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The Scottish Government Consolidated Accounts 2015 to 2016

Published: 30 Sep 2016
ISBN:
9781786524881

Annual report of consolidated financial results of the Scottish Government, its executive agencies and the Crown Office, prepared in accordance with IFRS.

140 page PDF

746.5kB

140 page PDF

746.5kB

Contents
The Scottish Government Consolidated Accounts 2015 to 2016
Notes to the Accounts

140 page PDF

746.5kB

Notes to the Accounts

For the Year Ended 31 March 2016

1. Statement of Accounting Policies

In accordance with the accounts direction issued by Scottish Ministers under section 19(4) of the Public Finance and Accountability (Scotland) Act 2000 these financial statements have been prepared in accordance with the 2015-16 Government Financial Reporting Manual ( FReM). The accounting policies contained in the FReM apply International Financial Reporting Standards ( IFRS) as adapted or interpreted for the public sector context.

The accounts are prepared using accounting policies, and, where necessary, estimation techniques, which are selected as the most appropriate for the purpose of giving a true and fair view in accordance with the principles set out in International Accounting Standard 8: Accounting Policies, Changes in Accounting Estimates and Errors. Changes in accounting policies which do not give rise to a prior year adjustment are reported in the relevant note.

The particular accounting policies adopted by the portfolios of the Scottish Government are described below. They have been applied consistently in dealing with items considered material in relation to the accounts.

1.1 Accounting Convention and basis of consolidation

These accounts have been prepared under the historical cost convention modified to account for the revaluation of property, plant and equipment ( PPE), intangible assets, and, where material, financial asset investments and inventories to fair value as determined by reference to their current costs.

These accounts reflect the consolidated assets and liabilities and the results for the year of all the entities within the Scottish Government accounting consolidation boundary as defined by the Government Financial Reporting Manual (Section 4.2). Transactions between entities included in the consolidation are eliminated. A list of all those entities within the consolidation boundary is given within the Performance Report.

The Executive Agencies detailed with the Performance Report are reported within the Outturn Statements of their sponsoring portfolio.

From 2015-16, IFRS 13: Fair Value Measurement has been adopted in full. As a result IAS 16: Property, Plant and Equipment and IAS 38: Intangible Assets have been adapted and interpreted for the public sector in the 2015-16 FReM, to ensure that IFRS 13 is consistently adopted across Government. This has resulted in surplus assets that are not held for service potential being valued using an open market value where there are no restrictions on the sale of the asset. Previously such surplus assets were valued using market value in existing use, i.e. the valuation took into consideration the asset's specific use. In applying IFRS 13 in full, this has not resulted in a material difference to 2014-15 or 2015-16 Account

1.2 Property, Plant and Equipment ( PPE)

Recognition

All PPE assets will be accounted for as non-current assets unless they are deemed to be held-for-sale (see 1.4 below), and will be accounted for under IAS16 Property, Plant and Equipment.

Scottish Ministers hold the legal title or effective control over all land and buildings shown in the accounts.

Assets classified as under construction are recognised in the statement of financial position to the extent that money has been paid or a liability has been incurred.

Capitalisation

The minimum levels for capitalisation of a property, plant or equipment asset are land and buildings £10,000 and equipment and vehicles £5,000. Information and Communications Technology ( ICT) systems are capitalised where the pooled value exceeds £1,000. Substantial improvements to leasehold properties are also capitalised. Furniture, fixtures and fittings are treated as current expenditure and are not capitalised. Any assets valued below these thresholds will be treated as expenditure in the year of purchase.

Valuation

Land and buildings have been stated at open market value for existing use or, under IAS 16 as adapted for the public sector, depreciated replacement cost for specialised buildings under a rolling 5-year programme of professional valuations and appropriate indices in intervening years. From 1 April 2007, other plant and equipment assets, other than vessels and aircraft, are no longer revalued using indices but will be reported at depreciated historic cost.

Losses in value reflected in valuations are accounted for in accordance with IAS 36, Impairment of Assets as adapted by the FReM which states that impairment losses that arise from a clear consumption of economic benefit should be taken to the outturn statement. The balance on any revaluation reserve (up to the level of impairment) to which the impairment would have been charged under IAS 36 should be transferred to the general fund.

The road network is valued at depreciated replacement cost as it is deemed to be specialist in nature. The road pavement element is valued using agreed rates determined to identify the gross replacement cost of applicable types of road on the basis of new construction on a greenfield site. These rates are re-valued annually using indices to

reflect current prices and are also updated when new construction costs become available as comparators to the costs previously identified for specific road types.

Structures are valued using agreed rates determined to identify the replacement cost of applicable types of structure on the basis of new construction on a greenfield site where these are available, but special structures, which tend to be one off by their nature, are valued using specific costs that are updated to current prices. Communications are valued using agreed rates determined to identify the replacement cost of applicable types of communication.

The indexation factors applied are:

  • Road Pavement and Structures
Baxter Index, published quarterly by the Department of Business, Innovation and Skills
  • Communications
Traffic Scotland provide new gross and calculated depreciated values each year
  • Land
Land indices produced by the Valuation Office Agency ( VOA)

Upwards movements in value are taken to the revaluation reserve. Downward movements in value are set off against any credit balance held in the revaluation reserve until the credit is exhausted and thereafter charged to the relevant portfolio outturn statement.

The trunking or detrunkings of roads from or to local authorities is treated as a transfer from or to other government departments. Roads and structures detrunked are effectively dealt with as disposals in accounting terms at nil consideration. Any associated profit or loss is processed through the general fund.

Subsequent Cost

Subsequent costs are only included in the asset's carrying amount or, where appropriate, recognised as a separate asset, when it is probable that future economic benefits associated with the item will flow to the Scottish Government and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the outturn statement during the financial period in which they are incurred.

1.3 Depreciation

Land is considered to have an indefinite life and is not depreciated.

Assets under construction are not depreciated.

For all other property, plant and equipment, depreciation is charged at rates calculated to write off their valuation by equal instalments over their estimated useful lives which are normally in the following ranges:

  • Dwellings and other buildings
5 to 50 years (as per valuation)
  • Vehicles
3 to 10 years
  • Vessels
10 to 25 years
  • Aircraft
5 to 20 years
  • Equipment
3 to 15 years
  • ICT systems
3 to 10 years
  • Internally developed software
3 to 5 years
  • Leasehold improvements
Over the shorter of asset life and lease term

1.4 Assets Held for Sale

A property is derecognised and held for sale under IFRS 5 Non-current Assets Held for Sale and Discontinued Operations when all of the following requirements are met:

  • It is available for immediate sale in its present condition
  • A plan is in place, supported by management, and steps have been taken to actively market the asset and conclude a sale at a reasonable price in relation to its current fair value
  • A sale is expected to be completed within 12 months.

Assets classified as held for sale are measured at the lower of their carrying amounts immediately prior to their classification as held for sale and their fair value less costs to sell. Assets classified as held for sale are not subject to depreciation or amortisation.

1.5 Donated Assets and European Union Grants

IAS 20 Accounting for Government Grants and Disclosure of Government Assistance, and SIC10 Government Assistance apply as interpreted by the FReM. Donated assets and grants received from the European Union for capital assets are capitalised at their valuation on receipt and this value is credited as income to the outturn statement. Subsequent revaluations are accounted for in the revaluation reserve, and impairments may be charged to the outturn statement.

1.6 Intangible Assets

In accordance with the FReM, Intangible assets are accounted for in line with the requirements of IAS 38 Intangible Assets, and SIC 32 Intangible Assets- Web Site Costs, and are valued initially at cost and subsequently at fair value using the revaluation model.

Where an active market does not exist, income generating assets are valued at the lower of depreciated replacement cost and value in use. Non income generating assets are carried at depreciated replacement cost. These valuation methods are considered to be a proxy for fair value.

Future economic benefit has been used as the criteria in assessing whether an intangible asset meets the definition and recognition criteria of IAS 38 Intangible Assets for assets that do not generate income. IAS 38 defines future economic benefit as, 'revenue from the sale of products or services, cost savings, or other benefits resulting from the use of the asset by the entity.'

Intangible assets under development are not amortised.

1.7 Financial Instruments

The Scottish Government measures and presents financial instruments in accordance with IAS 32 and 39, IFRS 7, and IFRS 13 as interpreted by the FReM. IFRS 7 requires the classification of financial instruments into separate categories for which the accounting treatment is different. The Scottish Government has classified its financial instruments as follows:

Financial Assets:

  • Cash and cash equivalents, trade receivables, short term loans, accrued income relating to EU funding, amounts receivable and shares and will be reported in the 'Loans and Receivables' category. This will also include investment funds managed by third parties which will be reported separately.
  • Shared equity loans advanced to private individuals will be reported in the 'At fair value through profit & loss' category.

Financial Liabilities:

  • Borrowings, trade payables, accruals, payables, bank overdrafts and financial guarantee contracts are classified as 'Other Liabilities'.

Financial instruments are initially measured at fair value with the exception of 'Shares held in and loans advanced to public sector bodies' which are held at historic cost, in the absence of an active market. The fair value of financial assets and liabilities is determined as follows:

  • The fair value of cash and cash equivalents and current non-interest bearing monetary financial assets and financial liabilities approximate their carrying value, and
  • The fair value of other non-current monetary financial assets and financial liabilities is based on market prices where a market exists, use of appropriate indices or has been determined by discounting expected cash flows by the current interest rate for financial assets and liabilities with similar risk profiles.

Financial instruments subsequent measurement depends on their classification:

  • Fair value through the profit and loss is held at fair value with any changes going through the outturn statement.
  • Loans and receivables and other liabilities are held at amortised cost and not revalued unless included in a fair value hedge accounting relationship. Any impairment losses go through the outturn statement.
  • Shares which are held in public sector bodies do not have a quoted market price in an active market, and the fair value cannot be reliably measured and reported at historic cost less impairment with any impairment losses going through the outturn statement.

Financial assets

Financial assets include shares in nationalised industries and limited companies, loans issued to public bodies not consolidated in departmental accounts; loans made under the terms of the student loans scheme, repayment and deferred loans relating to housing associations and investment funds. Such investments are generally reported as non-current assets. If an investment is held on a short-term basis, or a loan is due to be repaid within one year, it will be treated as a current asset.

Student Loans

Student loans are classified as 'Loans and Receivables', and are initially valued at fair value. They are subsequently recorded in the accounts at amortised cost.

As there is currently no active market for student loans, the Scottish Government values the loans by using a valuation technique. This technique involves the gross value of the loans being reduced by an amount based on:

  • Interest subsidy: This is the difference between the interest paid by students (lower of RPI and Bank of England Base Rate + 1% point) and the cost of capital on loans (currently 2.2%). The interest subsidy is estimated to meet the cost of the interest over the life of the loan and is offset by the annual interest capitalised.
  • Write off impairment: This is estimated to meet the future cost of loans that are not likely to be recovered mainly due to the death of the student, their income not reaching the income threshold, or not being able to trace the student. Each year, the future cost of bad debt is estimated based on a percentage of new loans issued during the financial year. This is offset by the actual debts written off by the Student Loan Company.

The estimates underpinning these adjustments are based on a model which holds data on the demographic and behavioural characteristics of students in order to predict their borrowing behaviour and estimate the likely repayments of student loans. Given the long term nature of both adjustments, the time value of money is significant, and they are discounted using the current HM Treasury discount rate of 2.2% in real terms.

There are significant uncertainties in assessing the actual likely costs and the impairment will be affected by the assumptions used. These are formally reviewed by the Scottish Government each year and the amounts impaired reflect the Scottish Government's current best estimate.

Further details of the movements in the loan valuation can be found in note 8, while disclosures relating to risk, required by IFRS 7, can be found in note 19.

Embedded Derivatives

Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of host contracts and the host contracts are not measured at fair value with changes in fair value recognised in profit and loss.

Financial Guarantee Contracts

Financial guarantee contract liabilities are measured initially at their fair value and subsequently at the higher of:

  • The amount of the obligation under the contract, as determined in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets; and
  • The amount initially recognised less, where appropriate, cumulative amortisation recognised in accordance with IAS 18 Revenue.

Financial Transactions

Financial Transactions are a capital funding source from HM Treasury which can only be used to fund loans and equity investments that cross the public/private sector boundary. These have to be repaid to HM Treasury in the future through adjustments to baseline funding. A repayment profile has been agreed with HM Treasury which aligns receipts by the Scottish Government with repayment to HM Treasury. This is reviewed annually.

1.8 Inventories

Items that cannot or will not be used are written down to their net realisable value. Taking into account the high turnover of NHS stocks, the use of average purchase price is deemed to represent the lower of cost and net realisable value. Work in progress is valued at the cost of the direct materials plus the conversion costs incurred to bring the goods up to their present degree of completion.

1.9 Non-Profit Distributing ( NPD)/ Public Private Partnerships ( PPP)/ Private Finance Initiatives ( PFI)

NPD/ PPP/ PFI transactions are accounted for in accordance with IFRIC 12, Service Concession Arrangements which sets out how NPD/ PPP/ PFI transactions are to be accounted for in the private sector. The Scottish Government currently uses the Non-Profit Distributing model in structuring its service concession arrangements. Previous administrations used the Public Private Partnership and Private Finance Initiative models. As payments made and assets held relating to these models will continue to be recorded in these accounts over the foreseeable future, the accounts refer to the three different service concession models in relevant disclosure.

Assets that are assessed to be on statement of financial position will be measured as follows:

  • Where the contract is separable between the service element, the interest charge and the infrastructure asset, the asset will be measured as under IAS 17, Leases, with the service element and the interest charge recognised as incurred over the term of the concession arrangement; and
  • Where there is a unitary payment stream that includes infrastructure and service elements that cannot be separated, the various elements will be separated using estimation techniques including obtaining information from the operator or using the fair value approach.

The grantor will recognise a liability for the capital value of the contract. That liability does not include the interest charge and service elements, which are expensed annually through the relevant portfolio outturn statement.

