Scottish Parliamentary Corporate Body

Annual Accounts 2007-08

1 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

Contents

Page

Management Commentary 3

Remuneration Report 8

Statement of the SPCB's and the Clerk 13 and Chief Executive's Responsibilities

Statement on Internal Control 14

Independent Auditor's Report 16

Statement of Accounting Policies 18

Schedule 1 - Summary of Resource Outturn 21

Schedule 2 - Operating Cost Statement 22

Schedule 3 - Balance Sheet 23

Schedule 4 - Cash Flow Statement 24

Schedule 5 - Resources by Departmental 25 Aim and Objective

Notes to the Resource Accounts 26

Accounts Direction 36

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Management Commentary

The accounts have been prepared in accordance with the Direction by The Scottish Ministers given on 17 January 2006 in accordance with section 19(4) of the Public Finance and Accountability (Scotland) Act 2000.

HISTORY AND STATUTORY BACKGROUND

The Scottish Parliamentary Corporate Body (SPCB) was established in May 1999 under Section 21 of The Scotland Act 1998 (the Act). The SPCB comprises the Presiding Officer, and four other members of the Scottish Parliament elected by the Parliament. The SPCB has appointed a Clerk (who is also the Chief Executive) in accordance with section 20 of the Act, and other staff of the Parliament. The SPCB is independent of the Scottish Government.

PRINCIPAL ACTIVITIES

The Parliament exists to determine, debate, decide and legislate on issues of importance to the people of Scotland. In doing so, it holds the Scottish Government to account and is answerable to the people of Scotland.

The SPCB has a duty to provide the Scottish Parliament, or ensure the Parliament is provided with the property, staff and services required for this purpose. The Parliament may also give general or specific directions for the purpose of, or in connection with the SPCB’s functions.

The SPCB provides the infrastructure (including the Holyrood Building) and allowances which enable members to undertake their duties both at the Parliament and in their local offices. It provides the facilities and staff to allow the Parliament and its Committees to meet and encourage public awareness of and engagement with the parliamentary process.

THE SPCB AND SENIOR MANAGERS

The Members of the SPCB were: Appointed

Alex Fergusson MSP, Presiding Officer 14-May-07 Alex Johnstone MSP 24-May-07 Tricia Marwick MSP 24-May-07 Tom McCabe MSP 24-May-07 Mike Pringle MSP 24-May-07

On 14 May 2007, the Parliament elected Alex Fergusson MSP as the new Presiding Officer at which point he also became chair of the SPCB. He replaced George Reid who served as Presiding Officer from 7 May 2003 to 14 May 2007. On 24 May 2007, Alex Johnstone MSP, Tricia Marwick MSP, Tom McCabe MSP and Mike Pringle MSP were elected by Parliament as the new members of the SPCB, replacing John Scott MSP (SPCB member from 21 May 2003 to 24 May 2007), Kenny MacAskill MSP (SPCB member from 12 Jan 2006 to 24 May 2007), Duncan McNeil MSP (SPCB member from 20 Dec 2001 to 24 May 2007) and Nora Radcliffe MSP (SPCB member from 30 June 2005 to 24 May 2007).

The SPCB has agreed portfolio arrangements whereby members take a lead interest in specific issues. During 2007-08 these were as follows:

Alex Johnstone MSP (Kenny MacAskill MSP to 24 May) - Directorate of Technology & Facilities Management including building maintenance, IT and local office support.

Tricia Marwick MSP (Duncan McNeill MSP to 24 May) – Directorate of Access & Information including visitor services, events, public information, education and outreach, as well as broadcasting and the broader aspects of media relations; the Scottish Parliament Information Centre (SPICe) together with editorial content of the website and the intranet.

Tom McCabe MSP (Nora Radcliffe MSP to 24 May) – Directorate of Resources & Governance including Procurement, Allowances and Finance Offices.

Mike Pringle MSP (John Scott MSP to 24 May) – Directorate of Resources & Governance including governance, commissioners, equalities and Personnel Office. 3 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

A Register of Members' Interests is published on the Parliament's website.

The senior management employed by the SPCB, apart from Ann Nelson who was on secondment from the Scottish Government, during the 2007-08 financial year and up to the date of signing the Accounts were:

Paul Grice Clerk to the Parliament/Chief Executive Carol Devon* Director of Access and Information (until 17 October 2007) Stewart Gilfillan Director of Technology and Facilities Management Catriona Hardman* Interim Director of Legal Services (from 21 January to 27 June 2008) Ken Hughes Interim Director of Clerking and Reporting (from 1 November 2007) Ian Leitch Director of Resources and Governance Ann Nelson* Legal Adviser/Director of Legal Services (until 28 September 2007) Bill Thomson Director of Clerking and Reporting (until 21 October 2007) Interim Director of Access and Information (from 22 October 2007) Lynda Towers* Legal Adviser/Director of Legal Services (from 1 October 2007)

* Ann Nelson returned to the Scottish Government on 28 September 2007 and was replaced by Lynda Towers from 1 October 2007. Lynda Towers had a period of absence from 21 January 2008 to 9 June 2008. Catriona Hardman acted as Interim Director of Legal Services during this period including a 2 week handover on Lynda’s return. Carol Devon is on secondment to the Northern Ireland Assembly returning 1 August 2008.

The Remuneration Report contains information about the salary and pension entitlements of the named individuals.

The Clerk/Chief Executive and Directors hold their appointments on a permanent basis.

At the end of the financial year 18 staff (18 staff in 2006-2007) were on secondment from other organisations.

REVIEW OF THE PRINCIPAL ACTIVITIES

The principal activity of the SPCB and its staff during the year was the continued support of the work of the Parliament.

This is reflected in our management plan for 2007-10 which had 4 core services covering the provision of infrastructure and services to:

(1) Support the successful running and continuity of business in the Parliament including its Committees

(2) Support the successful performance by Members of their Parliamentary and representative functions

(3) Increase awareness and understanding of the Parliament

(4) Widen opportunities for engagement and participation in Parliamentary activities

In addition there were 6 key developmental programmes, which relate to the delivery of the core resources:

 2007 Election  Governance  Business Continuity  Visitors and Events  Information Management  Commissioners/Ombudsmen

A copy of our management plan covering this reporting period is available on www.scottish.parliament.uk.

In the course of the parliamentary year which ran from 9 May 2007 to 8 May 2008, seven bills were introduced by the Scottish Government, covering areas such as abolition of bridge tolls, graduate endowment abolition and the Glasgow Commonwealth Games. One Member's bill was introduced covering a Scottish register of tartans. All of these were scrutinised by the Parliament, in accordance with the 3 stage process laid down in Standing Orders.

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The Parliament held 190 debates in the Chamber on a wide range of issues, including debates on matters raised by committees and members. Subjects covered included EU reform treaty, energy, effective use of police resources, organ donation, Scottish wheelchair users and their human rights and proposed closure of rural schools.

The Parliament's committees undertook major inquiries on topics such as increasing tourism revenue, health inequalities and transposition of EU directives. Committees also scrutinised bills and subordinate legislation, the Scottish Government’s budget proposals and considered over 200 public petitions.

In June 2007, a full scale independent review of parliamentary allowances was announced. A panel was appointed and a report was presented to the SPCB and published on 11 March 2008. Scheme changes will be introduced from 2008-09 onwards. Additionally, work was ongoing during the year by the Scottish Parliamentary Pension Scheme Committee to inquire into and report with recommendations for a Committee Bill on a replacement for the Scottish Parliamentary Pension Scheme rules. The report was published at the end of May 2008, with a parliamentary debate held in June 2008. Further detail of the SPCB’s main activities are available in the SPCB Annual Report and further detail on Parliamentary activity is contained in The Scottish Parliament Annual Report 2007-08 which is available on The Scottish Parliament website, www.scottish.parliament.uk.

The Parliament has continued to hold committee meetings throughout Scotland, involving local people in issues that affect them.

Since Her Majesty the Queen formally opened the Holyrood building on 9 October 2004, over 1,500,000 people have visited the Parliament with 330,000 of those visiting during the parliamentary year 2007-08.

POSITION AT END OF YEAR

The net resource outturn for 2007-08 was £87.5m (2006-07 £87.7m). Salaries of parliamentary staff, MSPs and other office holders accounted for £33.0m (2006-07 £31.2m) of this total as disclosed in Note 2 to the Accounts. Members' allowances, which enable MSPs to secure staff and accommodation to assist them in the discharge of their Parliamentary duties were £9.7m (2006-07 £9.7m) as disclosed in Note 3 to the Accounts. Information on the financial position is contained in Schedules 1-5 with further disclosure in the Notes to the Resource Accounts.

The Holyrood building was completed and occupied in the 2004-05 financial year. However, there was some completion and snagging work during 2007-08 which is in the process of being concluded. An independent valuation following Royal Institute Chartered Surveyors (RICS) guidance and appropriate accounting rules was completed in 2004-05 and reflected in our accounts. The building was valued on the basis of depreciated replacement cost and was valued at £333m. Capital expenditure in 2007-08 amounted to £1.2m (2006-07 £0.4m) and is detailed in Notes 5 and 6 to the accounts.

