The Scottish Government Consolidated Accounts for the year ended 31 March 2024

Performance Report

Introduction

About the Scottish Government

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

A number of powers are reserved to the UK Government, including immigration, the constitution, foreign policy and defence.

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 Thjxxe King.

Performance Overview

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.

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).

The First Minister serving during 2023-24 was Humza Yousaf MSP, with John Swinney MSP appointed as First Minister on 8 May 2024.

Humza Yousaf MSP

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.

The Cabinet Team members serving during 2023-24 were as follows:

• Shona Robison MSP: Deputy First Minister and Cabinet Secretary for Finance
• Shirley-Anne Somerville MSP: Cabinet Secretary for Social Justice
• Neil Gray MSP: Cabinet Secretary for NHS Recovery, Health and Social Care (from 8 February 2024, previously Cabinet Secretary for Wellbeing Economy, Fair Work and Energy)
• Mairi Gougeon MSP: Cabinet Secretary for Rural Affairs, Land Reform and Islands
• Angus Robertson MSP: Cabinet Secretary for Constitution, External Affairs and Culture
• Jenny Gilruth MSP: Cabinet Secretary for Education and Skills
• Màiri McAllan MSP: Cabinet Secretary for Wellbeing Economy, Net Zero and Energy (from 8 February 2024, previously Cabinet Secretary for Net Zero and Just Transition)
• Angela Constance MSP: Cabinet Secretary for Justice and Home Affairs
• Fiona Hyslop MSP: Cabinet Secretary for Transport (from 8 February 2024)
• Michael Matheson MSP: Cabinet Secretary for NHS Recovery, Health and Social Care (until 8 February 2024)

The Cabinet was supported in 2023-24 by the following ministerial team:

• George Adam MSP: Minister for Cabinet and Parliamentary Business (Minister for Parliamentary Business until 7 February 2024)
• Graeme Dey MSP: Minister for Higher and Further Education; and Minister for Veterans
• Gillian Martin MSP: Minister for Energy, Just Transition and Fair Work (from 8 February 2024, Minister for Energy and the Environment from 13 June 2023, Minister for Energy until 12 June 2023)
• Tom Arthur MSP: Minister for Community Wealth and Public Finance
• Patrick Harvie MSP: Minister for Zero Carbon Buildings, Active Travel and Tenants' Rights
• Lorna Slater MSP: Minister for Green Skills, Circular Economy and Biodiversity
• Maree Todd MSP: Minister for Social Care, Mental Wellbeing and Sport
• Jamie Hepburn MSP: Minister for Independence
• Joe FitzPatrick MSP: Minister for Local Government Empowerment and Planning
• Jenni Minto MSP: Minister for Public Health and Women’s Health
• Natalie Don MSP: Minister for Children, Young People and Keeping the Promise
• Emma Roddick MSP: Minister for Equalities, Migration and Refugees
• Paul McLennan MSP: Minister for Housing
• Siobhian Brown MSP: Minister for Victims and Community Safety
• Kaukab Stewart MSP: Minister for Culture, Europe and International Development (from 8 February 2024)
• Jim Fairlie MSP: Minister for Agriculture and Connectivity (from 8 February 2024)
• Richard Lochhead MSP: Minister for Small Business, Innovation, Tourism and Trade (Minister for Small Business, Innovation and Trade until 12 June 2023)
• Kevin Stewart MSP: Minister for Transport (until 30 June 2023)
• Elena Whitham MSP: Minister for Drugs and Alcohol Policy (until 6 February 2024)
• Christina McKelvie MSP: Minister for Drugs and Alcohol Policy (Minister for Culture, Europe and International Development until 7 February 2024)
• Fiona Hyslop MSP: Minister of Transport (between 13 June 2023 and 7 February 2024)

Law Officers during 2023-24

• Dorothy Bain KC: Lord Advocate
• Ruth Charteris KC: Solicitor General

Further information on Cabinet and Ministerial responsibilities is available from the Scottish Parliament and Scottish Government websites, at parliament.scot and gov.scot respectively.

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 to 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 in Scotland 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 eight 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 at gov.scot.

Permanent Secretary in post during 2023-24 was:

John-Paul Marks: Permanent Secretary

Directors General in 2023-24 were:

• Lesley Fraser: DG Corporate
• Gregor Irwin: DG Economy
• Louise Macdonald: OBE DG Communities
• Caroline Lamb: DG Health & Social Care
• Neil Rennick: DG Education and Justice (from 17 July 2023)
• Joe Griffin: DG Education and Justice (until 4 September 2023); DG Strategy and External Affairs (from 4 September 2023)
• Alyson Stafford: CBE DG Scottish Exchequer
• Ken Thomson: DG Strategy and External Affairs (until 24 November 2023)
• Roy Brannen: DG Net Zero

Directors in attendance at Corporate Board during 2023-24 were:

• Nicky Richards: Director of People
• Jackie McAllister: Chief Financial Officer
• Ruaraidh Macniven: Solicitor to the Scottish Government
• Andy Bruce: Director of Communications and Ministerial Support

Non-executive members of the Corporate Board during 2023-24 were:

• Ronnie Hinds (until 5 June 2023)
• Belinda Oldfield
• Jim Robertson
• Jayne Scott
• David Martin (joined on 6 June 2023)

No other non-executive directors were invited to attend the Corporate Board.

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:

• 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;
• Participating in a number of 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.

Belinda Oldfield, Non-Executive Director, was the Non-Executive Member of the Strategic Design Authority for the 2023-24 period covered by the Accounts.

Jim Robertson, Non-Executive Director, was the Chair of SGAAC for the 2023-24 period covered by the Accounts.

Jayne Scott, Non-Executive Director, was Deputy Chair of SGAAC for the 2023-24 period covered by the Accounts

Ronnie Hinds, Non-Executive Director, stepped down as Lead Non-Executive Director on 5 June 2023 when his appointment as a Non-Executive Director with the Scottish Government ended.

David Martin became Lead Non-Executive Director on 6 June and by default a member of the Corporate Board on 6 June 2023. His first attendance at Corporate Board in this capacity was on 20 June 2023. This is a correction to the published Consolidated Accounts for 2022-23 which noted his membership commenced from 20 June 2023.

Changes to the Corporate Board since 31 March 2024:

• Jim Robertson stepped down as Chair of SGAAC, and therefore member of the Corporate Board, on 30 June 2024. The position was taken over by Jayne Scott on 1 July 2024, who vacated the position of SGAAC Deputy Chair on 30 June 2024. Manish Joshi, who was appointed as Non-Executive Director on 15 April 2024, became the interim Deputy Chair of SGAAC on 1 July 2024.
• Jenny Stewart joined the Strategic Design Authority on 29 May 2024 and therefore became a member of the Corporate Board.
• David Martin stepped down as Non-Executive Director on 18 June 2024. The Lead Non-Executive Director position was taken over by Belinda Oldfield on an interim basis.

Register of Interests

Any member of the Corporate Board who held company directorships and other significant interests during 2023-24 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.
  • Nicky Richards: Director of People: Shares held with Hargreaves Lansdown and Fidelity; Trustee of Simon Community Scotland.
  • Roy Brannen: Director General Net Zero: Fellow of the Institution of Civil Engineers and Institution of Highways & Transportation; Honorary Member of World Road Association; and shares held with Standard Life and Royal Mail.
  • Gregor Irwin: Director General Economy: Shares held with Baillie Gifford, Barclays Wealth, Fidelity, Fundsmith, BlackRock, Brown Advisory Global Leaders, Loomis Sayles US Equity Leaders, Stewart Investors and Premier Milton US Opps.
  • Neil Rennick: Director General Education and Justice: Shares with Bank of Scotland; Board Member of Edinburgh World Heritage; and Scottish Government Member of the Advisory Council of the Judicial Studies Institute.
• Non-Executive Directors:
  • Ronnie Hinds: Chair of the Local Government Boundary Commission for Scotland.
  • Belinda Oldfield: Non-Executive Director and Chair of the Risk Committee of Northern Ireland Water; Non-Executive Director and Member of the Risk & Assurance Committee of Highlands & Islands Enterprise (until March 2024); Member of the Audit & Risk Committee of Strathclyde University; and Member of the University of Strathclyde Court (from September 2023).
  • Jim Robertson: Senior Fellow of the International Tax & Investment Center (ITIC); Director of JR Oil & Gas Limited, consultancy company registered in Scotland; Member of the Environmental Tax Sub-Committee, Chair of the Energy Transition workstream and Extractives Tax Sub-Committee in the United Nations; Member of the Governing Council, the Qualifications Board, the Devolved Taxes Committee and the Equality, Diversity & Inclusion Committee of the Institute of Chartered Accountants of Scotland; Chair of the Advanced Diploma in International Taxation Academic Board, Member of the Climate Change Working Group and the Equality, Diversity & Inclusion Committee of the Chartered Institute of Taxation; Chair of the Institute of Chartered Accountants of Scotland and Chartered Institute of Taxation working group on Building a Better Tax System (from July 2023); Partner at the G100 Global Women Leaders; Member of the Policy Dialogue on Natural Resource Based Taxation of the OECD Development Centre; and Member of the GlobalScot Network of Scottish Enterprise.
  • Jayne Scott: Partner at Scott Ross Partnership Management Consultants; Chair of the Private Healthcare Information Network; Board member of the Coal Authority; Board member of NHS Counter Fraud Authority (until October 2023); External Audit Committee member of the Information Commissioner’s Office; Chair of the Joint Audit Panel for the Metropolitan Police Service and the Mayor’s Office for Policing and Crime (from April 2023).
  • David Martin: Self-employed consultant for the Scottish Mentoring & Leadership Programme, the Hunter Foundation, SOLACE in Business - Recruitment and Assessment Services; Executive & Leadership Coaching at Care Inspectorate, and various local authorities. His sister-in-law, Gillian Martin is the Minister of Energy, Just Transition and Fair Work.