Assets should subsequently be measured consistently with other assets in their class using IAS 16, Property, Plant and Equipment, adopting an appropriate asset revaluation approach. Liabilities will be measured using the appropriate discount rate, taking account of the reduction arising from capital payments included in the unitary payment stream.

Any revenue received by the grantor is recognised in line with IAS 18, Revenue.

1.10 Income

Operating income is income that relates directly to the operating activities of the Scottish Government. It includes fees and charges for services provided, on a full cost basis, to external customers, public repayment work and income from investments. It includes both income applied with limit as outlined by the Scottish Budget documents and income not applied. For income categorised as being applied with limit, any excess income over that approved is surrendered to the Scottish Consolidated Fund. Operating income is stated net of VAT.

Income is analysed in Note 4 between that which, under the regime, is allowed to be offset against gross administrative costs in determining the outturn against the administration cost limit (income applied), and that operating income which is not (income not applied).

1.11 Administration and Programme Expenditure

The Summary Outturn Statement is analysed between administration and programme expenditure:

  • Administration expenditure reflects the costs of running the Core Portfolios as defined under the administration cost control regime, together with associated operating income. This does not include the costs of running other bodies within the departmental boundary: such costs are included within the appropriate category of programme expenditure in the relevant Portfolio Outturn Statements. The relevant staff numbers and staff costs information is provided in the Remuneration and Staff Report.
  • Programme expenditure reflects non-administration costs, including payments of grants and other disbursements, including the administration costs of those bodies within the departmental boundary. Programme expenditure also takes account of income applied. A note to the accounts provides an analysis of total programme income between income applied and income not applied ( Note 4).

1.12 Grants

Grants payable or paid are recorded as expenditure in the period that the underlying event or activity giving entitlement to the grant occurs. Where necessary obligations in respect of grant schemes are recognised as liabilities.

1.13 European Union Funds

Funds received from the European Union ( EU), are treated as income and shown in the relevant Portfolio Outturn Statement. Expenditure in respect of grants or subsidy claims is recorded in the period that the underlying event or activity giving entitlement to the grant or subsidy claim occurs. Any related payable or receivable balances are reflected in the Statement of Financial Position.

1.14 Foreign Exchange

Under the requirements of IAS 21 The Effects of Changes in Foreign Exchange Rates and SIC 7 Introduction of the Euro, transactions which are denominated in a foreign currency are translated into sterling at the exchange rate ruling on the date of each transaction, except where rates do not fluctuate significantly, in which case an average rate for a period is used. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the outturn statement.

1.15 Leases

As directed by the FReM, IAS 17 Leases and SIC15 Operating Leases apply. Where substantially all the risks and rewards of ownership of a leased property are borne by the entity, it is recorded as a non-current asset and a corresponding payable recorded in respect of the debt due to the lessor, with the interest element of the finance lease payment charged to the outturn statement. Leases other than finance leases are treated as operating leases, and rentals payable in respect of operating leases will be charged to the outturn statement on a straight line basis over the term of the lease.

1.16 Pensions

The Scottish Government as an employer

Present and past employees are covered by the provisions of the Principal Civil Service Pension Scheme ( PCSPS) which is a defined benefit scheme and is unfunded. Portfolios, agencies and other bodies covered by the PCSPS recognise the expected cost of providing pensions for their employees on a systematic and rational basis over the period during which they benefit from their services by payment to the PCSPS of amounts calculated on an accruing basis (relevant disclosures are reported in the Remuneration and Staff Report). Liability for the payment of future benefits is a charge to the PCSPS. Separate scheme statements for the PCSPS as a whole are published.

The Scottish Government as a scheme administrator

Expenditure reported within Portofolio Outturn Statements includes grant in aid to bodies sponsored by the Scottish Government, which covers pension related expenditure in respect of pension schemes operated by the sponsored body for their eligible employees. The arrangements for these pension schemes are reported and explained in the annual accounts of the relevant bodies.

NHS Bodies

The NHS Bodies in Scotland participate in the National Health Service Superannuation Scheme for Scotland which is a notional defined benefit scheme where contributions are credited to the Exchequer and the balance in the account is deemed to be invested in a portfolio of Government securities. The pension cost is assessed every five years by the Government Actuary; details of the most recent actuarial valuation can be found in the separate statement of the Scottish Public Pensions Agency ( SPPA).

Additional pension liabilities arising from early retirements are not funded by the scheme except where the retirement is due to ill health. The full amount of the liability for the additional costs is charged to the outturn statement at the time the Board commits itself to the retirement, regardless of the method of payment.

1.17 Provisions

IAS 37 Provisions, Contingent Liabilities and Contingent Assets applies in full, and in these accounts provisions are made for legal or constructive obligations which are of uncertain timing or amount at the statement of financial position date on the basis of the best estimate of the expenditure required to settle the obligation. Where material, they have been discounted using the appropriate discount rate as prescribed by HM Treasury.

Student Loans

The provision is established to reflect the debt sale subsidy.

Early Departure Costs

The Scottish Government is required to meet the additional cost of benefits beyond the normal PCSPS benefits in respect of employees who retired early, prior to 2011. The Scottish Government provides in full for this cost when the early retirement programme has been announced and is binding.

NHS

NHS bodies provide for all claims notified to the NHS Central Legal Office according to the value of the claim and the probability of settlement. Claims assessed as 'Category 3' are deemed most likely and provided for in full, those in 'Category 2' as 50% of the claim and those in 'Category 1' as nil. The balance of the value of claims not provided for is disclosed as a contingent liability. This procedure is intended to estimate the amount considered to be the liability in respect of any claims outstanding.

CNORIS

CNORIS is a risk transfer and financing scheme for NHSScotland, which was first established in 1999. Its primary objective is to provide cost-effective risk pooling and claims management arrangements for Scotland's NHS Health Boards and Special Health Boards.

A full accounting review was undertaken during 2014/15. The purpose of the review was to ensure that both NHS Boards and the Scottish Government apply the most appropriate accounting treatment.

The outcome of the review is that, as a result of participation in the CNORIS scheme, NHS Boards are now required to create a separate related, but distinct, provision recognising their respective shares of the total CNORIS national scheme liability. This is in addition to the recognition by NHS Boards of a provision for individual claims against their Board along with an associated debtor. The recognition of the separate provision is a technical accounting adjustment to more appropriately reflect the underlying substance of Boards' liabilities.

On consolidation into the Scottish Government accounts, the Scottish Government's CNORIS provision represents the national scheme liability and the Boards' accounting for individual claims is removed.

1.18 Contingent Liabilities

Contingent liabilities include those required to be disclosed under IAS 37 Provisions, Contingent Liabilities and Contingent Assets and other liabilities arising from indemnities and guarantees (which are not financial guarantee contracts) included for parliamentary reporting and accountability. Portfolios must seek the prior approval of Parliament, via the Finance Committee, before entering into any specific guarantee, indemnity or letter or statement of comfort unless it arises in the normal course of business or the sum of the risk is £1m or less.

1.19 Value Added Tax ( VAT)

Most of the activities of the Scottish Government are outside the scope of VAT, and in general output tax does not apply and input tax on purchases is not recoverable. Irrecoverable VAT is charged to the relevant expenditure category or included in the capitalised purchase cost of fixed assets. Where output tax is charged or input VAT is recoverable, the amounts are stated net of VAT.

1.20 Segmental Reporting

IFRS 8 Segmental Reporting requires operating segments to be identified on the basis of internal reports about components of the Scottish Government and its consolidated bodies that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segments and assess their performance. The Scottish Government reports segmental information within its outturn statements which are prepared on the basis of Ministerial portfolios.

1.21 Trade Receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less an estimate of likely impairment. Impairment of trade receivables is made where there is objective evidence that the Scottish Government will not be able to collect all amounts due according to the original terms of the receivables.

1.22 Cash and Cash Equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position. Balances are analysed between those held with the Government Banking Service and balances held in commercial banks.

1.23 Trade Payables

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

1.24 Short Term Employee Benefits

A liability and an expense is recognised for holiday days, holiday pay, bonuses and other short-term benefits when the employees render service that increases their entitlement to these benefits. As a result an accrual has been made for holidays earned but not taken.

1.25 New Accounting Standards

A number of new accounting standards have been issued or amendments made to existing standards, but do not come in to force until future accounting periods and therefore are not yet applied. All new standards issued and amendments made to existing standards are reviewed by Financial Reporting and Advisory Board ( FRAB) for subsequent inclusion in the FReM in force for the year in which the changes become applicable. The standards that are considered relevant to Scottish Government and the anticipated impact on the consolidated accounts are as follows:

IFRS 9 - Financial Instruments

This standard was issued in November 2014, and is effective from 1 January 2018. The adoption of this standard could change the classification and measurement of financial assets. The interpretation for the public sector is still under consideration and the impact has not been determined.

IFRS 16 - Leases

This standard will come into effect from 1 January 2019, when the distinction between finance and operating leases is removed and all leases become "on balance sheet". FRAB have not yet considered if this standard is to be adapted or applied in full although it is anticipated that the principles of the standard will be applied.

2. Note to the Cash Flow Statement

2a. Adjustment to Operating Activities for Non-cash Transactions

  2015-16
Net
2014-15
Net
£m £m
Depreciation 483 433
Impairment/Write-backs (2) 71
Total Capital Charges 481 504
Loss/(Profit) on disposal of property, plant and equipment (10) (2)
Capitalised Interest - financial assets (44) (51)
Investment fair value adjustment 146 88
Income from donated asset additions (13) (15)
Auditors Fees 3 2
Unrealised exchange rate (gain)/loss 14 -
NHS Lothian - transfer of assets 1 -
Other non-cash items (12) 15
NHS Highland - movement in year in LG pension costs (4) -
Total 562 541

2b. Analysis of Capital Charges by Portfolio

  Depreciation Impairment /
Write Backs
2015-16
Total
2014-15
Total
Portfolio £m £m £m £m
Finance, Constitution and Economy 5 - 5 3
Health, Wellbeing and Sport 309 10 319 390
Education and Lifelong Learning 5 - 5 6
Fair Work, Skills and Training - - - -
Justice 38 (11) 27 20
Social Justice, Communities and Pensioners' Rights - - - (3)
Rural Affairs, Food and the Environment 17 - 17 9
Culture, Europe and External Affairs 1 - 1 2
Infrastructure, Investment and Cities 94 - 94 59
Crown Office and Procurator Fiscal Service 4 1 5 6
Total Programme 473 - 473 492
Administration 10 (2) 8 12
Total Capital Charges 483 (2) 481 504

2c. Audit Fee

The consolidated audit fee for 2015-16 is £6m (Core Portfolios £1m). Part of the audit fee, including that of the Core Portfolios, is a notional charge, as noted above. Other entities within the consolidation boundary pay fees. The consolidated audit fee for 2014-15 year was £6m (Core Portfolios £1m). There were no additional charges in relation to non audit work undertaken by Audit Scotland.

2d. Movement in Working Capital

Note Opening
Balances
Closing
Balances
2015-16
Net
Movement
2014-15
Net
Movement
£m £m £m £m
Inventories 9 100 102
Net Decrease/(Increase) (2) (10)
Receivables and other assets
Due within one year 10a 1,044 1,332 (288) (163)
Due after more than one year 10a 54 47 7 38
Less: Capital included in PPE (10) (6) (4) 2
Less: Capital included in intangibles - - - -
Less: Capital included in investment (34) - (34) 1
Less: Receivable from SCF 10a (74) (289) 215 74
Less: General Fund receivable included above 10a - (3) 3 -
Total 980 1,081
Net Decrease/(Increase) (101) (48)
Payables and other liabilities
Due within one year 11a 2,335 2,435 100 (212)
Due after more than one year 11a 2,774 3,126 352 155
Less: Capital included in PPE (697) (846) (149) 20
Less: Capital included in intangibles - (5) (5) 6
Less: Capital included in Investment - (12) (12) 24
Less: Bank overdraft 11a (3) (3) - -
Less: SCF corporate payable included in above 11a (111) (132) (21) 7
Less: Payable to SCF 11a - (2) (2) 158
Less: NLF payable included in above 11a (700) (685) 15 5
Less: PFI imputed leases 11a (1,989) (2,327) (338) (140)
Total 1,609 1,549
Net (Decrease)/Increase (60) 23
Provisions (Current and non-current) 12 778 717 (61) 142
Less: Capital provisions (99) (83) 16 14
Total 679 634
Net (Decrease)/Increase (45) 156
Total Net Movement (Decrease)/Increase (208) 121

3. Cash and Cash Equivalents

2015-16 2014-15
£m £m
Government Banking Service 121 86
Commercial banks and cash in hand 13 37
At 31 March 134 123
At 1 April 123 128
Net change in cash and cash equivalent balances 11 (5)
At 31 March 134 123
The balance at 31 March comprises Note 2015-16
Net
2014-15
Net
£m £m
Cash due to be paid to the Scottish Consolidated Fund 11a 132 111
Consolidated Fund extra receipts received and due to be paid to SCF 11a 2 12
At 31 March 134 123

4. Income

4a. Operating income, analysed by classification and activity, is as follows:

  Total Income Income Not
Applied
2015-16
Income
Applied
2014-15
Income
Applied
£m £m £m £m
Administration Income:
Allowable within admin cost limit 11 - 11 11
Other:
Fees and charges (1) 7 - 7 11
Other (Detail) - - - -
Total Administration Income 18 - 18 22
Programme Income:
Finance, Constitution and Economy 20 2 18 18
Health, Wellbeing and Sport 1,277 - 1,277 809
Education and Lifelong Learning 92 - 92 98
Fair Work, Skills and Training - - - -
Justice 51 34 17 19
Social Justice, Communities and Pensioners' Rights 15 - 15 20
Rural Affairs, Food and the Environment 471 - 471 534
Culture, Europe and External Affairs 30 - 30 42
Infrastructure, Investment and Cities 213 - 213 184
Crown Office and Procurator Fiscal Service 4 3 1 1
Total Programme Income 2,173 39 2,134 1,725
Total 2,191 39 2,152 1,747

(1) The SG complies with HM Treasury and Office of Public Sector cost allocation and charging requirements.