Although the Commissioners and Ombudsman function independently of the SPCB, the SPCB is responsible for funding their activities. During 2007-08, funding paid to the Scottish Public Services Ombudsman was £3,034,000 (2006-07 £2,882,000), Scottish Information Commissioner was £1,525,000 (2006-07 £1,327,000), Commissioner for Children and Young People in Scotland was £1,238,000 (2006-07 £1,090,000), Commissioner for Public Appointments in Scotland was £410,000 (2006-07 £397,000), Scottish Parliamentary Standards Commissioner was £82,000 (2006-07 £72,000) and the SPCB disbursed expenditure on behalf of the new Scottish Commission for Human Rights of £39,000 (2006-07 £nil). Scotland’s Futures Forum Limited received funding during the year of £20,000 (2006-07 £18,000). All of these, apart from the Scottish Parliamentary Standards Commissioner, are responsible for preparing their own accounts and full details of their expenditure can be found via these organisations. Separate accounts have not been prepared this year for the Scottish Commission for Human Rights but will be in future years. A summary of funding provided is contained in Note 18 to the Accounts.

INDICATION OF LIKELY FUTURE DEVELOPMENTS

We will continue to provide high quality services to support the Parliament in its functions and we have identified 4 key developmental programmes to take forward in 2008-11 to help meet our strategic priorities. These are contained in our management plan 2008-11, which along with the 2007-10 management plan is available on the Scottish Parliament website (www.scottish.parliament.uk).

RISKS AND UNCERTAINTIES

The SPCB has developed a risk register identifying at a corporate level the high level risks it considers should be managed. The risk register is updated by Directors on a quarterly basis. The way the register is prepared and used 5 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______will be renewed to link in to the work on business continuity. Contingency arrangements in place ensured that, despite the unexpected problems with the chamber strut during the previous reporting period, the Parliament only lost half a day of business time.

EQUAL OPPORTUNITIES

The SPCB is committed to promoting equality of opportunity and eliminating unfair discrimination in its employment practices. It will take steps to ensure that all job applicants and staff will be treated fairly, with respect and without bias and that no one will be disadvantaged because of their gender; sexual orientation; marital or family status; racial group; religious belief, or a similar philosophical belief (or lack of any of these); disability; age; part-time or fixed term contract status; and trade union membership status/activities.

The SPCB has also adopted the two ticks Disability Symbol which recognises good practice in the employment of disabled people.

PENSION LIABILITIES

The treatment of pension liabilities and details of the relevant pension schemes are set out in the statement of accounting policies (note m).

SUPPLIER PAYMENT POLICY

The SPCB's policy is to comply with the Confederation of British Industry’s Prompt Payers Code. The target is for payment to be made within agreed payment terms or 30 days of receipt of invoices not in dispute for goods and services received. Average payment performance achieved for 2007-08 was 79.4% (2006-07 63.1%). In 2008-09 we will continue our programme to improve payment performance.

IMPORTANT EVENTS OCCURRING AFTER YEAR END

No important events have occurred since the year end that require disclosure or adjustment under the terms of FRS 21 Post Balance Sheet Events. In accordance with the requirements of FRS 21 post balance sheet events are considered up to the date on which the accounts are authorised for issue. This is interpreted as the date on which the Independent Auditor’s report is signed.

HEALTH AND SAFETY

The SPCB is committed to promoting health and safety as a priority issue. Its aim is to take appropriate and reasonable steps to ensure that it conducts its business in such a way that employees and other people who may be affected by its work are not exposed to risks to their health and safety.

To deliver this policy, the SPCB has established a Health and Safety Committee and a Fire Safety Committee; developed procedures necessary to form a robust Health and Safety management system; and has delivered a comprehensive training programme to enable all staff and other users of the Parliament accommodation to meet their Health and Safety responsibilities.

STAFF COMMUNICATIONS

The SPCB has in place an internal communication strategy to help ensure that staff:

 know what is going on in the organisation;  have the opportunity to feed in views; and  are aware of the need to keep updated on relevant policies, initiatives etc.

Key features include a bimonthly Chief Executive's message to staff to be discussed at team meetings, with comments and questions fed back. A corporate section on the SPCB intranet (SPEIR) and a corporate bulletin are produced, to improve knowledge among staff of the main issues being addressed across the Parliament.

AUDIT

The Accounts are audited by auditors appointed by the Auditor General for Scotland in accordance with the Public Finance and Accountability (Scotland) Act 2000. The audit costs for 2007-08 were £69,200 (2006-07 £67,800).

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DISCLOSURE OF RELEVANT AUDIT INFORMATION

As Principal Accountable Officer, I have taken all necessary steps to ensure that I am aware of any relevant audit information and to establish that the auditors are also aware of this information.

ADVISORY AUDIT BOARD (AAB)

The SPCB’s Advisory Audit Board supports the Principal Accountable Officer in monitoring and reviewing corporate governance, risk management and control systems. Membership of the AAB increased from two to four independent external members, one of which has the role of Chair and two members from the SPCB, helping to ensure objectivity. Current membership is three independent members. Members during the year to 31 March 2008 were:

Professor Niall Lothian Robert Bertram (retired 30 June 2008) Edward Murray (appointed 5 September 2007) Ian Robertson (appointed 5 September 2007) Duncan McNeill MSP (to 24 May 2007) John Scott MSP (to 24 May 2007) Tricia Marwick MSP (from 30 May 2007) Tom McCabe MSP (from 30 May 2007)

P E GRICE Date: 29 October 2008 Clerk to the Parliament and Chief Executive

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Remuneration Report

Remuneration policy

The remuneration of SPCB’s directors and the Clerk/Chief Executive is set by the SPCB taking into account their roles and responsibilities.

MSPs salaries are set at 87.5% of the level determined for MPs at Westminster. In 2007-08 this equated to a salary excluding Employers National Insurance and pension contributions of £53,767 (2006-07 £52,441). MSPs are members of their own pension scheme, The Scottish Parliamentary Contributory Pension Fund (SPCPF), and separate annual accounts are published for this on the Scottish Parliament website at www.scottish.parliament.uk.

The SPCB comprises 4 MSPs and the Presiding Officer. The MSPs are elected by the Parliament and the Presiding Officer has membership in accordance with the Scotland Act. The SPCB members receive no additional remuneration for this role. Similarly, MSPs serving as Conveners to Parliamentary Committees do not receive any additional remuneration. The Presiding Officer and two Deputy Presiding Officers receive additional salary for delivery of their roles.

In respect of Ministers in the Scottish Government, the salary for their services as an MSP along with the supplementary element for ministerial appointment, are both paid by the SPCB. Disclosure on the ministerial element of salary and pension entitlements is contained within the Scottish Government Consolidated Accounts which can be accessed at www.scotland.gov.uk. These also include disclosure details on the two Law Officer appointments within Scotland (the Lord Advocate and the Solicitor General for Scotland).

Under the various statutes establishing the offices of Commissioners and Ombudsmen (and the Auditor General for Scotland) the SPCB is responsible for determining the salaries of each officeholder. Details of the salaries of each officeholder are available in their own accounts. In relation to the Scottish Parliamentary Standards Commissioner, his salary details are set out in Note 18 to the accounts. Salaries for these officeholders are uprated on an annual basis in line with the Review Board recommendations for the senior civil service annual pay award.

Service contracts

Appointments of SPCB staff, on terms and conditions set by the SPCB, are made in accordance with SPCB recruitment policy which requires appointment to be on merit on the basis of fair and open competition but also includes the circumstances when appointments may otherwise be made. These principles are set out in the staff handbook and are in line with the Civil Service Commissioners’ Recruitment Code. More information is available on the SPCB staff handbook at www.scottish.parliament.uk.

Staff are not members of the Civil Service but are entitled to membership of the Principal Civil Service Pension Scheme (PCSPS).

Recommendations to the Parliament on the nomination of individuals as Commissioners and Ombudsmen for appointment by Her Majesty The Queen are made by a selection panel of members under rule 3.11 of the Parliament’s Standing Orders. Any recommendation for the reappointment of an individual to an office, where it is provided for by an enactment, is for the SPCB to recommend to the Parliament in accordance with Rule 3.11A of Standing Orders. During this reporting period the chair of the Scottish Commission for Human Rights has been appointed. Other Scottish Commission for Human Rights commission members were appointed after the year end. There has been no other reappointment of Crown appointed Commissioners.

The Scottish Parliamentary Standards Commissioner is appointed or reappointed by Parliament on the recommendation of the SPCB in accordance with Rule 3A.1 of Standing Orders. The Scottish Parliamentary Standards Commissioner’s first term of office ended on 31 March 2006. On 17 March 2006, Parliament agreed to an SPCB motion to his reappointment for a further 3 years commencing on 1 April 2006.

Unless otherwise stated below, officials covered by this report hold appointments which are open-ended until they reach normal retiring age of 60. Early termination, other than for misconduct, would result in the individual receiving compensation as set out in the Civil Service Compensation Scheme. All SPCB senior staff are directly employed by the SPCB with the exception of Ann Nelson, who was on secondment from the Scottish Government.