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 differences between the HMT required budgeting rules, which drive in-year financial reporting and the government financial reporting accounting requirements, which the accounts are required to comply with. These accounts therefore compare the actual outturn to the budget, both stated on the same accounting basis. Note 24 sets out the reconciliation and explanation of the budget reflected in the accounts with that shown in the annual budget documents.

Spending plans for financial year 2023-24 were set out in the Scottish Budget published on 15th December 2022. 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 2023 on 27th March 2023. 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 23^rd November 2023, and the Spring Budget Revision, made on 22^nd March 2024.

The budget of £54,257 million reported in these accounts is net of adjustments to reflect those activities not included in the accounting boundary as described below. This is made up of an operating budget of £51,766 million and a capital budget of £2,491 million.

The financial results for the year are reported in the attached accounts, based on the budget at Spring Budget Revision and in compliance with the government financial reporting accounting requirements. They record a Net Resource Outturn of £51,573 million against a budget of £51,766 million, resulting in an underspend of £193 million. The Net Capital Outturn for the year was £2,407 million against a budget of £2,491 million, representing an underspend of £84 million. The total outturn was £53,980 million, resulting in an underspend of £277 million which represents 0.5% of the total budget. Explanations are provided for the major variances in each of the Portfolio Outturn Statements, on pages 103 to 115.

An underspend of £292 million was set out as part of the provisional outturn announcement made by the Minister for Public Finance in June 2024, with spend of £49.3 billion against a total fiscal budget of £49.6 billion. The remaining funding of £292 million (which represented over just 0.6% of the total budget) has been carried forward within the Scotland Reserve if confirmed at Final Outturn, with no loss of spending power. This underspend varies from that set out within the accounts by £15 million as a result of the provisional outturn:

• being scored against the budget incorporating final funding changes post Spring Budget Revision (resulting in a movement of £258 million, which would reduce the Consolidated Accounts variance to £19 million). These are set out in further detail below.
• ring-fenced, non-cash, and Annually Managed Expenditure budgets that are included in the accounts but not in figures reported at Provisional Outturn. As well as covering all bodies within the Scottish Government budgeting boundary, which is wider than the areas incorporated within the accounts, and being prepared in accordance with HM Treasury Consolidated Budgeting Guidance rather than the Government’s Financial Reporting Manual (FReM). These total changes result in a movement of £273 million, resulting in the Consolidated Accounts underspend of £277 million.

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. Final outturn will be reported to Parliament once all accounts within the budgetary boundaries are finalised.

The £258 million of funding adjustments that reduced Scottish Government HM Treasury Budget limits following the completion of the Spring Budget Revision related to the following significant items:

• £151 million additional block grant funding confirmed as part of UK Government Supplementary Estimates, which meant that £310 million of funding was not required to be drawn down from Scotwind revenues;
• £87 million reduction in funding due to the decision to reduce borrowing levels as part of managing the year-end budget monitoring position, with final borrowing decisions always taken in the last month of the financial year; and
• £10 million less funding than had been anticipated from devolved tax receipts and other sources.

The funding adjustments are offset by ring-fenced, non-cash budgets and Annually Managed Expenditure which are not included in the figures reported in the Provisional Outturn.

The Total Outturn underspend of £277 million does not represent a loss of spending power to the Scottish Government. 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.

How the Scottish Budget is funded

There are a number of sources of funding to support the expenditure that is 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 2023-24, £15.4 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 collected and managed in Scotland by Revenue Scotland. A total of £853 million has been reported in respect of LBTT (£784 million) and SLfT (£69 million). These figures are in line with the Budget 2023-24 forecast. The Scottish Fiscal Commission is responsible for providing independent forecasts of tax revenue and provided the forecast for the Budget (Scotland) Act 2023. The Budget (Scotland) Act 2023 estimates were included in Scotland’s Economic and Fiscal Forecasts published in December 2023. Scotland’s Economic and Fiscal Forecasts – December 2023 | Scottish Fiscal Commission

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.scot and gov.scot.

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 Scottish Budget 2023 to 2024^[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 24 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 nine internal Portfolios, 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 30 March 2023.

• Deputy First Minister and Finance Portfolio
  • Executive Agencies:
    • Scottish Public Pensions Agency (Scottish Public Pensions Agency Website)
    • Accountant in Bankruptcy (Accountants in Bankruptcy Website)
• NHS Recovery and Social Care
  • Other Consolidated Bodies:
    • The NHS Bodies in Scotland (The NHS Bodies in Scotland Website)
    • Mental Welfare Commission (Mental Welfare Commission Website)
• Education and Skills Portfolio
  • Executive Agencies:
    • Disclosure Scotland (Disclosure Scotland Website)
    • Education Scotland (Education Scotland Website)
    • Student Awards Agency Scotland (Student Awards Agency Scotland Website)
• Justice and Home Affairs Portfolio
  • Executive Agency: Scottish Prison Service (Scottish Prison Service Website)
• Social Justice Portfolio
  • Executive Agency: Social Security Scotland (Social Security Scotland Website)
• Rural Affairs, Land Reform and Islands Portfolio
  • Executive Agency: Scottish Forestry (Scottish Forestry Website)
• Wellbeing Economy, Fair Work and Energy Portfolio
• Constitution, External Affairs and Culture Portfolio
• Transport, Net Zero and Just Transition Portfolio
  • Executive Agency: Transport Scotland (Transport Scotland Websitea)
• Other Consolidated Bodies:
  • The Crown Office and Procurator Fiscal Service (The Crown Office and Procurator Fiscal Service Websitea)

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 on our website^[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.

Statement of Financial Position

The primary purpose of these accounts is to reflect the use of resources. The Financial Performance: Outturn against Budget section (page 9) 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, (page 119) 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 £39,126 million at 31 March 2024 of which £27,428 million (70 per cent) relates specifically to the road network. There were additions of £672 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' (£7 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^[7], 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 delays to the Neart na Gaolthe turbine jacket generator 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 weakened Bifab’s cashflow and balance sheet. In light of this, the company was placed into administration on 14 December 2020. The administration period has been extended several times and is currently due to expire on 14 December 2024. A further 12 month extension request is anticipated.

Scottish Ministers remain committed to a sustainable future for the sites at Arnish, Burntisland and Methil. 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.

The one remaining asset of the BiFab estate is an outstanding debt claim against a BiFab customer for unpaid work. The claim has a potential recovery of up to £18.8 million arising from steel fabrication work carried out by BiFab between 2018 and 2020. As a secured creditor, Scottish Government’s primary interest in BiFab itself is now pursuing a return through the administration process.

Ferguson Marine (Port Glasgow) Limited

On 2 December 2019, the Scottish Government brought Ferguson Marine shipyard into public ownership. This intervention by the Scottish Government demonstrated Scottish Ministers’ commitment to protecting jobs at the Port Glasgow yard, delivering the two ferries under construction and securing a future for commercial shipbuilding on the Clyde.

Since the business was brought into public ownership, progress has been made on the vessels despite the impact that COVID-19, pandemic-related costs, and shortages of local skilled labour has had on delivery schedules. Due to the complexities of the Liquefied Natural Gas systems on MV Glen Sannox, the first dual fuel passenger vessel to be built in the United Kingdom, further delays related to the design and build materialised. The handover of Glen Sannox is due to take place in autumn 2024. All the lessons learnt in the design and build of Glen Sannox will be applied to the MV Glen Rosa, the handover of which is now planned for September 2025. The assets under construction have been valued as at 31 March 2024 for the Scottish Government in line with standard accounting procedures, and have had an impairment applied to ensure that the asset value is properly reflected in the annual accounts.

Ferguson Marine is continuing in parallel to deliver and submit bids to secure additional work in the commercial sector. The Scottish Government stands ready to support the shipyard in securing this work subject to the completion of the required due diligence. In addition, during early 2024, the shipyard replaced the previous Chief Executive Officer (CEO) with an interim CEO to ensure continued progress on both large ferries. Prior to his departure, in his update to the Net Zero, Energy and Transport Committee and Public Audit Committee of 26 February 2024, the former CEO confirmed that there would be a reforecast of the cost to complete both vessels (£149.1 million for Glen Sannox, and £150 million for Glen Rosa). While these figures may be subject to change, the Scottish Government will continue to carry out the required due diligence on these cost forecasts in line with the guidance in the Scottish Public Finance Manual to ensure that the current contracts remain the best route to securing the lifeline ferry services.

Ferguson Marine is included within the Significant Issues section of the Governance Statement; for more details, see page 67.

Lochaber

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.

Glasgow Prestwick Airport

Glasgow Prestwick Airport was purchased by the Scottish Government in 2013 with the stated aim of protecting jobs and safeguarding the asset. The total investment consists of capital spend of £43.4 million and interest of £12.1 million, with no new capital invested since 2019.

