Scottish Government Consolidated Accounts: year ended 31 March 2022

Performance Report

Introduction

About the Scottish Government

The Scottish Government is the devolved government for Scotland and has a range of responsibilities that include: the economy, education, health, justice, rural affairs, housing, environment, equal opportunities, consumer advocacy and advice, transport and taxation.

Some powers are reserved to the UK Government. These include: immigration, the constitution, foreign policy and defence. Further changes to the responsibilities devolved to the Scottish Government and Scottish Parliament have resulted from the Scotland Act 2012 and the Scotland Act 2016.

After a Scottish Parliamentary election, the First Minister is formally nominated by the Scottish Parliament and appointed by His Majesty the King. The First Minister then appoints the Scottish Ministers to make up the Cabinet with the agreement of the Scottish Parliament and the approval of The King. The current First Minister was appointed by Her Majesty the Queen and the Cabinet was approved by the Queen.

Scottish Cabinet Ministers and their responsibilities

The Cabinet is the main decision-making body of the Scottish Government. It is made up of the First Minister, all Cabinet Secretaries, the Minister for Parliamentary Business and the Permanent Secretary.

The First Minister appoints a Cabinet Secretary for each of the core portfolios described below, as well as additional Ministers to support the work of the Scottish Cabinet, and two Law Officers (Lord Advocate and Solicitor General for Scotland).

Nicola Sturgeon MSP

First Minister

Head of the Scottish Government: responsible for development, implementation and presentation of Government policy, constitutional affairs, and for promoting and representing Scotland at home and overseas.

Following the Scottish Parliamentary election in May 2021, the First Minister announced a new Scottish Cabinet.

The Cabinet Team members serving during 2021-22 are as follows:

John Swinney MSP

Deputy First Minister and Cabinet Secretary for Covid Recovery (from May 2021, previously the Deputy First Minister and Cabinet Secretary for Education and Skills)

Humza Yousaf MSP

Cabinet Secretary for Health and Social Care (from May 2021, previously the Cabinet Secretary for Justice)

Shirley-Anne Somerville MSP

Cabinet Secretary for Education and Skills (from May 2021, previously the Cabinet Secretary for Social Security and Older People)

Kate Forbes MSP

Cabinet Secretary for Finance and the Economy (from May 2021, previously the Cabinet Secretary for Finance)

Keith Brown MSP

Cabinet Secretary for Justice and Veterans (from May 2021)

Mairi Gougeon MSP

Cabinet Secretary for Rural Affairs and Islands (from May 2021)

Angus Robertson MSP

Cabinet Secretary for Constitution, External Affairs and Culture (from May 2021)

Michael Matheson MSP

Cabinet Secretary for Net Zero, Energy and Transport (from May 2021, previously the Cabinet Secretary for Transport, Infrastructure and Connectivity)

Shona Robison MSP

Cabinet Secretary for Social Justice, Housing and Local Government (from May 2021)

Roseanna Cunningham MSP

Cabinet Secretary for Environment, Climate Change and Land Reform (until May 2021)

Fergus Ewing MSP

Cabinet Secretary for Rural Economy and Tourism (until May 2021)

Jeane Freeman MSP

Cabinet Secretary for Health and Sport (until May 2021)

Aileen Campbell MSP

Cabinet Secretary for Communities and Local Government (until May 2021)

Fiona Hyslop MSP

Cabinet Secretary for Economy, Fair Work and Culture (until May 2021)

Michael Russell MSP

Cabinet Secretary for the Constitution, Europe and External Affairs (until May 2021)

The Cabinet is supported by the following ministerial team:

Angela Constance MSP

Minister for Drugs Policy

George Adam MSP

Minister for Parliamentary Business (from May 2021)

Richard Lochhead MSP

Minister for Further Education, Higher Education and Science (until May 2021); Minister for Just Transition, Employment and Fair Work (from May 2021)

Ivan McKee MSP

Minister for Trade, Innovation and Public Finance (until May 2021); Minister for Business, Trade, Tourism and Enterprise (from May 2021)

Tom Arthur MSP

Minister for Public Finance, Planning and Community Wealth (from May 2021)

Maree Todd MSP

Minister for Children and Young People (until May 2021); Minister for Public Health, Women's Health and Sport (from May 2021)

Kevin Stewart MSP

Minister for Local Government, Housing and Planning (until May 2021); Minister for Mental Wellbeing and Social Care (from May 2021)

Clare Haughey MSP

Minister for Mental Health (until May 2021); Minister for Children and Young People (from May 2021)

Jamie Hepburn MSP

Minister for Business, Fair Work and Skills (until May 2021); Minister for Higher Education and Further Education, Youth Employment and Training (from May 2021)

Mairi McAllan MSP

Minister for Environment and Land Reform (from May 2021)

Jenny Gilruth MSP

Minister for Culture, Europe and International Development (until January 2022); Minister for Transport (from January 2022)

Ash Regan (formerly Denham) MSP

Minister for Community Safety

Christina McKelvie MSP

Minister for Equalities and Older People

Ben Macpherson MSP

Minister for Rural Affairs and the Natural Environment (until May 2021); Minister for Social Security and Local Government (from May 2021)

Neil Gray MSP

Minister for Culture, Europe and International Development and Minister with special responsibility for Refugees from Ukraine (from January 2022)

Patrick Harvie MSP

Minister for Zero Carbon Buildings, Active Travel and Tenants' Rights (from September 2021)

Lorna Slater MSP

Minister for Green Skills, Circular Economy and Biodiversity (from August 2021)

Graeme Dey MSP

Minister for Parliamentary Business and Veterans (until May 2021); Minister for Transport (until January 2022)

Paul Wheelhouse MSP

Minister for Energy, Connectivity and the Islands (until May 2021)

Mairi Gougeon MSP

Minister for Public Health and Sport (until May 2021)

Law Officers during 2021-22

James Wolffe KC

Lord Advocate (until June 2021)

Dorothy Bain KC

Lord Advocate (from June 2021)

Alison Di Rollo KC

Solicitor General (until June 2021)

Ruth Charteris KC

Solicitor General (from June 2021)

Full details of the Ministerial Responsibilities can be found on the Scottish Parliament website: Cabinet and Ministers - gov.scot (www.gov.scot) and on the Scottish Government website.

The Civil Service and Government Officials

The First Minister leads the Scottish Government, with the support of the Scottish Cabinet and Ministers. The civil service helps the government of the day develop and implement its policies as well as deliver public services. Civil servants are accountable to Ministers, who in turn are accountable to Parliament.

The Permanent Secretary leads the civil service within the Scottish Government and supports the government in developing, implementing and communicating its policies; and is the principal policy adviser to the First Minister and Secretary to the Scottish Cabinet. The Permanent Secretary is also the Principal Accountable Officer with responsibility to ensure that the government's money and resources are used effectively and properly.

The government is structured into a number of directorates and their related public bodies. Directorates and agencies are managed by Directors General (DGs).

Scottish Government Senior Management Team (Corporate Board)

The Scottish Government Senior Management Team are responsible for ensuring that the Scottish Government is organised and managed in the most effective way to support Ministers in the implementation of their policies. Further information on the management structure of the Scottish Government is available on the Scottish Government website.

Permanent Secretaries in post during 2021-22 were:

• Leslie Evans - Permanent Secretary (until 31 December 2021)
• John-Paul Marks - Permanent Secretary (from 1 January 2022)

Directors General in 2021-22 were:

• Lesley Fraser - DG Corporate
• Liz Ditchburn - DG Economy (until 31 January 2022, on leave from November 2021)
• Elinor Mitchell - DG Economy (from 16 November 2021)
• Caroline Lamb - DG Health & Social Care
• Paul Johnston - DG Communities
• Joe Griffin - DG Education and Justice
• Alyson Stafford - CBE DG Scottish Exchequer
• Ken Thomson - DG Constitution & External Affairs
• Katrina Williams - DG External Affairs (until 6 June 2021)
• Roy Brannen - DG Net Zero (from 16 November 2021)

Directors serving as members of Corporate Board during 2021-22 were:

• Nicky Richards - Director of People
• Jackie McAllister - Chief Financial Officer
• Ruaraidh Macniven - Solicitor to the Scottish Government
• Madhu Malhotra - Director of Equality, Inclusion and Human Rights (until 31 Dec 2021)
• Andy Bruce - Director of Communications and Ministerial Support

Non-executive members of the Corporate Board during 2021-22 were:

• Annie Gunner Logan
• Ronnie Hinds
• Hugh McKay (until 31 January 2022)
• Linda McKay

Other non-executive directors:

• Nichola Clyde (until 24 June 2022)
• Ben McKendrick
• David Martin (from 28 March 2022)
• Neil Richardson
• Jim Robertson
• Fiona Ross
• Jayne Scott
• Jenny Stewart (from 28 March 2022)

The Non-Executive Directors provide advice, support and challenge to the Permanent Secretary as Principal Accountable Officer (PAO) and Directors-General as Accountable Officers (AO). They do so in a number of ways, including:

• By providing direct support, challenge and guidance to their "paired" Accountable Officer (AO) and senior staff in relation to the delivery of their portfolio-based risk, assurance and internal controls framework;
• By participating in a number of corporate boards including the Corporate Board, one or more of the formal sub-Boards and the Assurance meetings of their paired AOs; and
• As members of the Scottish Government Audit & Assurance Committee (SGAAC) which is chaired by a Non-Executive Director.

Ronnie Hinds, Non-Executive Director, was the Chair of SGAAC for the 2021-22 period covered by the Accounts. Jim Robertson, Non-Executive Director, was the Deputy Chair of SGAAC for the same period. One non-executive member of the Corporate Board, Hugh McKay, concluded his term as a Non-Executive Director during the 2021-22 period covered by the Accounts.

Register of Interests

Any member of the Corporate Board who held company directorships and other significant interests during 2021-22 were:

Staff:

Lesley Fraser: Director General Corporate: Shares with RBS.

Alyson Stafford CBE: Director General Scottish Exchequer: Trust Investments with Fidelity via Origen Financial Services.

Nicola Richards: Director of People: Shares held with Hargreaves Lansdown and Fidelity.

Roy Brannen: Director General Net Zero: Judge and Chair of the Panel for Scottish Transport Awards by Transport Times, Fellow of the Institution of Civil Engineers and Institution of Highways & Transportation, Honorary Member of World Road Association, shares held with Standard Life and Royal Mail.

Non-Executive Directors:

Annie Gunner Logan: Director and Company Secretary at Coalition of Care and Support Providers in Scotland (CCPS); and Board member of NHS Education for Scotland (from 1 November 2021).

Ronnie Hinds: Chair of the Local Government Boundary Commission for Scotland.

Hugh McKay: Non-Executive Director at Lloyds Development Capital.

Neil Richardson : Chief Executive, Turning Point Scotland.

Ben McKendrick : Chief Executive and Company Secretary of the Scottish Youth Parliament.

Performance Overview

Financial Performance: Outturn against Budget

These accounts report actual outturn compared to the budget authorised by the Scottish Parliament. The annual budget authorised by the Scottish Parliament is the budget for the wider Scottish Administration and includes the funding of activities which are not within the Scottish Government, and therefore outside the required accounting boundary of these accounts. There are also some differences between the HMT required budgeting rules and the government financial reporting accounting requirements that have to be accommodated in any comparison. These accounts therefore compare the actual outturn to the budget, both stated on the same accounting basis. There is a reconciliation and explanation of the budget reflected in the accounts with that shown in the annual budget documents provided in Note 22.

Spending plans for financial year 2021-22 were set out in the Scottish Budget 2021-22 published on 28^th January 2021. These plans were presented alongside the introduction of the Budget Bill. After consideration by the Scottish Parliament Finance and Constitution Committee and other Committees the Bill received Royal Assent as the Budget (Scotland) Act 2021 on 29^th March 2021. Parliamentary approval for the in-year revisions to the plans set out in the Budget (Scotland) Act was granted in the Autumn Budget Revision made on 27^th September 2021, and the Spring Budget Revision, made on 3^rd February 2022. Over the course of the two budget revisions, the Scottish Government allocated £5.965 billion COVID-19 consequentials in 2021-22.

The budget of £51,225 million reported in these accounts is net of adjustments to reflect those activities not included in the accounting boundary as described above. This is made up of an operating budget of £49,023 million and a capital budget of £2,202 million. As is discussed further below, there was a small number of funding adjustments made that reduced Scottish Government HM Treasury Budget limits and that would have also reduced the reported budget in these accounts had they been processed prior to the completion of the Spring Budget Revision. The financial results presented in the accounts therefore show an underspend that is higher than would be the case against that revised funding position.

The financial results for the year are reported in the attached accounts. They record a Net Resource Outturn of £47,201 million against a budget of £49,023 million, resulting in an underspend of £1,822 million. The Net Capital Outturn for the year was £2,036 million against a budget of £2,202 million, representing an underspend of £166 million. The total underspend was £1,988 million, 3,88% of the total budget. Explanations are provided for the major variances in each of the Portfolio Outturn Statements.

The Total Outturn underspend of £1,988 million does not represent a loss of spending power to the Scottish Government, and significant underspends relate to ring-fenced, non-cash budgets or Annually Managed Expenditure:

• £674 million of the underspend is in relation to the Student Loan Valuation model and is a direct reflection of the late movement in the Resource Accounting and Budgeting Charge (RAB) and Stock charges relating to Student Loans (the Resource Accounting and Budgeting (RAB) charge is the estimated cost to Government of borrowing to support the student finance system). This is a non-cash movement, representing an adjustment to the impairment of student loans based on economist expectations of likely repayments.
• £255 million relates to Annually Managed Expenditure (AME) budgets which are ring-fenced budgets set by HM Treasury. Any under/overspends shown against UK-funded Annually Managed Expenditure and other budgets cannot be deposited in the Scotland Reserve and have no subsequent impact on the Scottish Budget. These budgets are not available to buy public goods and deliver services.

Under the current devolution settlement, the Scottish Government must manage spending within fixed limits. It is not allowed to overspend its budget and has limited powers to carry forward funding through the Scotland Reserve. As a consequence, the Scottish Government has consistently adopted a position of controlling public expenditure to ensure we live within the budget limits that apply, whilst remaining able to carry forward any fiscal underspends for use in a future year within the current Scotland Reserve Limits.

Following the finalisation of Spring Budget Revision (which provides the budget limits against which spending is reported in these accounts) there were a small number of funding adjustments made to ensure public spending was managed within the limits imposed by the Fiscal Framework. These funding changes were too late to be reflected in the portfolio budgets reported in these accounts, resulting in underspends being reported here against a higher funding envelope than that which provides the basis for assessing the Scotland Reserve carry forward.

The late funding changes totalled £526 million and arose as a result of:

• A net £45 million resource funding movement due to the delay in finalising the UK Supplementary Estimates figures being confirmed,
• A £299 million reduction in funding as a result of the decision confirmed at the end of the financial year to reduce our intended capital borrowing levels (final decisions on borrowing levels are always made as part managing the in-year budget monitoring position as we approach the end of the financial year), and
• A £182 million reduction in Financial Transactions budgets as a result of planned repayments to HM Treasury.

Underspends reported by portfolios in the accounts would have been lower if we were able to adjust the budget to reflect these funding changes.

The provisional outturn announcement made by the Minister for Public Finance, Planning and Community Wealth in June 2022 acknowledged the financial challenges of the ongoing impact of the COVID-19 pandemic, the cost crisis and the war in Ukraine. The provisional fiscal outturn reported for 2021-22 was £47.0 billion against a total fiscal budget of £47.6 billion. The remaining funding of £650 million (which represented over just 1% of the total budget) has been carried forward within the Scotland Reserve. This outturn position covers all bodies within the Scottish Government budgeting boundary – as noted above this is wider than the areas covered within these financial accounts.

The Deputy First Minister has been clear on the scale of the financial challenges faced by the Scottish Government in managing the impact of rising inflation and the resultant cost of living crisis on spending plans. All of the additional funding available within the Scotland Reserve is intended to be fully utilised in supporting the funding priorities arising as a result of this crisis.

The provisional outturn announcement reports the position in terms of Scottish Government expenditure against budgetary control totals as set by HM Treasury. The figures reported at the time of the Provisional Outturn were indicative and these will be updated and reported to parliament in a Final Outturn report. As is always the case, the final outturn position is reported after the annual accounts, allowing for adjustments made through the accounts preparation process. We are still awaiting the final accounts for some bodies within the budgeting boundary, so are not able to give full final outturn report at this point (as indicated above this will be provided to parliament in due course and will be reconciled with the underspend presented here).