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Salaries and pension entitlements (Audited)

The following sections provide details of the remuneration and pension interests of senior staff and office holders. These are presented in banding ranges for salary and pension. Due to certain factors being incorrect in last year’s CETV calculator (provided by the Cabinet Office) there may be a slight difference between the final period CETV for 2006/07 and the start of period CETV for 2007/08.

Name and Salary Salary Real increase Total accrued CETV at CETV at Real increase title 2007/08 2006/07 in pension and pension at age 31/3/08 31/3/07 in CETV related lump 60 and related sum at age 60 lump sum at 31/3/08 £’000 £’000 £’000 £’000 £’000 £’000 £’000 SPCB senior staff Paul Grice 110-115 105-110 0-2.5 30-35 544 445 22 Clerk to the plus lump sum plus lump sum of Parliament of 95-100 and Chief 2.5-5 Executive Carol Devon 45-50 85-90 0-2.5 15-20 360 279 36 Director of plus lump sum plus lump sum of Access and of 55-60 Information (90-95 full 5-7.5 (until 17 year October 2007) equivalent)

Stewart 90-95 85-90 0-2.5 35-40 597 491 30 Gilfillan plus lump sum plus lump sum of Director of of 80-85 Technology 0-2.5 and Facilities Management Catriona 10-15 N/A 0-2.5 15-20 331 296 27 Hardman Interim Director of Legal (65-70 full Services year (from 21 equivalent) January to 27 June 2008) Ken Hughes 30-35 N/A 0-2.5 25-30 523 445 23 Interim plus lump sum plus lump sum of Director of of 80-85 Clerking and 2.5-5 Reporting (70-75 full (from 1 year November equivalent) 2007) Ian Leitch 80-85 70-75 0-2.5 10-15 320 232 47 Director of plus lump sum plus lump sum of Resources of 35-40 and 5-7.5 Governance Ann Nelson 45-50 85-90 0-2.5 15-20 306 272 21 Director of plus lump sum plus lump sum of Legal (90-95 full of 20-25 Services (to year 0-2.5 28 September equivalent) 2007) Bill Thomson 90-95 85-90 0-2.5 35-40 849 706 42 Director of plus lump sum plus lump sum of Clerking and of 115-120 Reporting (to 5-7.5 21 October 2007) Interim Director of Access and Information (from 22 October 2007) Lynda 35-40 N/A 0-2.5 20-25 466 397 7 Towers plus lump sum plus lump sum of 9 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

Director of of 70-75 Legal (75-80 full 0-2.5 Services year (from 1 equivalent) October 2007) Scottish Parliament office holders Name and Salary* Salary* Real increase Total accrued CETV at CETV at Real increase title 2007/08 2006/07 in pension and pension at age 31/3/08 31/3/07 in CETV related lump 65 and related sum at age 65 lump sum at 31/3/08 George Reid 0-5 35-40 0-2.5 15-20 N/A N/A N/A Presiding Officer (to 14 (40-45 full May 2007) year equivalent) Alex 35-40 N/A 17.5-20 15-20 N/A N/A N/A Fergusson Presiding (40-45 full Officer (from year 14 May 2007) equivalent) Trish 25-30 20-25 0-2.5 0-5 95 80 12 Godman Deputy Presiding Officer Murray Tosh 0-5 20-25 0-2.5 0-5 46 41 3 Deputy Presiding (25-30 full Officer (to 14 year May 2007) equivalent) Alasdair 20-25 N/A 0-2.5 0-5 9 0 9 Morgan Deputy Presiding (25-30 full Officer (from year 14 May 2007) equivalent)

* - Salary disclosed in the table above for Office Holders excludes the MSP element and relates solely to the office.

Salary

Salaries in the above table are the amount earned in the financial year and include, where applicable, performance bonuses payable, reserved rights, recruitment and retention allowances. They do not include National Insurance or Superannuation contributions. The scheme for payment of performance bonuses ended in 2005/06.

Cash Equivalent Transfer Values

A Cash Equivalent Transfer Value (CETV) is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member’s accrued benefits and any spouse’s pension contingently payable from the scheme. A CETV is the amount payable by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which the disclosure applies. The CETV figures, and from 2003-04 the other pension details, include the value of any pension benefit in another scheme or arrangement which the individual has transferred to the Civil Service Pension (CSP) arrangement and for which the Civil Service (CS) Vote has received a transfer payment commensurate to the additional pension liabilities being assumed. They also include any additional pension benefit accrued to the scheme member as a result of their purchasing additional years of pension service in the scheme at their own cost. CETV’s are calculated within the framework prescribed by the Institute and Faculty of Actuaries and do not take account of any actual or potential reduction to benefits resulting from Lifetime Allowance Tax which may be due when pension benefits are drawn.

Real Increase in CETV

The real increase in CETV reflects the increase effectively funded by the employer. It does not include the increase in accrued pension due to inflation, contributions paid by the employee (including the value of any benefits

10 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______transferred from another pension scheme or arrangement) and uses common market valuation factors for the start and end of the period.

Benefits in kind

No benefits in kind are paid to the Chief Executive, Directors, the Presiding Officer or the Deputy Presiding Officers.

Office Holders

In respect of office holders, the salary shown is that for the appointment itself together with related pension. Scottish Ministers’ disclosure is contained within the Scottish Government’s accounts. The Presiding Officer’s pension is payable from the Scottish Consolidated Fund and is equal to one half of salary payable in respect of the office in question at the rate in force on him/her ceasing to hold that office. The Presiding Officer’s pension is non contributory and non transferable so no cash equivalent transfer value (CETV) is available. Additionally, there is no option of commutation, i.e. they may not commute (give up) some of their pension to provide a lump sum. The Deputy Presiding Officers’ pension benefits are paid from the SPCPF in respect of their offices and accrue at the rate of 1/50th of final pensionable earnings for each year that the office is held. There is no automatic lump sum but these officers may commute some of their pension to provide a lump sum.

Pensions

Pension benefits for SPCB employees are provided through the Principal Civil Service Pension Scheme (PCSPS) arrangements. From 30 July 2007, civil servants may be in one of four defined benefit scheme; either a ‘final salary’ scheme (Classic, Premium or Classic Plus); or a ‘whole career’ scheme (Nuvos). These statutory arrangements are unfunded with the costs of benefits met by monies voted by the UK Parliament each year. Pensions payable under Classic, Premium, Classic Plus and Nuvos are increased annually in line with changes in the Retail Price Index (RPI). Members joining from October 2002 may opt for either the appropriate defined benefit arrangement or a good quality ‘money purchase’ stakeholder pension with a significant employer contribution (partnership pension account).

The PCSPS is an unfunded multi-employer defined benefit scheme but the Scottish Parliamentary Corporate Body is unable to identify its share of the underlying assets and liabilities. The scheme actuary valued the scheme as at 31 March 2007. Details can be found in the resource accounts of the Cabinet Office: Civil Superannuation (www.civilservice-pensions.gov.uk). For 2007-08, employer contributions at one of the four rates in the range 17.1% to 25.5% of pensionable pay, based on salary bands (the rates were the same in 2006-07). The scheme’s Actuary reviews employer contributions every four years following a full scheme valuation. From 2008-09, the salary bands will be revised but the rates remain the same. (The rates will be changing with effect from April 2009). The contribution rates are set to meet the cost of the benefits accruing during 2007-08 to be paid when the member retires, and not the benefits paid during this period to existing pensioners.

Employee contributions are set at the rate of 1.5% of pensionable earnings for Classic and 3.5% for Premium, Classic Plus and Nuvos. Benefits in Classic accrue at the rate of 1/80th of the pensionable salary for each year of service. In addition, a lump sum equivalent to three years’ pension is payable on retirement. For Premium, benefits accrue at the rate of 1/60th of final pensionable earnings for each year of service. Unlike Classic, there is no automatic lump sum, but members may commute some of their pension to provide a lump sum. Classic Plus is essentially a hybrid with benefits in respect of service before 1 October 2002 calculated broadly as per Classic and benefits for service from October 2002 calculated as in Premium. In Nuvos a member builds up a pension based on his pensionable earnings during their period of scheme membership. At the end of the scheme year (31 March) the member’s earned pension account is credited with 2.3% of their pensionable earnings in that scheme year and the accrued pension is uprated in line with RPI. In all cases members may opt to give up (commute) pension for lump sum up to the limits set by the Finance Act 2004.

The partnership pension account is a stakeholder pension arrangement. The employer makes a basic contribution of between 3 and 12.5% (depending on the age of the member) into a stakeholder pension product chosen by the employee. The employee does not have to contribute but where they do make contributions, the employer will match these up to a limit of 3% of pensionable salary (in addition to the employer’s basic contribution). Employers also contribute a further 0.8% of pensionable salary to cover the cost of centrally-provided risk benefit cover (death in service and ill health retirement).

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The accrued pension quoted is the pension the member is entitled to receive when they reach pension age, or immediately on ceasing to be an active member of the scheme if they are already at or over pension age. Pension age is 60 for members of Classic, Premium and Classic Plus and 65 for members of Nuvos.