Glasgow Prestwick Airport has demonstrated its key strength in offering a diverse range of services to different markets and returned an operating profit of £2.1 million in 2022-23, with results for 2023-24 expected late in 2024. This is the fourth consecutive year in profit and continues the positive trajectory over the last five years. Despite challenging market conditions, the airport was able to adapt and recruit, with staff working hard to deliver a safe, secure, and efficient service with passenger numbers increasing on the previous year.

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, £150 million in 2021-22, £300 million in 2022-23, and £300 million in 2023-24.

The repayment of borrowing outstanding as at 31 March 2024 is scheduled as follows:

	Principal	Interest	Total
	£m	£m	£m
<1 year	100.2	34.4	134.6
1 – 5 years	473.7	121.3	595.0
>5 years	1,189.8	140.3	1,330.1
Total	1,763.8	296.0	2,059.7

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 Non-Profit Distributing 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 then drawn down in 2021-22, £47 million in 2022-23, and £104 million in 2023-24 all within the revised annual limit of £600 million.

Further detail on the specific, annual and cumulative limits for Resource borrowing are available in the Fiscal Framework Outturn Report for 2023-24^[8].

The repayment of borrowing outstanding as at 31 March 2024 is scheduled as follows:

	Principal	Interest	Total
	£m	£m	£m
<1 year	123.1	8.6	131.7
1 – 5 years	341.8	16.4	358.2
>5 years	11.4	0.2	11.6
Total	476.3	25.2	501.5

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.

For financial year 2023-24, the Scottish Government, its Executive Agencies and the Crown Office and Procurator Fiscal Service made 97.8% of all payments within 10 days (2022-23: 97.3%). The specific payment performance of the individual bodies consolidated here will be reported separately within their individual accounts. The core Scottish Government made 98% of payments within 10 days (2022-23: 98%). The NHS bodies in Scotland made 81% of all payments within 10 days (2022-23: 79%).

The payment performance of the Scottish Government, its Executive Agencies and the Crown Office and Procurator Fiscal Service for 2023-24 was 99.5% (2022-23: 99.3%) 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 99.5% (2022-23: 99.4%) of all payments within the terms of its contractual 30 day payment policy. The NHS bodies in Scotland made 92% (2022-23: 91%) of all payments within the terms of their contractual 30 day payment policy.

Performance Reporting

Throughout 2023-24, the Scottish Government enhanced its performance and delivery reporting, aiming to better track and ensure the successful delivery of our key priorities.

We have begun to consolidate information on our progress, targets, and budget, enabling us to provide Ministers with a comprehensive overview. The emphasis on performance reporting in 2023-24 was on the Policy Prospectus three missions, and we seek to evolve this work during 2024-25 and beyond.

Managing risks

The Governance Statement, within the Accountability Report of these accounts, provides detailed information on the management of the organisation’s key risks. See page 57 for further details.

Scottish Government Strategy

Our strategic objectives that we deliver against are contained within the:

• Policy Prospectus – the priorities for the parliamentary term
• Programme for Government – commitments for the year

On becoming First Minister, Humza Yousaf MSP published his Policy Prospectus on 18 April 2023, which set out three critical and interdependent missions:

• equality – tackling poverty and protecting people from harm;
• opportunity – a fair, green and growing economy; and
• community – prioritising public services.

Throughout that year, the Scottish Government also made progress to refine its approach to performance management, with an aim of becoming more outcome focused. These improvements sought to align our strategic priorities and strengthen our collective capacity towards achieving key priorities.

The Scottish Government Executive Team met weekly throughout 2023-24 with an emphasis on providing challenge, leadership and direction on the delivery of the key priorities across the organisation. Focus of meetings rotated across the three missions. In addition, the Scottish Government Executive Team reviewed performance data monthly, with Non-Executive Directors joining to offer independent scrutiny.

This approach will continue throughout 2024-25 as we coordinate our resources to progress the four priorities announced by the First Minister, John Swinney MSP, in May 2024. They are:

• eradicating child poverty;
• growing the economy;
• tackling the climate emergency; and
• improving public services.

National Performance Framework

The National Performance Framework (NPF) is Scotland’s wellbeing framework. It sets out the type of Scotland we want to see and, through the indicators, combines measurement of how well Scotland is doing in economic terms. A broader range of wellbeing measures determines progress towards our National Outcomes which align with the United Nations Sustainable Development Goals.

• Children and young people - We grow up loved, safe and respected so that we realise our full potential
• Communities - We live in communities that are inclusive, empowered, resilient and safe
• Culture - We are creative and our vibrant and diverse cultures are expressed and enjoyed widely
• Economy - We have a globally competitive, entrepreneurial, inclusive and sustainable economy
• Education - We are well educated, skilled and able to contribute to society
• Environment - We value, enjoy, protect and enhance our environment
• Fair work and business - We have thriving and innovative businesses, with quality jobs and fair work for everyone
• Health - We are healthy and active
• Human rights - We respect, protect and fulfil human rights and live free from discrimination
• International - We are open, connected and make a positive contribution internationally
• Poverty - We tackle poverty by sharing opportunities, wealth and power more equally

The National Outcomes set out the kind of country we want Scotland to be. Whilst we recognise there is more to do, the Policy Prospectus cross-cutting missions have helped us make progress towards our National Outcomes, including:

• the Equality mission delivered progress on the Poverty, Children and Human Rights Outcomes, by continuing to tackle poverty in all its forms, ensuring that children will grow up loved safe and respected, and targeting spending so it will benefit those who need it most
• the Opportunity mission contributed to Economy, Environment and Fair Work and Business Outcomes, by harnessing the potential of the green economy in Scotland and supporting businesses to create good, well-paying jobs
• the Community mission contributed to Communities, Education and Health Outcomes, focusing on the delivery of key public services.

Progress against the National Outcomes is measured using National Indicators, which are a range of economic, social, and environmental indicators, providing an overall measure of national wellbeing. This assessment of performance is made objectively and impartially by senior analysts in the Scottish Government and independently of Scottish Government Ministers.

The website details the performance of National Indicators: as of August 2024, currently 6 are still in development, 35 are maintaining, 21 are improving and 14 have worsening performance. Where no performance can be calculated, due to changes in methodology, these 5 indicators will start reporting performance when comparable data becomes available.

Performance Analysis

Financial performance

The Scottish Government’s accounts record total outturn of £53,980 million against a budget of £54,257 million, resulting in an underspend of £277 million. Financial results are reported on a portfolio basis in the Portfolio Outturn Statements on pages 97 to 109. Financial information is also provided on key areas reported throughout this Performance Analysis. A summary of the Financial Performance: Outturn against Budget is provided on page 9 in the Performance Overview.

Performance against Missions

This section provides details on the progress and achievements we have successfully delivered and the challenges we faced during 2023-24, including the current financial landscape in which the Scottish Government is operating.

Risk Management and Performance

The Governance Statement covers Scottish Government’s approach to managing risks, see page 64. Improvements to the Scottish Government’s assurance arrangements have been made throughout 2023-24 and will continue in 2024-25 to ensure that risk management is embedded into the delivery of the government’s missions, providing a more responsive and dynamic approach to emerging risk and the external risk environment.

Mission 1 – Equality: Tackling poverty & protecting people from harm

Child Poverty

Despite operating in one of the most challenging fiscal contexts since devolution, action on child poverty remained a key priority of the Scottish Government. We have continued to direct resources to those in greatest need and invest in key measures to tackle child poverty now and in the future. The annual progress report^[9] on child poverty, published in June 2024, sets out the wide-ranging action taken in 2023-24 towards eradicating child poverty including:

• expanding eligibility for Best Start Foods by removing income thresholds for all qualifying benefits from February 2024. It is estimated that an additional 20,000 pregnant women and young children are now eligible.
• awarding almost £430 million through Scottish Child Payment with more than 329,000 children benefitting from the payment as at 31 March 2024 (see figure 3). The payment is expected to keep 60,000 children out of relative poverty in 2024-25.
• publishing new guidance to support Local Authorities in continuing to mitigate the benefit cap as fully as possible through improved and more targeted support. This helped over 2,500 families with over 8,900 children, almost three quarters of which are lone parent families.
• providing free school meals to all 277,632 children in primaries 1-5 and in special schools, as well as eligible pupils from P6 through to S6, saving parents who take them up an estimated £400 per eligible child per year and ensuring that children have access to a free, healthy and nutritious meal every day they are in school and are therefore ready to engage in learning.
• making almost £103 million available to support continued delivery of key employability commitments, with 4,748 parents supported through No One Left Behind services between April and December 2023. Figure 1 shows the increasing demand for Scottish Government funded employability support between April 2018 and March 2024.
• providing free bus travel to over 2.3 million people through our concessionary schemes. Free bus travel for under 22s was introduced in January 2022, and 727,000 children and young people registered for free bus travel as of March 2024, a 20% increase from March 2023.
• increasing the take home pay of 6,700 employees through real Living Wage accreditation and improving pay and working conditions by requiring all public sector grant recipients to pay at least the real Living Wage from 1 July 2023.
• distributing a further £32 million across all Children’s Services Planning Partnerships through the Whole Family Wellbeing Funding programme, allowing them autonomy and flexibility to tailor whole family support activities to local needs and align them with broader children’s services planning work.
• investing around £2.9 million from the Tackling Child Poverty Fund to support our place-based collaborations, bringing together partners to deliver more cohesive and holistic services and for a preventative, person-centred support.