The Provisional Outturn as reported to parliament and the outturn information contained in these accounts are not strictly comparable. The scope of what is included in these accounts is determined by the requirements of the Government's Financial Reporting Manual (FReM) and covers elements that are not included in the HM Treasury figures. The figures in the Provisional Outturn are prepared in accordance with HM Treasury Consolidated Budgeting Guidance.

The Performance Analysis section includes additional information on Covid -19 spend, and the Statement of Financial Position reflects the assets held and the liabilities arising from the spending plans which support policy choices.

How the Scottish Budget is funded

There are a number of sources of funding to support the expenditure planned and approved by the Scottish Parliament in the Scottish Budget Act.

The Scottish Consolidated Fund was established by the Scotland Act 1998 and operates in accordance with the Public Finance and Accountability (Scotland) Act 2000. The Scottish Consolidated Fund receives, from the Office of the Secretary of State for Scotland, sums which have been voted by the UK Parliament for the purpose of "grant payable to the Fund". Funding is drawn down by the Scottish Government from the Scottish Consolidated Fund to support the spending plans laid out in the draft budget.

The primary receipts to the Scottish Consolidated Fund are: the Block Grant from HM Treasury; revenue collected by HMRC on behalf of the Scottish Government under the provisions for Scottish Income Tax; Devolved taxes collected by Revenue Scotland which are currently Land and Buildings Transaction Tax (LBTT) and Scottish Landfill Tax (SLfT); and borrowing.

The block grant from the UK Government is allocated to the Secretary of State for Scotland through the approval of the UK Parliament, and forms part of the UK public expenditure control regime. This requires the Scottish Government to plan, monitor and report its spending against the control aggregates set by the UK Parliament and HM Treasury alongside those set by the Scottish Parliament.

The Scotland Act 2016 empowered the Scottish Parliament to set Scottish Income Tax rates and bands. During 2021-22, £11.6 billion in income tax revenues derived from Scottish Income Tax were assigned to the Scottish Administration and paid to the Scottish Consolidated Fund. Identification of Scottish taxpayers and administering the tax are matters for the UK Government and His Majesty's Revenue and Customs (HMRC).

Under devolved powers from the 2012 Scotland Act, devolved taxes in respect of LBTT and SLfT are managed in Scotland. A total of £932 million has been collected in respect of LBTT and SLfT, £258 million above the Budget 2021-22 forecast of £674 million. £807 million was collected for LBTT and £125 million for SLfT. The errors in forecast arose because house prices grew faster than expected and the share of residential properties paying the top two tax bands increased. This likely reflects unpredictable reactions to the end of pandemic-related restrictions, wider macroeconomic changes and changing buyers' preferences. Further information on forecasting can be found on the Scottish Fiscal Commission website.

Revenue Scotland was established by the Revenue Scotland and Tax Powers Act 2014 to administer and collect both fully devolved taxes. Revenue Scotland is responsible for preparing an account of the devolved taxes (The Devolved Taxes Account). The taxes collected by Revenue Scotland are paid to the Scottish Consolidated Fund. The Devolved Taxes Account and the Scottish Consolidated Fund Account are prepared and published separately and can be accessed online at Revenue Scotland and Scottish Government.

From the 2016 Scotland Act, the Scotland Reserve, effective from 1 April 2017, provides the Scottish Government with a limited tool to manage the smoothing of all types of spending and to assist with the management of tax volatility and determine the timing of expenditure.

As further powers have been devolved to Scotland, and the ability to use the existing fiscal levers to influence the funds available has increased, the impact of accurate tax forecasting has become greater. The Scottish Fiscal Commission was established in June 2014 as a non-statutory body to provide independent scrutiny of Scottish Government forecasts of receipts from taxes devolved to Scotland. By March 2016 the Scotland Act 2016^[1] devolving more fiscal powers to Scotland was passed, and the associated Fiscal Framework^[2] was agreed between the Scottish Government and UK Government. The Fiscal Framework changed the remit of the Scottish Fiscal Commission as reflected in the Scottish Fiscal Commission Act 2016^[3] which received Royal Assent on 14 April 2016.

Further information about the Scottish Budget setting and authorisation process can be found within The Scottish Budget 2021-22^[4] and in the Government Finance section of the Scottish Government website,^[5] which includes the financial reports and accounts.

The total budget approved by the Scottish Parliament includes activities not included in these accounts. Note 22 to these accounts provides a reconciliation to the total budget.

The fiscal activity of the Scottish Government is described in a suite of accounts information: the Scottish Consolidated Fund account, incorporating additional reporting on the use of borrowing powers and the related Devolved Taxes Account report on the funding available to the Scottish Government in the financial year; the Scottish Government Consolidated Accounts, the annual accounts of the other bodies within the Scottish Administration and of the bodies funded directly from the Scottish Budget together report on the use of resources authorised by the Scottish Parliament for the financial year.

Accounting Boundary

These accounts reflect the consolidated assets and liabilities and the results of all entities within the Scottish Government consolidation accounting boundary as required by and defined in the Government Financial Reporting Manual (FReM). This consists of eight internal Portfolios, supported by Administration, their Executive Agencies (each linked to a specific portfolio), the Crown Office and Procurator Fiscal Service and the NHS Bodies responsible for the planning, promotion, commissioning and the delivery of healthcare. The portfolio analysis in these accounts reflects the portfolios designated by the First Minister from 19 May 2021. The consolidation boundary includes the following:

Finance and Economy Portfolio

Executive Agencies:

Scottish Public Pensions Agency

Accountant in Bankruptcy

Health and Social Care Portfolio

Other Consolidated Bodies:

The NHS Bodies in Scotland

Mental Welfare Commission

Education and Skills Portfolio

Executive Agencies:

Disclosure Scotland

Education Scotland

Student Awards Agency Scotland

Justice and Veterans Portfolio

Executive Agency:

Scottish Prison Service

Social Justice, Housing and Local Government Portfolio

Executive Agency:

Social Security Scotland

Net Zero, Environment and Transport Portfolio

Executive Agencies:

Transport Scotland

Scottish Forestry

Rural Affairs and Islands Portfolio

Constitution, External Affairs and Culture Portfolio

Deputy First Minister and Covid Recovery

Other Consolidated Bodies:

The Crown Office and Procurator Fiscal Service

In addition to inclusion within these consolidated accounts, the executive agencies and other bodies detailed above also publish separate accounts providing greater detail about their income and expenditure and assets and liabilities. The accounts can be accessed at the websites noted above.

The Scottish Government is also the sole shareholder of Caledonian Maritime Assets Ltd, David MacBrayne Ltd, Highland and Islands Airports Limited, Scottish Futures Trust, Prestwick Holdco Limited and Ferguson Marine (Port Glasgow) Ltd, and sponsor 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, but do not fall within the Scottish Government consolidation accounting boundary. Further details of Scottish Public Bodies are available.^[6]

The financial statements of NHS Boards include NHS Endowment Funds. These Endowment Funds are Registered Charities with the Office of the Scottish Charity Regulator (OSCR) and they are also required by OSCR to prepare audited financial statements. NHS Endowment Funds are not part of the Scottish Government accounting boundary, and therefore they have not been included in Scottish Government consolidated accounts.

These accounts report actual outturn compared to the budget authorised by the Scottish Parliament. The Scottish Government also routinely reports to Parliament each year on the Final Outturn for the Scottish Administration in an additional statement. This brings together the audited information from the bodies within the Scottish Administration to show this against the Budget limit authorised by the Scottish Parliament.

The Budget Framework

The Scottish Government set out its spending plans for 2021-22 in January 2021 in The Draft Budget.^[7] Approval for a detailed budget for 2021-22 was given by the Parliament in March 2021 in the Budget (Scotland) Act 2021. The annual Budget is refined through in-year budget revisions, Parliamentary approval for which is given by statutory instrument. There are usually two revisions, Autumn and Spring.

The Scottish Government's Purpose

The Scottish Government's purpose is to focus government and public services on creating a more successful country with opportunities for all of Scotland to flourish, through increased wellbeing, and sustainable and inclusive economic growth.

The Programme for Government

Through the Programme for Government^[8] the plans for the year are set out, including the Bills to be introduced to the Scottish Parliament. On 7 September 2021, the First Minister set out a new Programme for Government for 2021-22 A Fairer, Greener Scotland which recognised the continuing response to the COVID-19 pandemic whilst looking to the future, ensuring that we grasp every opportunity to make Scotland fairer, greener, happier and healthier.

Managing risks

The Governance Statement, within the Accountability Report of these accounts provides detailed information on the management of the organisation's key risks.

In the Service of Scotland – our vision for the Scottish Government

Our organisational vision, 'In the Service of Scotland', contains three main elements: our mission, our vision and our values. Our mission, 'We work together to improve the lives of the people of Scotland' is the core purpose for everyone in the organisation. Our vision will enable us to support the government of the day and improve the lives of the people of Scotland: 'We put the people we serve at the heart of everything we do. We use digital thinking and approaches to strengthen our work and provide a better service for everyone. We are driven by our values, always searching for new ways to learn and improve. All in the service of Scotland.

Our five value principles guide how we act, the decisions we take and how we work together, across all parts of government, to improve the lives of the people of Scotland:

We act with integrity – Our actions reflect the values of the Civil Service

• We are impartial, demonstrate high ethical standards, respect, protect and fulfil human rights and uphold the rule of law.
• We speak up for what is right, even when it feels difficult.
• We are evidence based, open, transparent and honest.
• We build relationships based on trust.

We are inclusive - We have a respectful work environment which includes everyone.

• We listen to the voices of everyone and respect uniqueness.
• We value equity and create a sense of belonging.
• We continually strive to build a more diverse workforce, representative of the communities we serve.

We are collaborative - We work with others to realise Scotland's full potential.

• We work with others to improve our effectiveness and make things happen.
• We share connections, ideas and knowledge across boundaries.
• We actively listen and respond to the needs of our people, partners, Ministers and colleagues to co-produce a healthier, safer and more prosperous country.

We are innovative - We test different approaches and develop new solutions.

• We are flexible with our approach, seeing opportunities and pursuing them.
• We embrace ambiguity and uncertainty and have a positive attitude to change.
• We are professional and skilled.
• We are efficient with the money we spend, accountable for the decisions we make and take balanced risks.

We are kind - We care and show kindness towards people and the natural environment.

• We put the wellbeing of the people of Scotland and our colleagues at the centre of what we do.
• We are mindful about our impact on future generations.
• We treat everyone with empathy, compassion and care.

National Performance Framework

Purpose

The National Performance Framework^[9] (NPF) is for all of Scotland. Through it the Government aims to:

• create a more successful country;
• give opportunities to all people living in Scotland;
• increase the wellbeing of people living in Scotland;
• create sustainable and inclusive growth.

The Framework is underpinned by values which guide the Scottish Government's approach to:

• treat all our people with kindness, dignity and compassion;
• respect the rule of law;
• act in an open and transparent way.

National Outcomes

To help achieve its purpose, the framework sets out 'National Outcomes'. These outcomes describe the kind of Scotland it aims to create.

The Outcomes:

• reflect the values and aspirations of the people of Scotland;
• are aligned with the United Nations Sustainable Development Goals; and
• help to track progress in reducing inequality.

These national outcomes are that people:

• grow up loved, safe and respected so that they realise their full potential;
• live in communities that are inclusive, empowered, resilient and safe;
• are creative and their vibrant and diverse cultures are expressed and enjoyed widely;
• have a globally competitive, entrepreneurial, inclusive and sustainable economy;
• are well educated, skilled and able to contribute to society;
• value, enjoy, protect and enhance their environment;
• have thriving and innovative businesses, with quality jobs and fair work for everyone;
• are healthy and active;
• respect, protect and fulfil human rights and live free from discrimination;
• are open, connected and make a positive contribution internationally; and
• tackle poverty by sharing opportunities, wealth and power more equally.

National Outcomes - Monitoring & Evaluation

The framework measures Scotland's progress against the national outcomes. To do this, it uses 'National Indicators'.

These indicators give a measure of national wellbeing. They include a range of economic, social and environmental indicators.

More information about performance against outcomes can be found at National Indicator Performance.^[10]

Next Steps for the NPF

The NPF was renewed in June 2018 and published with a revised set of National Outcomes after extensive consultation with the public and stakeholders.

The NPF is now established as a Scotland wide framework, with COSLA as co-signatories, and is also the framework for localising the UN Sustainable Development Goals (SDGs) domestically.

The Community Empowerment (Scotland) Act 2015 requires Scottish ministers to review the National Outcomes at least every five years.

Scottish Ministers must consult those who represent the interests of communities in Scotland, and must consult Parliament on any proposed changes to the National Outcomes that come from this process. The next statutory review of the National Outcomes is due to commence this year.

Additionally, the Scottish Parliament's Finance and Public Administration Committee (FPAC) undertook an Inquiry into the NPF, and published its conclusions on 3 October 2022.

Delivering and Performing for Outcomes

As set out above, the NPF is for all of Scotland, not just the Scottish Government, and the NPF website^[11] provides an overview of how Scotland is progressing towards the national outcomes through a range of social, environmental and economic indicators. Performance is assessed as improving, maintaining or worsening based on the change between the last two data points of an indicator and includes time series and equality data is included where available. A range of performance information is also published on the Scottish Government website.^[12]

Over the course of the 2021-22 financial year, the Scottish Government delivered against many commitments, but also met with a range of challenges. These challenges required the organisation to respond in an agile way, focus resources towards immediate priority areas and, at times, allocate funds towards different projects than those set out on the 2021-22 Scottish Government Budget publication.

Furthermore, the Scottish Parliament 2021 election results led to a reallocation of resources between portfolios during the 2022 Spring Budget Revision.^[13]

The organisation's response to the ongoing spread of COVID-19 continued, particularly after the emergence of the Omicron variant at the end of 2021. This presented a range of ongoing delivery challenges, as routine screening programmes were temporarily paused last year, demand for hospital beds increased, and significant increases in COVID-19 related sick leave reduced health and social care workforce capacity. It is important to note that the pandemic remains a live and evolving issue, and although the Scottish Government continues to mitigate this through measures including the booster programmes and the NHS Recovery Plan, the challenges are likely to continue for some time.

The invasion of Ukraine by Russia in early 2022 also required a swift response from the Scottish Government to support those impacted by the crisis. In late February the First Minister announced a package of £4 million of humanitarian aid^[14] to be shared between the British Red Cross, Scottish Catholic International Aid Fund (SCIAF), the DEC Appeal for Ukraine and UNICEF. In addition to this financial aid, medical supplies worth £2.9 million were provided with the first donation arriving in Poland on 3 March 2022.

Additionally, the extreme weather conditions – for example – led to forestry workers being redeployed away from tree planting and peatland restoration in order to fell fallen trees and clear up damage from storms. Further information about the impact of these challenges against specific portfolio areas can be found below.

Furthermore, two impact case studies have been included in this report to demonstrate the link between Scottish Government spend and subsequent impact across Scotland. The tables below set out the specific deliverables and short term impact that has been linked to investment in specific projects: Scottish Child Payment and the Woodland Creation.

Whilst more detail is set out on a portfolio basis in the portfolio summaries below, some of the key projects and programmes enabled by Scottish Government funding in the 2021-22 financial year include:

Support for Public Services

• Publication of the NHS Recovery Plan, supported by £1 billion of funding, in August 2021. This set out plans for health and social care over the next 5 years, such as increasing NHS capacity as quickly as possible. Over 800 additional mental health workers were placed in settings such as A&E departments, GP practices, police custody suites, and prisons.
• Significant and vital funding for our justice system in 2021-22, including: over £1,300 million protected the police resource budget in real terms, £315 million budget for Scottish Fire and Rescue service, £370 million for the Scottish Prison Service, over £117 million for the provision of legal aid, over £7 million for third sector organisations supporting victims and witnesses and over £5.5 million to projects to address violence against women and girls.
• Scottish Attainment Challenge funding reached 97% of schools through Pupil Equity Funding (£147 million), with a further £50 million going to 9 local authorities and 73 specific schools to support children and young people impacted by poverty. Additionally, teacher numbers rose for the sixth year in a row, rising to 54,285, in 2021 – an increase of 885 on the previous year – and that the ratio of pupils-to-teachers is 13.2, the lowest since 2009.