4b. Income Not Applied

Income not applied are amounts for surrender to the Scottish Consolidated Fund in accordance with the Scotland Act 1998 (Designation of Receipts) Order 2009.

  Cash
Received
Accrued 2015-16 2014-15
The major items of income not applied are: £m £m £m £m
Repayment of interest - - - -
Designated receipts - Fines, forfeitures and fixed penalties 28 - 28 30
Non-designated receipts - Proceeds of Crime and other 11 - 11 12
Total Income Not Applied 39 - 39 42

4c. Interest Receivable

All interest receivable is external to the consolidated portfolio accounting boundary. It is included within the Operating Outturn Statement as income applied, unless it is required to be surrendered to the Scottish Consolidated Fund.

Total
Income
Income
Not
Applied
2015-16
Income
Applied
2014-15
Total
Income
Programme Income: £m £m £m £m
Social Justice, Communities and Pensioners' Rights - - - -
Health, Wellbeing and Sport - - - -
Infrastructure, Investment and Cities 84 - - 103
Total 84 - - 103

4d. Interest Payable

2015-16
Total
2014-15
Total
£m £m
Finance lease charges allocated in the year 154 194
Other interest 1 -
Total 155 194

5a. Property, Plant and Equipment

Land 1 Buildings 2 Dwellings Road
Network 3
Transport Equipment ICT
Systems
Fixtures
and fittings
Assets under
Construction
Total
Cost or valuation £m £m £m £m £m £m £m £m £m £m
At 1 April 2015 497 6,594 653 20,164 204 1,180 393 84 1,497 31,266
Additions - 21 1 14 4 38 14 1 920 1,013
Adjustments - - - (44) - - - - - (44)
Transfers 1 133 4 1,001 (1) 58 17 6 (277) 942
Transfers (to) assets classified held for sale 1 (7) (1) - - - - - - (7)
Disposals (7) (7) - - (5) (84) (16) (2) - (121)
Revaluations to Revaluation Reserve 19 (36) 16 (357) (1) - - - 1 (358)
Revaluations to Outturn Statement (3) (32) (2) - (1) (13) (3) - (3) (57)
At 31 March 2016 508 6,666 671 20,778 200 1,179 405 89 2,138 32,634
Depreciation
At 1 April 2015 - 357 45 3,167 108 808 304 56 - 4,845
Charged in year - 191 19 94 15 90 34 7 - 450
Adjustments - - - (6) - - - - - (6)
Transfers - (6) 1 475 (2) (6) (5) - - 457
Transfers (to) assets classified held for sale - (6) - - - - - - - (6)
Disposal - (7) - - (5) (84) (15) (2) - (113)
Reclassifications - - - - - - - - -
Revaluations to Revaluation Reserve - (164) (39) (76) - - - - - (279)
Revaluations to Outturn Statement - (9) (7) - - (12) (3) - - (31)
At 31 March 2016 - 356 19 3,654 116 796 315 61 - 5,317
Net book value at 31 March 2016 508 6,310 652 17,124 84 383 90 28 2,138 27,317
Net book value at 31 March 2015 497 6,237 608 16,997 96 372 89 28 1,497 26,421
Land 1 Buildings 2 Dwellings Road
Network 3
Transport Equipment ICT
Systems
Fixtures
and fittings
Assets under
Construction
Total
Analysis of asset financing: £m £m £m £m £m £m £m £m £m £m
Owned 488 4,689 570 14,773 75 382 90 28 1,627 22,722
Finance Leased - 41 - - 5 1 - - - 47
PFI included in Statement of Financial Position 20 1,579 82 2,351 - - - - 511 4,543
Donated Asset - 1 - - 4 - - - - 5
Net book value at 31 March 2016 508 6,310 652 17,124 84 383 90 28 2,138 27,317
Land 1 Buildings 2 Dwellings Road
Network 3
Transport Equipment ICT
Systems
Fixtures
and fittings
Assets under
Construction
Total
Donated Asset Movement £m £m £m £m £m £m £m £m £m £m
Additions - 1 - - - 6 1 - 5 13
Disposals - - - - - (3) - - - (3)

1 - (land holdings and land underlying buildings);
2 - (excluding dwellings);
3 - (including land)

Prior Year

Land 1 Buildings 2 Dwellings Road
Network 3
Transport Equipment ICT
Systems
Fixtures
and fittings
Assets under
Construction
Total
Cost or valuation £m £m £m £m £m £m £m £m £m £m
At 1 April 2014 503 5,758 607 20,321 200 1,185 386 87 1,628 30,675
Additions 1 42 - 9 4 32 17 1 797 903
Adjustments - - - 106 - - - - - 106
Transfers 6 760 7 210 11 31 11 3 (917) 122
Transfers (to) assets classified held for sale (13) (2) - - - - - - - (15)
Disposals (4) (12) - - (11) (67) (19) (7) (1) (121)
Revaluation 9 133 26 (482) 1 - - - (4) (317)
Impairments (5) (85) 13 - (1) (1) (2) - (6) (87)
At 31 March 2015 497 6,594 653 20,164 204 1,180 393 84 1,497 31,266
Depreciation
At 1 April 2014 - 298 25 3,194 102 785 287 55 - 4,746
Charged in year - 174 19 58 17 89 38 7 - 402
Transfers - - - 14 - - - - - 14
Transfers (to) assets classified held for sale - - - - - - - - - -
Disposal - (8) - - (11) (66) (19) (7) - (111)
Revaluation - (94) 2 (99) 1 - - - - (190)
Revaluation to Outturn Statement - (13) (1) - (1) - (2) 1 - (16)
At 31 March 2015 - 357 45 3,167 108 808 304 56 - 4,845
Net book value 31 March 2015 497 6,237 608 16,997 96 372 89 28 1,497 26,421
Net book value 31 March 2014 503 5,460 582 17,127 98 400 99 32 1,628 25,929
Land 1 Buildings 2 Dwellings Road
Network 3
Transport Equipment ICT
Systems
Fixtures
and fittings
Assets under
Construction
Total
Analysis of asset financing: £m £m £m £m £m £m £m £m £m £m
Owned 478 4,679 529 15,106 86 370 89 28 1,328 22,693
Finance Leased 1 42 - - 6 1 - - - 50
PFI included in Statement of Financial Position 18 1,516 79 1,891 - 1 - - 169 3,674
Donated Assets - - - - 4 - - - - 4
Net book value at 31 March 2015 497 6,237 608 16,997 96 372 89 28 1,497 26,421
Land 1 Buildings 2 Dwellings Road
Network 3
Transport Equipment ICT
Systems
Fixtures
and fittings
Assets under
Construction
Total
Donated Asset Movement £m £m £m £m £m £m £m £m £m £m
Additions - 2 - - - 2 1 - 3 8
Disposals - - - - - (4) - - - (4)

1 - (land holdings and land underlying buildings);
2 - (excluding dwellings);
3 - (including land)

5b . Non Current Asset Disclosures

2015-16 2014-15
£m £m
Net book value of Property, Plant and Equipment 27,317 26,421
Total value of assets held under:
Finance Leases 48 50
Hire Purchase Contracts - -
PFI and PPP Contracts 4,543 3,674
Total 4,591 3,724
Total depreciation charged in respect of assets held under:
Finance leases 5 27
PFI and PPP contracts 962 495
Total 967 522

As part of the 5-year rolling programme, the Scottish Agricultural Research Institutes and 8 other properties including Victoria Quay underwent a formal inspection and revaluation on the basis of Existing Use Value, as at 31 March 2016. Valuations were carried out by the Valuation Office Agency. These valuations were carried out in accordance with the Valuation - Professional Standards 2014 (the Red Book) published by the Royal Institution of Chartered Surveyors.

In addition to the land and buildings recorded in the core portfolios' accounts, the consolidated accounts reflect some land and buildings which are specialised operational properties and have been valued at their depreciated replacement cost. As noted in the relevant underlying agency accounts, the open market value of these properties would be significantly lower.

The national NHS estate revaluation scheme came to an end at 31 March 2005. Individual boards have instituted their own schemes, details of which are available in the various NHS Board accounts. These schemes operate in accordance with Scottish Government policy on revaluation as set out in Note 1.2 to these accounts.

6. Intangible Assets

EC Emission
Rights
Software
Licenses
Information
Technology
Software
Websites
that Deliver
Service
Assets Under
Development
Total
Cost or Valuation £m £m £m £m £m £m
Balance at 1 April 2015 - 162 234 1 23 420
Additions - 5 5 - 36 46
Disposals - (4) (6) - - (10)
Transfers - (1) 45 - (44) -
Impairments - - (1) - - (1)
Revaluations - - - - - -
At 31 March 2016 - 162 277 1 15 455
Amortisation
Balance at 1 April 2015 - 129 155 1 - 285
Charged in year - 11 22 - - 33
Disposals - (4) (6) - - (10)
Donated assets disposal - - - - - -
Adjustments - - - - - -
Transfers - - - - - -
Transfers (to)/from assets classified held for sale - - - - - -
Impairments - - - - - -
Revaluations - - (1) - - (1)
At 31 March 2016 - 136 170 1 - 307
Net book value at 31 March 2016 - 26 107 - 15 148
Net book value at 31 March 2015 - 33 79 - 23 135

Assets under development include £5m relating to information technology software, and £10m relating to software developed in-house or by third parties.

Prior Year EC Emission
Rights
Software
Licenses
Information
Technology
Software
Websites that
Deliver a
Service
Assets
Under
Development
Total
Cost or Valuation £m £m £m £m £m £m
Balance at 1 April 2014 - 160 183 1 23 367
Additions - 4 10 - 53 67
Disposals - (3) (12) - - (15)
Transfers - 1 53 - (53) 1
At 31 March 2015 - 162 234 1 23 420
Amortisation
Balance at 1 April 2014 - 118 150 1 - 269
Charged in year - 14 17 - - 31
Disposals - (3) (12) - - (15)
At 31 March 2015 - 129 155 1 - 285
Net book value at 31 March 2015 - 33 79 - 23 135
Net book value at 31 March 2014 - 42 33 - 23 98

Assets under development included £23m relating to information technology software.

7. Assets Classified as Held for Sale

The following assets have been presented for sale by the Scottish Government. The completion date for sale is expected to be within 12 months. Assets classified as held for sale are measured at the lower of their carrying amount immediately prior to their classification as held for sale and their fair value less costs to sell.

Assets classified as held for sale are not subject to depreciation or amortisation.

Property, Plant
and Equipment
Intangible
Assets
Investment
Assets
Total
£m £m £m £m
At 1 April 2015 42 - - 42
Transfers from Non-Current Assets 1 - - 1
Change arising on revaluation (4) - - (4)
Disposals (10) - - (10)
At 31 March 2016 29 - - 29
Prior year
At 1 April 2014 36 - - 36
Transfers from Non-Current Assets 15 - - 15
Change arising on revaluation (3) - - (3)
Disposals (6) - - (6)
At 31 March 2015 42 - - 42

8. Financial Assets

8a. Non-Current Financial Assets

  Interests in
Nationalised
Industries
and Limited
Companies
Voted
Loans
NLF
Loans
Student
Loans
Housing
Association
Loans
Shared
Equity
Housing
Other
Housing
Loans
Other
Funds
Total
£m £m £m £m £m £m £m £m £m
Balance at 1 April 2015 24 2,419 676 2,451 58 450 27 127 6,232
Add element reported within current assets - 276 14 130 - - - - 420
Advances and acquisitions:
Cash advances 1 365 - 549 - 200 13 119 1,247
Fair value adjustment - - - (170) - (8) (5) (9) (192)
Capitalised interest - - - 43 - - - 1 44
Adjustment - - - (1) - - - - (1)
Grant paid - - - - - - - - -
Repayments and disposals - (276) (14) (130) - (15) (1) (1) (437)
Student Loans unallocated receipts - - - (10) - - - - (10)
Unwinding of discounted cash flow - - - 46 1 - - - 47
Revaluations to outturn statement - - - - - - - - -
Balance at 31 March 2016 25 2,784 676 2,908 59 627 34 237 7,350
Loans repayable within 12 months transferred to current assets - (308) (24) (130) - - - (54) (516)
Balance at 31 March 2016 25 2,476 652 2,778 59 627 34 183 6,834

Prior Year

  Interests in
Nationalised Industries
and Limited
Companies
Voted
Loans
NLF
Loans
Restated*
Student
Loans
Housing
Association
Loans
Shared
Equity
Housing
Other
Housing
Loans
Other
Funds
Total
£m £m £m £m £m £m £m £m £m
Balance at 1 April 2014 22 2,400 690 2,110 57 269 24 106 5,678
Add element reported within current assets - 193 5 120 - - - - 318
Advances and acquisitions:
Cash advances 2 298 - 515 - 189 3 33 1,040
Fair value adjustment - - - (149) - - - - (149)
Capitalised interest - - - 50 - - - 1 51
Adjustments - - - - - - - (1) (1)
Grant paid - - - - - - - (2) (2)
Repayments and disposals - (196) (5) (126) - (11) (1) (10) (349)
Unwinding of discounted cash flow - - - 61 1 - - - 62
Revaluations to outturn statement - - - - - 3 1 - 4
Balance at 31 March 2015 24 2,695 690 2,581 58 450 27 127 6,652
Loans repayable within 12 months transferred to current assets - (276) (14) (130) - - - - (420)
Balance at 31 March 2015 24 2,419 676 2,451 58 450 27 127 6,232

Investments have been measured and presented in accordance with IAS 32, IAS 39, IFRS 13 and IFRS 7 as modified by the Government Financial Reporting Manual ( FReM).

See note 1.7

*Prior year Student Loans balances have been restated ( Note 23 Restatement)

8b. Nationalised Industries

As at 31 March 2016, the Scottish Ministers are the sole shareholder in Caledonian Maritime Assets Limited, David MacBrayne Limited, Highlands and Islands Airports Limited and Prestwick Holdco Limited. The Scottish Ministers hold the following investments:

Caledonian Maritime Assets Limited

1,500,000 ordinary shares of £10 each

David MacBrayne Limited

5,500,002 ordinary shares of £1 each

Highlands and Islands Airport Limited

50,000 ordinary shares of £1 each

TS Prestwick Holdco Limited

1 ordinary share of £1

These organisations are operated and managed independently of the Scottish Government, and, therefore, do not fall within the consolidated portfolio accounting boundary. The companies each publish an individual annual report and accounts. The net assets and results of the aforementioned companies are summarised in the table below.

