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The Scottish Government Consolidated Accounts for the Year Ended 31 March 2018

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The Scottish Government Consolidated Accounts for the Year Ended 31 March 2018 The Scottish Government Consolidated Accounts for the year ended 31 March 2018 Laid before the Scottish Parliament By the Scottish Ministers 27 September 2018 SG/2018/160 Foreword As Chief Financial Officer for the Scottish Government, it is my responsibility to oversee the processes that produce the financial reporting by and for the Scottish Government. I lead a team of finance professionals who support Scottish Ministers in their financial decision-making to secure the regularity, propriety and value for money of the funds provided by taxpayers to deliver devolved government in Scotland. I am pleased to introduce these accounts, which are an important part of the reporting on the stewardship of the whole Scottish Budget approved by the Scottish Parliament. The accounts cover the bodies within the accounting boundary and present the financial outturn compared to the spending plans of Scottish Ministers for those elements for the financial year 2017-18 authorised by the Budget (Scotland) Act 2017 and are prepared in accordance with international accounting standards and related accounting guidance. I am pleased that the Auditor General’s opinion on these accounts is, once again, unqualified. It is important to note that these accounts are not a Ministerial document: it is the Principal Accountable Officer’s responsibility to produce accounts, and a primary purpose of these accounts is to report on the stewardship of the sums authorised. It is also important to recognise that these accounts are not the full picture of the fiscal activity of Scottish Ministers. Our financial reporting outputs are developing alongside the Scottish Government’s increasing fiscal responsibility and in tandem with the developments associated with the implementation of the Budget Process Review Group recommendations: • building on this account, a separate statement to Parliament brings together the Financial Outturn of the bodies within the Scottish Administration, to report against the statutory limit authorised by the Scottish Parliament in the Budget processes. This will be extended this year to include the other bodies funded from the Scottish Budget. These accounts together report on the spending authorised by the Scottish Parliament in the annual Budget Act. • the wider picture of the funding available to the Scottish Budget is available in the separate account of the Scottish Consolidated Fund gov.scot which shows all the sums paid into and out of the Scottish Consolidated Fund in year. This also includes this year a statement of the borrowing position. A more detailed accounting of the Devolved Taxes is also available, published by Revenue Scotland, available online at revenue.scot. • once the complete set of audited financial data for the relevant bodies is available, we will be developing a further consolidated account, which will bring together the revenue-raising and spending elements. • in the meantime, the Fiscal Framework Outturn Report published on 20 September is a new report, which provides information in relation to devolved taxes, the use of borrowing powers and the operation of the Scotland Reserve. The accounts also explain the context and recent publication of a revised National Performance Framework, links to where the higher level reporting can be found and do not repeat more specific performance information that can be found in the stand-alone accounts of delivery bodies within the consolidation. Gordon Wales Chief Financial Officer 24 September 2018 Table of Contents Page No. Title Foreword Performance Report 4 Introduction 13 Performance Overview 17 Performance Analysis Accountability Report 22 Statement of Accountable Officer’s Responsibilities 23 Governance Statement 34 Remuneration and Staff Report 47 Losses and Special Payments 49 Report of the Auditor General for Scotland to the Scottish Parliament 52 Summaries of Resource, Capital and Total Outturn Portfolio Outturn Statements 53 Finance and the Constitution 54 Health and Sport 55 Education and Skills 56 Economy, Jobs and Fair Work 57 Justice 58 Communities, Social Security & Equalities 59 Environment, Climate Change and Land Reform 60 Culture, Tourism and External Affairs 61 Rural Economy and Connectivity 62 The Crown Office and Procurator Fiscal Service 63 Administration 64 Consolidated Statement of Financial Position 65 Consolidated Statements of Comprehensive Net Expenditure and Changes in Taxpayer’s Equity 67 Consolidated Statement of Cash flows 68 Notes to the Accounts 122 Accounts Direction 123 Glossary The Scottish Government Consolidated Accounts Year to 31 March 2018 Performance Report About the Scottish Government The Scottish