Tackling Poverty & Inequality

• Between April 2021 and 31 March 2022, the total value of Scottish Child Payments issued to clients was £55.1 million. An interim evaluation of the impact that the Scottish Child Payment has made was published on 29 July 2022, covering the period between November 2020 to March 2022, concluded that receiving the payment has been positive for both children and families. For example, it has led to more money being spent on children, such as on activities enabling them to participate in social and educational opportunities.
• Bridging Payments were introduced in 2021 ahead of the extension of the Scottish Child Payment to children under the age of 16. All children registered to receive free school meals on the basis of family low income are eligible and received £520 over the 2021 calendar year.
• Attainment Scotland Fund provided £215 million to help close the poverty-related attainment gap.
• Investment in National Heat and Energy Efficiency Programmes supported around 15,000 households in fuel poverty across Scotland.
• Over 700 families on low incomes have benefitted from free or no cost school age childcare through the Access to Childcare Fund.
• From January 2022, all young people and children were able to apply for access to free bus travel through the Young Persons' (Under 22s) Free Bus Travel Scheme.
• Awards given to 77 initiatives working with people affected by drug use with a combined value of over £25 million over the next five years, supported projects ranging from therapeutic support for young people, families, veterans and addressing challenges faced by women, through to support for skills development and training.

Economic Recovery

• Publication of the Covid Recovery Strategy: For a Fairer Future in October 2021. Scottish Government Ministers used this document to set out their intention and planned next steps to lead Scotland's recovery from COVID-19 in a way that reduces inequality, drives progress towards a wellbeing economy and create person-centred public services.
• During 2021-22, the five funds operating under the Scottish Growth Scheme invested £14 million into 118 companies. This levered £41 million of private investment to help finance their growth ambitions.
• Lease option awards for the ScotWind offshore wind leasing round were made in January 2022; creating almost £700 million for the Scottish Exchequer plus commitments to investment worth £2,500 million in the Scottish supply chain.
• The Islands Programme invested capital funding to ensure delivery of the National Islands Plan, by supporting a range of areas, including tourism, infrastructure, innovation, energy transition and skills, through the Islands' Infrastructure Fund, the National Islands Plan and the Island Communities Fund.
• The development of the Scottish Marine Environmental Enhancement Fund (SMEEF) which provides an opportunity for marine users to re-invest in the marine environment, helping to fund projects focused on recovery, restoration or enhancement of the health of marine and coastal habitats and species across Scotland.

Investing in Net Zero

• In late 2021, in partnership with the UK Government, the Scottish Government successfully delivered the COP26 Conference. This event brought over 120 world leaders and over 40,000 participants together to address the global climate emergency.
• During this financial year, over 10,000 hectares of woodland (of which 4,300 hectares was native woodland) were planted, and around 8000 hectares of degraded peatlands were restored.
• Over £600 million was delivered in ongoing agricultural support providing stability to farmers, crofters and land managers as we start to deliver and fund activities to enable the climate change targets through our transformation work with the sector.
• Scottish Water commenced new 2021-27 regulatory period with a £4,500 million capital investment programme over the period to deliver ongoing improvements to drinking water quality and progress towards achieving net-zero emissions by 2040.
• Cars make up 35% of the Transport sector's greenhouse gas emissions in Scotland; in January 2022 Transport Scotland published a consultation inviting members of the public to comment on policy options to meet the commitment to reduce car kilometres driven by 20% by 2030.
• The National Transition Training Fund (NTTF) continues to support upskilling and retraining for individuals and in sectors affected by COVID-19 but also sectors affected by Brexit and those in areas which require skills transitions, including the transition to net zero.

Performance Analysis

The following sections outline the initial strategic policy aims and the key deliverables of each of the Ministerial portfolios across 2021-22, with additional information about key challenges that impacted delivery and spend divergence where relevant. Where possible, examples of how each portfolio has contributed towards the national outcomes have also been provided.

The portfolio summaries below primarily refer to external policy delivery and impact. It is important to note that a broad range of additional internal corporate work happens alongside this to coordinate key government functions required to deliver progress towards the National Performance Framework outcomes. For example, the Finance and Economy portfolio is also responsible for key functions of government around fiscal policy, public spending and taxation.

Further to this, a list of references to relevant and detailed performance information already published elsewhere is included for each portfolio. Due to the timing of publications, some of the performance reports signposted below will refer to the previous financial year.

Delivery and Performance by Portfolio

Health and Social Care

Policy Aims in 2021-22 Budget

To promote and improve lifelong health and wellbeing across Scotland; respond to the unprecedented challenges facing Scotland's health and social care system; support remobilisation and long term reform of health and social care services to embed a public health system that delivers the right care, in the right place, at the right time to improve population health and address inequalities; provide investment for direct interventions to address health inequalities, exacerbated by COVID-19, to create a Scotland where we can all live longer, healthier lives.

Key Challenges & Financial Results

COVID-19: The ongoing impact of COVID-19, and in particular the emergence and spread of the Omicron variant, had a significant impact on delivery of portfolio aims throughout 2021-22. Whilst vaccinations and other controls and treatments have been successful at reducing immediate impact of harm and death from COVID-19, the pressure this has put on health and social care services has resulted in a growing backlog of patients waiting much longer for treatment, and a workforce that has been under significant and sustained stress.

Financial Results: Health and Social Care reported an overspend of £64 million for the year ended 31^st March 2022 (Budget: £18,398 million, Outturn: £18,462 million). More details are included in the Portfolio Outturn Statement.

2021-22 Deliverables

COVID-19 Recovery: An NHS Recovery Plan, backed by £1 billion of funding, was published in August 2021. This set out plans for health and social care over the next 5 years. Health boards recruited more than 1,000 additional healthcare support staff and almost 200 registered nurses from overseas. The portfolio published the Health and social care: national workforce strategy. Comprehensive COVID-19 vaccination programme was delivered, including third doses, and 2.7 million people have received the flu vaccination, with over 90% uptake in the over-65s category. Funding of £3.6 million was made available to support the expansion of Hospital at Home services – there are currently 20 partnerships with an active service and an estimated capacity of 275 virtual beds.

Primary Care Reform: Funding of £160.1 million was allocated to health boards to expand multi-disciplinary teams within GP practices and the community and modernise systems, helping to ensure patients can see the right healthcare expert at the right time while giving GPs more time with patients with complex needs. We have now recruited 3,220 whole time equivalent (WTE) healthcare professionals, such as pharmacists, mental health workers and physiotherapists, into multi-disciplinary teams (MDT) supporting practices. This included 793 WTE recruited in 2021-22, a record year for MDT recruitment.

Social Care Reform: The public were consulted about proposals for a new National Care Service (the Bill was then introduced in June 2022). Changes to the national Health and Social Care Standards for Scotland's adult care homes put Anne's Law into practical effect while legislation is being prepared.

Mental Health: We have record levels of investment, record numbers of staff, and we are providing more varied support and services to a larger number of people than ever before. In the six months between July and December 2021, more than 18,500 children, young people, parents and carers accessed our newly-established community services. Through investment of £21 million in 2021-22 in our Communities Mental Health and Wellbeing Fund for adults, we have made over 1,800 awards to community projects focused on prevention and early intervention. We have also funded over 800 additional mental health workers in settings such as A&E departments, GP practices, police custody suites, and prisons. We are setting the conditions needed for long-term, sustainable improvement. Boards are working hard to clear their backlogs and to see those who have waited the longest and those most at risk, first. We are directing tailored support to Boards not on track to meet the target, providing access to professional advice, to ensure that they have robust improvement plans in place and we are monitoring progress closely. Long waits are unacceptable and we remain committed to meet the standard that 90% of patients start treatment within 18 weeks of referral.

Drug related deaths and harms: Awards were given to 77 initiatives working with people affected by drug use with a combined value of over £25 million over the next five years. The list of awards so far range from therapeutic support for young people, families, veterans and addressing challenges faced by women, through to support for skills development and training. The NRS Drug Related death statistics 2021 showed 1,330 drug misuse deaths in 2021. Although down 1% (9 deaths) on 2020, it still remains the second highest figure on record but the first fall in recent years. Response to this public health emergency remains a priority for government and is actioned through the delivery of the National Mission, launched in January 2021. In the first year progress has been made; we have seen areas start to embed Medication-Assisted Treatment (MAT) Standards, the expansion of residential rehabilitation provision, the setting of a new treatment target, increased funding to community and grass-roots organisations and the laying of ground work for innovation such as Safer Drug Consumption Facilities and Digital Lifelines. Following the national campaign to reduce the stigmatisation of people at risk of overdose and people who use drugs more broadly, we launched the Naloxone Campaign to raise awareness of how to respond to an overdose and provide a lifesaving intervention.

Waiting Times: We are committed to maintaining targets, ensuring that Government and the NHS remain focussed. The recent Public Health Scotland report provides data against the target to eliminate 2-year waits for inpatient and day-case (IPDC) treatment in most specialties: by the end of September 2022 60% (18 of 30) of specialities had fewer than ten patients waiting more than two years, including 13 specialties with no patients waiting more than two years; 6 of 14 (43%) territorial Health Boards had fewer than twenty patients waiting more than two years; and specialties with the highest number of long waits were Orthopaedics (2,152), followed by General Surgery (1,610), ENT (1,327) and Urology (1,041). These four specialties account for 80% of all IPDC patients waiting over 2 years. We are working intensively with Boards to ensure that they have the support they need to address long waits as quickly as possible. In particular, we are continuing to maximise theatre productivity and are working with the Centre for Sustainable Delivery and boards to embed regional and national working to ensure that long waiting patients can access treatment more quickly. That also includes accelerating the implementation of high-impact changes, such as active clinical referral triage and patient-initiated review. These improvement programmes will support the delivery of the targets and provide sustainable solutions for the future. We are taking action to improve A&E waits - the £50 million Urgent and Unscheduled Care Collaborative is helping to implement a range of measures to drive down A&E waiting times. These measures include offering alternatives to hospital, such as Hospital at Home, directing people to more appropriate urgent care settings and scheduling urgent appointments to avoid long waits in A&E.

Overall Portfolio Contribution to National Outcomes

Primary Outcome

Health: Health and social care services provide care to improve population health, while the longer-term reform of health and social care services seek to address the challenges facing Scotland, and ensure that the right care is delivered at the right time.

Secondary Outcomes

Communities: Investing in areas such as mental health and wellbeing services, services to work with people affected by drug use, and services which allow a patient to be treated at home (where appropriate) allow people to live more full lives and remain engaged within their communities.

Human Rights: Addressing health inequalities through investment in direct interventions. For example, investment of £50 million per year in our National Mission on drugs is tackling inequalities through a rights-based approach – ensuring people have access to the treatment they have a right to through our Medication Assisted Treatment standards and that residential rehabilitation is available for all who need it. The Mission includes a national collaborative of people with lived and living experience whose voices are being used in the design and delivery of services, to ensure everyone has access to them as part of their rights - aligned with the Scottish Government approach to human rights.

Other Relevant Portfolio Performance Information

NHS Performs

Independent Living Fund Annual Report and Accounts 2020-21

Care Inspectorate Annual Report 2020-21

sportscotland Annual Review 2021-22

Social Justice, Housing and Local Government

Policy Aims in 2021-22 Budget

To prioritise funding to support the development, design and implementation of our social security powers and delivery of benefits through Social Security Scotland, building a system based on dignity, fairness and respect; continue to tackle poverty and inequality, providing assistance to ensure that every child has the best start in life and to improve the lives of those in need; support a wide range of work to prevent discrimination, strengthen and empower our communities and promote equality and human rights; tackle inequalities and reduce child poverty to create a fairer Scotland, support regeneration and inclusive growth, ensure provision of accessible, affordable, energy efficient housing for all, and promote community empowerment and the participation of people in all aspects of Scottish life. Additionally, the portfolio incorporates the Scottish Government's funding for local authorities in Scotland, allowing them to deliver the full range of services, from education and social care to transport and planning.

Key Challenges & Financial Results

COVID-19: The COVID-19 pandemic has had a significant and disproportionate impact on the most disadvantaged in Scottish society. In addition the increase in the cost of living, including for essentials such as food and fuel, has particularly impacted low income households. To support low income households additional action has been taken over the course of 2021-22 to mitigate these impacts. Global issues around the supply of materials and skilled labour, with associated rises in cost, have affected the pace at which homes are delivered

Financial Results: Social Justice, Housing and Local Government reported an underspend of £121 million for the year ended 31st March 2022 (Budget: £16,411 million, Outturn: £16,290 million). More details are included in the Portfolio Outturn Statement.

2021-22 Deliverables

Local Government: The 2021-22 local government settlement of almost £11,700 million provided an increase in local government day to day spending on local services of £375.6 million or 3.5%. Scotland's councils also received an additional £259 million to respond to the pandemic through the local government finance settlement. The Scottish Government also provided £712 million of COVID-19 non-domestic rates reliefs to support the retail, hospitality, leisure and aviation sectors.

Housing: £10 million Tenant Grant Fund supported those at risk of homelessness due to COVID-19-related rent arrears; £80 million support for those impacted by the Bedroom Tax, supporting people to sustain their tenancies through Discretionary Housing Payments.

Social Justice: Over 2021-22, Scottish Government invested almost £2,600 million in targeted support for low income households, of which over £1,100 million directly benefitted children. Through Low Income Pandemic Payments, over £68.9 million was awarded to low income households (£72.8 million including admin), providing £130 of additional financial support to those eligible. £80.7 million was allocated to local authorities to support delivery of Bridging Payments worth £520 in 2021. We have made £650 available per eligible child in 2022, until the roll out of Scottish Child Payment to under 16s, benefitting around 145,000 children as of Spring 2022.

The £41 million Winter Support Fund has enabled additional financial support to be provided to households impacted by the rising cost of living and fuel costs. This included £10 million for the Fuel Insecurity Fund delivered by third sector organisations to provide support to people who were at the imminent risk of self-disconnection or self-rationing their energy use for their home. We continued to fund Social Innovation Partnership projects, enabling them to support individuals and families across Scotland with a range of activities, including flexible childcare, flexible working, employability, income maximisation and advice and advocacy. We invested £1 million in the STV Children's Appeal, enabling it to support grassroots organisations in every local authority area in the country who deliver a range of activities to support families in poverty. All of the above provided support and financial assistance to those who need it most.

Social Security: Between April 2021 and 31 March 2022, the total value of Scottish Child Payments issued to clients was £55.1 million, supporting circa 103,000 children as of 31 March 2022 across all 32 local authorities in Scotland. Evaluation of the poverty impact of Scottish Child Payment will form part future Tackling Child Poverty reports. In recognition of the additional pressures faced by carers as a result of the pandemic, we made an extra payment of Carer's Allowance Supplement. Around 82,000 eligible carers received this additional support, meaning those in Scotland got up to £694.20 more support in 2021 compared to those in the rest of the UK.

Child Disability Payment, our first complex disability benefit, was launched in pilot areas from July 2021, and nationally across Scotland in November 2021 – the first time anywhere in the UK that disability benefit applicants could apply online, as well as by phone, post or face-to-face. Between 26 July 2021 and 31 March 2022, the total value of Child Disability Payments issued was £3.25 million. As of the 31 March 2022, it is estimated that 3,050 children were in receipt of Child Disability Payment. On 11 October 2021, the first Disability Living Allowance for children (DLAc) cases were selected for transfer to Child Disability Payment. As of 31 March 2022, 555 children and young people had received their first payment of Child Disability Payment as a result of our successful case transfer process. In March 2022, we launched the pilot for Adult Disability Payment, our replacement for Personal Independence Payments. The disability benefits have been co-designed with stakeholders and disabled people, ensuring that the values of dignity, fairness and respect are embedded throughout.

Equalities: Over £30 million in funding was provided to third sector organisations in 2021-22 including £13.5 million through the Delivering Equally Safe and Equality and Human Rights Funds.

Connected communities: We worked in close collaboration with a range of faith and belief, asylum and refugee and other partners to support and help integrate vulnerable communities across Scotland. The £500,000 Hate Crime Security Fund helped 42 places of worship install security measures, engagement was initiated to inform the development of a new hate crime strategy to be published later in 2022, and over £2 million was provided to third sector organisations working to support the integration of refugees and people seeking asylum, including to projects supporting employability and mental health.

