The Scottish Government Consolidated Accounts for the year ended 31 March 2025

Summaries of Resource, Capital and Total Outturn

Consolidated Portfolio Outturn Statements

For the year ended 31 March 2025

Consolidated Summary of Resource Outturn

For the year ended 31 March 2025

Consolidated Summary of Capital Outturn

For the year ended 31 March 2025

Health and Social Care

Consolidated Portfolio Outturn Statement for the Year Ended 31 March 2025

Explanation of Major Variances greater than £5m:

1. £32 million resource underspend arising due to late consequentials and spend controls to support the 2024-25 financial position.

2. Higher than anticipated levels of non-cash NHS provisions and impairments - provisions are as a result of Band 5-6 expectations and agreement of treatment linked to the Agenda For Change Reform commitment from 2023-24 pay negotiations. Impairments are as a result of thorough reviews of assets within NHS Boards at year-end prior to their audit.

3. Significant PFI revaluation gain has been recognised as a result of the application of IFRS16.

4. Reclassification of stockpile expenditure in line with the requirements of International Accounting Standards IAS 2 Inventories, as adapated for the public sector as per the 2024-25 Financial Reporting Manual. This adjustment replaced the interim treatment, resulting in reduced expenditure.

5. The transfer of the Aberdeen Mortuary from the Council to NHS Grampian did not take place at year end as had previously been expected and budgeted.

Social Justice

Consolidated Portfolio Outturn Statement for the Year Ended 31 March 2025

Explanation of Major Variances greater than £5m:

1. The variance is mainly driven by £23m underspend as forecasted remediation works in 2024-25 did not materialise as anticipated; £4m of contingency set aside for Urgent Interim Measures not being required (urgent interim measures are identified during the Single Building Assessment (SBA) process and can include actions such as setting up waking watches to manage immediate safety risks); and other minor variances across the programme.

2. The variance is mainly driven by lower than anticipated demand for Baby Box (£3m underspend) and other minor variance across the programme.

3. The variance is mainly driven by a £20m underspend on the non-cash Depreciation budget. This is a ring-fenced budget and not available for use elsewhere in the Social Justice portfolio.

4. Benefit expenditure is demand led and cannot be controlled in the same way as other budgets where spending limits can be set. Further information on benefit spend can be found in the Social Security Scotland accounts for 2024-25 at their website: Social Security Scotland annual accounts

5. The variance is driven by unbudgeted income of £15m from European Structural Funds where timing of receipt was confirmed after budgets were finalised.

6. Relates to year-end fair value adjustments for housing loans, shared equity schemes and charitable bands. Loan adjustments are discounted in year 1 (depending on the interest rate charged on loans), and the discount unwound in subsequent years.

7. This expenditure reflects movements in benefit overpayment impairment of £4 million in relation to benefits being administered by the Department for Work and Pensions, and benefit underpayments provisions in relation to Legal Entitlement and Administrative Practices (LEAP) review by the Department for Work and Pensions, of which £3 million were for new provisions, £12.5 million was utilised in year and £10 million was written back.

8. The variance is mainly driven by £20m additional Financial Transaction income of which approval was given to invest an additional £10m in Charitable Bonds; and other minor variances across the programme.

Net Zero and Energy

Consolidated Portfolio Outturn Statement for the Year Ended 31 March 2025

Explanation of Major Variances greater than £5m:

1. Most of the underspend is within the Energy Transitions Directorate, consisting of £2m for Carbon Capture, Usage and Storage, due to the delays to the UK Government Track 2 cluster sequencing and the lack of market certainty, and £2m for Aberdeen Hydrogen Hub due to delays to procurement processes.  In addition, Energy Consents over-recovered circa £2m in licencing income due to higher than anticipated demand, and there were other minor variances across the programme.

2. £10m of this underspend relates to loans issued through Home Energy Scotland and Small and Medium-sized Enterprises schemes (see note 5 below). There was a £16m underspend in the Heat in Buildings programme due to adjustments in the eligibility of schemes and, in addition, some elements paused to deliver savings and there were other minor variances across the programme.

3. There were projects across Environmental Services which contributed to the overall underspend including:

• £23m NatureScot underspend reflects the return of previous cash facility (£21m) following the conclusion of European Regional Development Fund claims, plus reported underspend on peatland restoration and nature restoration fund projects due to slippage (£2m).
• £6m underspend in Zero Waste Scotland as a result of the deferral of Glasgow City Council's Recycling Improvement Fund project.
• £6m of Nature Restoration projects were not taken forward as part of overall spend controls.
• £6m underspend includes the deferral of work to deliver Extended Producer Responsibility programmes and Digital Waste Tracking to progress in line with the four nations approach.