Prestwick
Holdco
Ltd
Highlands
and Islands
Airports
Ltd
Caledonian
Maritime
Assets Ltd
David
MacBrayne
Ltd
£m £m £m £m
Net Assets as at 31 March 2016 (21) (24) 75 14
Turnover 11 21 33 190
Profit/(Loss) for the financial year (10) (5) 8 (5)

These results are in draft as their accounts are yet to be published.

Caledonian Maritime Assets Ltd

Following a restructure of the Caledonian MacBrayne group in 2006, Caledonian MacBrayne Limited became known as Caledonian Maritime Assets Limited ( CMAL) and CalMac Ferries Limited ( CFL) was incorporated. CFL took over operation of the Clyde & Hebrides Ferry Services as successor to Caledonian MacBrayne Limited. CMAL retained ownership of all vessels and ports, which it leases to the operator of the Clyde & Hebrides Ferry services (currently CFL). CMAL remains wholly owned by Scottish Ministers.

David MacBrayne Ltd

Scottish Ministers previously owned 2 shares of £1 in a dormant company, David MacBrayne Limited. In the course of the restructuring of the Caledonian MacBrayne group in 2006, Scottish Ministers' shareholding in David MacBrayne Limited was increased by 5,500,000 shares to 5,500,002 ordinary shares of £1. David MacBrayne Limited is now the holding company for the ferry operating companies CalMac Ferries Limited, Argyll Ferries Limited and NorthLink Ferries Limited and for the dormant companies Cowal Ferries Limited and Rathlin Ferries Limited.

Highlands and Islands Airports Ltd ( HIAL)

The Scottish Ministers are the sole shareholders in HIAL. The company's purpose is to maintain the safe operation of its airports to support economic and social development in the Highland and Islands. HIAL currently operates 11 airports; 10 in the Highlands and Islands and also Dundee, which it assumed responsibility for in December 2007 and now operates via a wholly owned subsidiary company, Dundee Airport Limited.

TS Prestwick Holdco Limited

In 2013 Transport Scotland purchased the entire share capital of Prestwick Aviation Holdings Limited, the holding company of subsidiaries who own and operate Glasgow Prestwick Airport, through a company set up for this specific purpose - TS Prestwick Holdco Limited. Subsequently Transport Scotland advanced loan funding to the group to cover the cash deficit arising from its operating deficit and capital expenditure.

8c. Other Interests

The loans issued and reported as Financial Assets within these accounts have been valued reflecting current market expectations regarding discounted future cash flows. Under IFRS 13, these valuations have been classed as level 3 unobservable inputs, as there is no active market for the investments.

Student Loan Company ( SLC)

The Student Loan Company is a non-departmental public body which administers the payment and collection of loans to UK students. When it was set up in 1990, it was wholly owned by the Secretary of State for Education and Skills (now the Department for Business, Innovation and Skills) and the Secretary of State for Scotland. From 1 July 1999, the student support function was transferred to the Scottish Ministers with respect to students ordinarily resident in Scotland. Following a restructuring the Scottish Ministers hold 1 share with a nominal value of £0.50 (5% of the equity) in the SLC.

Scottish Futures Trust Ltd ( SFT)

The Scottish Futures Trust was set up in September 2008 to work collaboratively across the public sector to secure improved value for money in infrastructure procurement, and is working jointly with local authorities, NHS Boards and other public bodies to deliver benefits in cost effective asset procurement and management. The SFT is a limited company owned by the Scottish Ministers with share capital of £100, £2 of which has been issued and is held by the Scottish Ministers.

Scottish Health Innovations Ltd

Scottish Health Innovations Ltd is a company that works in partnership with NHS Scotland to protect and develop healthcare innovations. The company is limited by guarantee with three members, the Scottish Ministers, the National Waiting Times Centre, and NHS Tayside.

Voted Loans

The Scottish Ministers have provided loans from voted provision to Caledonian Maritime Assets Limited of £108m to be used for the construction of new shipping; £7m to crofters for building purposes; and £2,670m to Scottish Water for their capital investment programmes.

National Loans Fund

Prior to 1 July 1999, the Secretary of State lent money to Scottish Enterprise, Scottish Homes and the three Water Authorities (now Scottish Water), out of the National Loans Fund. At 1 July 1999, the right to the sums outstanding was transferred to the Scottish Ministers who must pay the repayments and interest to the Secretary of State for Scotland via the Scottish Consolidated Fund. The loans to Scottish Enterprise and Scottish Homes have since been repaid. The NLF loans remaining are with Scottish Water. Scottish Water's 2015-16 annual report and accounts can be found at http://www.scottishwater.co.uk/About-Us/Publications/Annual-Reports/Annual-Report-1516

Student Loans

Loans made under the terms of the student loans scheme are administered by the Student Loans Company Limited, a company owned jointly by the Scottish Ministers and the Department for Business, Innovation and Skills. These loans are accounted for on the basis of the loan balances of students domiciled in Scotland and adjusted for fair value and impairment.

Housing Association Loans

Housing Association loans are made up of repayment loans and deferred loans. The repayment loans are secured loans to registered Housing Associations and are repayable on an annuity basis, the deferred loans relate to the transfer of housing stock.

Shared Equity and Other Housing Loans

The Other Housing Loans include Deferred Financial Commitment Loans. The fair value estimation technique for housing loans was reviewed in 2009-10, resulting in a change from discounted cash flow to one relating to the underlying property valuation using the Nationwide Pricing Index method.

Other Funds

The Scottish Government provides funding to three organisations, Salix Finance Limited, Social Investment Scotland ( SIS) and Energy Saving Trust ( EST), to deliver programmes which include the issue of loans. Salix provides loans (£6m) to the public sector to improve their energy efficiency and reduce their carbon emissions. SIS administer and manage the Scottish Investment Fund (£17m) on behalf of the Scottish Government, the fund was set up to provide loans to build capacity, capability and financial sustainability in the third sector. EST administer and manage funds on behalf of the Scottish Government which provide loans (£51m) to save energy and reduce carbon dioxide emissions.

The Scottish Government, and the European Regional Development Funds, have established the Scottish Partnership for Regeneration in Urban Centres ( SPRUCE) Fund. This fund is a JESSICA (Joint Venture Support for Sustainable Investment in City Areas) Urban Development Fund (£37m) that helps fund regeneration and energy efficient projects within targeted areas of Scotland.

During the course of 2015-16, a Scottish Government national loans scheme was put in place (£54m) to provide support to the farming economy.

The Scottish Government provided £1.7m during 2014-15 and a further £4m during 2015-16 to the Scottish Futures Trust for use in their oversight of the Non Profit Distributing ( NPD) programme. SFT's pipeline of NPD projects is delivered through two channels - very large projects such as major roads or large hospitals, procured directly by the public sector organisations through the NPD programme, with smaller Design, Build, Finance and Maintain ( DBFM) projects delivered via the Scotland-wide hub initiative in partnership with local authorities, health boards and other public bodies. The funds are used to support subordinated debt investment in individual hub DBFM projects at a commercial rate of return. Interest on this investment contributes to the funding of on-going SFT activity.

In addition to the existing Charitable Bonds (£12m), the Scottish Government invested a further £25.6m in four Charitable Bonds during 2015-16. The bond issuer loaned £18.9m, at a market rate, to Kingdom Housing Association (£5.2m), Ayrshire Housing Association (£1.6m), Eildon Housing Association (£10m), and Orkney Housing Association (£2.1m) to develop new affordable homes. The balance of £6.7m will be donated to one or more charitable Housing Associations by the bond issuer for the provision of new social housing, funded by the Scottish Government foregoing interest on the bond. The full £25.6m will be repaid to the Scottish Government in 2025-26.

9. Inventories

2015-16 2014-15
£m £m
NHS inventories 100 96
Other inventories 2 4
Total 102 100

10a. Receivables and Other Assets

2015-16 2014-15
Amounts falling due within one year £m £m
Trade receivables 62 58
VAT 68 57
Other receivables 89 90
Prepayments and accrued income 294 371
Accrued income relating to EU funding 499 366
Interest receivable 28 28
Balances receivable from SCF 289 74
Corporate balance with the SCF 3 -
Balance as at 31 March 1,332 1,044
2015-16 2014-15
Amounts falling due in more than one year £m £m
Other receivables 3 3
Prepayments and accrued income 44 51
Balance as at 31 March 47 54
Total balance as at 31 March 1,379 1,098

Included within the total is interest receivable on NLF loans of £9m (2014-15: £10m) that will be paid to the Scottish Consolidated Fund as income not applied once the debt has been settled.

Trade Receivables are shown net of impairments as follows:

  2015-16 2014-15
£m £m
At 1 April 9 7
Charge for the year 6 5
Unused amount released (1) (1)
Utilised during the year (3) (2)
At 31 March 11 9

European Structural Funds Programmes ( ESF) - included within Accrued income relating to EU funding

The Scottish Government has provided the European Commission ( EC) with assurances about how it and other bodies in receipt of European Structural Funds are managing the programmes. The EC has recognised the actions taken and, in August 2016, the suspensions for the two European Social Fund programmes were lifted. We were notified in September 2016 of a decision to discontinue the remaining suspension in respect of one European Regional Development Fund programme. Formal confirmation from the EC is expected to follow within a short timescale.

10b. Intra Government Receivables and Other Asset Balances

2015-16 2014-15
Amounts falling due within one year £m £m
Balances with other central government bodies 263 93
Balances with local authorities 45 43
Balances with NHS Bodies in England and Wales 5 8
Balances with public corporations and trading funds 11 1
Balances with the European Union 504 324
Total: Intra-governmental balances 828 469
Balances with bodies external to government 504 575
Balance as at 31 March 1,332 1,044
2015-16 2014-15
Amounts falling due in more than one year £m £m
Balances with other central government bodies (212) (194)
Balances with local authorities 16 -
Balances with NHS Bodies in England and Wales - -
Balances with public corporations and trading funds - -
Balances with the European Union - -
Total: Intra-governmental balances (196) (194)
Balances with bodies external to government 243 248
Balance as at 31 March 47 54

11a. Payables and Other Liabilities

2015-16 Restated*
2014-15
Amounts falling due within one year £m £m
Trade payables 471 495
Other taxation and social security 118 118
Superannuation payable 95 85
Other payables 103 176
Deferred income and accruals 1,430 1,277
Accrued interest due on NLF loans 9 10
Finance leases 3 2
PFI imputed finance leases 45 44
Corporate balance with the SCF 132 111
Balances payable to the SCF 2 -
2,408 2,318
Other financial liabilities:
Current instalments on NLF loans 24 14
Bank overdraft 3 3
27 17
Total current liabilities 2,435 2,335

The balance payable to the SCF includes amounts due on income not applied of £2m (2014-15: £nil).

*Prior Year Deferred income and accruals balance has been restated ( Note 23 Restatement)

2015-16 Restated
2014-15
Amounts falling due in more than one year £m £m
Other payables 104 64
Deferred income and accruals 61 59
Finance leases 26 29
PFI imputed finance leases 2,282 1,945
Lease adjustment for rent free period 1 1
2,474 2,098
Other financial liabilities
Instalments on NLF loans 652 676
652 676
Total 3,126 2,774

11b. Intra Government Payables and Other Liabilities Balances

2015-16 Restated
2014-15
Amounts falling due within one year £m £m
Balances with other central government bodies 358 350
Balances with local authorities 297 189
Balances with NHS Bodies in England and Wales 29 16
Balances with public corporations and trading funds 4 1
Balances with the European Union 30 223
Total: Intra-governmental balances 718 779
Balances with bodies external to government 1,717 1,556
Balance as at 31 March 2,435 2,335
2015-16 Restated
2014-15
Amounts falling due in more than one year £m £m
Balances with other central government bodies 652 676
Balances with local authorities - 107
Balances with NHS Bodies in England and Wales - -
Balances with public corporations and trading funds - -
Balances with the European Union 48 45
Total: Intra-governmental balances 700 828
Balances with bodies external to government 2,426 1,946
Balance as at 31 March 3,126 2,774

12a. Provisions for Liabilities and Charges

Student
Loans Sale
Subsidy
Early
Departure
Costs
NHS Clinical
and Medical
Negligence
SPS
Prisoner
Compensation
Other
Provisions
Total
2015-16
£m £m £m £m £m £m
Balance as at 1 April 2015 44 141 118 - 108 411
Add: element reported as due within one year - 14 184 2 167 367
Balance as at 1 April 2015 44 155 302 2 275 778
Provided for in year - 15 144 2 39 200
Provisions not required written back (1) (3) (42) (1) (68) (115)
Provisions utilised in year (2) (13) (41) - (90) (146)
Discount amortised 1 - - - (1) -
Balance as at 31 March 2016 42 154 363 3 155 717
Payable within one year - (13) (107) (3) (62) (185)
Balance as at 31 March 2016 42 141 256 - 93 532
Analysis of expected timing of any resulting outflows of economic benefits:
Payable in 1 year - 13 107 3 62 185
Payable between 2 - 5 yrs 12 68 171 - 82 333
Payable between 6 - 10 yrs 30 33 13 - 11 87
Thereafter - 40 72 - - 112
Balance as at 31 March 2016 42 154 363 3 155 717

Prior Year

Student
Loans Sale
Subsidy
Early
Departure
Costs
NHS Clinical
and Medical
Negligence
SPS
Prisoner
Compensation
Other
Provisions
Total
2015-16
£m £m £m £m £m £m
Balance as at 1 April 2014 48 139 121 - 87 395
Add: element reported as due within one year - 14 140 3 84 241
Balance as at 1 April 2014 48 153 261 3 171 636
Provided for in year - 17 64 1 144 226
Provisions not required written back (4) (3) (13) (1) (7) (28)
Provisions utilised in year (2) (13) (10) (1) (32) (58)
Discount amortised 2 1 - - (1) 2
Balance as at 31 March 2015 44 155 302 2 275 778
Payable within one year - (14) (184) (2) (167) (367)
Balance as at 31 March 2015 44 141 118 - 108 411
Analysis of expected timing of any resulting outflows of economic benefits:
Payable in 1 year - 14 184 2 167 367
Payable between 2 - 5 yrs 13 70 118 - 92 293
Payable between 6 - 10 yrs 31 33 - - 12 76
Thereafter - 38 - - 4 42
Balance as at 31 March 2015 44 155 302 2 275 778

12b. Provisions for Liabilities and Charges

Student Loans

The debt sale subsidy is the additional cost to the Scottish Government of government subsidies contractually due to the purchaser of the debts, beyond the costs that the government would have incurred had the debts remained in the public sector. The debt sale subsidy provision is estimated to meet the cost of this subsidy over the expected life of loans sold. The utilisation of this provision is dependent on the timing of the repayment of the loans which is uncertain.