Overall Portfolio Contribution to National Outcomes

Primary Outcomes

Poverty: We are establishing a social security system that meets the needs of the people of Scotland and will deliver a service that treats people with dignity, fairness and respect; we support a range of services and support for people on low incomes through local government, housing, social justice funding and equalities.

Communities: A wide range of activity to build cohesive, resilient communities also ensures that divisive narratives find it harder to take hold. Affordable housing brings direct improvement to the wellbeing of people and communities.

Children: Children are supported and their rights upheld through measures such as the Scottish Child Payment (SCP), SCP Bridging Payments and Child Disability Payment and the broader programme of work to tackle child poverty. Investment in the delivery. Supply of homes through the affordable housing supply programme contributes to tackling child poverty.

Equality and Human Rights: We provide support to organisations tackling inequality and discrimination, furthering equality, and advancing the realisation of human rights in Scotland. Social security is an important human right and none of us know when we might need it.

Secondary Outcomes

Fair work and Business: Supporting employability and other services helps ensure that people are informed and supported in work and that they are aware of their rights.

Economy: Supporting people on low-income prevents financial hardship and – where possible – can support people into employment, as does support for parents and the childcare sector.

International: We support refugee and asylum organisations to facilitate integration, employability and the health and wellbeing of those arriving in Scotland.

Other Relevant Portfolio Performance Information

Local government finance statistics

Coronavirus (COVID-19) pandemic support payments

Tackling child poverty delivery plan 2022-2026 - annex 4: cumulative impact assessment

Tackling child poverty delivery plan: fourth year progress report 2021 to 2022

Child poverty analysis

Impact Case Study: Scottish Child Payment

Investment in 2021-22 Financial Year:

£55.1 million

Deliverables:

Each family received £10 per eligible child under six years old, per week (extended to an increase to £20 per week from April 2022).

A total of £55.1 million paid out to the families of around 103,000 children across Scotland

Short Term Impact (as per interim evaluation):

• Increased spend on children and in the Scottish economy
• Help to reduce money-related stress and pressure on household finances
• Can improve health and wellbeing across families:
  • Help to reduce income inequality by gender and between local areas
  • Reduce child poverty
• Commissioned research with recipients of Scottish Child Payment found the application process is perceived to be easy and quick to complete. Interim Evaluation of Scottish Child Payment (www.gov.scot/)
• Evidence from the Social Security Scotland client survey shows that 96% of respondents with experience of Scottish Child Payment had a good or very good experience with Social Security Scotland.

Intended Outcome:

Help to meet the Scottish Government's child poverty targets, set out in the 2017 Child Poverty Bill.

The policy objectives of Scottish Child Payment are outlined in the Analysis of options for the income supplement published in June 2019.

This states that by 2030:

• Less than 10% of children should be living in relative poverty
• Less than 5% of children should be living in: absolute poverty; combined low income and material deprivation; or persistent poverty
  • CIA link below sets out the impact SCP has on meeting the interim Child Poverty Targets
  • It is estimated that 26% of children in Scotland were living in relative poverty (after housing costs) in 2019-20. Scottish Child Payment is projected to reduce child poverty by an estimated 5 percentage points in 2023-24 when it is rolled out to under 16 year olds.

Relevant Performance Information:

• Social Security Scotland Statistics: Scottish Child Payment
• Scottish Child Payment: Interim Evaluation
• Tackling child poverty delivery plan 2022-2026 - annex 4: cumulative impact assessment
• Income supplement: analysis of options
• Tackling child poverty delivery plan: fourth year progress report 2021 to 2022
• Child poverty analysis

Finance and Economy

Policy Aims in 2021-22 Budget

To support economic recovery and transformation, protect existing jobs, to support workers to upskill and reskill, and to create good-quality jobs for the future. The work taking place across this portfolio contributes to tackling the global climate emergency, growing an inclusive economy, and responding to the challenges following Scotland's exit from the European Union, changing demographics and shifting global circumstances.

Key Challenges & Financial Results

COVID-19: The emergence of the Omicron variant at the end of 2021 resulted in a number of necessary measures to control the spread, which had a significant impact on businesses during the key Christmas trading period and required additional business support to be found, including continuation of sector specific programmes, such as tourism support. The COVID-19 pandemic led to supply chain issues, delaying broadband delivery across both commercial and SG-funded programmes. Business demand for the Business Ventilation Fund has been less than the initial forecast, resulting in underspend which was then repurposed, allowing university and college sectors to purchase CO2 monitors in March 2022. Additionally, COVID-19 resulted in high absence rates at Ferguson Marine, which reduced the efficiency of the yard. Finally, the Scottish National Investment Bank invested less than its ambitious forecast within the context of the necessary recruitment of an investment team and embedding professional investment processes within the Bank in its first full year of operation.

Financial Results: Finance and Economy reported an underspend of £536 million for the year ended 31^st March 2022 (Budget: £2,616 million, Outturn: £2,080 million). More details are included in the Portfolio Outturn Statement.

2021-22 Deliverables

Economic Strategy: Developed and published the National Strategy for Economic Transformation.

Employability Support: Developed Offer to Parents as part the Scottish Government's commitment to tackling child poverty, set out in the Tackling Child Poverty Delivery Plan, 'Best Start, Bright Futures'.^[15] From April 2021 to March 2022, the portfolio continued to support a range of measures such as the Young Person's Guarantee, Developing the Young Workforce (DYW), No One Left Behind, the Parental Employability Support Fund, the National Transition Training Fund, the North East Economic Recovery Fund and Fair Start Scotland.

Business Support: Delivered £30 million to support small and medium sized businesses to invest in digital technologies, boosting productivity and supporting companies impacted by the pandemic to pivot to new markets and operating models. Maintained sponsorship for Scotland's three enterprise agencies (Scottish Enterprise, Highlands and Islands Enterprise, South of Scotland Enterprise) and for Visit Scotland. The National Transition Training Fund (NTTF) continues to support upskilling and retraining for individuals, in sectors affected by COVID-19 but also sectors affected by Brexit, and those in areas which require skills transitions, including the transition to net zero. Between April 2021 and June 2022, 12,139 participants and 1,017 businesses have been supported. In 2021-22, the five funds operating under the Scottish Growth Scheme invested £14 million in 118 companies. This levered £41 million of private investment to help finance their growth ambitions. In collaboration with VisitScotland and other delivery partners, we supported a range of tourism and hospitality businesses in 2021-2022 with a support package worth up to £258.5 million in total (COVID-19 and Omicron funding).

Scottish National Investment Bank: 2021-22 was the Scottish National Investment Bank's first full year of operation The Bank made 12 investment commitments during that year, worth £142 million, bringing its total commitments since launch to £194 million (up to end of financial year 2021-22). These investments include: £30 million to help fund the expansion of Aberdeen Harbour, the largest marine infrastructure project in the UK, which will maintain the north east as a centre of energy excellence; £20 million in the Lothian Broadband Group, which will help to add 70,000 new premises to their network over the next four years; and £13 million investment in Iona Wind Partnership, which aims to deliver 800MW of onshore wind capacity by 2026 - enough to power 850,000 homes. £3 million in IndiNature will enable the company to scale-up production of its natural fibre construction insulation system at a new manufacturing facility in the Scottish Borders, and £3 million will allow travel technology business Travelnest to scale-up, support the creation of new jobs and allow the company to target new markets.

Digital Connectivity: Through a combination of the Reaching 100% (R100) contracts, the R100 Scottish Broadband Voucher Scheme and commercial build, the programme connected 8,078 premises to full fibre or superfast broadband. 27 new 4G masts went live across Scotland via the 4G Infill (S4GI) programme.

Tourism and hospitality: Over the past year, we have supported the recommendations of the Tourism Recovery Taskforce, including a £25 million portfolio of projects in 2021-22. Phase 1 Tourism and Hospitality Recovery Programme delivered, in collaboration with partners across Scotland, 10 projects to accelerate tourism and hospitality recovery in the short-term and provide a foundation for a sustainable recovery of the industry in future years. The aim of the Tourism and Hospitality Recovery Programme is to set the sector back on track towards achieving the ambitions of the national tourism strategy, Outlook 2030, for Scotland to be a world leader in 21st century tourism.

Managing the Public Finances: Delivered the Scottish Government's Medium Term Financial Strategy providing the medium term economic and fiscal outlook; the Scottish Budget 2022-23; pay policy for 2022-23 setting out specific measures to address low pay, including the introduction of a Scottish public sector wage floor; and a Financial Transparency commitment as part of the Open Government Plan focused on strengthening the accessibility of Government's public finance data.

Tax: We delivered the tax policy commitments set out in Budget 2021-22, using our tax powers to continue to deliver a more progressive tax system, raising revenue to fund Scotland's essential public services. Scotland's first Framework for Tax^[16] was published in December 2021, setting out the principles and strategic objectives that underpin the Scottish Approach to Taxation. Performance of LBTT and SLfT in 2021-22 was strong, with Revenue Scotland reporting provisional outturn revenues at £933 million, compared to the £674m forecast by the SFC in January 2021. Scottish Income Tax outturn for 2021-22 will become available in the summer of 2023.

Infrastructure Investment: During the first year of implementation of the five year Infrastructure Investment Plan,^[17] our major project reporting^[18] shows that infrastructure projects worth

£232.2 million completed construction and opened to the public. Infrastructure investment funding in 2021-22 supported almost £2,000 million of investment in low carbon infrastructure, including domestic energy efficiency, transport and industry.

Overall Portfolio Contribution to National Outcomes

Primary Outcomes

Economy: This portfolio has provided a significant amount of financial investment and support to both businesses and employees to mitigate the negative economic impacts of the COVID-19 pandemic and subsequent restrictions, where possible.

Fair Work & Business: £375 million was allocated in December 2021 to provide support to businesses impacted by the Omicron variant and the restrictions introduced to control its spread; however it was not known at that time how long those restrictions would need to remain in place. 72% of businesses in Scotland who received support (from Scottish and UK Governments) reported^[19] that it had helped them continue trading and therefore helped most beneficiaries to survive through the immediate crisis.

Secondary Outcomes

Environment: The Scottish Landfill Tax has supported development of the circular economy, encouraging the prevention, reuse and recycling of waste and helping keep valuable resources circulating in the Scottish economy.

Poverty: Scottish Income Tax^[20] is more progressive compared to the rest of the UK, protecting lower earners, while raising additional revenue for successive budgets to invest in public services and Scotland's economy. By the end of 2021-22, over 500 employers had signed up to the Young Person's Guarantee, offering more than 10,000 opportunities to young people. The other opportunities were created through funding of employability programmes, Further Education and Higher Education courses and third sector support.

Other Relevant Portfolio Performance Information

Scottish Growth Sector Statistics

Gross Domestic Product Reports

Glasgow City Region Annual Performance Report 2021-22

Inverness and Highland City Region Deal Annual Report 2020-21

Tay Cities Region Deal Annual Performance Report 2020-21

Care Inspectorate Annual Report and Accounts 2020-21

Education and Skills

Policy Aims in 2021-22 Budget

To improve the life chances of our children and young people through excellence and equity in education continues to be a key priority for this government, to invest in changing lives for the better and underpin key government priorities, in particular, promoting population wellbeing, tackling child poverty, and building sustainable and inclusive economic growth. Additionally, to support the development of well-educated, highly skilled people, supporting sustainable and inclusive growth and delivering our Young Person's Guarantee.

Key Challenges & Financial Results

COVID-19: The overspend of £7 million was due primarily to spend of £8 million on the Childcare Sector Omicron Impacts Fund, part of a package of Omicron Business Support Funding in February 2022, covered by an equivalent underspend in the Finance and Economy portfolio. Due to the late stage in the financial year at which the funding package was announced, funding was retained by the Finance and Economy portfolio rather than being transferred to Education & Skills portfolio. COVID-19 impacted the ability of grant funded organisations to deliver projects in this sector. There is evidence that the pandemic has disproportionately affected children and young people impacted by poverty, and we have seen a widening of the poverty related attainment gap for primary school aged pupils in particular. Curriculum programmes were delivered remotely to ensure they could continue during the COVID-19 pandemic.

Financial Results: Education and Skills reported an underspend of £806 million for the year ended 31^st March 2022 (Budget: £4,587 million, Outturn: £3,781 million). More details are included in the Portfolio Outturn Statement.

2021-22 Deliverables

Early Learning Centre (ELC) Expansion, School Age Childcare and Other Support: The latest monitoring data from January 2022 indicates that 97% of children who were accessing funded ELC were accessing more than 600 hours (the previous entitlement) and 88% of children were taking up the full 1140 hours entitlement – with this full entitlement, families now save up to £4,900 per child per year. Over 700 families on low incomes have benefitted from free or no cost school age childcare through the Access to Childcare Fund. Universal free school meals save all families an average of £400 per child, per year. The removal of charges for instrumental tuition and core curriculum charges supports young people to follow their interests and aptitude in their education. COVID-19 funding supported the education sector to respond to the unprecedented pressures of the pandemic. Over 4,600 services received a grant of between £950 and £4,500 from the Childcare Sector Omicron Impacts Fund.

Summer 2021 Holiday Programme: It is estimated that in excess of 130,000 children and young people accessed their provision. In addition, a further five local authorities reported in excess of 100,000 bookings or recorded attendances at their activities.

Care: The Redress for Survivors (Historical Child Abuse in Care) (Scotland) Bill was passed in Parliament in March 2021 and Scotland's Redress Scheme went live in December 2021. Prior to this applications were made through the Advance Payment Scheme and during 2021-22 payments were made to a further 163 survivors totalling £1.6m. Since December 2021 1,021 applications were received under the Scotland's Redress Scheme, of which 15 were concluded by 31 March 2022 and £0.6m was paid out.

The Promise Partnership Fund was launched in 2021 to help improve the lives of those in or on the edges of care. It helps organisations to implement changes so they can better support children, young people and families who need it. Since January 2021 a total of 244 applications to the Promise Partnership Fund were received, and just over £8.1 million distributed to support transformational change.

Attainment Gap: Scottish Attainment Challenge funding reached 97% of schools through Pupil Equity Funding (£147m), with a further £50m going to 9 local authorities and 73 specific schools to support children and young people impacted by poverty. £11.5 million was allocated to local authorities to support care experienced children and young people. The proportion of 2020-21 school leavers in a positive follow-up destination was 93.2%, up from 92.2% in 2019/20 and just below the highest level seen since consistent records began in 2009/10. The gap between the proportion of school leavers from the most and least deprived areas who entered a positive follow-up destination has reduced from 8.3 percentage points in 2019/20 to 7.5 percentage points in 2020-21 and is now the smallest since 2009/10. All children in primaries 1 to 5 now benefit from balanced and nutritious free school lunches during school term-time. A record high 16.7% of full-time first degree entrants to university coming from the 20% most deprived areas of Scotland in 2020-21, exceeding the interim Commission on Widening Access target to have 16% by 2021.

Estates and Staffing: Teacher numbers rose for the sixth year in a row, rising to 54,285, in 2021 – an increase of 885 on the previous year – and that the ratio of pupils-to-teachers is 13.2, the lowest since 2009. The proportion of schools in good or satisfactory condition has increased from 61% in April 2007 to 90.2% in April 2021.

Colleges and Universities: A record 282,875 students were enrolled at Scottish universities in 2020-21. The Scottish Funding Council Review reports that the return on investment in Scotland's colleges and universities is between £6.50 and £11 for every £1 spent.

Overall Portfolio Contribution to National Outcomes

Primary Outcomes

Education: Ongoing work across this portfolio such as free school meals or increasing the number of teachers ensures that learners can make the most of their time in primary, secondary and tertiary education, enabling them to reach positive destinations (such as further education, training or employment opportunities) and contribute to society.

Children: Creating and delivering an education system where children are nurtured and respected ensures each learner is given the opportunity to reach their potential.

Poverty: Supporting economically disadvantaged children by tackling the attainment gap through a range of direct interventions and ensuring that potential and life choices are not determined by background.

Secondary Outcomes

Health: Improved population health is delivered through programmes such as universal free school meals that provide healthy food for children in primaries 1-5.

Fair Work and Business: Education and Skills works to ensure that young people are able to obtain the skills and education they need and that meet the future needs of businesses and services in Scotland.

