Non cash charges - Roads adjustment 75 - 75
Total Non Cash charges 80 - 80
Other Reserve movements
Transfer of non-current assets - - -
Other Adjustment (2) - (2)
NHS Adjustment (77) - (77)
Transfer between reserves 104 (104) -
Total other reserve movements/adjustments 25 (104) (79)
Funding
Parliamentary Funding   48,290 - 48,290
NHS Adjustment - - -
Less funding to pensions schemes (113) - (113)
Less funding to Revenue Scotland, National Records of Scotland, Office of Scottish Charity Regulator, Scottish Courts and Tribunals Service, Scottish Fiscal Commission and Scottish Housing Regulator (49) - (49)
Net parliamentary funding drawn down 23 48,128 - 48,128
Movement of balance with the SCF 247 - 247
Net funding position 48,375 - 48,375
Net increase/(decrease) in year 279 (167) 112
Balance as at 31 March 2021   23,041 10,509 33,550

Explanation of Reserves:
General Fund – The General Fund represents the total assets less liabilities of the Scottish Government, to the extent that they are not represented by the revaluation reserve and financing items.
Revaluation Reserve – The Revaluation reserve reflects the unrealised element of the cumulative balance of indexation and revaluation adjustments (excluding donated assets).

Statement of Comprehensive Net Expenditure and Changes in Taxpayers' Equity

For the year ended 31 March 2020

Note General Fund £m Revaluation Reserve £m Total £m
Balance at 1 April 2019 22,862 10,425 33,287
Net operating cost for the year (37,695) - (37,695)
Net gain/(loss) on revaluation/indexation of property, plant and equipment 6 - 395 395
Non-Operating gain/(loss) on transfer of property, plant and equipment   - - -
Scottish Forestry transfer in year -3 (3)
Total Comprehensive Expenditure for the year ended 31 March 2019 (37,698) 395 (37,303)
Non Cash Charges
Non cash charges - auditor's remuneration 5e 3 - 3
Non cash charges - NHS adjustment   - - -
Non cash charges - Roads adjustment (235) - (235)
Total Non Cash charges (232) - (232)
Other Reserve movements      
Prior year adjustments (17) - (17)
NHS Highland Pension movement 16 - 16
Roads historic adjustment 75 75
Transfer between reserves 144 (144) -
Prior year adjustment (roundings) - -
Total other reserve movements/adjustments 218 (144) 74
Funding
Parliamentary Funding   37,616 - 37,616
Less funding to pensions schemes   (39) - (39)
Less funding to Revenue Scotland, National Records of Scotland, Office of Scottish Charity Regulator, Forestry Commission (Scotland), Scottish Courts and Tribunals Service, Revenue Scotland, Scottish Fiscal Commission and Scottish Housing Regulator (53) - (53)
Net parliamentary funding drawn down 24 37,524 - 37,524
Movement of balance with the SCF 88 - 88
Transfer of benefit overpayment receivables from DWP - - -
Net funding position 37,612 - 37,612
Net increase/(decrease) in year (100) 251 151
Balance as at 31 March 2020   22,762 10,676 33,438

Statement of Cash Flows

For the year ended 31 March 2021

2019-20 £m Note 2020-21 £m
(35,982) Net cash outflow from operating activities (A) (46,528)
(1,515) Net cash outflow from investment activities (B) (1,670)
(3) Payments (from)/to the SCF  (D) (38)
37,450 Cash flows from financing activities (C) 47,974
(50) Increase / (Decrease) in cash in the period 2 (262)
(A) Reconciliation of operating costs to operating cash flows
(37,695) Net Operating Cost SoCTE (48,200)
(3) Transfer by absoption from FCS to SF SoCTE -
5 Income not applied 5b 6
691 Adjustments for non-cash transactions 3 1,011
160 Add back: interest payable for financing 156
(21) Increase / (decrease) in inventories (101)
(203) (Increase) / decrease in receivables and other current assets 4 27
252 Increase / (decrease) in trade and other payables 4 1,446
916 Increase / (decrease) in provisions 4 (731)
(84) Interest receivable (142)
(35,982) Net cash outflow from operating activities (46,528)
(B) Analysis of cash flows from investing activities
(501) Purchase of property, plant and equipment (651)
(101) Purchase of intangible assets (135)
32 Proceeds of disposal of property, plant and equipment 10
2 Proceeds of disposal of intangible assets 13
1 Proceeds of assets held for sale 5
(1,784) Advances of Investments (1,871)
809 Repayments of Investments 926
27 NLF Loans 10 33
(1,515) Net Cash outflow from investment activities (1,670)
(C) Analysis of cash flows from financing activities
37,524 From Scottish Consolidated Fund SOCTE 48,128
77 Funding on NHS Capital -
(27) Loan transactions with the National Loans Fund 10 (33)
(16) Capital element of payments in respect of finance leases  (72)
111 Interest received 108
(221) Interest element of finance leases and NPD/PPP/PFI contracts included in SoFP (155)
2 Interest paid (2)
37,450 Cash flows from financing activities 47,974
50 Decrease/(Increase) in cash equivalents 2 262
37,500 Net cash and cash equivalents requirement   48,236

(D) Payments to the Scottish Consolidated Fund (SCF) represent the income not applied, £2m (Note 5b) offset by the increase in balances payable to the SCF of £1m and decrease in the balance receivable from the SCF of £1m.

Contact

Email: accountancyservicesunit@gov.scot

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