NHS Clinical and Medical Negligence

Included within provisions is an amount of £363m (2014-15: £302m) which relates to clinical and medical negligence costs. NHS Bodies provide for all claims notified to the NHS Central Legal Office according to the value of the claim and the probability of settlement. Claims assessed as 'Category 3' are deemed most likely and provided for in full, those in 'Category 2' as 50% of the claim and those in 'Category 1' as nil.

NHS Boards settled claims for £30m in 2015-16 (2014-15: £40m). Following the accounting review undertaken in 2014-15, on consolidation, the Scottish Government's CNORIS provision represents the national liability and the Boards' accounting for individual claims is removed.

In 2015-16 £144m of estimated settlement value of medical and clinical negligence claims were added to the provision. £41m in claims were settled and £42m was written back as no longer required.

Prisoner Compensation

Included within the Scottish Prison Service ( SPS) is an amount of £3m (2014-15: £2m) based on estimates of exposure to potential prisoner compensation claims. During the year £2m was added to the provision, while £1m of the provision was written-back following the Contravention Rights proceedings (Amendment) (Scotland) Act 2009 which came into force on 2 November 2009. This Act introduced a one year time limit to contravention rights claims. Further information can be found within the SPS annual accounts at www.sps.gov.uk.

Other Provisions - NHS Balances

Other provisions include NHS balances of £38m (2014-15: £26m). The NHS balances relate to various NHS Boards and Bodies and include: provision for non-medical legal liabilities, employer and third party costs, provision for future development costs, dilapidations, and a variety of other smaller provisions.

Other Provisions - Transport Scotland Balances

Also included within other provisions are Transport Scotland balances of £83.02m (14-15: £99.63m) includes £72.14m relating to land & property acquisition (14-15, £90.35m), £5.27m relating to major projects (14-15, £8.25m), and £5.61m relating to other (14-15, £1.02m ref early retirement benefits).

The land & property acquisition provisions relate primarily to estimates made of the likely compensation payable in respect of planning blight, discretionary and compulsory acquisition of property from owners arising from physical construction of a road or rail scheme. When land is acquired by CPO it is not known when compensation settlements will be made. A provision for the estimated total cost of land acquired is created when it is expected that a general vesting declaration will be published in the near future. It may take several years from the announcement of a scheme to completion and final settlement of all liabilities. The estimates provided by the Valuation Office Agency are reviewed bi-annually.

Major projects provisions relate to compensation claims made in respect of work done under on projects that have not yet fully settled Transport Scotland agreed to meet the additional cost of benefits payable to specific employees who retired early until they reach the age of 60 at which point the liability is assumed by the PCSPS. The cost of these benefits is provided in full when the employee retires.

Other Provisions - European Structural Funds Programmes ( ESF)

The 2007-13 ESF programmes are approaching closure with the expectation that the formal EU closure process will be concluded by 31 March 2017. An interim draft final declaration for the 2007-2013 programmes was submitted in July 2016. This included self-corrections which have facilitated the lifting of all previously suspended programmes. On the basis of the interim draft final declaration, provision of £14 million has been made within these Accounts reflecting that forecast costs are expected to exceed forecast income, recognising the specific ways in which individual projects are funded. In approaching closure there remains some uncertainty on final programme values which we expect to be confirmed by 31 March 2017.

13. Capital Commitments

2015-16 2014-15
Property, Plant and Equipment £m £m
Contracted capital commitments for which no provision has been made 1,001 695
Total 1,001 695
Intangible Assets
Contracted capital commitments for which no provision has been made 19 12
Total 19 12
Total Commitments 1,020 707

2015-16 Property, plant and equipment commitments include future payments of £771m in respect of major road schemes currently under construction, and a number of capital projects being undertaken by NHS Boards (£230m).

2015-16 Intangible asset commitments include the development of a replacement IT system for Marine Scotland's vessels of £1.7m (90% reimbursement expected from the European Union), the development of a new pensions administration system (£1.7m), and £15m to complete the CAP Futures project.

The 2014/15 Scottish Government Consolidated Accounts included a disclosure of authorised but not commited capital expenditure which is outwith the scope of the applicable accounting standards; these balances have been excluded from the accounts for 2015/16.

14. Commitments Under Leases

14a. Operating Leases

Total future minimum lease payments under operating leases are given in the tables below for each of the following periods:

Obligations under operating leases comprise:

  2015-16 2014-15
Land £m £m
Within one year 1 1
Between two and five years (inclusive) 3 3
After five years 6 7
Total 10 11
Buildings
Within one year 36 38
Between two and five years (inclusive) 113 121
After five years 115 135
Total 264 294
Other Commitments
Within one year 21 18
Between two and five years (inclusive) 33 37
After five years - 3
Total 54 58

14b. Finance Leases

Total future minimum lease payments under finance leases are given in the tables below for each of the following periods:

Obligations under finance leases comprise:

  2015-16 2014-15
Buildings £m £m
Within one year 6 6
Between two and five years (inclusive) 20 21
After five years 70 76
Total 96 103
Less the interest element (68) (72)
Total 28 31
Other Commitments
Within one year - -
Between two and five years (inclusive) 1 1
After five years 1 1
Total 2 2
Less the interest element (1) -
Total 1 2

This total net obligation under finance leases is analysed in Note 11a.

14c. Commitments Under Leases

Within the Scottish Government core estate, the main leasing arrangements are entered into on the basis of Market Rent, often incorporating a rent-free period. Subsequent rent reviews are calculated on the basis of (i) the market rental value or (ii) the passing rental if the Market Rent is less than the passing rental at the time of the rent review (i.e. upwards only). The Scottish Government have some properties where the rent at review is calculated by reference to the Retail Prices Index or other index (often also upwards only).

The ground lease covering the land at Saughton House is the only property which has terms of renewal. All other leases have no terms of renewal or purchase options.

15. Other Financial Commitments

15a. Other Commitments

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

2015-16 2014-15
£m £m
Payable in 1 year 760 780
Payable between 2 - 5 years 3,094 3,027
Payable in more than 5 years - -
Total 3,854 3,807

Other financial commitments payable within one year include £464m (2014-15: £447m) as a committed income stream to Network Rail in accordance with the Deed of Grant, £247m (2014-15: £293m) to Abellio ScotRail and £19m (2014-15: £17m) to Serco Caledonian Sleeper under the Franchise Agreements.

Commitments payable within 2 to 5 years include £1,585m (2014-15: £1,161m) to Network Rail, £1,449m (2014-15: £1,078m) to Abellio, £86m (2014-15: £56m) to Serco and £63m (2014-15: £nil) to fund Scotland's successful bid to co-host the European Sports Championships in 2018.

15b. 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.

Guarantees

Education & Lifelong Learning

Guarantees to the Lothian Pension Fund in relation to the admission of Children's Hearing Scotland and the Scottish Agricultural College were outstanding at 31 March 2016 and were of unquantifiable amounts.

Social Justice, Communities and Pensioners' Rights

There was a guarantee of a loan between Social Investment Scotland and Glencraft (Aberdeen) Ltd following the restructuring of the business. This loan was for less than £1m. There were also guarantees to the Lothian Pension Fund in relation to the admission of the Scottish Homes Pension Fund and Scottish Futures Trust, which were for unquantifiable amounts.

Finance, Constitution and Economy

There was a guarantee to Highlands and Islands Enterprise in relation to their pension scheme, which was unquantifiable at 31 March 2016.

Infrastructure, Investment and Cities

An unquantifiable guarantee at the start of the year, relating to the Scottish Government's underwriting of the Abellio ScotRail and Serco Caledonian Sleeper pension funds, in line with that provided to other train operators by the Department for Transport was nil at the year end.

Health, Wellbeing and Sport

There was a guarantee of less than £1m in respect of the underwriting of a figure equivalent to 50% of the previous year's donation from the Robertson Trust to the Scottish Charity Air Ambulance.

Justice

At the year-end there was an unquantifiable guarantee to Lothian Pension Fund in relation to the admission of The Scottish Legal Complaints Commission.

Indemnities

Culture, Europe and External Affairs

At the beginning of the year there was an existing indemnity of £1,133m relating to objects lent under the National Heritage Act 1980 and the National Heritage (Scotland) Act 1985. At the year end this figure decreased to £1,111m. This final figure depends on new acquisitions and the number of exhibitions that these pieces are included in during the financial year. Furthermore, there was an existing £15.450m indemnity for local museums and galleries. This increased to £15.565m at 31 March 2016 and is likewise dependent on the number of new acquisitions and number of exhibitions that these pieces were included in, during the financial year.

Social Justice, Communities and Pensioners' Rights

Mortgage lenders held indemnities by Scottish Homes for less than £1m at year end.

Infrastructure, Investment and Cities

A new indemnity was created at the beginning of the year for an unquantifiable amount. This related to operating agreements in respect of the ScotRail and Caledonian Sleeper Franchise Agreement

Letters of Comfort

None

16. Commitments under Service Concession Arrangements

Non-Profit Distributing ( NPD), Public Private Partnerships ( PPP) and Private Finance Initiative ( PFI) transactions are accounted for in accordance with IFRIC 12, Service Concession Arrangements which sets out how NPD/ PPP/ PFI transactions are to be accounted for in the private sector.

A transaction is deemed to be 'on balance sheet' (i.e. included in Statement of Financial Position) when:

the grantor controls or regulates what services the operator must provide with the infrastructure, to whom it must provide them and at what price; and

the grantor controls - through ownership, beneficial entitlement or otherwise - any significant residual interest in the infrastructure at the end of the term of the agreement.

Where the transaction is deemed to be 'on balance sheet', the substance of that contract is that the Scottish Government has a finance lease, with the asset being recognised as a fixed asset in the Scottish Government's Statement of Financial Position.

16a. Commitments Under Service Concession Arrangements - Included in Statement of Financial Position

Description of Schemes

Health Bodies:

Ayrshire and Arran Woodland View (formerly North Ayrshire Community Hospital) - Year 1 & 2 recognition of Non- Profit Distributing ( NPD) element of Work in Progress. Mental Health and Frail Elderly In-patient facility due to reach practical completion in April 2016, with the first patient due to move into the facility in May 2016.

Ayrshire and Arran East Ayrshire Community Hospital - situated in Cumnock, the facility provides Inpatient beds, Elderly Mental Ill, and GP Acute; there are day facilities for Frail Elderly and Elderly Mental Ill and Outpatient Clinics (including Allied Health Professions). At the end of the 25 year contract period, negotiations will have been undertaken to determine future options available for the site.

Ayrshire and Arran Ayrshire Maternity Unit - adjoined to Crosshouse Hospital in Kilmarnock, the facility provides Area Midwifery services for in-patients, day patients, and out-patients. The 30 year contract commenced in July 2006 and will be completed in July 2036. At the end of this period, the building is available for transfer to the NHS at no additional cost.

Dumfries and Galloway - Maternity and Day Surgery Unit - situated in Dumfries, is included in the statement of financial position (land and buildings) at a valuation of £10.322m as at 31st March 2016. The premises opened in January 2002 and the contract ends in January 2032. Under IFRIC 12, the asset is treated as an asset of the Board and is included in the Board's account as a fixed asset. The liability to pay for the property is in substance a finance lease obligation.

Dumfries and Galloway - The Board are in the construction phase of an NPD project to deliver the new District General Hospital replacing the existing Dumfries and Galloway Royal Infirmary. To date, a total of £81.575m of a £212.6m total construction cost has been added to Assets under Construction. The new hospital is due to open during 2017-18. The NPD (Non-Profit Distributing) funding model was developed and introduced as an alternative to, and has since superseded, the traditional PFI (Private Finance Initiative) model in Scotland.

Fife St Andrews Community Hospital and Health Centre - Contract started 31st July 2009. Contract ends 30th July 2039. In accordance with HM Treasury application of IFRIC 12 principles, the property is a Non current asset of NHS Fife Board and the liability to pay for the property is, in substance, a finance lease obligation.

Fife Victoria Hospital - Contract started 28th October 2011. Contract ends 27th October 2041. In accordance with HM Treasury application of IFRIC 12 principles, the property is a Non current asset of NHS Fife Board and the liability to pay for the property is, in substance, a finance lease obligation.

Forth Valley Clackmannanshire Community Healthcare Centre ( CCHC) - CCHC is a service concession for the development and right of use of Community Health Facilities (incorporating a Health Centre Building including accommodation for 3 GP practices, Associated Clinical Services and accomodation for local Health and Social Work Teams, a Mental Health Resource Centre, a Day Therapy Unit and 45 Inpatient Beds) and provision of services, including maintenance of the facility, under a Project Agreement. Certain facilities management services such as cleaning will be provided by the Board. Services Commencement date was 18th May 2009 and the contract term ends in July 2037. The payment mechanism is incorporated in the Project Agreement and subject to annual adjustment for inflation in line with the Retail Price Index ( RPI) and risk sharing arrangements around usage and price of utilities (gas, electricty and fuel oil). At the end of the agreement the asset will revert to the ownership of the Board. There were no significant changes to the contract in the year.