Human Rights: Ongoing work to reduce inequalities such as the attainment challenge ensures that every learner, regardless of their background, has an equal chance to succeed in education.

Other Relevant Portfolio Performance Information

Scottish Qualifications Authority Annual Reports

Student Awards Agency for Scotland Annual Reports

Education Scotland Annual Reports

Justice and Veterans

Policy Aims in 2021-22 Budget

The main aims for 2021-22 were to keep our communities safe and secure, to administer justice in its various forms; to tackle inequalities and ensure an environment where sustainable economic activity can prosper and enable our communities to be safe and resilient. To reduce crime and offending, support victims and witnesses and work to build the country's resilience by improving preparedness against a range of hazards and threats.

Key Challenges & Financial Results

COVID-19: The effects of the pandemic continued to be felt throughout 2021-22 causing delays across the criminal, community and civil justice systems. For example, criminal court business was significantly reduced, criminal justice social work capacity was impacted by restrictions and there was a reduction in the demand for legal aid. Additionally, COVID-19 regulations made it difficult for many grant-funded projects to deliver services. Investment in court technology and remote jury centres continued throughout 2021-22 in order to address the courts backlog.

Financial Results: Justice and Veterans reported an underspend of £39 million for the year ended 31^st March 2022 (Budget: £3,123 million, Outturn: £3,084 million). More details are included in the Portfolio Outturn Statement.

2021-22 Deliverables

Justice Strategy: The Vision for Justice in Scotland^[21] set out our transformative vision of the future justice system for Scotland, spanning the full journey of criminal, civil and administrative justice, with a focus on creating safer communities and shifting societal attitudes and circumstances which perpetuate crime and harm.

Police, Fire service, Prisons and Local authorities: During 2021-22 over £1,300 million was spent on policing to help prevent crime and harm and to support people who are vulnerable and in distress with recorded crime in Scotland remaining at one of the lowest levels since 1974 (down 14% since 2012-13). The £315 million budget for Scottish Fire and Rescue service has helped keep communities and individuals safe from fire and harm with 85,582 incidents attended during 2020-21 (latest figures available) of which 25,147 were fires. £370 million was spent on the Scottish Prison Service (SPS) to maintain prison operations supervising and supporting a daily population of between 7,300 and 7,600. However, whilst the overall prison population has been relatively stable during 2021-22, the SPS continues to face challenges with both the complexity of the needs of individual prisoners and the overall population between remand and sentenced prisoners. There is on-going work to modernise the prison estate aims to better respond to the needs of the current and future prison population and to ensure a continuing focus on support and rehabilitation for prisoners. £86.5 million was provided in grants which were allocated to Local Authorities to provide justice social work statutory services.

Courts and Tribunals: £50 million supported the 'Recover, Renew, Transform' programme^[22] for the Criminal Justice System, used in a variety of ways to increase capacity across the justice system. 82,147 cases concluded in Scottish Criminal Courts which is 88% of pre-pandemic (2019/20) levels but is up 80% on the previous year. In 2021-22 66,297 national trials called, up 54% on the previous year and 19% on the pre-pandemic levels (2019/20).

Legal aid: In 2021-22 over £117 million covered the provision of legal aid in Scotland, with 135,114 grants of legal assistance. The Scottish Legal Aid Board (SLAB) delivered legal services through a network of SLAB-employed solicitors (£5.5 million). SLAB also administered £2.3 million of Justice-funded grant programmes.

Victims, witnesses and violence prevention: Over £7 million funding was allocated to third-sector organisations supporting victims and witnesses and over £5.5 million to projects to address violence against women and girls, including specialised services such as ASSIST and Rape Crisis Scotland. The first year of a three-year national rollout programme for the Scottish Child Interview Model^[23] for Joint Investigative Interviews. Grant allocation of £1,029,500 were given for programmes to reduce violence across Scotland.

Cyber: £1.1 million Cyber Resilience funding supported the implementation of The Strategic Framework for a Cyber Resilient Scotland.^[24]

Veterans: Support continued for veterans' organisations through the Scottish Veterans Fund^[25] (17 veterans projects); the Armed Forces Third Sector Resilience Fund^[26] (26 third sector organisations); and an award to the Unforgotten Forces Consortium for their project supporting veterans over 60 in Scotland, directly benefitting almost 700 veterans in the first six months of 2021-22.

Overall Portfolio Contribution to National Outcomes

Primary Outcomes

Communities: Ongoing work across this portfolio to tackle crime and manage threats such as fire and cyber security issues allows communities across Scotland to remain safe, secure and resilient.

Human Rights: Upholding and promoting equality by ensuring equitable access to and experiences of the justice system and actively addressing barriers to seeking justice.

Secondary Outcomes

Economy: Safe and secure communities are essential for a vibrant economy – our police and courts system ensures that people and businesses see Scotland as a safe place to live and work.

Children: Children are protected by the justice system and initiatives to protect and support victims and witnesses aid children who come into contact with the justice system.

Other Relevant Portfolio Performance Information

Crime and justice statistics

Scottish Courts and Tribunal Service Data

Scottish Police Authority Annual Reports and Accounts

Quarterly Policing Performance Report – Q3 2021-22

Scottish Fire and Rescue Service (SFRS) Annual Performance Review

Scottish Legal Aid Board (SLAB) Annual Report and Accounts

Scottish Prison Service Annual Report and Accounts

Scottish Courts and Tribunals Service Annual Reports and Accounts

Community Justice Outcome Activity across Scotland Annual Report

HM Inspectorate of Constabulary in Scotland (HMICS) Annual Report

HM Inspectorate of Prosecution in Scotland Annual Report

HM Inspectorate for Prisons in Scotland Annual Report

HM Fire Inspectorate in Scotland Annual Report

Net Zero, Energy and Transport

Policy Aims in 2021-22 Budget

To protect and promote Scotland's environment by delivering the organisation's Net Zero ambitions, and to build a strong and sustainable net-zero economy. While there are significant challenges in this space there are also significant opportunities to diversify our economy, create good, green jobs, and to lead the world in transitioning to net-zero.

Key Challenges & Financial Results

COVID-19: The ongoing impact of the pandemic has led to delays, reduced demand and labour or supply shortages across a range of operations in this portfolio, particularly across the Transport network which continued to have patronage numbers far below those pre-covid. There has also continued to be an impact on the pace of delivery of large infrastructure projects which have continued to be impacted by Covid delays as well as labour and supply shortages.

Adverse Weather Conditions: Scottish Forestry approved enough grant applications to achieve the 2021-22 woodland creation target; however, Storms Arwen, Corrie and Malik, the worst winter storms for decades, blew down around 8,000 hectares of trees, resulting in forestry labour and agents being re-directed from woodland planting to felling and clearing up. On Scotland's National Forests and Land this affected up to 4,000 hectares of forests, resulting in approximately one million m³ of fallen trees (roughly 1/3 of what FLS would fell in a given year nationally) and hundreds of miles of trails closed for inspection and repair. The challenging weather also disrupted the delivery of peatland restoration.

Supply Chain Issues: Supply chain delays and material price increases, particularly in the construction sector, have delayed time to develop and approve bids before awarding some grants. Issues relating to supply chains also led to project delays for our major net zero funds as well as causing lack of demand for manufacturing sites to co-invest in decarbonisation projects.

Financial Results: Net Zero, Energy & Transport reported an underspend of £475 million for the year ended 31^st March 2022 (Budget: £4,536 million, Outturn: £4,061 million). More details are included in the Portfolio Outturn Statement.

2021-22 Deliverables

COP26: Successfully delivered COP26 Conference in collaboration with UK Government, facilitating full participation from agencies such as Police Scotland and Transport Scotland with an efficient pre-financing mechanism.

Climate Change: Invested £3.4 million of grant funding to 46 community organisations through the Climate Challenge Fund, produced a cross-Government response to Scotland's Climate Assembly report^[27] and recommendations, delivered phase one of the regional Community Climate Action Hubs and Climate Action Town Programmes.^[28]

Scottish Water: Commenced new 2021-27 regulatory period with a £4,500 million capital investment programme over the period to deliver ongoing improvements to drinking water quality and progress towards achieving net-zero emissions by 2040.

Energy: Progress made on increasing Scottish Government investment in heat and energy efficiency transition, supporting domestic and SME buildings owners, public sector and social housing sector (£263.7 million total value across CDEL and FT funds, £90.8 million spent in 21/22), supported businesses in the energy sector transition to net zero through the Energy Transition Fund (£75 million total fund value, £6 million spent in 2021-22) and used Scottish Industrial Energy Transformation Fund to reduce costs and emissions in energy-intensive manufacturing industries (£35 million total fund value, £310,000 spent during opening round of the competition).

Offshore Wind: Lease option awards for the ScotWind offshore wind leasing round were made in January 2022; creating almost £700 million for the Scottish Exchequer (The Scottish Budget 2022-23 assumed drawdown of around £40 million in that financial year and the Medium Term Financial Strategy published in May 2022 set out a profile of £310 million and £350 million being drawn down in 2023-24 and 2024-25 respectively. The SG has discretion to update the exact profile of drawdown of ScotWind income through annual budget processes) plus commitments to investment worth £25 billion in the Scottish supply chain, funding from the Scottish Government (via the Growth Accelerator Mechanism) awarded a £49 million contract for the Stornoway Deep Water Terminal.

Transport: Delivery and Publication of the Strategic Transport Projects Review (STPR2), development of NTS2 Delivery Plan and a monitoring and evaluation framework to track progress and achievements, published the Route Map to 20% reduction in car kilometres by 2030, funded the delivery of active travel infrastructure projects such as Connecting Woodside, Bowline, installation of Stockingfield Bridge in partnership with Local Authorities and Scottish Canals, provided over 1000 free bikes to school children who cannot afford one, developed Smart Ticketing and Mobile Travel Apps for buses, supported the delivery of bus and ferry services, launched the bus concessionary travel scheme for young people under the age of 22, completed preparatory work to ensure a successful transition of the ScotRail Services to Scottish Government control, further developed plans for de-carbonisation of Rail Services by 2035 and supported the growth of Rail Freight.

Biodiversity, Forestry, Peatland & Land: Delivered projects to tackle twin crisis of climate change and biodiversity loss, including the first year of the Nature Restoration Fund,^[29] which funded 54 projects to restore wildlife and habitats on land and sea, planted 10,480 hectares of woodland (of which 4,300 hectares was native woodland, exceeding the revised target that was set as part of the Bute House Agreement), restored around 8000 hectares of degraded peatlands, delivered the Register of Persons Holding a Controlled Interest in Land as included in the 2016 Land Reform Act.

Circular Economy: First investments made from the Recycling Improvement Fund^[30] for 16 projects across 13 local authorities to improve, for example, frequency of recycling collections, extending food and garden collections.

Overall Portfolio Contribution to National Outcomes

Primary Outcomes

Environment: Investment into improved recycling systems will reduce household waste. Planting woodland and restoring peatland contribute significantly to reducing the country's carbon emissions. Transport initiatives such as the Young Persons' (Under 22s) Free Bus Travel Scheme and increasing Electric Vehicle Charging Infrastructure will incentivise citizens to travel sustainably. The successful delivery of COP26 allowed governments, civil society, businesses, and climate activists to come together and commit to greater action on climate change in support of the Paris Agreement.

Economy: As noted in the above examples, significant investment has been made to boost sustainable and inclusive economic growth across Scotland.

Communities: The Scottish Land Fund awarded £7 million to 87 communities for asset purchases, increasing community land ownership across Scotland. Scottish Water's upgrade to the Katrine Aqueduct in April 2021 improved the security of water supply to over 1.3 million people.

Secondary Outcomes

Fair Work & Business: ScotWind is expected to result in thousands of jobs in the Scottish supply chain while during 2021-22 the funding package for the Stornoway deep water terminal was agreed between Scottish Government, Highlands and Islands Enterprise and other partners such as Comhairle nan Eilean Siar (CNeS) resulting in the signing of the construction contract for the project in March 2022. Since then, construction has commenced and is proceeding on track for completion by the end of 2023.

Poverty: Investment in National Heat and Energy Efficiency Programmes supported around 15,000 households in fuel poverty across Scotland. Continued funding for heat networks across Scotland, including targeted investment to provide low cost heating to homes in deprived areas.

Other Relevant Portfolio Performance Information

Scottish Green House Gas Statistics 2020

Climate Change Plan: Monitoring Reports 2022

Public Bodies Climate Change Reporting 2020/21 Analysis Report

Impact Case Study: Woodland Creation (Forestry Grant Scheme)

Investment in 2021-22 Financial Year (in woodland creation through forestry grant scheme):

£43.1 million

Deliverables:

9,854 hectares of new woodland planted, of which 4,200 ha. native woodland (below the SG target of 13,500* hectares of woodland creation due to labour shortages following extreme weather conditions, Brexit and COVID-19 pandemic).

Short Term Impact (as per interim evaluation):

It is estimated that every additional 1,000 hectares of new planting will capture 280,000 tCO2 over 25 years (roughly 6.2 MtCO2/year valued at over £400 million/year).

Intended Outcome:

Meet target to reach net-zero emissions of all greenhouse gases across Scotland by 2045.

Relevant Performance Information:

• Forestry Grant Scheme Statistics
• Forestry Scotland Annual Report and Accounts

* The SG target includes a contribution of WC hectares that would be planted on land managed by Forestry & Land Scotland. FLS planted an additional 626 hectares making the SG total 10,480 ha.

Rural Affairs and Islands

Policy Aims in 2021-22 Budget

Rural Affairs and Islands (RAI) is a diverse portfolio covering a range of responsibilities which contribute to the economic wellbeing of rural Scotland, and includes farming and food production, animal health and welfare, plant health, food and drink, fisheries, crofting and aquaculture. The portfolio priorities focused on minimising and addressing impacts on rural, coastal and island communities and businesses of the UK's exit from the EU as well as the extraordinary challenges arising from the global pandemic. Investments made over this financial year were aimed to support building towards a better sustainable green future through job creation and retention, supporting hospitality and food and drink, as well as rural communities in their recovery and resilience.

Key Challenges & Financial Results

EU-exit: Continued support for the seafood sector was necessary in face of cumulative and new regulatory impacts and costs arising from post EU Exit regulatory burdens. Through clear advice and seeking to simplify procedures and anticipate risks we have reduced costs and helped to assure and retain sector confidence. Issues arising from EU exit continued to constrain food and drink exports with a direct impact on business (for example, UK exports of Scotch in 2021 were down £402 million (-8.2%) on that exported in 2019 and Atlantic salmon was down £5 million (-0.8%) on that exported in 2019). Support for the seafood sector to adapt to the new trading environment was provided through funding of Seafood Scotland, who delivered tactical support to businesses, and through administration of the Marine Fund Scotland, which offered opportunity to existing businesses for financial support for development and adaptation, including to climate change mitigation measures. Uncertainty around border checks, the Northern Ireland Protocol and Unfettered Market Access for Northern Ireland goods continued, resulting in significant resource commitment and difficulty closing projects well beyond their original expected timelines. The end of Freedom of Movement has created severe labour shortages across many agri-food sectors. To support the recovery from COVID-19 and the challenges presented by EU Exit, in August 2021 the Scottish Government launched the 2021 National Basic Payment Support Scheme ("NBPSS21"), providing farmers and crofters early access to over £331 million in financial support to maintain vital cash flow within the rural economy. As well as this Rural Payments and Inspection Division (RPID)'s performance in making all CAP Support Scheme payments continued to improve year on year and delivered in line with their published payment strategy.

COVID-19: An Agricultural Transformation Fund (£38.2 million) was established to support the sector in reducing greenhouse gas emissions, however due to the effect of the pandemic and EU exit on supply chain some stakeholders were unable to obtain capital equipment. The impact of restrictions on sales/orders and of isolation requirements on staffing created acute difficulty for the food and drink sector, particularly in the run up to Christmas which is typically a peak trading period for food and drink businesses.

Financial Results: Rural Affairs and Islands reported an underspend of £72 million for the year ended 31^st March 2022 (Budget: £948 million, Outturn: £876 million). More details are included in the Portfolio Outturn Statement.