Commissioners and Ombudsmen are members of the PCSPS.

Further details about the PCSPS arrangements can be found at the website www.civilservice-pensions.gov.uk.

Parliamentary Office Holders and Members of the Scottish Parliament belong to the SPCPF which is a scheme established under the Scotland Act 1998 (Transitory and Transitional provisions) (Scottish Parliamentary Pension Scheme) Order 1999 (S.I. No.1082). The scheme is a defined benefit scheme and applies to the salary of members, to any ministerial salary and the salary of the Lord Advocate and the Solicitor General for Scotland.

The main benefits of the scheme are an immediate pension of 1/50th of final salary for each year of service on retirement at age 65. Pensions are increased annually in line with changes in the Retail Prices Index. Members pay a contribution equivalent to 6% of their salary including any additional element for an office holder position, with the SPCB contributing an employer contribution representing 20.3% equivalent of their salary.

P E GRICE Date: 29 October 2008

Clerk to the Parliament and Chief Executive

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Statement of the SPCB’s and the Clerk and Chief Executive's Responsibilities

The Clerk and Chief Executive has prepared the statement of accounts in accordance with the Direction by the Scottish Ministers and with the accounting principles and disclosure requirements set out in the Financial Reporting Manual. The Resource Accounts are prepared on an accruals accounting basis and give a true and fair view of the SPCB's state of affairs at the year-end, the net resource outturn, resources applied to objectives, operating cost statement, recognised gains and losses and cash flows for the financial year.

In preparing the accounts the Clerk and Chief Executive has:

 Observed the accounts direction issued by Scottish Ministers;  Observed relevant accounting and disclosure requirements, and applied suitable accounting policies on a consistent basis;  Made judgements and estimates which are reasonable and prudent;  Stated whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the accounts; and  Prepared the accounts on a going concern basis.

The Clerk to the Parliament and Chief Executive is, by virtue of his appointment, Principal Accountable Officer for the SPCB. The relevant responsibilities of the Principal Accountable Officer, including the responsibility for the propriety and regularity of the finances of the SPCB, and for the keeping of proper records, are set out in section 16 of the Public Finance and Accountability (Scotland) Act 2000.

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Statement on Internal Control

Scope of responsibility

As Principal Accountable Officer of the SPCB, I acknowledge my responsibility for ensuring that an effective system of internal control is maintained and operated to safeguard the public funds and assets for which I am personally responsible in accordance with the responsibilities assigned to me.

Purpose of the system of internal control

The system of internal control is designed to manage rather than eliminate the risk of failure to achieve the organisation’s policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness.

The system of internal control is based on an ongoing process designed to identify the principal risks to the achievement of the organisation’s policies, aims and objectives, to evaluate the nature and extent of those risks and to manage them efficiently, effectively and economically. This process has been in place for the year ended 31 March 2008 and has been in place up to the date of approval of the annual accounts and accords with guidance from the Scottish Public Finance Manual (SPFM).

Control framework and management of risk

The SPCB operate a risk management strategy which includes maintenance of an organisation wide risk register in line with the requirements of the SPFM and in accordance with relevant guidance issued by the Scottish Ministers. As such the risk management strategy forms an integral part of the corporate governance arrangements for which the Accountable Officer is responsible.

Review of effectiveness

As Principal Accountable Officer, I also have responsibility for reviewing the effectiveness of the system of internal control. The following processes and institutional arrangements have been established:

 Following on from the review of corporate governance in 2006-07 by Audit Scotland which indicated that the SPCB had developed a sound and comprehensive framework of systems and processes to support its governance arrangements, incorporating many aspects of good practice, the SPCB is committed to evolving its governance arrangements to help meet its aspiration to become an exemplar of good governance in the public sector. The Corporate Body recognises that there is scope for further development in some areas, taking account of the Good Governance Standard for Public Services published in 2005.

 The Advisory Audit Board (AAB) met 2 times in the year ended 31 March 2008. In 2007-08, membership of the AAB increased from two to four independent external members, one of which has the role of Chair and two members of the Corporate Body. The AAB receives reports from both external and internal auditors and provides guidance to the Principal Accountable Officer on corporate governance issues.

 Directors meet fortnightly to consider the plans and strategic direction of the organisation.

 During 2007-08, the SPCB appointed a full time Head of Internal Audit who took the lead on audit matters. Henderson Loggie CA were appointed following competitive tender to support the Head of Internal Audit in this role.

 Regular reports are presented to the AAB by the Head of Internal Audit as an independent opinion on the adequacy and effectiveness of the system of internal control together with recommendations for improvement.

 The AAB reviews and approves the Internal Audit Plan each year.

 Regular reports from managers on the steps they are taking to manage risks in their areas of responsibility including progress reports on key projects.

14 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

 A programme of training for senior managers which includes corporate governance and risk management training.

 Establishment of key performance and risk indicators.

 A policy on fraud prevention and fraud prevention guidance.

 The SPCB formally complies with the principles of the Scottish Public Finance Manual.

 The SPCB have a dedicated set of Standing Financial Instructions based on the Scottish Public Finance Manual which contain financial policies and procedures that are specific to the SPCB.

 The SPCB approves the accounts including the Statement on Internal Control.

The SPCB is responsible for funding a number of Commissioner and Ombudsman bodies. These bodies were created by Acts of the Scottish Parliament and operate independently from the SPCB. I rely on the Accountable Officer for each of these bodies to be responsible for ensuring that an effective system of internal control is maintained and operated to safeguard the public funds and assets for which they are personally responsible.

My review of the effectiveness of the system of internal control is informed by the work of the internal auditors and the senior managers within the organisation who have responsibility for the development and maintenance of the internal control framework. I am also informed by our external auditors, Audit Scotland, on matters of internal control through their management letters and reports.

P E GRICE Date: 29 October 2008 Clerk to the Parliament and Chief Executive

15 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

Independent Auditor’s Report

Report of the Auditor General for Scotland to the Scottish Parliament

I have audited the financial statements of the Scottish Parliamentary Corporate Body for the year ended 31 March 2008 under the Public Finance and Accountability (Scotland) Act 2000. These comprise the Summary of Resource Outturn, the Operating Cost Statement and Statement of Recognised Gains and Losses, Balance Sheet, the Cash Flow Statement, the Resources by Aims and Objectives, and the related notes. These financial statements have been prepared under the accounting policies set out within them. I have also audited the information in the Remuneration Report that is described in that report as having been audited.

This report is made solely to the parties to whom it is addressed in accordance with the Public Finance and Accountability (Scotland) Act 2000 and for no other purpose. In accordance with paragraph 123 of the Code of Audit Practice approved by me, I do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties.

Respective responsibilities of the Scottish Parliamentary Corporate Body, the Principal Accountable Officer and Auditor General

The Scottish Parliamentary Corporate Body and Principal Accountable Officer are responsible for preparing the Annual Accounts, which includes the Remuneration Report, and the financial statements in accordance with the Public Finance and Accountability (Scotland) Act 2000 and directions made thereunder by the Scottish Ministers and for ensuring the regularity of expenditure and receipts. These responsibilities are set out in the Statement of the Scottish Parliamentary Corporate Body’s and the Principal Accountable Officer’s Responsibilities.

My responsibility is to audit the financial statements and the part of the Remuneration Report to be audited in accordance with relevant legal and regulatory requirements and with International Standards on Auditing (UK and Ireland) as required by the Code of Audit Practice which was prepared by Audit Scotland and approved by me.

I report my opinion as to whether the financial statements give a true and fair view and whether the financial statements and the part of the Remuneration Report to be audited have been properly prepared in accordance with the Public Finance and Accountability (Scotland) Act 2000 and directions made thereunder by the Scottish Ministers. I report to you whether, in my opinion, the information which comprises the Management Commentary is consistent with the financial statements. I also report whether in all material respects

 the expenditure and receipts shown in the financial statements were incurred or applied in accordance with any applicable enactments and guidance issued by the Scottish Ministers, the Budget (Scotland) Act covering the financial year and sections 4 to 7 of the Public Finance and Accountability (Scotland) Act 2000; and

 the sums paid out of the Scottish Consolidated Fund for the purpose of meeting the expenditure shown in the financial statements were applied in accordance with section 65 of the Scotland Act 1998.

In addition, I report to you, if in my opinion, the Scottish Parliamentary Corporate Body has not kept proper accounting records, if I have not received all the information and explanations I require for my audit, or if information specified by relevant authorities regarding remuneration and other transactions is not disclosed.

I review whether the Statement on Internal Control reflects the Scottish Parliamentary Corporate Body’s compliance with the relevant guidance issued on behalf of Scottish Ministers and I report if, in my opinion, it does not. I am not required to consider whether this statement covers all risks and controls or to form an opinion on the effectiveness of the Scottish Parliamentary Corporate Body’s corporate governance procedures or its risk and control procedures.