For statistical trends on child poverty, see figure 4 on page 26.

The below chart shows the total value of Scottish Child Payment paid by the month of the issued payment date. In the 2023-24 financial year, £429.3 million had been paid by 31 March 2024, taking the total value issued to clients since the benefit launched to £677.9 million.

Figure 3 shows the number of children actively benefitting from Scottish Child Payment broken down by each quarter. As of 31 March 2024, 329,055 children aged 0-15 years were actively benefitting from Scottish Child Payment.

While the action taken and progress achieved so far has been significant, we know that there is much more to do. That is why the 2024-25 Programme for Government will continue to drive forward action to eradicate child poverty.

Poverty & Cost of Living

We continued to allocate around £3 billion to policies which tackle poverty and protect people as far as possible during the ongoing cost of living crisis. In 2023-24 we:

• increased all Scottish benefits by 10.1% from 1 April 2023 at a cost of around £430 million, except for Scottish Child Payment which was increased by 25% from November 2022.
• introduced the Carer Support Payment to replace Carer’s Allowance in Scotland with national rollout from November 2024.
• paid over £30 million to households to help with the increase in energy bills through our Winter Heating Payments and Child Winter Heating Payments, totalling over 400,000 payments.
• made £83.7 million available to Local Authorities to spend on Discretionary Housing Payments, including £6.2 million to mitigate the UK Government’s benefit cap as fully as possible within devolved powers.
• protected investment in the Scottish Welfare Fund at £41 million to support those most in need.
• provided over £350 million to local government to deliver the Council Tax Reduction Scheme, ensuring over 450,000 households receive some level of Council Tax Reduction and on average recipients saving over £800 a year.
• invested £12.5 million in welfare, debt and income maximisation advice services including £1 million in a new programme to increase the accessibility of advice in places where people already go. More than 85,000 people received advice to improve household financial wellbeing.
• published and began implementation of a Plan, the first in the UK, that works towards ending the need for food banks in Scotland. “Cash-First: Towards Ending the Need for Food Banks in Scotland”, outlines nine actions that we will take forward over 3 years to improve the response to crisis. This includes a new £1.8 million Cash-First Programme (over 24 months) to improve urgent access to cash in a crisis.

Further information on the above is available in the Scottish Government’s Best Start, Bright Futures - tackling child poverty: progress report 2023 to 2024.

It is estimated that 21% of Scotland’s population (1,110,000 people each year) were living in relative poverty after housing costs in 2020-23, as illustrated by the above graph. The latest after-housing poverty estimate is similar to last year (21%) but slightly higher than levels in the last decade.

Higher food, fuel and energy bills, alongside the increase in interest rates, have affected households. Single parents, followed by single adult households, spend the highest proportion of their net income on housing, fuel and food so are disproportionately impacted by rises. Five of the NPF indicators on poverty showed maintaining performance, with one – wealth inequality - showing a worsening performance. The NPF indicator on unmanageable debt is maintaining performance albeit showing a slight increase in the estimated proportion of households falling behind with bills or credit commitments.

The transformation of the social security system in Scotland will continue into 2024-25 with the safe and secure transfer of cases from Department for Work and Pensions (DWP) to Social Security Scotland. This will bring tens of thousands more people into our social security system which is built on dignity, fairness and respect.

Childcare

We continued to deliver 1,140 hours of funded early learning and childcare (ELC) for all three and four year olds and eligible two year olds. The budget to local authorities totalled around £1 billion in 2023-24. There were 92,182 registrations for funded ELC in September 2023, including 76,436 three and four year olds, 6,636 two year olds, 556 children aged under two years old, and 8,554 deferred registrations. The most recent Improvement Service data, published in April 2024, shows that 85.1% of children registered were accessing the full offer of 1,140 hours in April 2024, an increase of 0.6 percentage points since April 2023.

School Age Childcare was delivered across four Adopter Communities (EAC), eight Access to Childcare fund projects, and 31 football clubs through the Scottish Football Association Extra Time Programme. Across all our School Age Childcare Programme tests of change, we are supporting 4,200 children to access services.

Life Chances

We are continuing to invest in keeping the Promise^[10] to our care-experienced children and young people. In 2023-24, we:

• provided national support for local delivery incorporating a Learning into Action Network for research and evaluation activities and collaborative partnerships with CSPPs; and funding for 12 cross-government projects helping to transform how families are supported;
• announced the Scottish Recommended Allowance for kinship and foster carers, supported by an additional £16 million per annum which will benefit over 9,000 families;
• took a significant step towards adoption of the Bairns’ Hoose Model with £3.5 million invested in six test-site Pathfinders; and
• invested £4 million Promise Partnership funding to help organisations with early intervention to improve support to children, young people, and families in or on the edges of care.

To help promote equality of delivery of services and improve life chances we have also:

• invested £4.2 billion in disability benefits, providing disabled people with a fundamentally different experience when applying for and receiving the support they are entitled to;
• implemented our Equally Safe strategy, backed by £19 million from Delivering Equally Safe Fund, supporting 121 projects since October 2021 with almost 32,000 people benefiting in the first year having a transformative impact on their lives;
• established the Equality and Human Rights Fund, which supports organisations to embed and mainstream equality and human rights within policy and practice. Since October 2021 £8.2 million has supported 48 organisations;
• worked in partnership with local authorities and the third sector that enabled Ukrainian people displaced by war to settle in Scotland;
• tackled gender inequality through National Advisory Council on Women and Girls;
• supported the narrowing of the gender pay gap for full-time employees in Scotland to 1.7% in 2023 from 3% in 2022;
• delivered the International Development Fund to support development work in our partner countries in pursuit of the UN Global Goals and to support some of the world’s poorest people; and
• invested £255 million in Scotland’s culture and historic environment to ensure, amongst other things, our diverse and world-class cultural sector continues to thrive against the impacts of inflation and public spending constraints and our historic buildings are protected against the impacts of climate change.

Mission 1 Case Study – No One Left Behind

Marc is a single parent and lives with his two daughters. Due to his disability and unsuitable working conditions, Marc had to make the difficult decision to leave his previous employment, leaving him out of work since January 2023.

In July 2023, Marc was referred to the Perth and Kinross Council Futures for Families service, delivered as part of the No One Left Behind approach. The service, which is joint funded by Perth and Kinross and the Scottish Government, offers a tailored package of support to eligible parents with the aim of securing well paid, highly skilled employment.

Marc had experience as a Hygiene Supervisor and in a variety of hospitality roles. Future for Families worked with him to build a CV and assisted him with job applications to help him find something more suitable for his needs. With this support, Marc began volunteering at the Strathmore Community Hub in Coupar Angus in August 2023.

During this time Marc worked primarily in the kitchen, preparing meals for community lunches and themed evenings. He also helped the Community Hub to set up a new library. Marc has nerve damage in his hand and the Community Hub have always been very accommodating of this, including ensuring that his workload does not involve any heavy lifting tasks.

Marc managed to create excellent relationships with staff members and other volunteers. The Community Hub were so impressed with his enthusiasm and work ethic that they wanted to offer him a part time role as Community Hub Cook.

The Community Hub successfully applied for financial support though the Future for Families Parental Employer Recruitment Incentive, which covered 50% of Marc’s wages. He officially started his new role at the beginning of December 2023.

With the support provided by Future for Families, Marc’s confidence has grown and he has managed to secure employment which works for him and his family.

Mission 2 Opportunity: A fair, green and growing economy

Climate Change

Scotland is at the global forefront of renewable and low carbon energy production – generating almost 90% of electricity in Scotland from zero or low carbon sources. The journey will become more challenging and key legislation is necessary to guide this, including the Heat in Buildings, Agriculture, Circular Economy, and Nature Bills, as well as a new carbon budget framework. In 2023-24 we:

• awarded £5 million through the Scottish Industrial Energy Transformation Fund to 15 industrial manufacturing projects, which leverages £9 million investment;
• awarded nearly £7 million in Hydrogen Innovation Scheme grants to 31 projects to drive innovation in renewable hydrogen production, storage, and distribution to help meet an ambition of at least 5GW of renewable and low carbon hydrogen by 2030 and 25GW by 2045. £3.4 million was provided within this financial year, with the remainder to follow in 2024-25;
• supported HydroGlen’s green hydrogen farming pilot with over £6 million;
• The Energy Transition Fund provided a total of £13.72 million for the 4 projects that are supported. This was distributed as follows: Energy Transition Zone Ltd £5.54 million, Net Zero Technology Transition Programme (delivered by the Net Zero Technology Centre) £6.16 million, Aberdeen Hydrogen Hub (delivered by Aberdeen City Council) £1.3 million and Global Underwater Hub £720,000;
• invested £3.21 million in the Wave Energy Scotland (WES) programme;
• formally launched the National Green Theatres Programme (NGTP) in March 2023 which aims to reduce the carbon footprint of clinical theatres across NHS Scotland. In its first year, potential opportunities for carbon and financial savings were identified equating to 20,422 tonnes of CO2e and £5.8 million of cash;
• invested £4 million to deliver the National Islands Plan and £1 million to implement Community Climate Change Action Plans for six carbon neutral islands, supporting a range of projects from small scale renewables to nature restoration efforts;
• invested almost £6m to support grassroots climate action through Community Climate Action Hubs, Climate Action Towns, the Climate Engagement Fund and Climate Action Schools initiatives helping people to understand climate change, reduce emissions and prepare for a changing climate; and
• invested £18m through our Just Transition Fund to accelerate the transition to net zero within targeted industries in the North East of Scotland.