2021-22 Deliverables

Agricultural transformation: Designed, developed and implemented the initial stages of the National Test Programme^[31] (NTP) for Agriculture. This programme builds on the work of the Farmer-led Climate Change Groups^[32] with the input and oversight of the Agriculture Reform Implementation Oversight Board (ARIOB). It is based on the principles of collaboration and co-creation that are the foundation of a Just Transition. The NTP supports delivery of The Scottish Government's Vision for Agriculture.^[33] The Vision sets out the principles and values that will be at the heart of Scotland's future agriculture support framework that will be implemented from 2025 onwards.

Rural Payments:^[34] Delivered over £613 million in ongoing agricultural support providing stability to farmers, crofters and land managers as we start to deliver and fund activities to enable the climate change targets through our transformation work with the sector. This includes delivery of the Basic Payment Scheme, alongside Greening and Young Farmer payments and Rural Priorities, Agri-Environment & Climate Scheme (AECS); and Forestry Grant Scheme, as well as supporting those farming and crofting in our most remote and fragile areas through the Less Favoured Areas scheme to 2018 levels. Alongside this we also invested in our IT/Digital estate - improving the user's experience, maintaining operational efficiency and ensuring it continues to be stable and secure, in the face of increasing cyber threat.

Food and Drink: The Good Food Nation (Scotland) Bill^[35] passed Stage 2 of the Scottish Parliament's legislative process; maintained COVID-19 support schemes to support the industry (including £5.4 million to wholesale businesses via the Scottish Wholesale Food & Drink Resilience Fund, over £1 million to brewers via the Scottish Brewers Support Fund and £1.15 million to supply chain businesses through the Scottish Food and Drink Producers Fund); supported the second year of the industry-led Food and Drink Industry Recovery Plan^[36] with up to £5 million of funding for business and market-facing interventions; invested more than £7.3 million in supporting businesses through the Food Processing, Manufacturing and Co-Operation^[37] grant scheme; consulted on a draft Local Food Strategy^[38] for Scotland; and progressed work to develop a single marketing brand for all Scottish food and drink produce by commencing research into existing schemes, other countries' approaches, industry and consumer views.

Rural Communities: Investment of £3.5 million in rural communities^[39] to test and evaluate new approaches to Community Led Local development (CLLD), supporting development of future policy in consultation with stakeholders and informing delivery of further funds in 2022-23. Supported Scottish Rural Action to take forward the immediate recommendations from the Scottish Rural Parliament (March 2021) to maximise rural communities' engagement with consultations such as the National Performance Framework 4 and NTS2. Invested heavily in mental health services, including £195,000 to support the National Rural Mental Health Forum to reflect the unique endemic challenges experienced in rural communities; we supported research to investigate the lived experience of marginalised communities during Covid 19, and also funded the launch of a £150,000 micro grant 'rural community engagement fund'^[40] in 3 pilot locations. LANTRA - investing over £0.5 million on driving skills development and increasing the number and diversity of employees in Scotland's land-based, aquaculture and environmental conservation sectors.

Islands: The Islands Programme invested capital funding to ensure delivery of the National Islands Plan, by supporting a range of areas, including tourism, infrastructure, innovation, energy transition and skills - informed by our learning of how island communities have responded and adapted to COVID-19. The 2021-22 Islands Programme encompassed three project strands: £6.2 million through the Islands Infrastructure Fund to sustain, enhance and develop transformational and critical infrastructure projects based on local priorities whilst supporting delivery of the National Islands Plan; £2 million Island Communities Fund which provided capital investment for community-led projects that support employment, community resilience and contribute to Scotland's just transition to net zero and climate resilient living on islands; and the £1.3 million Healthy Islands Fund which focused on building local capacity to increase well-being, foster connections and promote healthy and resilient islanders and communities.

Animal Health and Welfare: Successfully reacted to the most challenging Avian Influenza season in history with several infected premises in Scotland. Completed Legislative Consent Motion procedure for UK Welfare of Kept Animals Bill to improve controls on Pet Imports, Zoo Licensing, and to ban the export of live animals for fattening and slaughter. Scottish Vet Service Programme established. The service will meet needs across the public and private sector and provide crucial resilience to the sectors. Completed Pigeon register on ScotEID (post EU Exit requirement) to allow pigeon racing to continue.

Blue Economy: Published New Blue Economy Vision^[41] and outcomes document setting out long terms aims for sustainable management of Scotland's marine resource.

Fisheries and Aquaculture: Delivered key support in seafood supply chains, including innovation in seafood processing to mitigate effects of labour shortages caused by UKG visa restrictions, and create quality jobs. Delivered support for new entrants to commercial fishing through the

Young Fishers Scheme. Also provided funding for improvements in catch quality in the catching sector, and improvements to health and safety for fishers. Also delivered funding support for harbours including storm damage repairs, and in building resilience in coastal communities through supporting the creation of jobs, development of port infrastructure, and business innovation. Delivered funding support for the 'observers programme' on fishing vessels providing vital data input to SG fisheries science and stock assessments.

Seafood Trade: Supported seafood sector through short-life projects designed to mitigate costs and impacts resulting from Brexit, delivering export support through partnership working between Food Standards Scotland and the main logistics hubs, which also identified and resolved risks resulting from introduction of the new Export Health Certificates (EHC) for exports of seafood to the EU and NI. In addition, started development of a Strategy for Seafood which will be delivered in Autumn which will support revitalisation of the sector while delivering a sustainable and natural capital approach ensuring the remote coastal and rural communities benefit from the activity to support growth.

Overall Portfolio Contribution to National Outcomes

Primary Outcome

Economy: Ongoing work in this portfolio delivered over £600 million per year to businesses and communities and across the Scottish rural economy. Additionally, the Good Food Nation (Scotland) Bill will support the long-term sustainable growth of Scotland's food and drink sector.

Environment: Teams in this area consistently developed and implemented policies designed to protect animal health and welfare, and plant health in the farmed, natural and domestic environments. Work across this portfolio also protects habitats and biodiversity, clean water, natural and living landscapes, history, soils, healthy and well cared for livestock, trade, and public health for the people of Scotland. For example, initiatives such as the Agri-Environment Climate Scheme that promotes land management practices that protect Scotland's natural heritage and mitigate and adapt to climate change. Also, the development of the Scottish Marine Environmental Enhancement Fund (SMEEF) which provides an opportunity for marine users to re-invest in the marine environment, helping to fund projects focused on recovery, restoration or enhancement of the health of marine and coastal habitats and species across Scotland. The Good Food Nation Bill will help ensure that Scottish producers produce increasingly environmentally sound produce for Scots to enjoy.

Secondary Outcomes

International: Contributions to risk mitigation work in relation to seafood trade between Scotland, the EU and Northern Ireland. Our work in Food and Drink, particularly our support for the SDI-led Export Plan (£0.573 million in 2021-22) and the international market interventions set out in the Recovery Plan, helps bolster Scotland's reputation for high quality, premium food and drink produce and promote Scottish produce abroad.

Fair Work & Business: Provided financial support to a range of rural, marine and agricultural business through initiatives such as the Greening & Young Farmer payments and the Marine Fund Scotland, and further developed other schemes. Jobs in the food and drink sector were also created or safeguarded by projects funded through the Food Processing, Manufacturing and Co-Operation grant scheme. Invested in the skills of workforces in our rural communities through support for LANTRA, work being taken forward through the Commission on the Land Based Learning Review, the Women in Agriculture Fund and the Farm Advisory Service.

Other Relevant Portfolio Performance Information

Food Standards Scotland Financial and Business Reports

Climate Change Plan: Monitoring Reports

Rural Development Operational Committee & Monitoring and Evaluation Steering Group Reports

Constitution, External Affairs and Culture

Policy Aims in 2021-22 Budget

To enhance Scotland's reputation and increase sustainable economic growth, pursue organisational interests overseas, and promote Scotland as a great place to live, visit, work and do business through European and wider International Affairs. Additionally, to coordinate the development and implementation of the Scottish Government's policies on constitutional change and devolution, and ensure Scotland remains an open and welcoming nation for people and their families to live, work and make a positive contribution to our country. To ensure our diverse and evolving cultural heritage thrives and is celebrated, and that our historic environment, world-class collections and performing companies are cared for and enjoyed by new and diverse audiences as well as future generations right across Scotland. Our Major Events budget continues to support a strong and inclusive programme of events and festivals each year which creates jobs, drives other sectors such as tourism, and boosts the wellbeing economy whilst delivering benefits to communities across Scotland.

Key Challenges & Financial Results

COVID-19: The ongoing impact of the pandemic has led to delays, reduced demand and labour or supply shortages across a range of projects in this portfolio. Scotland's Census was postponed from 2021 to 2022 due to the impact of the COVID-19 pandemic, leading to financial challenges. The emergence of the Omicron variant of COVID-19 and subsequent restrictions had a significant impact on culture, creative, heritage and events sectors. The Scottish Government provided additional financial support in recognition of this impact. Travel restrictions also necessarily restricted international engagement.

Ukraine invasion: The invasion of Ukraine in February 2022 has led to an overspend by this portfolio through provision of emergency humanitarian aid.

Climate Emergency: Climate change and other factors are accelerating the rate of decay of historic properties which has led to resource re-prioritisation.

Financial Results: Constitution, External Affairs & Culture reported an overspend of £1 million for the year ended 31^st March 2022 (Budget: £354 million, Outturn: £355 million). More details are included in the Portfolio Outturn Statement.

2021-22 Deliverables

External Affairs: Delivered both the International Development Fund and the Humanitarian Emergency Fund, provided a package of support for EU Citizens to help them secure their status now the UK has left the EU, maintained operations across the External Network of Offices to enhance the Government's reach and Scotland's international reputation, supported an extensive programme of international ministerial engagement during COP26, and provided over £5 million in medical aid and humanitarian assistance to Ukraine following the invasion in February 2022; including £1 million for UNICEF (the United Nations children's organisation).

Culture and Major Events: Provided funding to culture bodies and core funded organisations including Creative Scotland, museums, collections and National Performing Companies, led a significant marketing campaign for St Andrew's Day working with over 130 partners, reaching an audience of 1.9 million, invested in a broad range of Major Events such as key Edinburgh and Glasgow Festivals, the Dandelion creative project (part of Unboxed: Creativity in the UK), Scotland's Year of Stories 2022 and Scotland's Winter Festivals 2021-22 (covering St Andrew's Day, Hogmanay and Burns). Funding also supported preparations for the 2023 Cycling World Championships.

Historic Environment Scotland: Delivered 45 events at COP26 and published the Energy Retrofit Guide for Historic Buildings and their Green Recovery Statement (supports green principles set out by Scottish Government and sets out how Scotland's Historic Environment can help to boost economic recovery).

National Records of Scotland: Planned and launched the 2022 Scotland Census which went live on 28 February 2022.

Overall Portfolio Contribution to National Outcomes

Primary Outcomes

International: The £10 million International Development Fund and the £1 million Humanitarian Emergency Fund have provided support to some of the world's poorest people and life-saving assistance for crisis hit communities across the world.

Economy: Investing in such a vast programme of culture, events and festivals generates business and creates jobs, and generates economic impact. Pre-pandemic, the Creative industries sector, which covers culture, arts, screen, software publishing and computer game design, contributed £4.5 billion gross value added (GVA) to Scotland's economy and employed 127,000 people, including an estimated 40,000 who are self-employed. Before the pandemic, the sector had total international exports of almost £1.7 billion, accounting for around 4.8% of Scottish international exports and culture and heritage is found to be significant motivator for tourism to Scotland. The live events sector contributed around £1 billion GVA to the Scottish economy prior to the pandemic. The promotion of Scotland's interests abroad through the External Network of Offices encourages additional international investment in the country.

Culture: The support funding provided to arts organisations by Creative Scotland and the Scottish Government (over 6,200 in total) has supported delivery and equitable access to our cultural and heritage offer. It has also supported the continuation and survival of key events such as Edinburgh and Glasgow Festivals through financial difficulties. Events such as Dandelion (part of Unboxed: Creativity in the UK) include a focus on participation of children, young people and communities in cultural activity.

Communities: Investment in creative projects can support health and education across local communities, such as the RSNO's Gaspard digital project for Schools and the Scottish Opera's Breath Cycle programme. Historic Environment Scotland's Community Connections Programme has funded projects that demonstrate the benefits and overall value of local heritage, supporting the recovery and renewal of Scotland's communities. Scotland's Year of Stories 2022 and Scotland's Winter Festivals 2021-22 both have a focus on community engagement, for example the Community Stories Fund supported 180 community events during calendar year 2022, providing an opportunity for communities across Scotland to tell the stories that are unique or important to them.

Secondary Outcome

Poverty: The Dandelion Creative Project will engage communities, including those from socioeconomically disadvantaged areas, and in particular young people throughout Scotland.

Other Relevant Portfolio Performance Information

National Indicator Performance | National Performance Framework

Scottish Growth Sector Statistics

Arts and Creative Industries - What we already know | One Scotland

4.7 Enabling sectors - Scotland: a trading nation

Deputy First Minister and Covid Recovery

Policy Aims in 2021-22 Budget

To provide the central function of co-ordination and support for performance, delivery and resilience activity across the Scottish Government and ensure that the organisation monitors and responds to a range of concurrent risks; managing policies on constitutional change, devolution, intergovernmental relations, elections, Freedom of Information, the legislative and constitutional impacts of EU exit, Cabinet business and the government's legislative programme; support the development of a public inquiry into the Scottish Government's Response to COVID-19; coordinate, draft and deliver work to deliver the Covid Recovery Strategy For a Fairer Future.

Key Challenges & Financial Results

COVID-19: The spread of COVID-19 led to increased planning and delivery work for the 2021 Scottish Parliament Elections to ensure they could go ahead safely. This included primary legislation (the Scottish General Election (Coronavirus) Bill introduced in late 2020) and extensive co-operation with electoral administrators.

Financial Results: Deputy First Minister & Covid Recovery reported an underspend of £9 million for the year ended 31^st March 2022 (Budget: £72 million, Outturn: £63 million). More details are included in the Portfolio Outturn Statement.

2021-22 Deliverables

Performance, Delivery & Resilience: Supported effective planning, preparations and response to significant/concurrent risks, emergencies and incidents including the winter reporting arrangements, support around COP26 and a range of other activities. Developed and implemented more effective performance and delivery mechanisms across Scottish Government, including monitoring, assessing and reporting on delivery to Ministers and Executive team.

Constitution and Cabinet: Delivered the Scottish Parliament elections in May 2021. Delivered a major suite of primary and secondary legislation, including significant emergency legislation related to COVID-19.

COVID-19 Recovery: Developed and published the Covid Recovery Strategy: for a fairer future^[42] in October 2021. Delivered a whole parliament Open Government Partnership (O Action plan, with 5 major commitments all core to SG priorities. Establishment of a Working Group on participation and deliberation – the IPDD. Provided expert advice and support to the Citizens Assembly on Climate Action in 2021. Delivered a pilot programme of place based systems leadership to Local Authorities and Police Scotland. Refreshed the Community Planning Improvement Board and established new governance structures reflecting the needs of the country through a period of change. Delivered of the Columba 1400 Senior Leadership Programme to the first cohort with a second planned later this year.

COVID-19 Inquiry: Established Scottish public inquiry into the handling of the COVID-19 pandemic^[43] to learn lessons for the future.

Overall Portfolio Contribution to National Outcomes

Primary Outcome

Communities: Lead on the preparation and responses to challenging winter weather conditions, support around COP26 and a range of other activity to support communities and mitigate negative impacts of such events where possible.

International: Upholding and promoting equality by ensuring equitable access to and experiences of the justice system and actively addressing barriers to seeking justice.

Secondary Outcomes

Economy: Supported the development of the Resource Spending Review, a financial review that sets out steps towards growing a stronger, fairer and greener economy.

Human Rights: Delivered the Scottish Parliament elections in May 2021, ensuring citizens could exercise their right to vote in free elections.

Poverty: Delivered leadership programme to young people from disadvantaged backgrounds, with a long-term aim of reducing inequality.

Health: Facilitated the delivery of significant emergency legislation related to the COVID-19 response, mitigating the impact of the virus across Scotland.

Other Relevant Portfolio Performance Information

Freedom of Information performance

Crown Office and Procurator Fiscal Service

Policy Aims in 2021-22 Budget

The Crown Office and Procurator Fiscal Service (COPFS) is the sole public prosecution authority in Scotland, prosecuting cases independently, fairly and effectively in the public interest and is also responsible for investigating sudden, unexplained and suspicious deaths and allegations of criminal conduct by police officers. The Lord Advocate has Ministerial responsibility for the work of the Service. Her position as head of the systems of criminal prosecution and investigation of deaths is enshrined in the Scotland Act 1998 and she exercises that responsibility independently of any other person.