Forth Valley Royal Hospital ( FVRH) - Forth Valley Royal Hospital ( FVRH) is a service concession for the NHS Forth Valley development and right of use of a new Acute Hospital for Forth Valley ( FVRH) and associated provision of services including facilities management services such as patient catering, portering, cleaning and maintenance. Services Commencement (handover of the facility to the Board) was in three phases May 2010, August 2010 and April 2011. The duration of the agreement is for 30 years from practical completion to the end of the financial year in which the 30th anniversary occurs. The payment mechanism is incorporated in the Project Agreement and subject to annual adjustment for inflation in line with the Retail Price Index ( RPI) and risk sharing arrangements around volumes of patient catering supplied and usage and price of utilities (gas, electricity and fuel oil). At the end of the agreement the asset will revert to the ownership of the Board. There were no significant changes to the contract in the year.

Grampian - Service Concession agreement with HUB North of Scotland Ltd for occupancy of the Aberdeen Health and Community Care Village effective 14th November 2013. Under the terms of the agreement NHS Grampian have a legal commitment to occupy the buildings for a period of 25 years and will incur annual charges for occupancy, maintenance and running costs.

Grampian - Service Concession agreement with HUB North of Scotland Ltd for occupancy of Woodside Health Centre effective 28 June 2014. Under the terms of the agreement NHS Grampian have a legal commitment to occupy the buildings for a period of 25 years and will incur annual charges for occupancy, maintenance and running costs.

Grampian - Service Concession agreement with HUB North of Scotland Ltd for occupancy of Forres Health Centre effective 9 August 2014. Under the terms of the agreement NHS Grampian have a legal commitment to occupy the buildings for a period of 25 years and will incur annual charges for occupancy, maintenance and running costs.

Greater Glasgow and Clyde Larkfield Unit - The Day Hospital Elderly Care Facility contract commenced with Quayle Munro Ltd on 1 November 2000 for a period of 25 years. The estimated capital value at commencement of the contract was £9.1m.

Greater Glasgow and Clyde Southern General Hospital - The Elderly Bed Facility (210 Beds) contract commenced with Carillion Private Finance on 1 April 2001 for a period of 28 years. The estimated capital value at commencement of the contract was £11.1m.

Greater Glasgow and Clyde Gartnavel Royal Hospital - The Mental Health Facility (117 Beds) contract commenced with Robertson Capital Projects Ltd on 1 October 2007 for a period of 30 years. The estimated capital value at commencement of the contract was £17.7m.

Greater Glasgow and Clyde Stobhill Rowanbank Clinic - The Mental Health Secure Care Centre (74 Beds) contract commenced with Quayle Munro Ltd on 1 May 2007 for a period of 35 years. The estimated capital value at commencement of the contract was £19m.

Greater Glasgow and Clyde (New) Stobhill Hospital - The Ambulatory Care and Diagnostic Treatment Centre contract commenced with Glasgow Healthcare Facilities Ltd on 1 April 2009 for a period of 30 years. The estimated capital value at commencement of the contract was £78.7m. Greater Glasgow and Clyde (New) Victoria Hospital - The Ambulatory Care and Diagnostic Treatment Centre contract commenced with Glasgow Healthcare Facilities Ltd on 1 April 2009 for a period of 30 years. The estimated capital value at commencement of the contract was £99.3m.

Greater Glasgow and Clyde (New) Stobhill Hospital - The Ambulatory Care and Diagnostic Treatment Centre 60 Bed extension. PFI contract commenced with Glasgow Healthcare Facilities Ltd on 25 February 2011 for a period of 30 years. Estimated capital value at commencement £15.8m.

Highland New Craigs - The scheme is a replacement for the Craig Dunain Hospital, Inverness and provides inpatient facilities for adults with Mental Health needs or Learning Disabilities. The contract commenced July 2000 for a period of 25 years. The estimated capital value at commencement of the contract was £14.4m.

Highland Easter Ross - This scheme is a redevelopment of County Hospital, Invergordon into a Primary Care Centre and combines a community hospital and a health centre, integrating primary and community care into one community health resource. The contract commenced February 2005 for a period of 25 years. The estimated capital value at the commencement of the contract was £8.8m and the PFI property will revert to the board at the end of the contract.

Highland Mid Argyll Community Hospital and Integrated Care Centre Lochgilphead - NHS Highland financed the development of the Mid Argyll Community Hospital and Integrated Care Centre in Lochgilphead. The contract commenced June 2006 and will be completed May 2036 at which point the ownership of the asset will transfer to the board. The estimated capital value at the commencement of the contract was £19.2m.

Highland - Service Concession agreement with HUB North of Scotland Ltd for occupancy of the Tain Health Centre effective 24th May 2014. Under the terms of the agreement NHS Highland have a legal commitment to occupy the buildings for a period of 25 years and will incur annual charges for occupancy, maintenance and running costs.

Lanarkshire Hairmyres Hospital - The provision of a large general hospital. The period of contract is 26 March 2001 to 30 June 2031. The estimated capital value is £ 73.538m. The hospital services are provided under a contract between Lanarkshire Health Board and Prospect Healthcare (Hairmyres) Limited, with hard and soft facilities management services being supplied under a subcontract to ISS Mediclean Limited. The hospital building is provided by way of a capital rental which is non indexed linked and is profiled for the duration of the contract. Major maintenance, risk overhead and margin are set within the contracts financial framework but these increase on an annual basis in line with the retail price index. Hard facilities management services include the provision of estates services, information technology, window cleaning, pest control and energy services. These services are subject to increase in line with the retail price index. Soft facilities management services includes full provision of catering services for patients and staff, housekeeping / ward hostess, linen, portering, transport security, switchboard and waste management. These services are subject to increase in line with the retail price index. The services provided are subject to a performance regime where reductions in the payments are recovered in line with the performance measurement regime. The services provided are subject to "market testing" every seven years.

Lanarkshire Wishaw Hospital - The provision of a large general hospital. The period of contract is 28 May 2001 to 30 November 2028. The estimated capital value is £ 150.695m. The hospital and services are provided under a contract between Lanarkshire Health Board and Summit Healthcare (Wishaw) Limited, with hard and soft facilities management services being supplied under a subcontract to SERCO health Limited. A managed radiology service is provided by Siemens Ltd. and under this service all major radiology diagnostic equipment is provided, maintained and replaced in line with an investment programme. This sum is fixed within the contract and increased in line with the retail price index. The hospital building is provided by way of an Availability payment which is largely non indexed linked and is profiled for the duration of the contract. Life cycle maintenance costs and insurance are set within the contracts financial framework but these increase on an annual basis in line with the retail price index. Hard facilities management services include the provision of estates and energy services. These services are subject to increase in line with the retail price index. Soft facilities management services include full provision of catering services for patients and staff, cleaning/domestics, linen, portering, security, switchboard and waste management. The services are set to increase in line with the retail price index. The services provided are subject to a performance regime where reductions in the payments charged are recovered in line with the performance measurement regime. The services provided are subject to "market testing" every seven years.

Lanarkshire Stonehouse Hospital - The provision of a small community hospital. The period of contract is 1 May 2004 to 30 April 2034. The estimated capital value is £ 4.282m. The hospital is provided under a contract between Lanarkshire Health Board and Stonehouse Hospitals Limited, with the service arrangements provided internally by Lanarkshire Health Board.

Lanarkshire Hub Projects - The provision of three community Health Centres in East Kilbride, Kilsyth and Wishaw under the Scottish Future Trust Hubco leased model. These new facilities opened in 2015-16 and are provided by hub South West Scotland under a 25 year contract. The Hubco provides the centres and is responsible for lifecycle and hard facilities management services which are delivered under a subcontract with Graham Facilities Management ltd. The contract is managed under a performance regime with deduction applied to the payment for performance failures. The current estimated capital value of these facilities is £ 39.486m.

Lothian Royal Infirmary of Edinburgh at Little France - an Acute Teaching hospital. The contract started 1 November 2013 and will end 30 June 2053. The estimated capital value is £181.387m.

Lothian Ferryfield House - The provision of a 30 bedded facility for frail elderly and dementia patients which replaced the 100 year old Northern General Hospital. The contract started 1 October 1996 and will end 1 October 2021. The estimated capital value is £2.509m.

Lothian Ellens Glen - service provides a 60 bedded facility for frail elderly and dementia patients. The contract started 1 November 1999 and will end 1 November 2029. The estimated capital value is £3.744m.

Lothian Findlay House - service provides a 60 bedded facility for frail elderly and dementia patients in the grounds of the Eastern General Hospital. The contract started 13 June 2003 and will end 12 June 2033. The estimated capital value is £3.948m.

Lothian Tippethill - service provides a 60 bedded facility for frail elderly and dementia patients at Whitburn.The contract started 6 September 2000 and will end 5 September 2025. The estimated capital value is £3.126m.

Lothian Bathgate Primary Care Centre - service provides a Primary Care Centre which accommodates 3 GP Practices and the CHP's community activities in the locality. The contract started 1 October 2001 and will end 30 September 2026. The estimated capital value is £2.209m.

Lothian - Midlothian Community Hospital - This hospital provides 88 beds for frail elderly and dementia patients, outpatient clinics and a number of CHP led community activities. The contract started 1 September 2010 and will end 31 August 2040. The estimated capital value is £15.109m.

Tayside The Carseview Centre - Located on the Ninewells Hospital site in Dundee the centre provides in-patient facilities for Adult Psychiatry and Learning Disability. The contract commenced 11 June 2001 and will be completed 11 June 2026 , when NHS Tayside may negotiate a further contract or purchase the facility.

Tayside The Susan Carnegie Clinic (Mental Health NPDO Phase 1) - Located on the Stracathro Hospital site by Brechin it provides in-patient facilities and a day hospital for both General Adult Psychiatry and Psychiatry of Old Age. The contract start date was 2 December 2011 and the end date will be 17 May 2042, when NHS Tayside will become owners of the facility.

Tayside Whitehills Community Resource Centre - Covers Forfar, Kirriemuir and the surrounding area in conjunction with Angus Council and Lippen Care. The contract commenced 21 March 2005 and will be completed 21 March 2030, when NHS Tayside will become owners of the facility.

Tayside The Mental Health NPDO - Phase 2 is located on the Murray Royal Hospital site in Perth and provides in-patient, day-patient and out-patient facilities for NHS Tayside's General Adult Psychiatry, Psychiatry of Old Age and Low Secure Forensic services, as well as a regional in-patient unit providing Medium Secure Forensic services for patients from the North of Scotland Health Boards. The contract start date was 1 June 2012 and the end date will be 17 May 2042, when NHS Tayside will become owners of the property.

NSS - SNBTS National Centre. The National Centre for the processing and testing of blood, tissues and cells for patients in Scotland by the Scottish National Blood Transfusion Service ( SNBTS)

Transport Scotland:

M6/(74) DBFO - The contract covers the design, construction, financing and operation of 28.3km of the new Scottish motorway as well as the operation and maintenance of 90km of new and existing Scottish motorway. Payments are made under a shadow toll regime. The toll period commenced in July 1997 and expires in July 2027.

M77 Fenwick to Malletsheugh - This is a joint Public Private Partnership ( PPP) entered into by the Scottish Government, East Renfrewshire and South Lanarkshire Councils. The project covers the design, construction, financing and operation of 15km of the new Scottish motorway and a new 9km local link road between the new motorway and the A726 trunk road. Payments are made under a shadow toll regime. The toll period began in April 2005 and expires in April 2035.

M80 - The contract covers the design, build and financing of approximately 18km of dual two/three lane motorway, together with, but not limited to, associated slip roads, side roads, junctions, structures, culverts and associated works. The contract also incorporates the operation and maintenance of the new motorways, associated structures, and related elements for a period of 30 years after completion of the new works. Unitary charge payments commenced in September 2011 and will cease in September 2041.

M8, M73, M74 Improvements - the project will upgrade the A8 Baillieston to Newhouse, completing the M8 motorway between Glasgow and Edinburgh, including improvements to the M74 Raith Interchange and widening of key sections of the M8, M73 and M74. The Non Profit Distributing ( NPD) contract also incorporates the management, operation and maintenance (routine, winter and major maintenance works) of this core section of the motorway network for the next 30 years. The unitary charge payments will become committed after construction completion in 2017 and will cease in 2047.

Aberdeen Western Peripheral Road/Balmedie and Tipperty - The project will construct a new dual carriageway to by-pass the City of Aberdeen and upgrade the road between Balmedie and Tipperty to dual carriageway. The Non Profit Distributing ( NPD) contract also incorporates the management, operation and maintenance of these roads for a period of 30 years. The unitary charge payments will become committed in phases from Autumn 2016 until construction completion in 2018 and will cease in 2048.

Scottish Prison Service:

HMP Kilmarnock - The contract covers the design, construction, financing and operation of a prison, HMP Kilmarnock. The contract commenced in March 1999 for a period of 25 years. The capital liability is now nil, however, payments for the service element continue to the end of the contract.

HMP Addiewell - The contract covers the design, construction, financing and operation of HMP Addiewell. The contract commenced in December 2008 for a period of 25 years.

Court Custody and Prisoner Escort Service - This service concession arrangement covers a service let for 7 years with an option to extend for a further 3 years. The contract commenced in January 2012.

Further details of the individual contracts can be found in the individual accounts of the NHS bodies in Scotland, Scottish Prison Service and Transport Scotland.