New buildings constructed under a building warrant applied for from 1 April 2024, must use clean heating systems that produce zero or negligible levels of greenhouse gas emissions at point of use. In 2023-24, £200 million capital funding and £20 million revenue supported:

• over 128,000 households, of which 60,000 were vulnerable to fuel poverty, through the Home Energy Scotland Network;
• nearly 10,000 fuel poor households through the Warmer Homes Scotland programme and Area-Based Schemes;
• 6,600 homeowners that applied to the Home Energy Scotland grant and Loans scheme to undertake energy efficiency works and/or install Zero Direct Emissions Heating (ZDEH), resulting in 6,100 funding offers; and
• 337 homes connected to heat networks using clean heat sources – achieving the initial target.

We have committed strategic investment of up to £500 million in the offshore wind sector over five years to support market certainty, embed innovation, provide new jobs, and boost skills. A strong pipeline of port infrastructure and supply chain projects has been identified.

The Scottish Government remains fully committed to ending Scotland’s contribution to global emissions as soon as possible, and by 2045 at the latest – and the above graph illustrates our progress to date. It also shows that, in spite of strong progress over the long term, a number of more recent emissions targets have been missed as the task of decarbonisation has become steadily more challenging as the electricity system has largely decarbonised and the focus has turned to more dispersed and socially embedded emissions sources such as houses and vehicles. The GHG Account, which is used to monitor performance against emissions targets, reduced by 50.0 per cent between the baseline period and 2022, falling short of the target of 53.8 per cent. The NPF National Outcome for the Environment reflects this challenging context, with four improving indicators and three maintaining performance.

There were, however, challenges during 2023-24. These included the withdrawal of Highly Protected Marine Areas after consultation, a change to Heat in Buildings policies and the delay to the Deposit Return Scheme (DRS). The Scottish Government remains committed to the delivery of an interoperable DRS to realise the environmental and economic benefits it will bring and continues to engage constructively with industry and governments across the UK to support the delivery of a DRS in 2027.

The Climate Change Committee has challenged us to go further, and we will work with Parliament on a timetable to bring forward expedited legislation. Successful and continued delivery of the Adaptation Scotland Programme provides capacity building on climate adaptation for stakeholders. Our next Climate Change Plan will set out our approach to delivering Scotland’s net zero targets.

Rural Affairs

We matched the strong performance of 2022, to maintain stability for the rural economy and for the farmers and crofters who receive financial support. During 2023-24:

• £17.2 million was paid out to farmers, crofters and land managers for management actions which support biodiversity;
• £4 million was paid to help farmers and crofters manage their land to appropriate organic standards, with more than 88,000 hectares supported; and
• £1 million was invested to improve slurry storage capacity.

A significant challenge during 2023 was the requirement to draw down the maximum European Commission funding for Pillar 2 schemes, which had pre-2020 contracts, prior to 31 December deadline. All Agriculture schemes met 2023 Payment Strategy targets with over £557 million paid into the rural economy in 2023-24.

The Agricultural Reform Programme will ensure future support payments are linked to the contribution farmers and crofters make in delivering our climate and nature objectives. To support the transition over £2.6 million of Preparing for Sustainable Farming was paid. A new process for streamlining land inspections was implemented for 2023-24 to deliver these more efficiently.

We continued to support the marine sectors after EU Exit with the launch of Marine Fund Scotland. Over £40 million in grants were provided to more than 270 projects in the last three years, with 91 of those projects receiving over £14 million in 2023-24.

International fisheries agreebudments with Coastal State partners were reached for 2024 and provide key opportunities to vessels and coastal communities, building on the success of last year’s negotiations, which secured £600 million of fishing opportunities for Scotland.

In 2024-25, we will continue to protect our marine environment and the industries that rely on it and have committed to doing this in a fair and just way through the development of our National Marine Plan 2.

We committed £5 million in 2023-24 to support the delivery of Scotland’s food and drink strategy Sustaining Scotland, Supplying the World^[12] led by Scotland Food & Drink. A Food Security Unit was created with industry in the immediate wake of the conflict in Ukraine as recommended by the Short-life Food Security and Supply Taskforce.

Environment

Within our ten-year £250 million peatland restoration commitment, our £30.4 million investment in 2023-24 delivered restoration of 10,361 hectares of degraded peat. This is a 38% increase from the 7,468 hectares restored in 2022-23 and narrowly misses the 10,700 target. We have committed almost £50 million since 2021 through our Nature Restoration Fund, the investment has contributed directly to reducing greenhouse gas emissions and enhancing biodiversity to protect our land and seas for nature by 2030.

Scotland has the highest level of woodland creation for 34 years with 15,000 hectares of new woodland created in 2023-24, a significant increase from the 8,190 hectares created in 2022-23. Scotland has created nearly 75% of all new woodland in the UK and the highest level of native woodland creation since 2001 standing at 7,700 hectares.

Progress during 2023-24 included:

• over £8 million of Scottish Land funding to 41 groups, the total funding has now reached over £20 million to support 114 community organisations since 2021;
• air quality improvements for the second year running with all monitoring sites meeting their objectives reflecting a long-term downward trend in air pollution;
• around 400 community-led projects supported by Community Led Local Development Funds to strengthen the resilience and sustainability of communities; and
• the Circular Economy (Scotland) Act 2024 was unanimously passed by the Scottish Parliament in June 2024 and received Royal Assent on 8 August. It will support Scotland’s transition to a zero waste and circular economy and will help achieve our ambitions to increase reuse and recycling rates. The £70 million Recycling Improvement Fund has so far allocated £63 million to support 25 councils to reduce waste and increase recycling rates. Increased fixed penalties for fly-tipping offences, from £200 to £500, came into effect on 1 January 2024.

In 2023-24, we invested £61 million on flood resilience measures, with flood protection schemes being completed in Arbroath, Stonehaven and Caol and Lochyside. We also provided much needed support to communities in the aftermath of Storms Babet and Gerrit, including flood recovery grants to impacted homes and businesses.

Investment in Infrastructure

The Economy portfolio is at the heart of the Scottish Government’s vision to build a wellbeing economy that promotes fair green growth. Our National Strategy for Economic Transformation^[13] (NSET) outlines the type of economy we want Scotland to have by 2032.

Given the wider economic context, it is more important than ever we prioritise the actions that will most effectively grow our economy to tackle child poverty, drive progress towards net zero and increase investment in our public services. The following delivery milestones demonstrate progress against our strategy:

• our national Techscaler network provides support and incubation space to over 700 founders and over 2700 community members;
• we secured £350 million inward regional investment in the subsea cable manufacturing plant at Port of Nigg. Sumitomo’s new factory, supported by £24.5 million of public sector funding, is their first investment of this kind in Europe and the only such factory in the UK, which will create hundreds of green jobs over the next ten years;
• we secured further regional investment with Scottish National Investment Bank (SNIB) investing £50 million in a £100 million credit facility to enable the redevelopment of Ardersier. The investment, alongside £50 million from the UK Infrastructure Bank, comes as part of a £300 million investment commitment from global energy investor Quantum Energy Partners to establish the port (owned by Haventus) as a major hub for offshore wind. At full capacity it is estimated that the site has potential to enable around 3,000 jobs and reskilling opportunities for the community; and
• opened the National Manufacturing Institute to promote growth in the industry
• The Reaching 100% (R100) programme was a commitment to provide access to superfast broadband to every home and business in Scotland. This commitment has been fulfilled, and the over £600 million of R100 contracts continue to deliver full fibre, gigabit capable connections to some of Scotland's most rural communities. Over 61,000 connections have now been delivered, with more still to come. The Scottish Government will play a key role in the UK’s Government’s Project Gigabit delivery across Scotland, working to ensure that sufficient funding is available in Scotland.

Economy

In the year to March 2024, Scotland’s economy has shown improvements in growth, business activity, and consumer sentiment, and demonstrated resilience in the labour market. Despite a fall in the inflation rate over the year, according to the Consumer Prices Index, consumer prices are 22% higher in March 2024 than at the start of 2021. A record number of foreign direct investment projects (142) were secured in 2023, an increase of 12.7% from 2022. The Scottish Fiscal Commission estimate Scotland’s economic growth will strengthen to 0.7% in 2024, rising to 1.1% in 2025. The NPF Economy National Outcomes reflects this with four indicators improving and five maintaining performance. The Fair Work & Business National Outcome shows four indicators are improving, two maintaining and three have worsening performance.

The below graph shows the overall trend in Scotland’s onshore GDP. The changing pattern from 2019 shows the impact the COVID-19 pandemic had on Scotland’s onshore economy, and also the subsequent recovery. The pattern is broadly similar to that of the UK as a whole.

The high level “measures of success” for NSET are representative of the key areas where the programmes seek to shift the dial and were agreed based on:

• the detailed evidence base which underpinned creation of the strategy
• mapping of priority NSET actions to outcomes.