Key Challenges & Financial Results

COVID-19: The coronavirus pandemic has had a significant impact on the work of COPFS, most notably leading to a substantial increase in the backlog of criminal cases, resulting in significant delays for those involved. COPFS continued to rely on the provisions of the COVID-19 pandemic emergency legislation, including the extension to time-bars and use of digital courts. Throughout 2021-22 COPFS worked with justice partners to outline and implement plans to reduce the backlog and trial delay periods, however it is anticipated that recovery to pre pandemic levels will take some years and the Scottish Government provided additional recovery funding to COPFS to allow us to tackle the backlog as quickly as possible.

Financial Results: Crown Office and Procurator Fiscal Service reported an overspend of £5 million for the year ended 31^st March 2022 (Budget: £180 million, Outturn: £185 million). More details are included in the Portfolio Outturn Statement.

COPFS was involved in civil litigation brought against the Lord Advocate by individuals prosecuted in connection with the acquisition and administration of Rangers Football Club. Some cases have resolved, with sums paid to pursuers as at March 2022 totalling £35.5 million (includes compensation and pursuers' legal fees), and other cases remain before the court. This is a highly complex matter in which the Inner House of the Court of Session has clarified the law on the common law immunity from suit of the Lord Advocate in exercising their prosecutorial function. In February 2021 the Lord Advocate made a statement in the Scottish Parliament about this matter and has committed to further public accountability and to a process of inquiry once all litigation has concluded.

2021-22 Deliverables

Service: Despite public health restrictions being in place for much of the financial year, the total number of criminal reports received was not significantly less than in 2020-21. It is notable that the number of death reports, for example, after increasing substantially in 2020-21, by around 50%, has remained almost the same for 2021-22. COPFS is working with Justice Partners to deliver the Court Recovery Programme with Scottish Government support.

The KPI for investigation of sudden deaths has fallen to 50%. Financial years 2020-21 and 2021-22 saw increases in fatalities reported to COPFS of 44% and 40% respectively, reflecting a combination of factors including, but not restricted to, excess deaths attributable directly to COVID-19, local GPs having less contact with patients in the community and being unable to certify deaths, and changes in the process of dealing with and reporting deaths in the community which has impacted negatively on the KPI. Work is progressing with all parties to address this and improve the results for the 2022-23 financial year.

Workforce: A Working Safely Hub was launched to provide learning and resources for staff.

COVID-19 Recovery: Additional recovery courts were introduced in September 2021 in the Sheriff Court and High Court to reduce the pandemic backlog. COPFS moved from the 2020-21 Business Plan priorities of Response, Recovery and Renewal to supporting the Strategic Plan priorities of Deliver High Quality Casework, Support our People and Improve our Service. Due to the COVID-19 pandemic restrictions, cases concluded increased by 35,988 (78%) compared to 2020-21 levels, and total complaints registered increased by 8,907 (12%) compared to 2020-21 levels.

Overall Portfolio Contribution to National Outcomes

Primary Outcomes

Communities: The work of COPFS contributed to the resilience and safety of communities across Scotland. COPFS receives reports about crimes from the police and other reporting agencies and decides what action to take, including whether or not to prosecute. The Service also investigates deaths that need further explanation and allegations of criminal conduct against police officers while on duty. COPFS promotes diversity and engagement with local communities across the country through its annual Schools Public Speaking Competition.

Human Rights: COPFS delivers justice and ensures the right for a fair trial for all, without which a fair and equitable society cannot function.

Secondary Outcome

Economy: COPFS contributes to making Scotland a safe and secure place to work, live and do business, protecting the economy by mitigating the negative economic impact of increased criminal activity.

Other Relevant Portfolio Performance Information

COPFS Annual Report

Additional information on COVID-19 spend

There is understandable interest in the level of spending on COVID-19 response. "Covid spend" is not, however, a budgetary or accounting classification and the portfolio statements in these accounts necessarily report against the authorised budgets at a higher level.

Building on the information provided in respect of 2021-2022, further information on Covid spend has been made publicly available to support scrutiny. The Scottish Government set out available funding and spending plans in the Budget and Budget revisions and information on spend was provided to the Finance and Public Administration Committee as part of the Spring Budget Revision process and then updated in the Provisional Outturn statement to Parliament in June.

The Governance Statement provides information on the Scottish Government's COVID-19 Recovery Strategy, and includes details on assurances on grants to Local Authorities for payment of COVID-19 support schemes. The assurance processes demonstrated that the Scottish Government managed and mitigated the fraud risk associated with business support funding.

During 2021-22 Scottish Government spent £5.7 billion on COVID-19 initiatives to provide support and help tackle the pandemic. Extensive support was provided across all sectors to support Scotland through this pandemic.

The highest spending portfolios include:

a. Health - spending £2.6 billion (46% of total COVID-19 expenditure). Delivering essential support to social care, vaccinations, test & protect among many other wider health and social care sectors. Any surplus reserves retained by IJBs are required to support ongoing COVID-19 costs across health and social care.

b. Social Justice, Housing and Local Government – spending £1.5 billion (26% of total COVID-19 expenditure). This includes £726 million of Non-Domestic rates relief, £259 million of General Revenue Grants to Local Authorities allowing them to allocate spend based on local needs and priorities, £80 million on Business Support Grants and £73 million on Anti-Poverty measures.

c. Finance and Economy – spending £789 million (14% of total COVID-19 expenditure). The majority of this has been channelled through Enterprise Trade and Investment for initiatives including Business Support £624 million and Self-Isolation Support Grants £64 million.

d. Net Zero energy and Transport– spending £479 million (8% of total COVID-19 expenditure) supporting the travel industry largely through a number of bus and rail schemes.

The table below updates the information on 2021-22 actual spend in more detail. Please note figures are provided based on a strict interpretation of where expenditure can be clearly distinguished between COVID-19 and non-COVID-19 spend.

Portfolio	Level 2	£'000s	Description of Spend
Constitution External Affairs and Culture	Culture and Major Events	87,819	Covid support provided to the culture, creative and heritage sectors as a result of the Omicron restrictions for their recovery from the pandemic. Targeted funds were administered by Creative Scotland on behalf of SG and included: recovery fund for cultural organisations; cancellation fund for cultural organisations; hardship fund for Creative Freelancers, additional funding for the Creative Scotland Open Fund, recovery fund for Independent Cinemas, Cancellation Fund for Creative Freelancers, and Platforms for Creative Excellence Resilience Fund.
	Historic Environment Scotland	20,373	£20 million - One off covid funding to meet income shortfall due to covid restrictions £373 thousand - Historic Environment Recovery funding
Constitution External Affairs and Culture Total		108,192
Corporate Running Costs	Corporate Running Costs	2,455	Includes: Covid catering subsidy, covid cleaning, data centre monitoring, Covid secure buildings & working from home equipment.
Corporate Running Costs Total		2,455
Deputy First Minister and Cabinet Secretary for Covid Response	Government Business	7,053	Costs relating to analysis and development of advice to Ministers, policy and legislation. Establishing the Covid Inquiry.
Deputy First Minister and Cabinet Secretary for Covid Response Total		7,053
Education and Skills	Learning	31,992	Capital - £4 million CO2 monitor and ventilation costs plus school transport costs. £12.5 million Additional Teacher Payments for Alternative Certification Model for the National Qualifications in 2020-21 £2.5 million funding for Outdoor Education Centres £3 million Education Scotland £7.5 million Education Recovery Funding £1.5 million Improvement, Attainment and Wellbeing £1 million Workforce Infrastructure and Reform
	Scottish Funding Council	22,400	£5 million Digital learning Further Education colleges £3 million Foundation Apprenticeships - Further Education £4.4 million Mental health Further Education colleges £3 million Student support - summer courses -Further Education £7 million Graduate apprenticeships - Higher Education
	Higher Education and Student Support	19,611	£9 million Student Support - Summer Covid discretionary support agreed per 100 day manifesto commitments £5 million Student Support - Additional discretionary funding £5.6 million Student Support - 20-21 Covid discretionary funding carried forward
	Central Government Grants to Local Authorities (ES)	19,170	Pupil Equity Premium
	Early Learning and Childcare	8,360	Covid compliance
	Skills and Training	7,958	£2.5 million Wages & Salaries - Staffing Partnership Action for Continuing Employment (PACE) plus Young Person's Guarantee (YPG) £5.3 million Other Staff Related Costs - Pathway Apprenticeships Liability + National Transition Training Fund (NTTF) + Adopt an Apprentice (AAA) + Apprentice Transition Plan (ATP) + Partnership Action for Continuing Employment (PACE)
	Children and Families	3,500	£2.2 million - Disclosure Scotland - lost income due to free applications £0.1 million - Disclosure Scotland - Delivery of laptops to staff, refurbing office for 1 meter distance £0.9 million - Supernumerary staff (organisational recovery, virtual hearings team etc.) £0.3 million resumption of social work practise placement grant
	Advanced Learning and Science	3,353	£1.4 million Student Support and Participation - Covid expenditure including transfers for student support £2 million Community Learning and Development - The Community Based Adult Learning Recovery Fund
Education and Skills Total		116,344
Finance and Economy	Enterprise Trade and Investment	694,421	£624 million Business support grants £64 million Self Isolation support grants £4 million Total Operating Costs for teams working on COVID safer workplaces and business support / self isolation etc. £0.1 million non staff TOC costs for teams working on COVID safer workplaces and business support / self isolation etc. £2 million Capital business ventilation grants Offset by £1m in repayment of Covid Grants
	Tourism	51,760	Emergency funding administered by VisitScotland provided to businesses in the Tourism sector that were directly affected by the COVID-19 restrictions put in place in December due to the Omicron variant and funding provided to VisitScotland for the delivery of seven projects as part of the Tourism Recovery Programme. Also, COVID-19 funding administered by VisitScotland for the events sector, primarily in relation to events that were cancelled, postponed or restricted due to the Omicron variant.
	Employability and Training	20,230	Young Person's Guarantee - Local Partnerships funding to Local Government; College funding to Scottish Funding Council (SFC) / Student Awards Agency Scotland (SAAS); Developing the Young Workforce funding; Third sector funding Employability - No One Left Behind - Long Term Unemployed funding to Local Government; Skills Consequentials - Funding to National Transition Training Fund (NTTF), Climate Emergency Skills and Action Plan (CESAP), Talent Attraction and Women Returners North East Economic Recovery Support Fund (NEERSF)
	Finance	11,900	Marketing activity related to Covid
	Rural Economy Enterprise	8,484	Assisting companies & communities in difficulty and transition & resetting from COVID
	Planning	1,107	Legislative costs
	Registers of Scotland	760	Health & Safety/PPE equipment. Equipment to support Digital Submissions service and remote working of staff. Covid related closures.
	Strategic Industrial Assets	514	The Ferguson Marine Port Glasgow costs for covid related to absences, masks, sanitiser and distancing measures, this included costs to Dec 21 then further costs for Omicron in Jan 22
	Digital Strategy	313	Connecting Scotland project work & evaluation research
	Accountant in Bankruptcy	4	PPE Equipment. Anti-Covid lacquering. Training costs for Facilities Management staff to use Citrox fogging machine.
Finance and Economy Total		789,493
Food Standards Scotland	Food Standards Scotland	105	Office furniture for staff working from home, space solution costs and staff focus groups for returning to the office, and locum costs.
Food Standards Scotland Total		105
Health & Social Care	Additional Integration Authorities Support	366,000	Additional funding to support Integration Authorities.
	Social Care Support	306,000	Additional funding to support social care services and increased capacity.
	Vaccinations	273,000	Additional funding for the administering of the COVID-19 and extended flu vaccinations.
	Test & Protect	241,000	Additional funding provided to Boards which includes contact tracing and testing.
	Additional Staff Costs	206,000	Additional funding to support additional staffing requirement.
	NHS Board Support	183,000	Funding to meet additional financial pressures within Health Boards.
	Additional Personal Protective Equipment	174,000	Additional funding to provide PPE to Boards
	Revenue to Capital Transfer	129,000	COVID-19 research and additional equipment used to manage the consequences of the pandemic.
	Mental Health Support	120,000	Funding to support mental health impacts of the COVID-19 pandemic through delivery of the Mental Health Transition and Recovery Plan.
	Public Health Compliance	100,000	Support for public health compliance via business restrictions and self-isolation
	Additional Hospital Capacity	81,000	Additional funding to increase the bed capacity within hospitals
	Additional Social Care/Community Capacity	79,000	Additional funding to increase the capacity of social care providers
	NHS Recovery	60,000	Additional funding for recovery of COVID-19 related backlog
	Equipment & Maintenance Inc. IT	45,000	Additional funding to provide Boards with sufficient equipment as was needed.
	Additional Infections Prevention and Control Costs	38,000	Funding to support additional cleaning procedures
	Military Assistance	24,000	Additional funding for military support with vaccinations
	Scale up of Public Health measures	23,000	Funding to provide additional capacity within Public Health measures.
	Multidisciplinary Teams	20,000	Funding to support the recruitment and development of Multidisciplinary Teams to support delayed discharge
	Family Health Services Costs	17,000	Additional funding to support pharmaceutical, dental and ophthalmic services
	Marketing	15,000	Funding for public awareness campaigns to inform public of COVID-19 and Flu risks.
	Other (range of items under £10 million)	142,000
Health and Social Care Total		2,642,000
Justice	Scottish Courts and Tribunal Service	34,162	£20.4 million - Various business costs e.g. building works/signage, health & safety, security, utilities/cleaning, IT, network costs. £3.6 million - Income shortfall funding £1.5 million - Judicial costs - goods and services £1 million - other court expenditure £3.6 million - SCTS Staff costs £4 million - Capital - Digitisation/business continuity spend associated with homeworking and Renew Recover Transform Digital courtroom tech including laptops.
	Scottish Police Authority	12,300	£2.5 million - Mainly PPE £2 million - Additional staffing cost £6 million - loss of income due to COVID-19 £2 million - Overtime
	Community Justice Services	8,496	£8.4 million - Covid consequential funding has been allocated for use by justice social work services in directly addressing the impact of the pandemic. Additional Homeworking allowance & equipment used to manage the consequences of the pandemic Renew Recover Transform programme post - Additional temporary capacity to assist in recovery work in response to the pandemic
	Miscellaneous	7,635	£7 million - Legal Aid Business Support and Recovery Fund £1 million - covid consequentials for grants for veterans.
	Scottish Prison Service	2,848	£0.4 million - Virtual courts £0.1 million Mobile phone units £1.5 million - Mobile phone charges & Food costs £0.4 million - PPE and Cleaning £0.3 million - Ex gratia and Temp staff
	Scottish Fire and Rescue Service	2,222	Increased overtime, Retained and Volunteer Duty System COVID payments, cleaning
Justice Total		67,663
Net Zero Energy and Transport	Concessionary Fares and Bus Services	243,346	£99 million - Covid Support Grant re Free Bus Scheme. £144 million - £51 million Covid Support Grant re Bus Service Operating Grant; £93 million Covid Support Grant re bus industry restart (COVID-19 Support Grant-Restart).
	Rail Services	187,600	Emergency Measure Agreements expenditure for Rail Franchises
	Ferry Services	16,000	Covid support for loss of farebox revenue as a result of physical distancing restrictions restricting capacity
	Active Travel Low Carbon and Other Transport	14,462	Support for Light Rail
	Air Services	10,500	Covid support for loss of revenue due to impact of travel restrictions on the aviation sector
	Environmental Services	4,662	£0.2 million - COVID measures including portaloos, additional cleaning and health and safety measures £0.2 million - Loss of revenue and rental income. £0.2 million - Additional seasonal staff costs for visitor managenent during covid £0.5 million - Seasonal rangers all other costs - equipment/out of pocket/travel etc. (£268 thousand); Green Recovery Fund (£250 thousand); and other costs incurred supporting home working by staff due to covid (£11 thousand) £1.7 million - National Nature Reserves visitor management and Better Places Fund £0.2 million - National Nature Reserves visitor management £0.6 million - Better Places Fund £1 million Covid Waste water
	Research Analysis and Other Services	2,517	£0.1 million - Additional Cleaning costs £2.4 million - Reductions in events income and trading income.
Net Zero Energy and Transport Total		479,087
Revenue Scotland	Revenue Scotland	67	IT hardware and consultancy on home working plans
Revenue Scotland Total		67
Rural Affairs and Islands	Rural Services	6,990	Additional Covid relief funding for producers and wholesalers
	Marine Scotland	68	Deep cleaning of vessels, additional berthing, Travel & Subsistence and agency staff cover. In addition, a small element of costs associated with equipment for home working.
Rural Affairs and Islands Total		7,058
Scottish Fiscal Commission	Scottish Fiscal Commission	1	Staff costs
Scottish Fiscal Commission Total		1
Scottish Housing Regulator	Scottish Housing Regulator	2
Scottish Housing Regulator Total		2
Social Justice Housing and Local Government	Local Government	1,480,490	Covid allocation to Local Authorities; Education Recovery funding; Non Domestic Rates relief funding; Anti-poverty measures relief funding; Self-isolation payments funding; tenant grant funding; CO2 monitors funding; Financial insecurity funding; Covid Business Support administration funding and Business Support and Low Income Household funding. Winter Support & Food Insecurity.
	Social Security Assistance	18,944	Carers Allowance Supplement
	Housing	16,467	£1.7 million Ending Homelessness Together Fund £0.2 million PRS Emergency Loan Admin £10 million Fuel Insecurity Fund £2.6 million Discretionary Housing Payments £2 million Tenant Hardship Fund
	Third Sector	15,176	Community and Third Sector Recovery Programme
	Cities Investment and Strategy	8,335	£0.3 million Greenspace Memorials £5.4 million Community & Third Sector Recovery Programme £2.6 million Scotland Loves Local & Business Improvement Districts (BIDs)
	Social Security (Agency)	18	Staff equipment to support home working
Social Justice Housing and Local Government Total		1,539,430
The Crown Office and Procurator Fiscal	The Crown Office and Procurator Fiscal	5,477	£4.5 million staff costs for the ongoing court recovery programme £1 million Non-staff costs including IT equipment, additional licences, recruitment checks, staff training, furniture and other back office expenses
The Crown Office and Procurator Fiscal Total		5,477
Grand Total		5,764,427