Under IFRIC 12 the asset is treated as an asset of the Scottish Government and included in the Scottish Government's accounts as a non current asset. The liability to pay for the property is in substance a finance lease obligation. Contractual payments therefore comprise two elements: imputed finance lease charges and service charges. The imputed finance lease obligation is as follows:

Gross Minimum Lease Payments NHS Bodies
in
Scotland
Scottish
Prison
Service
Transport
Scotland
2015-16
Total
2014-15
Total
£m £m £m £m £m
Rentals due within 1 year 144 11 40 195 198
Due within 2 to 5 years 610 41 162 813 779
Due after 5 years 2,429 121 976 3,526 3,332
Total 3,183 173 1,178 4,534 4,309
Interest Element NHS Bodies
in
Scotland
Scottish
Prison
Service
Transport
Scotland
2015-16
Total
2014-15
Total
£m £m £m £m £m
Rentals due within 1 year 114 7 29 150 153
Due within 2 to 5 years 429 26 108 563 567
Due after 5 years 1,198 44 253 1,495 1,601
Total 1,741 77 390 2,208 2,321
Present Value of Minimum Lease Payments NHS Bodies
in
Scotland
Scottish
Prison
Service
Transport
Scotland
2015-16
Total
2014-15
Total
£m £m £m £m £m
Rentals due within 1 year 30 4 11 45 45
Due within 2 to 5 years 181 15 54 250 212
Due after 5 years 1,231 77 723 2,031 1,731
Total 1,442 96 788 2,326 1,988

Amounts charged to the portfolio outturn statements in respect of NPD/ PPP/ PFI transactions included in Statement of Financial Position comprise:

2015-16 2014-15
£m £m
Service charges 195 181
Interest charges 153 156
Other charges 20 23
Total 368 360

Contingent rents

IAS 17 Leases defines contingent rents as "that portion of lease payment that is not fixed in amount but is based on the future amount of a factor that changes other than with the passage of time (e.g. percentage of future sales, amount of future use, future price indices, and future market rates of interest)".

Contingent rents recognised as an expense in the period were £21m (2014-15: £20m)

17. Contingent Assets/Liabilities disclosed under IAS 37

17a. Contingent Assets disclosed under IAS 37: Provisions, Contingent Liabilities and Contingent Assets

The definition of a Contingent Asset under IAS 37 Provisions, Contingent Liabilities and Contingent Assets is as follows:

a possible asset, whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the entity's control:

Brief Description

Balance at
01 April 2015

Balance at
31 March 2016

Health, Wellbeing and Sport

NHS Greater Glasgow and Clyde - Woodilee land sale - ransom strip.

£3m

nil

Infrastructure, Investment and Cities

Transport Scotland successfully defended an allegation of Glasgow Airport Rail Link ( GARL) copyright infringement, and a subsequent appeal which was dismissed in May 2012. The process of recovering the expenses awarded by the Court of Session is continuing.

unquantifiable

unquantifiable

Transport Scotland successfully defended a legal challenge in respect of the procurement of the Northern Isles Ferry Service. The legal judgement was confirmed in March 2016. The process of recovering the expenses awarded by the Court of Session is ongoing.

nil

unquantifiable

Education and Lifelong Learning

Disclosure Scotland ( DS) planned to replace the BT service contract with a new contract for the care and maintenance of the PVG system which would better meet the organisation needs. It awarded a new contract to a new supplier in May 2014 with the service due to transfer in December 2014. The delivery and transfer of the service by the "new supplier" did not take place as planned and to protect the business critical operations DS continued the existing service contract with BT until the end of March 2015. DS awarded a new contract to BT for the support and maintenance of the PVG system starting April 2015. DS is in discussions with the "new supplier" around the non-completion of the contract awarded in May 2014 and therefore is unable to quantify any amount claimable at this time.

unquantifiable

unquantifiable

Social Justice, Communities and Pensioners' Rights

Grants repayable as a result of sales of Housing Association Properties to tenants or as a result of conditions of grant being breached. Grants become repayable when conditions of grant cease to be met. It is not possible to predict the level of activity in future years.

unquantifiable

unquantifiable

Repayments of grant from the Open Market Shared Equity Scheme which allows people on low income to buy a share in a property, the balance being owned by a housing association and funded by grant from the Scottish Government. If the property is sold or an increased share is purchased by the owner, the grant becomes repayable. It is not possible to estimate the level of future receipts.

unquantifiable

unquantifiable

Receipts payable following right to buy sales of ex-council housing stock and ex-Scottish Homes housing stock. Timing uncertain as to when events giving rise to the realisation of this contingent asset are likely to occur.

unquantifiable

unquantifiable

Grants repayable from Edinburgh Council Rent Guarantee - Project Resonance. Grant becomes repayable if either (a) projects do not proceed as planned, where it is repayable immediately, or, (b) projects are sold on privately up to 10 years from now. Timing uncertain as to when events giving rise to the contingent asset are likely to occur.

< £1m

< £1m

17b. Contingent Liabilities Disclosed under IAS 37: Provisions, Contingent Liabilities and Contingent Assets

The definition of a Contingent Liability under IAS 37: Provisions,Contingent Liabilities and Contingent Assets is as follows:

a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence of one or more uncertain future events not wholly within the entity's control; or

a present obligation that arises from past events but is not recognised because it is not probable that a transfer of economic benefits will be required to settle the obligation; or

the amount of the obligation cannot be measured with sufficient reliability.

Brief Description

Balance at
01 April 2015
Balance at
31 March 2016

Health, Wellbeing and Sport

Clinical and Medical compensation payment.

£204m

£225m

NHS Employer's Liability.

£3m

£3m

NHS Third Party Liability.

£1m

£0.5m

Non-clinical compensation.

£1m

£1m

Penrose Inquiry - potential additional costs as a result of recommendations included within the Final Report, particularly in relation to working with other UK nations to review financial support schemes offered.

unquantifiable

Closed

Vale of Leven Inquiry - potential costs and implications arising as a result of the 75 recommendations included within the Vale of Leven hospital inquiry.

unquantifiable

Closed

Education and Lifelong Learning

Additional subsidy chargeable on the Income Contingent Repayment Student Loans if the Bank of England Base Rate plus 1 percentage point is lower than RPI rate modelled to calculate the cost of providing Student Loans over the Spending Review period.

unquantifiable

unquantifiable

Justice

Claims against former independent Conveyancing and Executry Practitioners in Scotland. This is a contingent liability relating to an agreement to meet any valid claims arising from the acts or omissions of past independent conveyancing and executory practitioners, as defined by the Law Reform (Miscellaneous Provisions) Scotland Act 1990.

unquantifiable

unquantifiable

Potential prisoner compensation. (See note 14).

£0.31m

£0.8m

Scottish Prison Service other costs.

£0.05m

£0.2m

Rural Affairs, Food and the Environment

Court of Session has found that the Agricultural Holdings Act 2003 has breached the European Convention of Human Rights - Art 1 P1. The Scottish Government has lost its Appeal to the Supreme Court, which could result in compensation payouts to tenant farmers and their landlords.

unquantifiable

unquantifiable

Netsmen compensation payments resulting from the Conservation of Salmon Regulations (Scotland) 2016, prohibiting the retention of salmon caught in coastal waters whilst a proper management framework for this type of fishing is in place.

nil

unquantifiable

Claims for Francovich damages from Angus Growers and 20 of the Producer Organisation's grower members against the loss of investment opportunities for their growers businesses. The claim is for the period that Angus Growers were not recognised as a Producer Organisation ( PO) in terms of the EU Fruit and Vegetable Scheme and were not entitled to receive grant funding.

£17m

<£17m

Brief Description

Balance at
01 April 2015

Balance at
31 March 2016

Infrastructure, Investment and Cities

Transport Scotland has a guarantee in place in relation to funding received by European Union re TENS-T funding for GARL Project where there is an obligation for a period of 5 years, to require repayment of 50% of the total funding (€850,000 / £697,298) should it be considered that the monies were not used for the purposes agreed under the original application. This liability runs out in July 2015 and would be based on the exchange rate at the time any repayment is made.

<£1m

Closed

As part of Transport Scotland's normal course of business the Forestry Commission granted the right to use a forestry track as an emergency diversion route on the A83 Rest And Be Thankful on the understanding that Transport Scotland will have liability for any incidents that may occur whilst the track is being used for this purpose. The potential obligation is estimated at £5m but it is not considered likely that any liability will occur.

£5m

£5m

Social Justice, Communities and Pensioners' Rights

This potential liability relates to the Glasgow Stock Transfer. It would arise if HMRC were to successfully challenge the terms of the original VAT agreement that was entered into in 2004 by GHA and GCC. In previous years this was reported as the liability that would arise on future works. However if a challenge was successful HMRC would be able to go back six years to reclaim tax previously claimed in that period. It is however considered highly unlikely that HMRC would in fact challenge the arrangement given the time that has elapsed since the transfer.

£118.5m

£100.1m

Housing and Regeneration litigation in relation to ex Scottish Homes cases from former tenants and former employees.

£0.9m

£0.2m

The Mortgage Indemnity New Home Scheme ( MI New Home) allows credit-worthy borrowers, locked out of the market by high deposit requirements, access to 90% to 95% LTV mortgages. The scheme is supported by a SG guarantee which sits behind cash indemnities set aside by participating housebuilders (for each house sold under the scheme). The guarantee can only be called upon once the indemnities are exhausted and lasts for 7 years.

£7.1m

£7.35m

National Housing Trust - Guarantees which the Scottish Government are committed to giving but are not active until the houses which the guarantee relates to have been completed.

£2.5m

£3.1m

Finance, Constitution and Economy

Solheim Cup - If the Cup were to be cancelled the SG will be required to make a payment to the European Ladies Tour.

nil

£5.6m

European Indoor Athletics Championship 2019 - A bid has been submitted by Glasgow City Council to host these championships. If the bid is successful the SG will be committed to providing funding currently estimated in the range of between £1.5m and £2.2m.

nil

£2.2m

European Sports Championship - Co-hosting and Service agreements in the event that the championships are cancelled.

nil

£7m

18. Related Party Transactions

The Scottish Government is the sole shareholder and sponsor of Caledonian Maritime Assets Ltd, David MacBrayne Ltd, Highland and Islands Airports Ltd, Scottish Futures Trust and Prestwick Airport Holdco Ltd; a shareholder in Scottish Health Innovations Ltd and the Student Loans Company; and sponsor of Scottish Water, a number of non-consolidated Health Bodies, and of a number of executive, advisory and tribunal Non Departmental Public Bodies. These bodies are regarded as related parties with which the Scottish Government has had various transactions during the year. Further details of Scottish Public Bodies are available from the Scottish Government website - www.scotland.gov.uk/government/publicbodies.

The Scottish Government is also the sponsor of cross-border public authorities which are listed in The Scotland Act 1998 (Cross-Border Public Authorities) (Specification) Order 1999. These bodies are regarded as related parties with which the Scottish Government has had material transactions during the year.

In addition the Scottish Government has had a number of transactions with other government departments and other central government bodies, primarily the Scotland Office and the Office of the Advocate General, the Rural Payments Agency, the Home Office and the Department for Work and Pensions.

The Scottish Government has material transactions with local government bodies, Regional Transport Partnerships, Community Justice Authorities and Scottish Water.

None of the senior officers, key managerial staff or other related parties has undertaken any material transactions with the Scottish Government during the year.

All Scottish Ministers are required, as Members of the Scottish Parliament, to register information about certain financial interests. The types of financial interest that must be registered are those that might affect any actions, speeches or votes in the Parliament. This register is available for public inspection at the office of the Standards clerks with a further copy available at the main visitor information desk at the Scottish Parliament building. Accounts of the individual Executive Agencies, the Crown Office and Procurator Fiscal Service and Health Bodies contain details of related party transactions specific to those entities.

19. Financial Instruments

The Scottish Government measures and presents financial instruments in accordance with International Accounting Standard ( IAS) 32, IAS 39 and International Financial Reporting Standard ( IFRS) 7 as interpreted by the Financial Reporting Manual. International Financial Reporting Standard ( IFRS) 7, Financial Instruments: Disclosures, requires disclosure of the role that financial instruments have played during the period in creating or changing the risks that an entity faces in its activities. The Scottish Government is not exposed to the degree of financial risk faced by business entities because of the largely non-trading nature of its activities and the way that government is financed. Moreover, financial instruments play a much more limited role in creating or changing risk than would be typical of the listed companies to which IFRS 7 mainly applies. Financial assets and liabilities are generated by day-to-day operational activities and are not held to change the risks facing the organisation in undertaking its activities.

Liquidity Risk

The Scottish Parliament makes provision for the use of resources by the Scottish Government, for revenue and capital purposes, in a Budget Act for each financial year. Resources and accruing resources may be used only for the purposes specified and up to the amounts specified in the Budget Act. The Act also specifies an overall cash authorisation to operate for the financial year. The Scottish Government is not, therefore, exposed to significant liquidity risks.

A maturity profile of the carrying amount of financial liabilities is presented below. This analysis satisfies the disclosure requirements of International Financial Reporting Standard 7, Financial Instruments: Disclosures ( IFRS 7). The maturity profile for NLF loans is matched by the corresponding profile for the related fixed asset investments. The amounts disclosed are undiscounted cash flows as per IFRS 7.

Maturity Profile

Financial Liabilities <1yr 1-2 yrs 2-5 yrs >5yrs 2015-16
Total
2014-15
Total
£m £m £m £m £m £m
Trade payables 471 - - - 471 588
Accruals 1,263 3 - - 1,266 935
Other payables 70 137 - - 207 287
NLF loans 24 30 91 531 676 690
Accrued Interest due on NLF Loans 9 - - - 9 10
Balances Payable to SCF 2 - - - 2 -
Corporate balance with SCF 132 - - - 132 115
PFI Deferred Residual Interest - - - - - 1
PFI Imputed finance leases 45 841 133 1,308 2,327 2,073
Lease payables 3 3 11 13 30 77
Bank overdraft 3 - - - 3 3
Other financial liabilities - - - - - 4
Total 2,022 1,014 235 1,852 5,123 4,783

Credit risk

Credit risk is the risk that a third party will default on its obligations. The maximum exposure to credit risk at the Statement of Financial Position date in relation to each class of financial asset is the carrying amount of those assets net of any impairment. No collateral is held as security.

Cash at bank is held with major UK banks. The credit risk associated with cash at bank is considered to be low.

The only area where the Scottish Government has significant concentrations of credit risk is on student loans. The Scottish Government has a statutory obligation to issue student loans and seek repayments in line with legislation. The Scottish Government is not permitted to withhold loans on the basis of poor credit rating nor is it able to seek collateral. The Scottish Government is therefore exposed to the risk that some student loans will not be repaid, although this is partly mitigated by the fact that most repayments are collected by Her Majesty's Revenue and Customs as part of the tax collection process. In addition this risk is mitigated through the valuation of student loans at fair value (= amortised cost).