The latest performance against these success measures was set out in the second NSET progress report^[14] published in June 2024, some data from that report includes:

Entrepreneurial People & Culture – The number of high growth registered businesses increased by 365 between 2022 and 2023. The three-year business survival rate has decreased slightly over the latest two data points, from 58% down to 56%. Early stage entrepreneurial activity has increased by 0.5 percentage points from 2021 to 2022.

New Market Opportunities – Capital investment in Scotland rose by 7.8% in 2023 despite the increase in the cost of borrowing from higher interest rates and uncertain economic conditions. Scotland maintained its position as the most attractive area of the UK for inward investment, outside of London, for the eighth consecutive year.

Productive Businesses and Regions – Business confidence improved over the second half of 2023 and into 2024. However, business confidence remains slightly lower compared to the start of 2023, reflecting relatively subdued demand during 2023. Scotland’s Business research & development (R&D) spend was estimated at £2.7 billion in 2022. The proportion of businesses reporting staff are ‘fully equipped’ to meet the business’s digital technology needs fell between 2017 and 2021. Over the same period the proportion of staff reporting to be ‘well equipped but with some skills gaps’ increased from 48% to 56%, and the proportion reporting ‘considerable skills gaps’ fell from 19% to 15%.

Skilled Workforce – In some respects, performance of the Scottish labour market remains robust, with a low unemployment rate of 4% and 2.45 million payrolled employees remaining close to its record high. Labour market tightness has been softening over the past year with lower vacancy rates and recruitment activity.

A Fairer and More Equal Society – While there has been strong nominal wage growth over the year, high inflation has meant real earnings growth has been slow, resulting in household finances continuing to face significant pressures. In 2023, an estimated 89.9% of employees in Scotland aged 18 and over were paid at least the real living wage. The young people’s (16-24) employment rate was estimated at 55.9 per cent in 2023, decreasing by two percentage points from the previous year.

A Culture of Delivery – The recent Scottish income tax figures were published in July 2023 and show that the total amount of income tax generated by Scottish taxpayers in the 2021 to 2022 tax year was £13.7 billion – an increase of 14.9% compared to 2020 to 2021. Palma ratio figures (the ratio of the income shares of the richest 10% of people to that of the poorest 40%) for 2020-23 show that the top ten percent of the population had 34% more income (before housing costs) than the bottom 40% combined.

Successful delivery of the Cycling World Championships, Golf Championships and World Athletics Indoor Championships contributed to Scotland’s economy and promoted Scotland on the world stage for hosting major events. The cycling event alone achieved £205 million total GVA (Gross Value Added); £129 million total GVA in Glasgow; £220 million total visitor spend and over the course of their stay, international visitors contributed £115 million in direct spending into Scotland.

Opportunities

In September 2023, the UK agreed a deal to associate to Horizon Europe after four years of post-Brexit uncertainty. The Agreement enables UK-based researchers to fully participate in this €95 billion programme.

Mission 2 Case Study – Techscaler

When it comes to entrepreneurship, we know that some groups, such as women, those on low incomes and those without qualifications at further or higher education, experience barriers to access and opportunities. The Scottish Government continues to address these barriers through our Techscaler programme, which seeks to improve accessibility to people from all parts of Scotland’s society.

Through collaboration with partners, including AccelerateHER, Radiant & Brighter, DataKirk and Black Professionals Scotland, the Techscaler programme provides high-quality entrepreneurial education programmes, mentoring and community activity to under-represented groups throughout Scotland. In the last year, we have expanded Techscaler to seven regions of Scotland.

Based on applications to date, the programme has already begun boosting the involvement of under-represented groups in entrepreneurship.

• 36.3% of Techscaler applicants identify as non-White European, compared with 12.9% of the Scottish population who identify as coming from a minority ethnic background^[15]
• 36% of Techscaler Founder applicants are women which, whilst still not high enough, is well above the current rate of female-led incorporations in Scotland (roughly 20%)^[16]
• over 44% of members live outside of Scotland’s Central Belt.

But it is not only through its applicants that Techscaler is removing barriers for under-represented groups. The network also holds meetings at its hubs and supports events, such as the Scottish Black Data Summit, to build a supportive route for under-represented founders into entrepreneurship. The DataKirk Young Internship Initiative, for instance, sought to dismantle barriers to entry and empower Black youth in Scotland aged 14-22 by equipping participants with the knowledge, skills, and confidence to thrive in the professional landscape. Through this and a series of other initiatives and partnerships, Techscaler continues to work towards building an equitable and inclusive tech ecosystem in Scotland.

Mission 3 – Community: Prioritising our public services

During 2023-24 we successfully concluded negotiations on public sector pay awards to ensure our public sector workers received their increase timeously and limited any strike action. However, a challenging financial climate and certain fiscal constraints led to ongoing budget and resource challenges which resulted in difficult decisions having to be made in year, including a pause on significant infrastructure investment plans.

While it may take longer than initially anticipated to achieve some goals, our dedication to improving the wellbeing of our nation is unwavering. This journey is reflected in the NPF National Outcomes, with three Health, two Communities, and two Education indicators showing areas that need more attention and improvement, with Public Service Reform (PSR) playing a key role going forward.

Public Service Reform (PSR)

In December 2023, the Scottish Government published a refreshed 10-year programme of PSR with the following key objectives:

• to ensure public services remain fiscally sustainable, by reducing the costs, and reducing long term demand through investment in prevention;
• to improve outcomes, which will improve lives and reduce demand; and
• to reduce inequalities of outcome among communities in Scotland recognising the need not just for improved outcomes, but a focus in policy and delivery on those most disadvantaged.

This refreshed programme sets out over 30 actions under a comprehensive framework (convene, save, enable, align) to drive cross-Government work to deliver PSR. It sets out a clear vision for what services should look like in future; everyone should experience efficient, high quality and effective services. Where there is a risk of poor outcomes, we need to identify this early work with partners in the community and those individuals to understand and meet their needs. This is a preventative, place-based and relational approach to service delivery. We are committed to delivering PSR and recognise we cannot do this alone and are building a consensus with public bodies, wider public sector, and other partners on this approach.

In terms of driving service change, key progress has been made across the pathfinder programme. The Scottish Government is working in partnership with Clackmannanshire, Dundee, and Glasgow to tackle child poverty through transforming the way public services are delivered. Over 2,200 families have been supported so far across the relevant local authorities and, building on this, and lessons from delivery to date, we will expand with additional partnerships in 2024-25.

We continue to work with Convention of Scottish Local Authorities (CoSLA) to conclude the Local Governance Review by the end of this parliament. We have concluded engagement with communities on the future of decision-making in our towns, villages and neighbourhoods and will set out the findings and next steps over the summer. This will be accompanied by an update on locally led work in some of our rural and island authorities to develop alternative governance models that respond to local circumstances with the best use of available resources.

The PSR programme also encompasses the importance of delivering efficient services. We initiated a series of invest to save programmes, including the Single Scottish Estate programme; Commercial Value for Money programme; the expansion of Collaborative Procurement; Digital; and Automation programmes. In 2023-2024 the programmes of work were scoped out and mobilised, and collectively delivered secured over £40 million of cost avoidance and cash releasing savings. This is in addition to savings of over £130 million delivered in 2023-24 through our ongoing programme of national collaborative procurement.

Health & Social Care

Working with partners across health and social care the Scottish Government continues to support the recovery and reform of NHS services to improve services across our communities.

Investing in mental health services, primary and community care

A Mental Health and Wellbeing Delivery Plan^[17] was published in November 2023 to outline actions the Government will take in support of our Mental Health and Wellbeing Strategy^[18]. Direct Mental Health spend has helped to tackle Child and Adolescent Mental Health Services (CAMHS) and psychological therapies, waiting times backlogs, with national performance against the 18-week CAMHS standard in the last quarter (86.0%) being the best reported since the 18-week standard was introduced in 2014, and moving towards the Scottish Government target of 90%.

We are delivering improved community-based mental health and wellbeing support. The Mental Health and Wellbeing Fund was expanded in 2023-24 with £15 million for early interventions and other non-clinical support in communities, adding significant value to the 1,400 grassroots projects supported during 2022-23.

We have continued our investment in the primary care multi-disciplinary workforce and funded a further 100 medical students in 2023-24 as part of a commitment to increase places by 500 by the end of this Parliamentary term. Over 1,000 nurses, midwives and Allied Health Professions (AHP) were recruited through international efforts.

We invested £190 million of primary care funding in multi-disciplinary teams and in the development and expansion of Community Treatment and Care (CTAC) services. Almost £1 million of Inclusion Health Action in General Practice (IHAGP) funding supported 67 practices, serving the most deprived areas in NHS Greater Glasgow and Clyde, to take actions to tackle health inequalities. External evaluation has shown clear evidence of positive impacts with over 7,000 extended or outreach consultations delivered.

The Scottish Government is supporting increased investment in NHS dental services through the payment reform as part of a wider commitment to deliver more equitable and sustainable access for patients. We are also continuing to invest in community optometry through the universal free NHS eye examination, and the new Community Glaucoma Service is ensuring that more services are available within the community.

An additional £100 million was provided to support delivery of the real living wage for adult social care, building on previous increases, with over £1.7 billion now allocated to support social care and integration services.