Statement of Financial Position

The primary purpose of these accounts is to reflect the use of resources. The Performance Overview section sets out the financial performance in terms of the outturn compared to Budget authorised by the Scottish Parliament. The Statement of Financial Position reflects the assets held and liabilities arising from the spending plans which support policy choices. Assets are held not for their income generation capability or their inherent value but for their service potential or as a direct consequence of particular policies, for example providing healthcare in hospitals and the provision of funding to students in the form of loans. Similarly, liabilities arise as a consequence of the timing of commitments relating to spending and policy choices.

The Consolidated Statement of Financial Position, is one of the primary financial statements in the Consolidated Accounts. It summarises what is owned and owed by the Scottish Government. This shows taxpayers' equity – an accounting measurement of the amount invested by taxpayers that has continuing public benefit. It shows how much of this has arisen from the application of revenues (including the Scottish Block Grant) and that which has resulted through changes over time in the value of physical assets.

It is important to note that the consolidated accounts bring together the "balance sheets" of bodies that are significant in their own right. Detailed financial and narrative information on the major items, for example the road network, is available in the accounts and related reports of the relevant body - Transport Scotland; similarly, information about NHS bodies is in the detailed accounts for each body; the Student Awards Agency also provides separate reporting around student loans i.e. the loans are not within SAAS' accounts but they do provide information about their administration, and the loans themselves are reported within these consolidated accounts.

The Statement of Financial Position includes:

• items which are owned, have already been funded from revenues and will provide continuing economic benefit in future periods. These increase taxpayers' equity;
• items which are owed and expected to require to be funded from future revenues. These decrease taxpayers' equity;
• items owed to the Scottish Government; and
• an analysis between amounts that will release or require funding within a year and those which will be carried into future years.

Assets and liabilities

Physical assets are the highest value group of assets in the Consolidated Accounts with a value of £33,731 million at 31 March 2022 of which £23,051 million (68 per cent) relates specifically to the road network. There were additions of £817 million that resulted from capital investment, offset by disposals and the net effect of depreciation and revaluations.

Most physical assets are valued by professional valuers in line with recognised methodologies. This provides an assessment of the continuing benefit they provide in financial terms. Where these assets have been funded by traditional means through capital then there are no continuing liabilities relating to them (maintenance and repair costs will arise). Those funded through other means (such as Public Finance Initiatives, Non Profit Distributing Projects and Scottish Government borrowed funds) also lead to liabilities representing the amounts that will require to be met from future budgets. Only physical assets that are deemed surplus and 'held for sale' (£14 million) will release resources previously invested for future use.

Financial assets include loans made directly to other organisations and individuals, investment funds used to deliver development programmes and investments in nationalised industries plus fully or part owned companies. These assets are of continuing benefit to the Scottish Government, and have the potential over time to release the resources currently invested for future use – including reinvestment, in accordance with the terms of the loan or other investment made.

Where Scottish Ministers decide to make investments directly through the Scottish Government, Accountable Officers must ensure that appropriate diligence and consideration is carried out before any commitment is made to invest in accordance with the detailed guidance in the Scottish Public Finance Manual,^[44] support specific economic objectives and are in line with the outcomes set out in the National Performance Framework.

Such investments are exceptional in nature and investment is in accordance with Scottish Ministers' purpose of achieving a commercial outcome; this means that the investment should be able to demonstrate a potential return commensurate with the risk associated with the proposal.

For the purposes of assessing the valuation of such investment for accounting purposes, IFRS 9 applies an "expected credit loss model". This is not a write-off of those investments or a prediction of loss but a measure of the risk in the investment which means that the assessment for accounts purposes has to take a prudent view of whether a positive outcome can yet be substantiated.

Burntisland Fabrications Limited (BiFab)

In the 2018/19 financial year, the Scottish Government converted £37.4 million of loans previously advanced to BiFab on a commercial basis to equity in the company. As a result of the conversion of these loans, the Scottish Government now holds a 32.4% equity stake in BiFab. The equity stake in BiFab was valued at nil in the 2019/20 annual accounts.

The BiFab administration is ongoing and is due to end on 13 December 2022. This will likely be extended due to the ongoing pursuit of a BiFab debtor. The Scottish Government holds a second-ranking security in the Administration of BiFab, and is pursuing a return on its investment, however, the value of the return is not known at this stage. In 2020-21, loan funding of £600,000 was agreed for the administrators of BiFab, Teneo, to pursue a commercial claim against a pre-administration customer. To date Teneo have not drawn more than £300,000 of the £600,000 loan facility, and negotiations with the BiFab debtor are ongoing. As a secured creditor, Scottish Government's primary interest in BiFab itself is now pursuing a return through the administration process.

The delays to the NnG contract award, the decision to award the Seagreen contract to overseas competitors, compounded by the majority shareholder's continued lack of financial support for the business greatly weakened Bifab's cashflow and balance sheet. In light of this, the company was placed into administration on 14 December 2020. Scottish Ministers remain committed to a sustainable future for the sites at Arnish, Burntisland and Methil. In support of this, the Scottish Government provided funding to the Administrators of BiFab to allow a sales process to be conducted and support the pursuit of a financial return to Scottish Government, as a high-ranking creditor, through the administration process. This process resulted in a sale of the business to InfraStrata PLC, trading as Harland & Wolff, in February 2021. There have been no further developments to note in the financial year 2021-22.

Ferguson Marine (Port Glasgow) Limited

Ferguson Marine has been in a period of turnaround since late 2019. The past two years have been challenging, exacerbated by the global COVID-19 pandemic, and a complex range of issues have been addressed in that time.

On 16 August 2019, Ferguson Marine shipyard was placed in administration. In order to remove the threat of closure, the Scottish Government took control of the operations at the yard under a management agreement with the Administrators of the business. This intervention by Scottish Ministers ensured continuity of employment for the workforce and continued work on the vessels under construction during the period of Administration. On 2 December 2019, following a marketing process by the Administrators, the Scottish Government completed a commercial transaction to bring the shipyard into public ownership. The move to bring Ferguson Marine into public ownership demonstrated Scottish Ministers' commitment to protecting the jobs at the Port Glasgow yard and securing a future for commercial shipbuilding on the Clyde.

A new CEO was appointed in February 2022 and the target date for the completion of Hull 801 (Glen Sannox) remains by end May 2023 and for Hull 802 by end December 2023. No change to these target dates has been agreed by Ministers and we continue to press FMPG for completion to these dates.

The contracts for the completion of vessels 801/802 by Ferguson Marine were restructured to implement a contractual relationship which reflected the commitment from Scottish Ministers to fund the completion and delivery of the two ferry vessels. The Scottish Government entered into new contracts with Ferguson Marine in 2021 which replaced the original contracts between CMAL and the shipyard. This reorganisation resulted in the vessels being transferred onto the Scottish Government's balance sheet as Assets Under Construction in partial repayment of the outstanding voted loans and also resulted in a write-off of the residual voted loan balance.

The Scottish Government has not agreed to an increase in funding for Ferguson Marine since the 23 March letter to MSPs setting out delivery costs. In relation to costs and schedule, the Cabinet Secretary confirmed in the Chamber on 23 March 2022, that the cost to complete the build of the ferries from the point of public ownership rose from the £110.3m-to-£114.3m range (previously communicated to Parliament in December 2019) to a range of £119m-to-£123m.

Following the FMPG Board meeting on 22 September, the CEO wrote to the Scottish Government setting out his proposals relating to the increased cost estimates and timetable for delivering both vessels. He also provided an update to the Net Zero, Energy and Transport Committee. The Scottish Government's priority now is to undertake its own due diligence and this will be supported by external, independent financial advisors to ensure that a rigorous approach is taken to scrutinise this request for additional funding. As at November 2022, no decision has yet been made on these projected increases.

Ferguson Marine is included within the Significant Issues section of the Governance Statement.

Lochaber Aluminium Smelter

In December 2016 the Scottish Government entered into a 25-year financial guarantee relating to the hydro plant and aluminium smelter at Lochaber. This involved guaranteeing the power purchase obligations of the smelter if the business does not fulfil its obligations to pay for contracted power. The guaranteed annual amounts vary between £14 million and £32 million over the life of the contract. The Scottish Government receives an annual fee in return for the guarantee. The carrying value of this financial asset in the accounts is zero.

Lochaber Aluminium Smelter is included within the Significant Issues section of the Governance Statement.

Pensions

The Scottish Government consolidated accounts include as expenditure the employers' contributions payable for the financial year. Staff in the Core Scottish Government, Executive Agencies and Crown and Procurator Fiscal Service are members of the Principal Civil Service Pension Scheme (PCSPS). There is no pension liability in respect of the PCSPS within the Scottish Government consolidated accounts, because it is a UK scheme, administered by the Cabinet Office and it is not possible to identify the "Scottish share" of the underlying assets and liabilities of the scheme. The Cabinet Office produces separate pension scheme accounts, covering all members across the UK.

Staff in the NHS consolidated bodies can choose between the PCSPS and the NHS Superannuation Scheme for Scotland, which is an unfunded statutory public service pension scheme with benefits underwritten by the UK Government. The NHS scheme is administered by the Scottish Public Pensions Agency and annual scheme accounts are produced.

The liabilities to be met over time are not met from investments but paid out each year from the funding of the relevant schemes. The NHS scheme is funded within the Scottish Administration in the Scottish Budget; the PCSPS is dealt with through the UK annual process.

Borrowing

Capital Borrowing

Under Section 32 of the Scotland Act 2012, as amended by Scotland Act 2016 Section 20, additional borrowing powers were conferred on Scottish Ministers with effect from 1 April 2015. Any sums borrowed and repaid under these provisions must do so via the Scottish Consolidated Fund and hence be reflected in those accounts.

The first exercise of the Capital borrowing powers took place in 2017-18 where £450 million (the maximum available) has been drawn down to the Scottish Consolidated Fund from the National Loans Fund. This was followed by borrowing of £250 million in 2018-19, £405 million in 2019-20, £200 million in 2020-21 and £150 million in 2021-22.

The repayment of borrowing outstanding as at 31 March 2022 is scheduled as follows:

	Principal	Interest	Total
	£m	£m	£m
<1 year	67.2	15.9	83.1
1 – 5 years	289.8	55.4	345.2
>5 years	952.9	103.0	1,055.9
Total	1,309.9	174.3	1,484.2

An arrangement was agreed with HM Treasury for notional borrowing in 2015-16 and 2016-17 to meet the budget implications of the classification decision related to the introduction of The European System of National and Regional Accounts (ESA10) which required the capital value of a small number of NPD projects to be budgeted for in the years of asset construction. This required the notional amounts borrowed to be recorded against the Scottish Government's borrowing cap in each of these years, however no actual borrowing was undertaken.

Resource Borrowing

The first exercise of the Resource borrowing powers took place in 2020-21 where £207 million has been drawn down to the Scottish Consolidated Fund from the National Loans Fund. This was within the final limit for Resource Borrowing for the financial year 2020-21 of £300m. £319 million was drawn down in 2021-22 within the revised annual limit of £600 million. This limit was expanded following the Scottish Specific Economic shock powers being triggered and will apply until 2023-24. Further detail on the specific, annual and cumulative limits for Resource Borrowing are available in the Fiscal Framework Outturn Report for 2021-22.^[45]

The repayment of borrowing outstanding as at 31 March 2022 is scheduled as follows:

	Principal	Interest	Total
	£m	£m	£m
<1 year	72.1	4.5	76.6
1 – 5 years	400.4	11.3	411.7
>5 years	33.0	0.2	33.2
Total	505.5	16.0	521.5

Payment Policy

The Scottish Government policy requires that all suppliers' invoices not in dispute are paid within the terms of the relevant contract. The Scottish Government aims to pay 100% of invoices, including disputed invoices once the dispute has been settled, on time in these terms.

The Scottish Government has a 10-day target for paying bills to businesses in Scotland. This aspiration is above and beyond our contractual commitment to pay suppliers within 30 days. Paying supplier bills within ten working days is seen as a key objective, and an important expression of the Scottish Government's commitment to supporting business. The Scottish Government responded to the challenges of the pandemic and remote working by deploying continuity measures and introducing additional measures to enable payments to be made as quickly as possible. Payment performance did not drop significantly.

For financial year 2021-22, the Scottish Government, its Executive Agencies and the Crown Office and Procurator Fiscal Service made 97.1% of all payments within 10 days (2020-21: 96.6%). The specific payment performance of the individual bodies consolidated here will be reported separately within their individual accounts. The core Scottish Government made 97.7% of payments within 10 days (2020-21: 96.7%). The NHS bodies in Scotland made 81% of all payments within 10 days (2020-21: 83%).

The payment performance of the Scottish Government, its Executive Agencies and the Crown Office and Procurator Fiscal Service for 2021-22 was 99.1% (2020-21: 99.5%) of all transactions settled within the terms of its contractual 30 day payment policy. The specific payment performance of the individual bodies consolidated here will be reported separately within their individual accounts. The core Scottish Government made 99.3% (2020-21: 99.6%) of all payments within the terms of its contractual 30 day payment policy. The NHS bodies in Scotland made 92% (2020-21: 93%) of all payments within the terms of their contractual 30 day payment policy.

Sustainability and Environmental Reporting

The Scottish Government recognises that it has a responsibility to achieve the best results in terms of meeting sustainability criteria, and has set ambitious targets for improving the environmental performance of our estate.

The Scottish Government has developed guidance for central government and the wider public sector on the preparation of sustainability reports to complement Annual Reports and Accounts. The guidance is intended to form a key element of a sustainability reporting framework for the Scottish public sector (referred to as the Scottish Sustainability Reporting Framework). The Framework will aim to inform best-practice across the public sector and demonstrate a coherent approach which meets statutory and non-statutory sustainability reporting requirements in the most cost effective and least burdensome manner to help drive improvements in sustainability performance.

The guidance relates specifically to information to be included in Scottish Public Sector Sustainability Reports^[46] intended to complement Annual Reports and Accounts and expected to be consistent with the reporting requirements flowing from the Climate Change (Scotland) Act 2009 and the principles for sustainability reporting contained in HM Treasury guidance.

John-Paul Marks

Principal Accountable Officer