I read the other information contained in the Annual Accounts and consider whether it is consistent with the audited financial statements. This other information comprises only those parts of the Remuneration Report not subject to audit. I consider the implications for my report if I become aware of any apparent misstatements or material inconsistencies with the financial statements. My responsibilities do not extend to any other information.

16 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

Basis of audit opinion

I conducted my audit in accordance with the Public Finance and Accountability (Scotland) Act 2000 and International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board as required by the Code of Audit Practice. My audit includes examination, on a test basis, of evidence relevant to the amounts, disclosures and regularity of expenditure and receipts included in the financial statements and the part of the Remuneration Report to be audited. It also includes an assessment of the significant estimates and judgements made by the Scottish Parliamentary Corporate Body and Principal Accountable Officer in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Scottish Parliamentary Corporate Body’s circumstances, consistently applied and adequately disclosed.

I planned and performed my audit so as to obtain all the information and explanations which I considered necessary in order to provide me with sufficient evidence to give reasonable assurance that the financial statements and the part of the Remuneration Report to be audited are free from material misstatement, whether caused by fraud or error, and that in all material respects the expenditure and receipts shown in the financial statements were incurred or applied in accordance with any applicable enactments and guidance issued by the Scottish Ministers. In forming my opinion I also evaluated the overall adequacy of the presentation of information in the financial statements and the part of the Remuneration Report to be audited.

Opinion

Financial statements

In my opinion

 the financial statements give a true and fair view, in accordance with the Public Finance and Accountability (Scotland) Act 2000 and directions made thereunder by the Scottish Ministers, of the state of affairs of the Scottish Parliamentary Corporate Body as at 31 March 2008 and of the net cash requirement, net resource outturn and net operating cost, resources applied to aim, recognised gains and losses and cash flows for the year then ended;

 the financial statements and the part of the Remuneration Report to be audited have been properly prepared in accordance with the Public Finance and Accountability (Scotland) Act 2000 and directions made thereunder by the Scottish Ministers; and

 the information which comprises only the Management Commentary is consistent with the financial statements.

Regularity

In my opinion in all material respects

 the expenditure and receipts shown in the financial statements were incurred or applied in accordance with any applicable enactments and guidance issued by the Scottish Ministers, the Budget (Scotland) Act covering the financial year and sections 4 to 7 of the Public Finance and Accountability (Scotland) Act 2000; and

 the sums paid out of the Scottish Consolidated Fund for the purpose of meeting the expenditure shown in the financial statements were applied in accordance with section 65 of the Scotland Act 1998.

Signature Robert W Black Auditor General for Scotland 110 George Street Edinburgh EH2 4LH Date: 31 October 2008

17 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

Statement of Accounting Policies

Resource Accounts 2007-08 (year ended 31 March 2008)

The Statement of Accounts is intended to present a 'true and fair view' of the financial position and transactions of the Corporate Body and has been prepared in accordance with the fundamental accounting principles of accruals, going concern, materiality and primacy of legislative requirements in accordance with the Financial Reporting Manual (FReM). The information has also been prepared taking cognisance of relevance, reliability, comparability and understandability. a. Accounting Convention The financial statements have been prepared on a going concern basis, applying the historical cost convention modified to include the revaluation of fixed assets. Stocks are valued at the lower of cost and net realisable value. b. Tangible Fixed Assets The minimum level for capitalisation of a tangible fixed asset (or grouped value of related asset purchases) is £1,000 inclusive of irrecoverable VAT. The threshold for land and buildings is set at £10,000.

Title to all property is held by the SPCB. Land and buildings will be restated at current cost using professional valuations at a minimum of every 5 years. During 2004-05, the Holyrood complex became operational and was professionally valued on a depreciated replacement cost (DRC) basis, including an element for finance costs and professional fees, in line with RICS guidance on DRC valuations. c. Intangible Fixed Assets Software licences are capitalised as intangible fixed assets and amortised on a straight line basis over the expected life of the asset (3 years). d. Donated Assets Donated assets are capitalised at current value on receipt. In 2007-08 following changes to the Financial Reporting Manual these will be carried in future at value on receipt rather than revalued annually using indices. No further revaluation will be carried out to these assets unless they are judged sufficiently material. The value of donated assets is reflected in the donated asset reserve, which is credited with the value of the original donation and subsequent revaluations if material. e. Indexation Land and buildings will be restated at current cost using professional valuations at a minimum of every 5 years and appropriate indices in intervening years. In 2007-08 following changes to the Financial Reporting Manual, indices will no longer be applied to fixed assets where the asset life is short or the value is low. The indices in use are based on information compiled by the Office of National Statistics using the relevant index codes for the category of asset. However, the buildings indexation is based on RICS Tender Price Indices.

Land Valuation and RPI (Retail Price Index) Buildings Valuation and TPI (Tender Price Index) Buildings (fixed plant) Valuation and RPI (Retail Price Index) Fixtures & Fittings and Equipment Not indexed Vehicles Not indexed IT Systems Not indexed Donated Assets Not indexed Intangible Assets Not indexed f. Prior Year Adjustment

2007-08 In 2007-08 the accounts reflect a change in accounting policy for short term employee benefits, namely untaken holiday leave and flexi working balances at the year end. Relevant amounts are now accrued, with the associated expenditure charged to the Operating Cost Statement. The change in accounting policy represents early adoption of the requirements of International Financial Reporting Standards. Further detail is provided at note 11.

2006-07 From 2006-07, following Financial Reporting Advisory Board (FRAB) clarification, the indexation movement on buildings and fixed plant relating to the Holyrood building is shown as a movement through the Revaluation 18 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

Reserve rather than a credit to the Operating Cost Statement. This resulted in a prior year adjustment in 2006-07 for the 2005-06 movement. Further detail is provided in note 5. g. Depreciation Land, historic documents and records and works of art are not depreciated. Depreciation is provided at a rate calculated to write off the valuation of buildings and other tangible fixed assets by equal instalments over their estimated useful lives. Asset lives are normally as follows:

Buildings Holyrood building 50 years Holyrood fixed plant 10-25 years

Equipment and Computers Computers, Telecom systems and Broadcasting Equipment 3 years Fixtures and fittings 5 years Machinery and motor vehicles 5 years Office equipment 5 years

Historic assets which are donated are capitalised at current value on receipt but are not depreciated and therefore there is no release to the operating cost statement from reserves. h. Realised Element of Depreciation from Revaluation Reserve Depreciation is charged on the revalued amount of assets. An element of the depreciation therefore may arise due to an increase in valuation and would be in excess of the depreciation that would be charged on the historical cost of assets. The amount relating to such an excess would be a realised gain on valuation, and is transferred from the Revaluation Reserve to the General Fund. i. Operating Cost Statement Operating income and costs relate directly to the operating activities of the SPCB. Income includes charges for goods and services provided on a full cost basis to external customers. Income and costs are shown net of Value Added Tax where it is recoverable. j. Capital Charge A charge, reflecting the cost of capital utilised by the Parliament, is included in operating costs. The charge is calculated at the Government standard rate of 3.5% (2006-07 3.5%) on the average of net relevant assets. Net relevant assets are defined as all assets less liabilities except for donated assets and cash balances with the Office of the Paymaster General. Average is calculated by adding together the balances at this year end and the previous year end, and dividing by two. k. Stocks Stocks, including goods held for resale, are stated at the lower of cost and net realisable value. l. Foreign Exchange Transactions which are denominated in a foreign currency are translated into sterling at the exchange rate ruling on the date of each transaction. Foreign currency imprests are translated into sterling at the exchange rate ruling at the time of funding. m. Pensions

The Principal Civil Service Pension Scheme (PCSPS)

Staff employed directly by SPCB, staff seconded to the SPCB and the Parliamentary Commissioners and their staff are members of the Principal Civil Service Pension Scheme (PCSPS). It is an unfunded multi- employer defined benefit scheme and the SPCB is unable to identify its share of the underlying assets and liabilities. A full actuarial valuation was carried out as at 31 March 2007. Details can be found in the resource accounts of the Cabinet Office: Civil Superannuation (www.civilservice-pensions.gov.uk) which comply with FRS 17.

The Scottish Parliamentary Pension Scheme (SPPS)

A pension scheme for the Members of the Scottish Parliament has been established by the SPCB under the Scotland Act 1998 (Transitory and Transitional provisions) (Scottish Parliamentary Pension Scheme) 19 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

Order 1999 (S.I. No.1082). The scheme is a defined benefit scheme, and applies to the salary of members, to any ministerial salary and the salary of the Lord Advocate and Solicitor General for Scotland. The cost of pension cover provided for the MSPs is by payment of charges calculated on an accruing basis, with liability for payment of future benefits charged to the Scottish Parliamentary Pension Scheme (SPPS). Any liabilities of the fund arising from a deficit on assets will be met through increased funding. The liability for this will be met by the SPCB through the Scottish Consolidated Fund. n. Operating Lease Charges Rentals payable under operating leases are charged to the operating cost statement in the period to which they relate. o. Value Added Tax The SPCB is treated as a Crown Body for the purposes of the Value Added Tax Act 1994 and accordingly for the purposes of Section 41 of that Act (application to the Crown) it is treated as a government department, and is exempt for VAT on the provision of parliamentary goods and services. The SPCB is standard rated for VAT on its trading activities, such as the Parliament shop.