Increasing capacity and activity and tackling waiting times

During 2023-24 we initiated national plans for specialties including orthopaedics, ophthalmology, diagnostic and cancer, taking a regional and national approach to tackling waiting times across NHS Scotland. The National Treatment Centre (NTC) Highland opened in April 2023 and has increased capacity for ophthalmic and orthopedic procedures. While the NTC programme has been paused due to capital funding constraints announced as part of the 2024-25 Scottish Budget, two further NTC’s are opening in 2024. Once fully operational the NTC’s will deliver around 20,000 additional planned care procedures per annum. A £1.8 million new digital dermatology programme will speed up treatment times for one of the longest waiting times across the specialties.

Overall, waiting times remain high, however, we have seen a number of significant reductions. Data shows a significant reduction of over 50% in the longest waits (over 2 years) for a new outpatient appointment at March 2024 compared to June 2022. Over the 12 months to March 2024, new outpatient activity was 2.2% more than previous 12 months. Numbers waiting longer than 2 years for inpatient or day case treatment reduced by 25% at March 2024 compared to June 2022.

Urgent suspicion of cancer referrals remained around 50% above pre-Covid levels and Health Boards are continuing to work towards ensuring cancer patients receive their first treatment within the 62-day standard. The University of Strathclyde’s evaluation report shows that Scotland’s Rapid Cancer Diagnostic Services (RCDS) are achieving what they set out to do to find cancer whilst delivering a high standard of quality care.

In 2023-24 we allocated over £12.6 million to Health Boards to support three CT scanners and seven mobile MRI scanners, used flexibly across NHS Boards. Board returns have confirmed that this extra funding and equipment delivered over 58,000 additional imaging scans.

£3.6 million was allocated to Hospital at Home for Older People in 2023-24 supporting over 150 extra virtual beds, with a further £4.1 million allocated to expand Hospital and Home pathways over the winter period. This investment reduces pressure on traditional acute settings by avoiding admissions and improving system flow – which is more important than ever as services face increasing levels of demand.

The below graph demonstrates that since the pandemic, the number of patients waiting over four hours has risen due to increasing pressure on the system driven largely by the admitted pathway leading to long waits in A&E and for ambulance handover.

Person-centred services

Further investment of £9 million continues support for a partnership to deliver help to cancer patients and their families dealing with the financial, emotional and physical health effects of the disease. This helps to reduce pressure on the NHS and makes a positive difference to people living with cancer and their families.

Investment of over £1.6 million in 2023-24 supported improvements to gender identify healthcare, in particular working with Health Boards to address waiting times and service capacity as well as supporting production of national standards for accessing and delivery of gender identity healthcare, and development of a transgender healthcare knowledge and skills framework.

We have invested over £2 million to date in funding healthcare models to support the aims of the Scottish Prison Service’s Strategy for Women in Custody, working with partners to develop appropriate trauma informed health care models at HMP Stirling and the Bella and Lilias Community Custody Units.

Improving outcomes for people impacted by alcohol and drugs

Our National Mission was supported by an increased investment of £160 million. This funded local and national initiatives to reduce the avoidable harms associated with drugs and alcohol. It has allowed us to continue to expand capacity in residential rehabilitation, to further implement standards of care for people on medication assisted treatment, and to ensure that up to 75% of people at risk of overdose have access to life-saving Naloxone kits. This includes having the first national police force in the world trained to carry and use these kits. Public Health Scotland has continued to improve and refine their public health surveillance system to prepare for the potential emergence of new drug trends. Data from Police Scotland shows there were 1,219 suspected drug deaths over the 12 months to March 2024 (114 more than the 12 months to March 2023 following a downward trend from early 2021 to late 2022). The Scottish Government is building on the foundations of the National Mission on Drug Deaths and investing an additional £250 million over the course of this parliament to make real change.

We delivered the continuation and increase to Minimum Unit Pricing of alcohol, a measure that is estimated by Public Health Scotland to have saved hundreds of lives and likely to have reduced hospital admissions wholly attributable to alcohol. Evidence shows that alcohol harm is greater for low-income households than more affluent households, where they consume the same amount of alcohol, therefore this is expected to further reduce health inequalities in Scotland.

Justice

The Vision for Justice^[20] was published in November 2023 and sets out Scottish Government’s transformative vision for the justice sector, providing an overview of work across the sector up to March 2026. Progress includes:

• working with our partners on establishing and implementing the judicially led Summary Case Management (SCM) pilots to reduce the number of unnecessary hearings at summary level by facilitating early disclosure of evidence, early engagement between Crown and defence and early judicial case management. Following successful pilots in Dundee, Hamilton and Paisley sheriff courts this was rolled-out to Glasgow Sheriff Court in January 2024; and
• investment of up to £20 million of our Cashback for Communities programme in projects delivering positive futures for our children and young people.

Police recorded crime remains below the position immediately prior to the pandemic (2019-20) and down 51% from its peak in 1991. The total number of crimes recorded by the police in 2023-24 was 299,780 which is 10,418 crimes (4%) higher than 2022-23.

The criminal court recovery programme commenced in September 2021 to address the criminal case backlog as a result of the COVID-19 pandemic. Scheduled trials peaked at 43,606 in January 2022 and reduced to 26,227 as at March 2024.

The prison population continued to be lower than in 2019-20, but there was a sustained population increase in 2023. The number of people held on remand remained at a considerably higher level than pre-pandemic. At the end of March 2024, the population^[21] increased to 8,040 with 2,176 (27%) on remand and 5,864 (73%) serving a sentence.

The new Stirling Prison was opened and provides world-leading facilities designed to meet the specific needs of women, focusing on rehabilitation, and reducing reoffending. Construction work on HMP Highland began this year, which will double the current prison’s capacity when it is completed in 2026.

We continued to progress our Digital Evidence Sharing Capability (DESC) programme with our criminal justice partners from its pilot in January 2023. This global first digital solution allows prosecutors, defence lawyers, court staff and judges to access evidence in a streamlined and efficient way This will resolve cases quicker and reduce the impact, inconvenience, and risk of trauma for victims, witnesses, and other justice users.

Education & Skills

We continued to invest in the £1 billion Scottish Attainment Challenge (SAC) programme to close the poverty related attainment gap. Local authorities set ambitious stretch aims for the three-year period 2023-24 to 2025-26. In 2023-24, funding included over £130 million in Pupil Equity Funding for headteachers to invest support for the children and young people who need it most; over £55 million to local authorities in Strategic Equity Funding and Care Experienced Children and Young People funding; and funding third sector partners to help tackle the cost of the school day, capture youth voice on readiness to learn and support youth work. The commitment to recruit 3,500 additional teachers by 2026 is unlikely to be achieved.

The overall pass rate for National 5, Highers and Advanced Highers in 2023 has increased from the 2019 pre-pandemic level, with a record number of passes in an exam year achieved at National 5.

The 2022 Programme for International Student Assessment (PISA) study published in December 2023 showed our performance in reading was above the Organization for Economic Cooperation and Development (OECD) average, with results in maths and science in line with the average. This was the same relative to the OECD average as in PISA 2018. However, Scotland's scores in maths and reading were lower in PISA 2022 than they were in PISA 2018. This was also the case for the OECD average and the majority of the countries taking part in the assessment. In response to the PISA results, the Scottish Government instigated a regular Curriculum for Excellence improvement cycle which will consider curricular areas in a planned and systematic way, including considerations around the relevance of curriculum content, role of knowledge, transitions between primary and secondary, and alignment between the broad general education and senior phase.

In 2023-24, we maintained Modern Apprenticeship new start numbers with 25,365 recruited. An estimated 1,250 people started Graduate Apprenticeships in 2023-24 and funding for up to 5,000 Foundation Apprenticeships was also provided.

Overall, more than 95 per cent (95.9%) of 2022-23 school leavers were in a positive initial destination. This is the highest figure since consistent records began in 2009-10. The coronavirus pandemic had an impact on the initial destination choices made by, and opportunities available to, school leavers. The greatest effect of the pandemic on school leaver destinations is likely to have been seen in 2019-20. It is likely, however, that there has been some ongoing impact on the destinations of some 2020-21, 2021-22 and 2022-23 school leavers.

The 2023-24 budget delivered around £2 billion investment in the post school system, principally via our colleges and universities. Financial support available to undergraduate students has risen by £900, meaning estranged students in higher education and other undergraduate learners with the lowest household income have seen their maximum support package increase from £8,100 to £9,000 per year.

According to the 2023 Annual Participation Measure 94.3% of 16-19 year olds were participating in employment, education or training, the highest on record since the series began in 2016 and an increase of 0.8 percentage points from 2022.

The below graph shows that the attainment gap under the All SCQF measure was 16.6 percentage points in 2022-23, increasing slightly from 16.2 percentage points in 2021-22. Longer term, the gap has narrowed most years, starting from 32.1 percentage points in 2009-10 and reaching its narrowest in 2020-21 (16.1 percentage points). The gap in 2022-23 is narrower than in all years other than 2020-21 and 2021-22.

Please note that the dotted line reflects changes to the assessment approach due to COVID-19, and that the All SCQF measure is not currently among the 13 key National Improvement Framework measures which are used to assess progress towards closing the poverty-related attainment gap.