Government is the devolved government for Scotland and has a range of responsibilities that include: the economy, education, health, justice, rural affairs, housing, environment, equal opportunities, consumer advocacy and advice, transport and taxation. Some powers are reserved to the UK Government. These include: immigration, the constitution, foreign policy and defence. Further changes to the responsibilities devolved to the Scottish Government and Scottish Parliament have resulted from the Scotland Act 2012 and the Scotland Act 2016. After a Scottish Parliamentary election, the First Minister is formally nominated by the Scottish Parliament and appointed by Her Majesty the Queen. The First Minister then appoints the Scottish Ministers to make up the Cabinet with the agreement of the Scottish Parliament and the approval of The Queen. Scottish Cabinet Ministers and their responsibilities The Cabinet is the main decision-making body of the Scottish Government. It is made up of the First Minister, all Cabinet Secretaries, Minister for Parliamentary Business and Permanent Secretary. The First Minister appoints a Cabinet Secretary for each of the core portfolios described below, and additional Ministers to support the work of the Scottish Cabinet, and two Law Officers (Lord Advocate and Solicitor General for Scotland). The previous parliament was dissolved in 24 March 2016, and following the Scottish Parliamentary election on 5 May 2016, the First Minister announced a new Scottish Cabinet, identifying education and the economy as priorities, along with the reform and improvement of public services and the ability to respond to challenges such as climate change in the years to come. The Ministers serving in the Cabinet Team during 2017-18 were: Nicola Sturgeon First Minister The First Minister is head of the Scottish Government. Ultimately responsible for all policy and decisions. Nicola Sturgeon became First Minister on 20 November 2014. The Cabinet Team members serving during 2017-18, who were appointed on 18 May 2016, are as follows: John Swinney Deputy First Minister and Cabinet Secretary for Education and Skills Responsibilities included: Government Strategy, Delivery and outcomes across portfolios, Resilience, School standards, Educational attainment and closing the attainment gap, National Improvement Framework, Quality and improvement, Teaching profession, School infrastructure and staffing, Qualifications, Behaviour, Measures to combat bullying, The Gaelic - 4 - The Scottish Government Consolidated Accounts Year to 31 March 2018 and Scots languages, Modern languages, Historical Abuse Enquiry, Named person, Cross Government co-ordination of Public Service Reform, Childcare implementation, Early years, Child protection, Social services workforce, Adoption and Fostering, Children’s rights, Looked after children, Children’s hearings, Protection of vulnerable groups, Children’s services, Widening Access, Higher education and universities, Further education and colleges, Student funding, Science and STEM, Youth work, Skills Development Scotland, Implementation of Wood recommendations, Non advanced vocational skills. Derek Mackay Cabinet Secretary for Finance and the Constitution Responsibilities included: Scottish Budget, Fiscal policy, Taxation, Budgetary monitoring and reporting, Scottish Public Finances and their sustainability, Public sector pay and pensions, Scottish Futures Trust, Efficient government, Public Bodies Policy, National Performance Framework, Registers of Scotland, Government procurement, Digital Public Services, Constitution, Government and Parliamentary business, Scottish Parliamentary elections and Local Government Elections, relations with other UK administrations, FOI, Open Government. Keith Brown Cabinet Secretary for Economy, Jobs and Fair Work Responsibilities included: The Scottish economy, infrastructure investment policy, Scottish Enterprise, trade & inward investment, innovation, internationalisation, increasing productivity, fair work and inclusive growth, labour market strategy, living wage, European structural funds, consumer advocacy and advice, employment policy, trades unions, bankruptcy policy and Accountant in Bankruptcy (AiB), business, industry and manufacturing, cities, energy and energy consent, regional economic forums, life sciences, financial services, low carbon economy, renewable energy industries, youth and women’s employment, veterans, employability programmes. Roseanna Cunningham Cabinet Secretary for Environment, Climate Change and Land Reform Responsibilities included: Climate change, flood prevention, water quality, land reform, physical and marine environment, sustainable development, biodiversity, natural heritage, environmental protection, environmental and climate justice, national parks, Scottish Water, The Crown Estate. Angela Constance Cabinet Secretary
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