Market risk

There are a number of areas where the Scottish Government is exposed to potential market risk. These relate to interest rates, foreign currency risk and housing market risks.

Interest Rate Risk

66% (2014-15: 63%) of the Scottish Government's financial assets and 100% (2014-15: 100%) of its financial liabilities carry nil or fixed rates of interest and it is not therefore exposed to significant interest rate risk. The portion of the Scottish Government's financial assets that carry a floating rate of interest relate in the main to student loans.

Foreign Currency Risk

Within payables, the Scottish Government has a balance that is subject to exchange rate fluctuations. This relates to advances received by the Infrastructure, Investment and Cities portfolio from the European Commission ( EC) for the 2007-13 and 2014-20 European Structural Funds' ( ESF) programmes. The advances are either utilised by the end of the programme period or returned to the EC when the individual programme is closed. The year end balance of €110.5m is the sterling equivalent of £87.0m translated at the accounting date (exchange rate at 31 March 2016: €1 = £0.787).

Where there are other transactions denominated in Euros the exchange rate is managed within the programmes.

The Scottish Government has no other significant exposure to foreign currency risk.

Housing Market Risk

The Scottish Government engages in a number of shared equity housing schemes, and is exposed to the risk of potential falls in the value of the housing market. The current investment in such schemes is £627m (2014-15: £450m).

Categories of financial assets and financial liabilities

The Scottish Government has the following categories of financial assets and financial liabilities:

Financial Assets
Current Year

Note Fair Value
Through
Profit and
Loss
Note a
Loans and
Receivables
Note b
Shares Held in or
Loans Advanced to
Public Sector
Note c
2015-16
Total
£m £m £m £m
Description
Voted loans 8 - 7 2,778 2,785
NLF loans 8 - - 676 676
Housing association loans 8 - 59 - 59
Shared Equity Housing 8 627 - - 627
Other Housing Loans 8 - 35 - 35
Other Funds 8 - 236 - 236
Student loans 8 - 2,908 - 2,908
Interests in nationalised industries 8 - 25 - 25
Trade receivables 10a - 62 - 62
Accrued income 10a - 636 - 636
Interest receivable 10a - 28 - 28
Amounts receivable from the SCF 10a - 289 - 289
Deposits and advances 10a - - - -
Other receivables 10a - 92 - 92
Corporate balance with the SCF 10a 3 - 3
Cash and cash equivalents 3 - 134 - 134
Total 627 4,514 3,454 8,595
Financial Assets
Prior Year

Note Fair Value
Through
Profit and
Loss
Note a
Restated
Loans and
Receivables
Note b
Shares Held in or
Loans Advanced to
Public Sector
Note c
2014-15
Total
Description £m £m £m £m
Voted loans 8 - 7 2,688 2,695
NLF loans 8 - - 690 690
Housing association loans 8 - 58 - 58
Shared Equity Housing 8 450 - 450
Other Housing Loans 8 15 12 27
Other Funds 8 - 127 127
Student loans 8 - 2,581 2,581
Interests in nationalised industries 8 - 24 24
Trade receivables 10a - 58 58
Accrued income 10a - 456 456
Interest receivable 10a - 28 28
Amounts receivable from the SCF 10a - 74 74
Deposits and advances 10a - - -
Other receivables 10a - 93 93
Cash and cash equivalents 3 - 123 123
Total 465 3,641 3,378 7,484

Note: As not all assets are financial instruments, the above table excludes VAT £68m (2014/15: 57m) and Prepayments £201m (2014/15: £382m) from the associated asset note ( Note 10a).

Financial Liabilities
Current Year

Note Fair Value
Through
Profit and
Loss
Note a
All Other
Financial
Liabilities
Note d
Shares Held in or
Loans Advanced to
Public Sector
Note c
2015-16
Total
Description £m £m £m £m
Trade payables 11a - 471 - 471
Accruals 11a - 1,266 - 1,266
Other payables 11a - 207 - 207
NLF loans 11a - - 676 676
Accrued Interest due on NLF Loans 11a - - 9 9
Balances payable to the SCF 11a - 2 - 2
Corporate balance with SCF 11a - 132 - 132
PFI Imputed finance leases 11a - 2,327 - 2,327
Lease payables 11a - 30 - 30
Bank overdraft 11a - 3 - 3
Total - 4,438 685 5,123

Note: As not all liabilities are financial instruments, the above tables exclude deferred income £156m, other tax and social security £118m, superannuation payable £95m and employee benefit accrual £69m included in the associated liability note. ( note 11a). The finance leases are disclosed at the discounted cash flow value.

Financial Liabilities
Restated Prior year
Note Fair Value
Through
Profit and
Loss
Note a
All Other
Financial
Liabilities
Note d
Shares Held in or
Loans Advanced to
the Public Sector
Note c

Restated
2014-15
Total

Description £m £m £m £m
Trade payables 11a - 495 - 495
Accruals 11a - 949 - 949
Other payables 11a - 240 - 240
NLF loans 11a - - 690 690
Accrued Interest due on NLF Loans 11a - - 10 10
Balances payable to the SCF 11a - - - -
Corporate balance with SCF 11a - 111 - 111
PFI Imputed finance leases 11a - 1,989 - 1,989
Lease payables 11a - 31 - 31
Bank overdraft 11a - 3 - 3
Total - 3,818 700 4,518

Note: As not all liabilities are financial instruments, the above table excludes deferred income £421m, other taxation and social security £118m, superannuation payable £85m and employee benefit accrual £70m from the associated liabilities note ( Note 11a). The finance leases are disclosed at the discounted cash flow value.

Note a: Assets and liabilities held at fair value through the profit and loss are measured at fair value with gains or losses being accounted for through the outturn statement.

Note b: Loans and receivables are measured at amortised cost using the effective interest methods, and any impairment losses go through the outturn statement. Disposal may give rise to a gain or loss, which is recognised through the outturn statement.

Note c: Shares held in or loans advanced to public sector or due to the NLF are held at historic cost less impairment, and any impairment losses go to the outturn statement.

Note d: All other financial liabilities will be measured at fair value initially and subsequently at amortised cost.

The fair value of financial instruments is equivalent to the carrying value disclosed in the financial statements. No financial assets or financial liabilities have been offset and presented net in these accounts.

20. Third Party Assets

Assets held at Statement of Financial Position date to which monetary value can be assigned:

2014-15 Gross Inflows Gross Outflows 2015-16
£m £m £m £m
Monetary amounts such as bank balances and monies on deposit 47 26 (24) 49
Unclaimed dividends and unapplied balances 20 - (1) 19
Securities - - - -
Other monetary assets - - - -
Total Monetary Assets 67 26 (25) 68

Accountant in Bankruptcy holds funds of £56m (2014-15: £56m) on behalf of third parties. This mainly comprises realised assets that are held whilst awaiting repayment to the public purse or distribution to creditors with a value of £37m (2014-15: £36m). The balance of £19m (2014-15: £20m) relates to money consigned in respect of unclaimed dividends and unapplied balances.

The NHS Bodies hold money on behalf of patients. This totalled £10m in 2015-16 (2014-15: £10m).

The Scottish Prison Service also holds £1m on behalf of prisoners (2014-15: £1m).

Other Assets held at the Statement of Financial Position date all relate to Accountant in Bankruptcy:

2015-16 2014-15
Description Number held Number held
Residential property 2,081 1,564
Motor vehicles, boats and caravans 170 109
Life Policies 810 779
Shares and Investments 430 260
Miscellaneous 1,512 1,137

No third party assets have been included within the Statement of Financial Position.

21. Resource Budget

The resource budget detailed in the outturn statements is the consolidated budget for the Scottish Government. The following table provides a reconciliation of the budgets shown in the accounts with the total budget for Scotland approved by the Scottish Parliament.

2015-16 2014-15
£m £m
Budget (Scotland) Act 2015 37,322 35,458
Scotland's Autumn Budget Revisions - Scottish Statutory Instrument 2015 No. 434 88 973
Scotland's Spring Budget Revisions - Scottish Statutory Instrument 2016 No. 158 (2) 475
Total approved spending 37,408 36,906
Less activities not included in these accounts:
National Records of Scotland (23) (21)
Office of the Scottish Charity Regulator (3) (3)
Scottish Courts and Tribunals Service (94) (74)
Revenue Scotland (5) -
Food Standards Scotland (16) (11)
Scottish Housing Regulator (4) (5)
NHS and Teachers' Pension Schemes (3,398) (3,617)
Forestry Commission (Scotland) (63) (60)
Scottish Parliament Corporate Body (92) (91)
Audit Scotland (10) (8)
Consolidated Portfolios' approved estimates 33,700 33,016
Capital Budget - see Analysis of Capital Expenditure and Receipts 1,944 1,841
Operating Budget as reflected in portfolio outturn statements 31,756 31,175
33,700 33,016
Portfolio analysis Budget
Act
Approval
2015-16
Capital
Budget
2015-16
Operating
Budget
£m £m £m
Finance, Constitution and Economy 604 28 576
Health, Wellbeing and Sport 12,483 319 12,164
Education and Lifelong Learning 2,969 481 2,488
Fair Work, Skills and Training 270 - 270
Justice 2,399 37 2,362
Social Justice, Communities and Pensioners' Rights 11,617 341 11,276
Rural Affairs, Food and the Environment 511 41 470
Culture, Europe and External Affairs 220 5 215
Infrastructure, Investment and Cities 2,321 680 1,641
Crown Office and Procurator Fiscal Service 114 4 110
Administration 192 8 184
33,700 1,944 31,756

The 2014-15 approved budgets.

Budget
Act
2014-15
Capital
2014-15
Operating
£m £m £m
Finance, Constitution and Economy 537 16 521
Health, Wellbeing and Sport 12,355 434 11,921
Education and Lifelong Learning 2,804 469 2,335
Fair Work, Skills and Training 252 - 252
Justice 2,573 24 2,549
Social Justice, Communities and Pensioners' Rights 11,274 225 11,049
Rural Affairs, Food and the Environment 463 22 441
Culture, Europe and External Affairs 194 2 192
Infrastructure, Investment and Cities 2,252 639 1,613
Crown Office and Procurator Fiscal Service 113 4 109
Administration 199 6 193
33,016 1,841 31,175

Budgets approved by the Scottish Parliament are applied to the consolidated accounts as detailed above. The budgets advised to HM Treasury include items outwith the scope of the Scottish Parliament. A reconciliation between the 2015-16 budget approved by the Scottish Parliament and the amount drawn down from HM Treasury is provided below.

2015-16
£m
Total spending approved by Scottish Parliament 37,408
NDPB's non cash budgets 206
Judicial salaries 30
Repayment of NLF and other loans by Scottish Water (53)
Forth Road Crossing technical adjustment (50)
Sleeper contract technical adjustment 14
Provision of SFRS grant-in-aid to support working capital requirements (8)
Historic Scotland non-cash allocation (1)
Utilisation of Scottish Cultural Collections and Royal Botanic Gardens reserves 2
IFRS - PPP/ PFI adjustments (96)
IFRS - revenue financed infrastructure projects (Transport Scotland) (99)
Police loan charges (5)
HM Treasury funding for DEL not included in Spring Budget Revision (156)
HM Treasury funding for AME not included in Spring Budget Revision (inc. NDPBs) 117
Total Managed Expenditure budget draw down from HM Treasury 37,309
Analysed by spending category:
Departmental Expenditure Limit ( DEL) 29,801
Annually Managed Expenditure ( AME) 7,508
37,309

22. Cash Authorisation

2015-16 2014-15
£m £m
Cash authorisation for the Scottish Administration:
Budet (Scotland) Act 2015 33,345 32,874
Amended by:
Scotland's Autumn Budget Revisions - Scottish Statutory Instrument 2015 No. 434 93 (398)
Scotland's Spring Budget Revisions - Scottish Statutory Instrument 2016 No. 158 653 169
Total Approved Cash Authorisation for the Scottish Administration 34,091 32,645
Less non core activities not included in these accounts:
National Records of Scotland (20) (17)
NHS and Teachers' Pension Schemes (475) (404)
Office of the Scottish Charity Regulator (3) (3)
Scottish Housing Regulator (4) (4)
Forestry Commission ( EU Funding) 5 1
Scottish Courts and Tribunals Service (80) (74)
Revenue Scotland (5) -
Food Standards Scotland (15) -
Available Cash Authorisation for Consolidated Bodies 33,494 32,144
Funding Drawn down from the Scottish Consolidated Fund ( SOCTE) 32,537 32,076

23. Restatements

Student Loan Repayments

The Scottish Government receives student loan repayments from HMRC and records these as income in the Scottish Government Consolidated Accounts. Due to timing differences, the amounts reported separately by the Student Loan Company do not reflect the full HMRC transfer. Following a review of the Scottish Government Consolidated Accounts, this difference is now presented in the Financial Assets note to the accounts; it was previously recorded as deferred income as part of the Payables and Other Liabilities note to the accounts.

Restated Notes to the Accounts - Prior Year Balances

Note 11
Deferred
income and
accruals
Note 11
Total current
liabilities
Note 8
Student Loans
Balance at
1 April 2014
Note 8
Student Loans
Balance at
31 March 2015
£m £m £m £m
2014/15 Scottish Government Consolidated Accounts 1,381 2,439 2,214 2,685
Adjustment for unallocated receipts (104) (104) (104) (104)
Restated Prior Year (2014/15) Balance 1,277 2,335 2,110 2,581

Restated Statement of Financial Position - Prior Year Balances

Other Financial
Assets Including
Investments Due
in More Than One
Year
Total Non-
Current
Assets
Payables and
Other Current
Liabilities
Total Current
Liabilities
£m £m £m £m
2014/15 Scottish Government Consolidated Accounts 6,336 32,946 2,422 2,806
Adjustment for unallocated receipts (104) (104) (104) (104)
Restated Prior Year (2014/15) Balance 6,232 32,842 2,318 2,702

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