Title
Contents
Performance Report Overview
Performance Report Performance Analysis
Accountability Report Corporate Governance
Accountability Report Remuneration & Staff Annual Report & Accounts Annual For the year ended Accounts 31 March 2018 transport.gov.scot Annex 2 |
Title Contents
Contents
Performance Report Accountability Report Annual Accounts 58 Overview 3 Corporate Governance Report 33 Statement of Comprehensive Introduction 4 Directors Report 35 Net Expenditure 59 Performance Statement by Chief Executive 5 Statement of Chief Executive’s Statement of Financial Position 60 Report Purpose and main activities Responsibilities 36 Cash Flow Statement 62 Overview of the Agency 6 Governance Statement 37 Statement of Changes Key issues and risks 6 in Taxpayers’ Equity 64 Remuneration & Staff Report 45 Notes to the Accounts 66 Performance Performance Analysis 8 Staff Report 46 Report Performance in key areas 9 Remuneration Report 49 Annex 110 Performance Social and Community issues 24 Parliamentary Accountability Report 54 Direction by the Scottish Ministers 111 Analysis Future Developments 26 Independent Auditors Report 55 Financials 27 Sustainability 32 Accountability Report Corporate Governance
Accountability Report Remuneration & Staff
Annual Accounts
Laid before the Scottish Parliament by the Scottish Ministers under Public Finance & Accountability (Scotland) Act 2000 s22(5) September 2018 SG/2018/133
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 3 |
Title
Contents
Performance Report Overview
Performance Report Performance Analysis
Accountability Report Corporate Governance
Accountability Report Performance Remuneration Report & Staff Annual Overview Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 4 |
Title Performance Report Overview
Contents This presents a review of the Agency’s performance, Performance the Chief Executive summary of the year and highlights Report the key purpose and activities of the Agency, together with Overview the risks, opportunities and challenges faced during the year. Performance Report Performance Analysis
Accountability Report Corporate Governance
Accountability Report Remuneration & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 5 | Performance Report Overview
Title
Chief Executive Statement
Contents
I am pleased to introduce Transport Scotland’s Our work has also been recognised with We are the Lead Partner in the European Annual Report and Accounts for 2017-18. a number of awards including The Forth Regional Development Fund 2014-2020 The past year has been an extremely busy Replacement Crossing Employer’s Delivery programme, focusing on funding for Performance and interesting one for the Agency. Team’s win in The Project Delivery Excellence projects that support the Programme for Report category at the 2017 Civil Service awards Government’s ambition to build an active Overview The opening of the new Queensferry Crossing, ceremony. The A75 won Road Safety scheme nation and phase out the need for new petrol the M8 M73 M74 Motorway Improvement of the year at the Highways Excellence and diesel cars and vans by 2032. This will Project and the completion of the first Magazine awards and the procurement be reflected in our comprehensive review of Performance section of the A9 Dualling have been some team also won recognition for the CivTech the National Transport Strategy that will set Report of our significant achievements in 2017-18. app as well as for the procurement on the a vision for Transport over the next 20 years. Performance In addition, our Aviation, Maritime, Freight A82 Pulpit Rock project. Analysis and Canals team supported the launch of During the past year, we have taken forward new air routes to Heathrow and we held a In addition, we also won the CIHT Asset a number of corporate developments Cruise Summit, jointly hosted by the Cabinet Management Award for the Transport including an increased focus on Learning Secretary for Rural Economy and Connectivity Scotland Asset Management Improvement and Development, the development Accountability and the Cabinet Secretary for Culture, Programme (Atkins and Transport Scotland) of a smarter working programme and Report Corporate consideration of our future structure given Tourism and External Affairs. and were highly commended for the Forth Governance Road Bridge Truss End Link Repairs at the the significant commitments signalled in Within our Rail directorate, we saw the 2017 British Construction Industry Awards. the Scottish Government’s Programme for introduction of the first electric passenger Government. These have been reflected services on the newly electrified Edinburgh Finally, the M8 M73 M74 Motorway in our Corporate Plan 2017-20 launched at Accountability Glasgow line and the opening of Scotland’s Improvements Project has been shortlisted the end of October 2017. It’s been another Report newest railway station in Forres. We have as Scotland’s representative for the Institution incredible year, with so much achieved across Remuneration continued to link more journeys by making of Civil Engineers People’s Choice Award. all of what we do and so much to be very & Staff more cycle spaces available at key locations proud of. I thank all colleagues involved and on the rail network and we have installed acknowledge our partners across Scotland, 100 electric car parking spaces. ‘The past year has who played a significant role in making this been an extremely another successful year. busy and interesting Annual one for the Agency.’ Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 6 | Performance Report Overview
Title
Purpose Key Risks Performance & Activities & Challenges Summary
Contents
Transport Scotland is an Agency of the The principal risks and uncertainties facing us We measure our Performance against Scottish Government, responsible for national relate to our major contracts for, and financial Strategic Objectives outlined in our Corporate transport and accountable to Parliament and investment in, rail, ferry, bus and air services, Plan, which sets out our policies and Performance the public through Scottish Ministers. We the maintenance of the road, rail and the commitments going forward. These objectives Report oversee the operation and improvement of Highlands and Islands air networks and major are in line with the vision set out within the Overview the trunk road, ferry, inland waterway and infrastructure projects. National Performance Framework (NPF). railway networks in Scotland; air passenger facilities in the Highlands and Islands and are The inherent risks relate to performance by We provide regular formal progress reports to Performance responsible for securing air routes for Scotland; contractors which can also be affected by Senior Management and Scottish Government Report national concessionary travel schemes outside factors such as adverse weather. during the year on our performance against Performance and the provision of network traffic and We continue to focus efforts in particular on our objectives and our progress towards Analysis travel information services. We also support improving winter resilience on the trunk road achieving our outcomes. We also monitor Ministers in prioritising future transport policy network and manage the related financial expenditure against our budget which formed and investments, whilst actively promoting risks on these contracts by providing support, part of the Rural Economy and Connectivity sustainable transport and road safety. including monthly reporting to budget holders, portfolio, and formally report on, the risks, Accountability directors and the Scottish Government. challenges and opportunities faced in Report Corporate Our purpose is to support and advise delivering our objectives and the processes Governance Scottish Ministers on strategy and we utilise to manage them. policy options for Transport in Scotland, and to increase sustainable economic growth through the development of Accountability national transport projects. Report Remuneration Our aim is to help create an accessible & Staff Scotland, with a safe, integrated and reliable transport network.