We have set out plans for implementing reform of our education and skills bodies and put the voices of children, young people, and adult learners at their core, including by:

• developing the Education (Scotland) Bill to introduce Parliament (in June) to establish an independent office of HM Chief Inspector for Education and to enable the replacement of the Scottish Qualifications Authority with a new qualifications body by Autumn 2025. Work is progressing to appoint an institution to host our new Centre for Teaching Excellence by the end of 2024 and we are reforming our national agency, Education Scotland, to refocus on the curriculum; and
• publishing reports from the National Discussion, Independent Review of Qualifications and Assessments, the Independent Review of the Skills Delivery Landscape, and the Scottish Government’s Purpose and Principles for Post-School Education, Research and Skills.

Housing

We have progressed the delivery of affordable homes towards our 2032 target of 110,000 affordable homes, making housing available to those who need it most, tackling poverty and regenerating communities supporting economic growth and contributing to net zero targets. In 2023-24 we have:

• completed a further 9,514 affordable homes as part of the Affordable Housing Supply Programme, which is down slightly from the 10,458 delivered in the 12 months up to end of March 2023;
• we have delivered, since 23 March 2022, 21,092 affordable homes consisting of 15,964 (76%) homes for social rent, 2,904 (14%) for affordable rent and 2,224 (10%) for affordable home ownership. This includes homes through our investment in a National Acquisition Programme which has exceeded the £60 million commitment; and
• allocated £30.5 million to Local Authorities for homelessness prevention and a further £10 million for rapid rehousing transition plans and reducing numbers in temporary accommodation in 2023-24.

We will continue to take action to increase housing supply, investment and reduce homelessness in response to the housing emergency. The homelessness statistics^[22] published in February showed an 8% rise in the number of households and children in temporary accommodate between April and September 2023. A combination of supporting Local Authorities with the acquisition of homes, working with social landlords to increase the allocations of social homes to homeless households and tackling empty homes as a priority will bring more homes back to productive use.

Transport

Transport policies and operations are delivered through Transport Scotland focusing its activities on delivery, through the National Transport Strategy (NTS2). The first National Transport Strategy: Report to Parliament provides an overview of the commitments as detailed in the publication of its annual Delivery Plans and also its annual transport and travel statistics.

In the current five-year railway funding period (2019-2024), £4.85 billion has been allocated to maintain and enhance Scotland’s railway. Through the Rail Services Decarbonisation Plan improvements include a new railway station at East Linton, electrification of the Glasgow-Barrhead line and the East Kilbride Enhancement project. The Levenmouth project entered service in June 2024.

We continued to support concessionary travel schemes enabling half the population to access free bus journeys and introduced Scotrail Peak Fares Removal pilot in October 2023. Fares on the Northern Isles and Clyde & Hebrides ferry networks were frozen, with islander fares capped and four free single ferry journeys a year for young islanders.

We are progressing the delivery of the new ferries and the A9 dualling project as quickly as possible so that we can support and serve our rural and island communities and businesses. Planning, assurance, and reporting worked on the delivery of the two delayed ferries under construction at Ferguson Marine (Port Glasgow) Ltd continues. Funding was provided to procure four new major vessels for Islay and the Little Minch routes and they are scheduled for delivery in 2024 and 2025.

Over £450 million has been invested in the A9 Inverness to Perth dualling, and the target date for completion was revised to 2035 by the earliest. Work started on improving the resilience of the old military road at Rest and be Thankful (A83) and on a consultation on dualling Inverness to Nairn including the Nairn bypass (A96).

Low Emission Zones (LEZ) were created in our four largest cities, with enforcement in Glasgow from June 2023. In addition, the Active Travel Transformation Fund provided £20 million to Local Authorities, Regional Transport Partnerships and National Park Authorities to deliver active travel infrastructure.

The above graph shows the percentage of journeys made by main mode of transport in Scotland. The graph shows that in 2022, driving a car or van was the most common mode of transport, accounting for 55% of journeys. Walking was the next most popular mode of transport (23% of journeys). 11% of journeys were as car or van passenger, with 6% by bus and 2% by rail.

Mission 3 Case Study – Virtual School Headteacher (VSHT) Development of Care Experienced Children and Young People Groups, CELCIS

Supported by the Care Experienced Children and Young People funding as part of the Scottish Attainment Challenge, the VSHT in Aberdeenshire has been supporting the establishment and growth of ‘care experienced groups’ within schools.

The project was initiated by a Principal Teacher in one secondary school asking care experienced pupils whether they would be interested in joining a group for care experienced learners. This resulted in the establishment of a care experienced group within the school, who the VSHT started to liaise with on first coming into post. The group was able to undertake a residential trip shortly before the first COVID-19 lockdown, and continued to meet online throughout the lockdown. Since the establishment of this first group, the VSHT has supported and encouraged other schools in the local authority to grow groups based on the needs of their communities. The VSHT uses social media to communicate with young people and an online platform, ‘Your Place, Your Space’, where schools and learners share their experiences as well as providing a forum for all local care experienced young people to link them to organisations and showcases work across the local authority.

Care experienced groups of young people have met consistently and regularly, as part of the school timetable, in two schools in Aberdeenshire, providing safe spaces for children and young people who share common experiences to meet together whilst learning and participating in a range of cultural, social and voluntary activities both in and out of school. Teaching staff have developed greater understanding of this group of learners in their schools and their needs, have access to information which is helping to further reduce barriers to learning, and are able to quickly offer bespoke support as and when needs arise. There have been multiple benefits for individual learners within the groups and learners have been supported to access additional tuition, helped with transport to work experience opportunities, and have attended career-related training and courses. In doing so, this contributes to the mission of the Scottish Attainment Challenge to improve outcomes for children and young people impacted by poverty, with a focus on closing the poverty related attainment gap; and contributes to the ambitions of The Promise.

This case study, which is adapted from a 2022 publication, points towards a model that creates sustainable safe spaces for learners and a mechanism for schools to get to know care experienced learners in a deep and nuanced way. Further information is available in VSHT case studies :: Celcis. Further case studies and evaluation of the Scottish Attainment Challenge can be found on gov.scot.

Sustainability & Environmental Reporting

In accordance with the ‘Climate Change (Duties of Public Bodies: Reporting Requirements) (Scotland) Order 2015’ as amended by the Climate Change (Duties of Public Bodies: Reporting Requirements) (Scotland) Amendment Order 2020, the Scottish Government is required to report annually on compliance with climate change duties. Mandatory reporting began in 2015-16. Reporting is published in the form of Scottish Government’s Climate Change Duty Reports in Sustainable Scotland Network Reports^[23]. This includes Greenhouse Gas Emissions and is intended to complement Annual Reports and Accounts and will be available from November 2024.

We recognise our responsibility to achieve the best results in terms of meeting sustainability criteria and have set ambitious targets for improving the environmental performance of our estate. Our longstanding commitment to reducing our impact on the environment is achieved through effective sustainable management of our operations and estate and engaging with staff to embed sustainable development principles into day-to-day working practices.

A dedicated Environmental Management and Sustainable Travel Team (EMT) is responsible for climate change mitigation activities across the core estate, ensuring the corporate body meets its obligations. The EMT reports to the Director-General Corporate, a member of the SG Executive Team and the Place Board, is also kept informed of progress. The People and Place Board is a corporate board, responsible for overseeing our employer people policies and ‘Place’ in Scottish Government – the physical and digital spaces in which we work.

The EMT develops and progresses our Carbon Management Plan (CMP) that sets out our targets, objectives and activities for reducing emissions. Development of the CMP was overseen by the Sustainable Operations Steering Group (SOSG). The Corporate Environmental Management objectives and corresponding actions contribute towards delivery of our National Outcomes which help achieve societal wellbeing for all the people of Scotland.

The EMT is responsible for making progress against the environmental management objectives in the Scottish Government’s Environmental Policy, which states our intentions for managing our environment and sets out its commitment to reduce our environmental impact. The EMT also embeds climate change action as part of the daily environmental management of our estate. The team has recruited and trained a network of Environmental Champions who play a vital role in helping promote and address environmental issues.

The separate accounting entities within the Scottish Government consolidation boundary have Sustainability & Environmental reporting arrangements in place appropriate to their individual circumstances and in compliance with relevant guidance. Sustainability & Environmental reporting for separate accounting entities will be addressed as part of their annual accounts.

Forward Look

The 2024-25 Programme for Government was published in September 2024 and set out the Scottish Government’s policy delivery and legislative plans for the year ahead, focussing on the First Minister’s four key priorities of:

• eradicating child poverty;
• tackling the climate emergency;
• growing the economy; and
• delivering excellent and sustainable public services.

This is against a continued challenging financial context in 2024-25 and beyond as set out by the Cabinet Secretary for Finance and Local Government to Parliament on 3 September 2024.

We have established the Strategy & Delivery Directorate to support the Cabinet in delivering for the people of Scotland. Our intensified focus on performance and delivery will better align our budget with our strategic vision. Through developing interconnected deliverables and rigorous logic modelling, alongside implementing a portfolio management approach where suitable, we will seek to drive continuous improvements.

We remain committed to making the right, sometimes challenging decisions, continually assessing our options to ensure we navigate the optimal path. At the core of our approach lies evidence-based decision-making, which seeks to firmly embed a culture of delivery.

John Paul Marks

Principal Accountable Officer

08 October 2024