4. £4m overspend was due to various projects reprofiling spend from 2023-24 into 2024-25, the significant item being £3m Energy Transition Skills Hub (formerly Advanced Skills Manufacturing Hub), and there were other minor variances across the programme.

5. Heat in Buildings loans for the Home Energy Scotland and Small and Medium-sized Enterprises schemes were originally budgeted within Resource but the loans have been issued as Capital to reflect classification of spend. This £10m overspend is offset by a corresponding underspend within Resource.

Education and Skills

Consolidated Portfolio Outturn Statement for the Year Ended 31 March 2025

Explanation of Major Variances greater than £5m:

1. This variance mainly relates to savings within Disclosure Scotland to support the financial position.

2. The underspend on the RAB (Resource Accounting and Budgeting) charge is due to a lower provision for the impairment of student loans. This is a ring-fenced budget and not available for use elsewhere in the Education portfolio.

3. Underspend is driven by lower cash grant-in-aid drawn down by Skills Development Scotland due to their receipt of £14m unbudgeted income from European Social Funds.

4. This non-cash variance is predominantly due to movement in the fair value calculation in relation to Student Loans caused by the inflation rate remaining higher than forecast (for more details see the accounting policies note and note 11e).

Justice and Home Affairs

Consolidated Portfolio Outturn Statement for the Year Ended 31 March 2025

Explanation of Major Variances greater than £5m:

1. Legal Aid is a demand-led scheme and claims were 2.5% lower than estimated at Spring Budget Revision, resulting in the majority of this underspend.

2. Variance is largely due to additional cash drawn down to meet an earlier than expected VAT bill of £6.5m.

Transport

Consolidated Portfolio Outturn Statement for the Year Ended 31 March 2025

Explanation of Major Variances greater than £5m:

1. £30 million underspend in Rail which reflects underspends of £22 million on Network Rail programmes driven by rephasing of national (UK wide) Network Rail Programmes whose costs are allocated to Scotland Region. In addition, there were lower than anticipated compensation payments, and a further £6 million underspend relating to slippage in works by Scottish Rail Holdings subsidiaries. These underspends were offset by £10 million of additional spend on infrastructure improvement and rolling stock improvement programmes. A further £15.5 million of underspend is due to budget timing differences to fulfil lease obligations under IFRS16. This underspend is then offset by a £5 million overspend in Rail services due to lower than forecasted revenue related to a downturn in leisure patronage.

2. £7 million underspend in Bus Services due to lower than anticipated Concessionary Travel expenditure as a result of bad weathertowards the end of the year as well as lower than forecast claims by bus operators relating to the bus support grant.

3. The underspend on the Trunk Road Network is driven by a variance in non-cash depreciation requirements due to fluctuations in the road network valuation. This is a ring-fenced budget and not available for use elsewhere in the Transport portfolio.

4. Ferry services underspend due to reprofiling of vessel payments and ports and harbour works into 2025-26.

5. The variance against AME budgets represents a number of accounting adjustments to release previously made provisions where the liability had crystallised or, upon reconciliation, were no longer required and unwinding the discount on loans to the Energy Saving Trust. AME budgets are ringfenced therefore underspends cannot be used elsewhere.

6. £40 million underspend due to reprofiling of certain construction related works, offset by increased spending in indirect capital of £15 million for essential road maintenance programmes.

7. This represents a number of accounting adjustments to release previously made provisions where the liability had crystallised or, upon reconciliation, were no longer required.

Rural Affairs, Land Reform and Islands

Consolidated Portfolio Outturn Statement for the Year Ended 31 March 2025

Explanation of Major Variances greater than £5m:

1. There are several schemes within Agricultural Support and Related Services that have contributed to the overall underspend within this budget line where demand-led funding had lower than anticipated expenditure:

• Pillar 1 (£8m), Less Favoured Area Support Scheme (£5m);
• underspends across a variety of other programmes, including Agricultural Transformation Fund £1m, Agri-Environmental Measures £1m, Crofting Agricultural Grant Scheme £1m and Crofting Assistance £2m.

2. There was an underspend of £2m in Animal Health due to reduced costs from the Animal & Plant Health Agency, and recruitment delays in establishing the Scottish Kept Birds Register. A further £2m of the underspend relates to a court case whose costs were less than forecast

Constitution, External Affairs and Culture

Consolidated Portfolio Outturn Statement for the Year Ended 31 March 2025

There are no variances greater than £5m.

Finance and Local Government

Consolidated Portfolio Outturn Statement for the Year Ended 31 March 2025

Explanation of Major Variances greater than £5m:

1. The variance is mainly driven by a £21m overspend due to late approval of 2023-24 Local Government Pay Deal resulting in expenditure being recorded in 2024-25 and other minor variances across the programme.