20 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

Schedule 1 Summary of Resource Outturn 2007-08

For the year ended 31 March 2008

2007-08 2006-07

BUDGET OUTTURN Net total outturn compared Gross Income NET Gross Income NET with Prior year Expenditure TOTAL Expenditure TOTAL Budget Outturn

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 NET OPERATING COST (Schedule 2) 87,306 (660) 86,646 81,896 PRIOR YEAR ADJUSTMENT (i) 868 868 5,818 TOTAL RESOURCES 95,756 (622) 95,134 88,174 (660) 87,514 7,620 87,714

NET CASH REQUIREMENT 81,372 68,469 12,903 73,174

Reconciliation of Total Resources to Net Cash Requirement

£ ' 000 Note £ ' 000 £ ' 000

Total Resources (i) 95,134 87,514 87,714

Capital: Purchase of fixed assets (ii) 1,600 5, 6 & 13 1,198 432

Adjustments: Non-cash items (25,362) 3 (22,552) (23,201) Prior year adjustment 5 (868) (5,818) Movements in working capital other than cash 10,000 7 3,177 14,047

Net Cash Requirement (Schedule 4) (iii) 81,372 68,469 73,174

Explanation of the variation between Budget and Outturn Total Resources:

(i) An amount of £868k, shown as a prior year adjustment, relates to SPCB accruing short term employee benefits. There was a £1.9m reduction in the cost clarification as the final Holyrood accounts were determined. £2.8m variation from budget reflects reduced depreciation and cost of capital. Commissioners and Ombudsman accounted for a £1.2m under spend with a further £507k under spend against budget representing Members costs and the remaining under spend against budget occurring within the parliamentary service costs.

Explanation of the variation between Budget and Outturn Purchase of fixed assets

(ii) Budget provision was not fully utilised

Explanation of the variation between Budget and Outturn Net Cash Requirement:

(iii) The timing of cash settlement of final accounts and release of retentions originally budgeted for 2007-08 is anticipated to be concluded in subsequent financial years.

The notes on pages 26 to 35 form part of these accounts

21 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

Schedule 2

Operating Cost Statement

For the year ended 31 March 2008

2007-08 2006-07

Note £ ' 000 £ ' 000 Administration Costs

Staff costs 2. 33,006 31,227 Other administration costs 3. 49,869 50,585 Other related parties 18. 6,348 5,786

Gross Administration Costs 89,223 87,598

Operating income 4. (660) (695)

Net Administration Costs 88,563 86,903

Reduction in estimated Holyrood final cost 5. (1,917) (5,007)

NET OPERATING COST Schedule 1 86,646 81,896

Statement of Recognised Gains and Losses

For the year ended 31 March 2008

2007-08 2006-07

£ ' 000 £ ' 000

Net gain on revaluation of tangible fixed assets 5. & 13. 12,649 16,132

Prior year adjustment 5 & 11 (868) (5,818) Donated asset additions 13 - 7

Recognised gains and losses for the year ended 31 March 2008 11,781 10,321

The above results relate to continuing activities.

The notes on pages 26 to 35 form part of these accounts

22 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

Schedule 3 Balance Sheet

As at 31 March 2008

31 March 2008 31 March 2007

Restated Note £ ' 000 £ ' 000 £ ' 000 £ ' 000

Fixed Assets Tangible assets 5. 345,710 343,119 Intangible assets 6. 297 374

346,007 343,493 Current Assets Stock 8. 97 102 Debtors 9. 1,233 1,652 Cash at bank and in hand 10. 2,444 2,713

3,774 4,467

Creditors (due within one year) 11. (13,910) (17,848)

Net Current Liabilities (10,136) (13,381)

Total Assets less Current Liabilities 335,871 330,112

Creditors: amounts falling due after one year 12. (188) (120)

335,683 329,992

Taxpayers' Equity General Fund 17. 293,326 299,667

Revaluation Reserve 13. 42,211 30,179

Donated Asset Reserve 13. 146 146

335,683 329,992

P E GRICE Date: 29 October 2008 Clerk to the Parliament and Chief Executive

The notes on pages 26 to 35 form part of these accounts

23 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

Schedule 4 Cash Flow Statement

For the year ended 31 March 2008

Note 2007-08 2006-07

£ ' 000 £ ' 000

Net cash (outflow) from operating activities (67,271) (72,742)

Capital expenditure and financial investment (1,198) (432)

Financing from the Consolidated Fund 68,200 72,600

(Decrease) in cash in the period (269) (574)

Reconciliation of operating cost to operating cash flows

Net operating cost 86,646 81,896

Adjust for non-cash transactions 3. (22,552) (23,201)

Adjust for movements in working capital other than cash 7. 3,177 14,047

Net cash outflow from operating activities 67,271 72,742

Analysis of capital expenditure and financial investment

Purchase of fixed assets Tangibles 5. & 13. 1,073 253 125 179 Intangibles 6.

Net cash outflow from investing activities 1,198 432

Analysis of financing

From Consolidated Fund (Supply) 17. 68,200 72,600

Decrease /(Increase) in cash 10. 269 574

Net cash requirement (Schedule 1) 68,469 73,174

The notes on pages 26 to 35 form part of these accounts

24 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

Schedule 5

Resources By Departmental Aim And Objectives

For the year ended 31 March 2008

2007-08 2006-07

Gross Income Net Gross Income Net £'000 £'000 £'000 £'000 £'000 £'000

Aim

The Parliament exists to determine, debate, decide and legislate on issues of importance to the people of Scotland. In doing so, it holds the Scottish Executive to account and is answerable to the people of Scotland.

Objective

To provide the Scottish Parliament, or ensure the Parliament is provided with the property, staff and services required for this purpose. 87,306 (660) 86,646 82,591 (695) 81,896

NET OPERATING COSTS 87,306 (660) 86,646 82,591 (695) 81,896

25 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

Notes to the Resource Accounts Annual Resource Accounts 2007-08 (year ended 31 March 2008)

1. Background The accounts for the Scottish Parliamentary Corporate Body have been prepared for the year ended 31 March 2008. Comparable figures used for 2006-07 reflect those shown in the audited and published accounts prepared for the year ended 31 March 2007 except where they have been restated to reflect a prior year adjustment.

2. Members and Staff Numbers and Costs

A. Pay costs consist of: 2007-08 2006-07

£ ' 000 £ ' 000 £ ' 000 £ ' 000 £ ' 000 £ ' 000 Total Staff Members & Total Staff Members & Office Office Bearers* Bearers Salaries SPCB 24,340 16,125 8,215 22,720 15,828 6,892 Seconded staff 819 819 869 869 - Ministers 746 - 746 834 - 834 Social security costs SPCB 1,958 1,274 684 1,913 1,224 689 Seconded staff 80 80 - 87 87 - Ministers 93 - 93 101 - 101 Other pension costs SPCB 4,667 3,238 1,429 4,351 2,968 1,383 Seconded staff 169 169 201 201 - Ministers 134 - 134 151 - 151

Total Salary Cost per Operating Cost Statement 33,006 21,705 11,301 31,227 21,177 10,050

Other Related Parties - salary costs

Scottish Parliamentary Standards Commissioner (Note 18) 55 - 55 53 - 53

Total salary costs 33,061 21,705 11,356 31,280 21,177 10,103

* - Due to the election in May 2007, in 2007-08 Members and Office Bearers costs include resettlement grant and ministerial and office holder severance of £1,260,781.

26 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

B. The average number of whole-time equivalent persons employed (including senior management) during the year was as follows:

2007-08 2006-07

Total Staff Members & Total Staff Members & Office Office Bearers Bearers

SPCB 598 485 113 596 485 111 Seconded staff 18 18 - 18 18 - Ministers (including 2 Law Officers) 18 - 18 20 - 20 Scottish Parliamentary Standards Commissioner 0.5 - 0.5 0.5 - 0.5

The Commissioner works on a part time basis.

C. The number of Members of the Scottish Parliament is 129.

D. The SPCB is, as defined in the Scotland Act 1998 S.21, the Presiding Officer and 4 elected Members (see Management Commentary for detail). Apart from the Presiding Officer, they do not receive remuneration for carrying out the functions of the SPCB. All senior managers are the staff of the SPCB.

Pensions

a. Members of the Principal Civil Service Pension Scheme (PCSPS) - see accounting policies.

For 2007-08, Employer’s contributions of £3,269,601 were payable to the PCSPS (2006-07 £3,147,841).

Employees joining the SPCB after 1 October 2002 can opt to open a partnership pension account, being a stakeholder pension with an employer contribution. Employers' contributions of £10,401 (2006-07 £6,405) relating to stakeholder pensions were paid to one or more of a panel of four appointed stakeholder pension providers. In addition, employer contributions of £209 (2006-07 £542), 0.8% of pensionable pay, were payable to the PCSPS to cover the cost of the future provision of lump sum benefits on death in service and medical retirement of employees with stakeholder pensions. Medical retirement is possible in the event of serious ill health. In this case, pensions are brought into payment immediately without actuarial reduction and with service enhanced as for widow(er) pensions. There was one medical retiral in 2007-08 (2006-07, none).

There were no outstanding or prepaid scheme contributions at the balance sheet date.

On death, pensions are payable to the surviving spouse at a rate of half of the member's pension. On death in service, the Classic scheme pays a lump sum benefit of twice pensionable pay and the Premium scheme pays three times pensionable pay. A service enhancement is also provided in computing the spouse's pension. The enhancement depends on the length of service up to a maximum of ten years.

Staff seconded to SPCB from other organisations are members of the pension schemes operated by their respective employers.

b. Members of the Scottish Parliamentary Pension Scheme (SPPS) - see accounting policies.

The cost of benefits accruing for each year of service is met partly by a specified contribution from members, with the SPCB meeting the balance of the cost of the benefits. The total cost of benefits accruing in the year 2007-2008 (other than insured death benefits) has been assessed using the methodology and assumptions set out below. The results are as follows: % of Pensionable Pay Members’ Contribution Rate 6.00% Employer’s Contribution Rate 20.30% Total Contribution Rate 26.30%

Methodology The value of the liabilities has been obtained using the projected unit method, with allowance for expected future pay increases in respect of active members. The contribution rate for accruing costs has been determined using the projected unit method.

Assumptions The principal financial assumptions adopted for the pension assessments made in relation to this statement are an investment return in excess of a price increase of 3.1% p.a. (2006-07 1.9%) as pension benefits under this scheme will be increased in line with prices. The gross rate of return is 6.9% and the real rate of return, net of earnings is 1.6%.

In relation to the pensionable payroll for the financial year, the SPCB’s contributions for 2007-08 were £1,537,411 (2006-07 £1,524,019).

27 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

The value of the whole Pension Fund 2007-08 2006-07 £ ' 000 £ ' 000

Units in Baillie Gifford Managed Fund 19,495 18,399 AVC 270 282 19,765 18,681

The Scheme is valued triennially, with the latest valuation being completed by the Government Actuary’s Department as at 31 March 2008.

2007-08 2006-07 £ ' 000 £ ' 000

Value of the Pension Fund as at 31 March 19,675 18,538 Actuarial Valuation of the future liabilities of the Scheme 21,000 23,400

(Deficit) in Scheme for year (1,325) (4,862)

The pension benefits taken into account in this assessment are those provided under the rules of the scheme, including normal retirement benefits, medical retirement benefits, and benefits applicable following the death of a member. (The accruing costs exclude the death in service lump sum, which is insured separately by the scheme).

The scheme liability at 31 March 2008 stands at £21.0m, a decrease of £2.4m (10%) on the liability of £23.4m reported as at 31 March 2007. The liability has changed for a number of reasons. The interest cost and current service cost are expected increases to the liability. The current service cost is the cost of the additional year of benefits that have accrued. The interest cost is the expected increase to the liabilities during the year because the benefits are one year closer to being paid, and so have one less year of discounting applied. Benefits paid and transfers out reduce the liability of the scheme. The combined effect of all these items is an increase of £3.4m.

The experience gain of £5.8m is due to changes in the assumptions and actual experience turning out different from assumptions. The largest effect is a decrease in liability due to the changes in financial assumptions. Corporate bond yields rose during the year, meaning that the liabilities are being discounted at a higher rate as at 31 March 2008 than at 31 March 2007, giving a lower current value. Other assumption changes included updating of mortality assumptions, with the effect of increasing the expected longevity of scheme members, thus increasing the scheme’s liability. The withdrawal assumptions, based on a proportion of members leaving at future elections, have also been revised to more accurately reflect withdrawals patterns in practice. This change partly offsets the mortality basis change and decreases the liabilities slightly.

The value of the fund assets has increased to £19.7m, an increase of £1.1m from the value as at 31 March 2007. This arises from contributions of £1.3m and investment value decrease of £0.2m.

The value of the Pension Fund is monitored on an on-going basis. The next full valuation of the scheme, which may recommend a change in contribution rates and which is carried out on a triennial basis is due as at 31 March 2008.

Any surpluses or deficits in the valuation of the Scheme is required to be met via decreased or increased contribution rates, as advised by the Government Actuary’s Department.

28 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

3. Other Administration Costs

2007-08 2006-07

£ ' 000 £ ' 000 £ ' 000 £ ' 000

MSP allowances 9,727 9,738 Rentals under operating leases 12 18 Other accommodation costs Rates 3,346 3,376 Utilities 831 905 Other 3,083 7,260 2,878 7,159

Travel and Expenses, Hospitality 550 345

Other expenditure Contractors and consultants 759 582 Equipment and IT maintenance 2,175 2,175 Postage, stationery and publications 1,642 1,797 Broadcasting 726 660 Other staff costs 514 486 Other (a) 3,952 9,768 4,424 10,124 Non cash items: Depreciation 11,333 11,966 Cost of capital charge 11,150 11,167 Auditor's remuneration and expenses 69 22,552 68 23,201

Total other admin cost per operating cost statement 49,869 50,585

Other Related Parties

Scottish Parliamentary Standards Commissioner Note 18 27 19 Human Rights Commissioner 39 -

49,935 50,604

(a) - These figures include the costs incurred by Members in respect of their office supplies to assist them in the discharge of their Parliamentary duties. An analysis of these costs, by individual Member, is published separately.

4. Operating Income

2007-08 2006-07

£ ' 000 £ ' 000 Operating income analysed by classification and activity, is as follows: Income from broadcasting 28 24 Shop trading income 238 221 Income from guided tours 135 105 Miscellaneous income 259 345

Total Income 660 695

29 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

5. Tangible Fixed Assets 2007-2008

Fixtures & Artwork & Land & Fittings and Work in Donated Buildings Equipment Vehicles IT Systems progress Assets Total Cost or valuation £ ' 000 £ ' 000 £ ' 000 £ ' 000 £ ' 000 £ ' 000 £ ' 000 At 1 April 2007 356,212 9,904 10 8,243 - 547 374,916 Additions - 261 616 196 - 1,073 Disposals - - (10) - - - (10)

Indexation 13,902 - - - - - 13,902

At 31 March 2008 370,114 10,165 - 8,859 196 547 389,881

Depreciation At 1 April 2007 19,593 4,510 10 7,684 - - 31,797 Charged in year 8,737 1,914 - 480 - - 11,131 Disposals - - (10) - - - (10)

Indexation 1,253 - - - - - 1,253

At 31 March 2008 29,583 6,424 - 8,164 - - 44,171

Net book value

At 31 March 2008 340,531 3,741 - 695 196 547 345,710

At 1 April 2007 336,619 5,394 - 559 - 547 343,119

Note:

The principal fixed asset of the SPCB is the parliamentary building at Holyrood, Edinburgh. This was occupied in the 2004-2005 financial year. The Parliament land and building was professionally valued on a depreciated replacement cost basis as at 7 January 2005 by James Barr (Chartered Surveyors) at £333,000,000. This included structural buildings valued at £274,185,000, a land value of £13,500,000 and £45,315,000 in respect of fixed plant. The valuation was made in accordance with the RICS Appraisal and Valuation Manual and included an element of £27,900,000 for finance costs. A full revaluation will be commissioned at a minimum of every five years, in line with the SPCB fixed asset policy. Revaluation may result in an increase or decrease of the previous recorded value.

Clarification of final Holyrood costs:

Arising from the report published by the SPCB in February 2007 on the Holyrood Project Close-Out, which finalised the cost of the Holyrood building, initial cost estimates made at the time of the valuation in 2004-05 for accounting purposes were clarified. This resulted in a decrease of estimated cost by £6,307,000. However, this did not affect the valuation of the building within fixed assets and the cost reduction against the cost to complete has been reflected through the operating cost statement. The report also confirmed that costs estimated in 2004-05 for Fixtures and Fittings were higher than the final cost and a compensating adjustment of £1,300,000 has been reflected through the fixed assets note. The associated charge has been reflected through the operating cost statement along with the cost reduction.

The cost estimates for accounting purposes as at March 2007 were reduced by a further £1,917,000 in 2007-08 as the final Holyrood accounts were determined. As above, this does not affect the valuation of the building within fixed assets and the cost reduction against the cost to complete has been reflected through the Operating Cost Statement.

2006-07 Prior year adjustment:

From 2006-07, following clarification from the Financial Reporting Advisory Board (FRAB), the indexation movement on buildings and fixed plant relating to Holyrood building has been shown as a movement through the Revaluation Reserve rather than a credit to the Operating Cost Statement. This is in line with the treatment for indexation movement of land costs through the revaluation reserve. A prior year adjustment was shown for 2005-06 of £6,123,000 for buildings less an amount of £305,000 relating to indexation depreciation movement (net £5,818,000). The land indexation movement had previously already been disclosed through the revaluation reserve.