2. The variance is mainly driven by a £7.5m overspend in relation to the increase in the value of the staff benefit accrual which records staff annual leave and flexi leave earned during the period but not used. The transaction is unbudgeted due to not being able to reliably predict the direction of movement (increase or decrease) until year end. The remaining variance is driven by other minor variances across numerous directorates.

3. Contingency for year-end adjustments relates to funding held annually for post year-end audit adjustments, as well as funding to be carried forward for 2025-26 Health and Social Care costs, as set out in the Spring Budget Revision.

4. There is no formal cash repayment in relation to the £25 million FT repayment line within the accounts. Instead, to reflect the repayment to HM Treasury the amount of Financial Transactions underspend that will be deposited in the Scotland Reserve has been reduced.

5. There was a £6m underspend relating to the Ellis Marine Building and the electric vehicle infrastructure programme due to project delays. There was also a £5m underspend in relation to the IFRS 16 property leases budget. These underspends were partially offset by expenditure elsewhere in the capital programme.

Deputy First Minister, Economy and Gaelic

Consolidated Portfolio Outturn Statement for the Year Ended 31 March 2025

Explanation of Major Variances greater than £5m:

1. £5m of the budget underspend relates to the digital depreciation budget allocated here, however the expenditure has been recorded under Other Finance within the Finance and Local Government portfolio. £2m underspend due to slightly lower R100 build costs (Superfast broadband reaching 100% of homes and businesses in Scotland).

2. Enterprise Trade and Investment (ETI) underspend of £13m, mainly due to:

• £21m underspend in Grant in Aid to Scottish Enterprise. £6m of this was drawn down in advance in 23-24 while the remaining £15m relates to Expected Credit Losses (a non-cash budget)
• £7m overspend for Social Enterprise expenditure that has moved to ETI. However, the budget has remained within Cities Investment and Strategy leading to an overspend within ETI (see note 5 below).

3. Regeneration underspend of £27m, mainly due to:

• in year savings of £17m to reduce the Place Based Investment Programme. This was part of overall spend controls to withhold spend in case it was needed to meet wider pressures.
• underspends of £6m on the Regeneration Capital Grant fund following 5 high value projects being withdrawn by Local Authority applicants.
• net receipts from the European Social Fund of £3m in relation to the Aspiring Communities Fund and Growing the Social Economy programme.

4. Underspend due to lower than anticipated exercise of Convertible Loan Notes leading to higher levels of interest income being received by the bank. In addition to lower staffing costs following delays to recruitment, some roles still being vacant, and lower than anticipated pay rises, reducing the amount of cash it held at year-end.

5. City Deal underspends have arisen due to some projects facing higher-than anticipated tender prices, impacting both delivery timelines and overall viability (£10m). This includes:

• £3m in the Stirling and Clackmannanshire deal due to delays in the National Aquaculture Technology and Innovation Hub construction programme;
• £3m in the Argyle and Bute deal due to delays in finalising the construction contract for Rothesay Pavilion; and other minor variances across projects; and
• Further City Deal underspends of £3m arose due to delays in activity on several skills projects, resulting in a slower pace of spend.

Additionally Growth Accelerator spend of £7m on Social Enterprise has moved to Enterprise, Trade and Investment. However the budget has remained within Cities Investment and Strategy, leading to the underspend (see note 2 above).

6. Overspend relating to the write down in valuation of vessels at the disposal of MV Glen Sannox (801) (£15.5m) and the assets under construction following updated valuation of vessel MV Glen Rosa (802) (£39m). Partially offset by costs that cannot be absorbed by the contract to build vessels 801 and 802 being lower than originally forecast.

7. Overspend following an impairment in the valuation of Scottish National Investment Bank's investments. Further details of this can be found within the accounts for the bank: Scottish National Investment Bank Accounts

8. Overspend of £12m in relation to the unwinding of the Redress provision. The total number of payments expected has not changed, however, the value of payments has increased.

9. Underspend of £29m due to the delay of an investment deal, which was partially offset by £4m lower than anticipated equity investments being sold.

10. Receipt of SPRUCE (Scottish Partnership for Regeneration in Urban Centres) income that was not budgeted for (£9m).

11. Additional budget applied at SBR in relation to Scottish Growth Scheme and Energy Investment Funds resulted in this underspend.

The Crown Office and Procurator Fiscal Service

Consolidated Portfolio Outturn Statement for the Year Ended 31 March 2025

Explanation of Major Variances greater than £5m:

1. The COPFS Resource underspend of primarily relates to depreciation adjustments (£10m) resulting from the review and subsequent change to accounting policy and asset useful economic lives. The remaining underspend is due to recruitment delays as a result of Scottish Government emergency spending controls.