30 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

6. Intangible Assets 2007-08 £’000 Software Cost At 1 April 2007 2,422 Additions 125 At 31 March 2008 2,547

Depreciation At 1 April 2007 2,048 Charged in year 202 At 31 March 2008 2,250

Net book value At 31 March 2008 297 At 1 April 2007 374

7. Movements in Working Capital other than Cash 2007-08 2006-07 £ ' 000 £ ' 000

Increase/(Decrease) in stock (5) 3 Increase/(Decrease) in debtors (419) 831 Decrease/(Increase) in creditors 3,601 13,213

3,177 14,047

8. Stocks Retail 77 81 Other stock 20 21

97 102

9. Debtors: Amounts falling due within one year VAT 493 1,047 Trade Debtors 386 253 Prepayments and accrued income 125 151 Other debtors 229 201

1,233 1,652

31 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

10. Cash at Bank and in Hand

2007-08 2006-07 £ ' 000 £ ' 000

Balance at 1 April 2,713 3,287 Net cash (outflow)/inflow (269) (574)

Balance at 31 March 2,444 2,713

The Office of HM Paymaster General (OPG) provides a current account banking service.

The following balances were held as at 31st March:

Balances at OPG 2,336 2,550 Commercial banks and cash in hand 108 163

Total balance 2,444 2,713

11. Creditors: amounts falling due within one year 2007-08 2006-07 £ ' 000 £ ' 000 Restated Accruals 8,642 13,115 Trade Creditors 1,287 513 MSP Staff Pension Scheme 41 37 Other creditors 1,496 1,470 Scottish Consolidated Fund (SCF) 2,444 2,713

13,910 17,848

2007-08 Prior year adjustment

In 2007-08 the accounts reflect a change in accounting policy for short term employee benefits, namely untaken holiday leave and flexi working balances at year end. Relevant amounts are now accrued, with the associated expenditure charged to the Operating Cost Statement. The change in accounting policy represents early adoption of the requirements of International Financial Reporting Standards. The accruals above for 2007-08 and 2006-07 include an amount of £868,000 for these short term employee benefits. There is no movement in the estimated accrual for 2006-07 and 2007-08 and therefore the net effect of the change of accounting policy on outturn in these years is nil. .

12. Creditors: Amounts falling due after one year

Other creditors 188 120

32 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

13. Reserves 2007-08 2006-07

£ ' 000 £ ' 000 Revaluation Revaluation Reserve Reserve

Balance as at 1 April 30,179 14,368

Arising on indexation during the year (net) - Buildings (Note 5) 9,296 15,430 - Fixed Plant (Note 5) 2,762 - - Land (Note 5) 591 633 - Fixtures, Fittings and Equipment - 50 - Artwork and donated assets - 19

Transferred to general fund in respect of realised element of revaluation reserve (Note 17) (617) (317)

Transferred to donated asset reserve in respect of indexation on donated asset - (4)

Balance at 31 March 42,211 30,179

The revaluation reserve reflects the unrealised element of the cumulative balance of indexation and revaluation adjustments.

Donated Asset Donated Asset Reserve Reserve

Balance as at 1 April 146 135

Transferred from revaluation reserve - 4 Donated artwork - 7

Balance at 31 March 146 146

14. Capital Commitments

There are no capital commitments as at 31 March 2008 (2006-07 none).

15. Commitments under operating leases

Land and Land and Buildings buildings At 31 March the SPCB committed to making the following payments during the next year in respect of operating leases expiring: within one year 11 5 between two and five years - -

11 5

16. Contingent Liabilities

The SPCB has provided a number of letters of indemnity for loaned artwork which is on display within the Scottish Parliament. The maximum contingent liability in respect of these indemnities is £295,000. There are no other contingent liabilities.

33 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

17. Reconciliation of Net Operating Cost to changes in General Fund

This is the movement in the General Fund over the year to 31 March 2008.

2007-08 2006-07 Restated £ ' 000 £ ' 000 £ ' 000 £ ' 000

Net operating cost for the year (86,646) (81,896) Movement in cash balances held at the year end (Note 10) 269 574 (86,377) (81,322)

Net Parliamentary funding 68,200 72,600

Transferred to General Fund in respect of realised element of 617 317 revaluation reserve (Note 13)

Funding of non-cash charges: cost of capital 11,150 11,167 auditor's remuneration 69 68 11,219 11,235 Net increase / (decrease) in General Fund (6,341) 2,830

General Fund at 1 April as previously reported 300,535 297,705 Prior year adjustment (868) (868) General Fund at 1 April 299,667 296,837

General Fund at 31 March (Schedule 3) 293,326 299,667

18. Related Party Transactions

Scotland’s Futures Forum Limited was established on 16 August 2005 as a Company Limited by Guarantee. It was created by the Scottish Parliament to help its Members, along with policy makers, businesses, academics, and the wider community of Scotland, look beyond immediate horizons, to some of the challenges and opportunities in the future. All shares are owned by the Scottish Parliamentary Corporate Body. Net spending by Scotland’s Futures Forum Limited in 2007-08 was £77,875 (2006-07 £52,641), being £27,864 (2006-07 £22,727) contributed by SPCB and £50,011 (2006-07 £29,914) from other partners. Taking into account surplus funding provided by other partners, the net funding provided by SPCB was £20,000 (2006-07 £18,000) as shown below. Since funding, including sponsorship from other organisations, was higher than actual spending, this created bank balances of £14,757, (2006-07 £6,268), which are included within Note 10 Cash at Bank and in Hand. A set of the accounts is available on request.

The SPCB has a number of transactions with the Scottish Government and with other government departments and public bodies, including Historic Scotland and HM Revenue & Customs. Additionally, regular transactions take place with the Scottish Parliamentary Pension Scheme, see note 2.

In 2007-08 the Scottish Public Services Ombudsman, The Scottish Information Commissioner, the Commissioner for Children and Young People in Scotland and the Commissioner for Public Appointments in Scotland were responsible for the management of their funds and preparation of their accounts. Further detail on their accounts can be found on the appropriate websites. The Scottish Parliamentary Standards Commissioner figures are included within those of the SPCB and details of amounts paid are set out below. A new Scottish Commission for Human Rights was established during 2007-08, and SPCB disbursed expenditure on it’s behalf.

34 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

Funding provided was:

2007-08 2006-07

£’000 £’000

Scottish Public Services Ombudsman 3,034 2,882 Scottish Information Commissioner 1,525 1,327 Commissioner for Children and Young People in Scotland 1,238 1,090 Commissioner for Public Appointments in Scotland 410 397 Scottish Parliamentary Standards Commissioner 82 72 Scottish Commission for Human Rights 39 - Scotland’s Futures Forum Limited 20 18 Net Cost (Schedule 2) 6,348 5,786

Scottish Parliamentary Standards Commissioner

The above organisation was set up on the 1 April 2003 under the terms of the Scottish Parliamentary Standards Commissioner Act 2002. SPCB pays all salaries and expenses. The Clerk/Chief Executive of the SPCB is the Accountable Officer for the SPSC.

The following amounts were paid out: 2007-08 2006-07

£ ' 000 £ ' 000

Salaries (see Note 2) 55 53 Other Administration Costs (see Note 3) 27 19

Net Operating Cost 82 72

Remuneration details are set out below:

Scottish Parliamentary Standards Commissioner Name and Salary Salary Real Total CETV at CETV at Real title 2007/08 2006/07 increase in accrued 31/3/08 31/3/07 increase in pension pension at CETV and related age 60 lump sum and at age 60 related lump sum at 31/3/08 Jim Dyer 40-41 35-40 0-2.5 0-5 74 57 12 Scottish Parliamentary Standards Commissioner

The Scottish Parliamentary Standards Commissioner is the only Commissioner for whom the Chief Executive of the SPCB is the Accountable Officer. Dr Dyer works on a part time basis.

19. Notional Charges

The following notional charges have been included in the accounts: 2007-08 2006-07

£ ' 000 £ ' 000

Cost of Capital 11,150 11,167 Auditor's Fee 69 68

The cost of capital charge is calculated as explained in the Statement of Accounting Policies (note j Capital Charge).

20. Losses Statement

Losses and special payments for the year total £6,895 (2006-07 £2,000).

There were no individual losses or special payments in excess of £250,000 which would require separate disclosure.

35 Scottish Parliamentary Corporate Body Annual Accounts 2007-08 ______

SCOTTISH PARLIAMENTARY CORPORATE BODY

DIRECTION BY THE SCOTTISH MINISTERS in accordance with section 19(4) of the Public Finance and Accountability (Scotland) Act 2000

The statement of accounts for the financial year ended 31 March 2007 and subsequent years shall comply with the accounting principles and disclosure requirements of the edition of the Government Financial Reporting Manual (FReM) which is in force for the year for which the statement of accounts are prepared.

The accounts shall be prepared so as to give a true and fair view of the net resource outturn, resources applied to objectives, recognised gains and losses and cash flows for the financial year, and of the state of affairs as at the end of the financial year.

This direction shall be reproduced as an appendix to the statement of accounts. The direction given on 15 July 2002 is hereby revoked.

Signed by the authority of the Scottish Ministers

Dated 17 January 2006

36