We seek to promote transport integration, support the transition to active and more Annual sustainable forms of transport and deliver Accounts a first class transport system for the people of Scotland.
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 7 | Performance Report Overview
Title
Financial performance & use of resources
Contents
Changes to our budget are reflected in Original ABR SBR Revised Outturn Variance the Scottish Government Autumn Budget Budget Adjust Adjust Budget 2017-18 Revision (ABR) and Spring Budget Revision 2017-18 2017-18 Performance (SBR), and for 2017-18, these include £40 £000’s £000’s £000’s £000’s £000’s £000’s Report million additional budget allocated through Rail Services 747,959 - - 747,959 761,982 14,023 Overview the Spring Budget Revision as part of the Concessionary Travel 254,400 - - 254,400 252,787 (1,613) deployment of CDEL consequentials for 2017-18. The table on the right shows Motorways & Trunk Roads 835,563 631 (1,395) 834,799 691,843 (142,956) Performance these movements and comparison Ferries 181,042 - - 181,042 237,849 56,807 Report with the outturn for 2017-18. Air 49,802 - - 49,802 51,993 2,191 Performance Analysis Other Transport 113,100 - 41,495 154,595 167,250 12,655 Scottish Futures Fund 25,250 (5,000) - 20,250 18,124 (2,126) Local Authority Grants 27,500 - - 27,500 27,236 (264) Accountability Report Total DEL 2,234,616 (4,369) 40,100 2,270,347 2,209,064 (61,823) Corporate AME ------Governance AME Capital - - 20,000 20,000 (4,268) (24,268)
ODEL PFI Resource 121,163 - 10,013 131,176 109,976 (21,200) Accountability ODEL PFI Capital - 5,000 - 5,000 4,958 (42) Report Remuneration TOTAL 2,355,779 631 70,113 2,426,523 2,319,730 (106,793) & Staff
Roy Brannen Chief Executive Transport Scotland
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 8 |
Title
Contents
Performance Report Overview
Performance Report Performance Analysis
Accountability Report Corporate Performance Governance
Accountability Report Report Remuneration Performance & Staff Annual Analysis Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 9 |
Title Performance Report
Performance Analysis Contents This shows our performance against our Corporate Deliverables Performance and high level objectives. Report Overview
Performance Report Performance Analysis
Accountability Report Corporate Governance
Accountability Report Remuneration & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 10 | Performance Report Performance Analysis
Title
Our three year Corporate Plan sets out how we will deliver our own aims and objectives, listed overleaf, within the Scottish Government’s wider purpose of a more successful country and a greener, wealthier, Contents fairer, smarter, stronger and healthier society.
The key contributions of each Directorate within Transport Scotland will be listed in Performance this section, many of which contribute to Report multiple objectives, and regular formal Overview progress reports on these are provided to senior management during the year, including performance against targets, narrative on methodologies and variations from targets. Performance Report Performance Analysis
Accountability Report Corporate Governance
Accountability Report Remuneration & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 11 | Performance Report Performance Analysis
Title
Key Objectives
Contents
A more detailed analysis of our performance is reported more fully in our Transport Review 2017 which can be accessed from our Performance website at: Strategic transport New infrastructure Who we are and Report planning and how we operate Overview www.transport.gov.scot/media/41871/ governance annual-review-2017.pdf Performance Report Performance Analysis
Accountability Report Corporate Environmental Moving freight Moving people Governance sustainability
Accountability Report Remuneration & Staff
Maintaining Procurement, Improving Annual and developing asset management communication, Accounts Scotland’s and contract travel choices, transport networks management resilience and safety
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 12 | Performance Report Performance Analysis
Title
Trunk Roads & Bus Operations
Contents
Community Engagement The Category B listed A7 Old Tweed Bridge Traffic Scotland Mobile Website We have continued to engage successfully was also partially reconstructed and a new The new Traffic Scotland mobile website with the businesses and communities that and wider structure on the replacement my.trafficscotland.org launched in Performance our transport networks serve, to listen to Cromdale footbridge adjacent to the A95 September 2017, makes it easier for road Report concerns and to provide pro-active solutions. now allows for easier access for all users users to plan ahead and obtain clarity on road Overview This year we have forged positive links with; including cyclists. Works to replace the conditions. Usage has already increased by the A82 Fort William Traffic Congestion expansions joints on the Ballachulish Bridge over 10% since the website launched, and Working Group, the A77 Action Group, the were completed in November 2017 and continued growth is anticipated as users Performance A92 Community Groups (Glenrothes and the works to upgrade the three spans of benefit from the existing functionality and Report Freuchie), the A82 Transport Forum and the A9 Cromarty Bridge continue. new features. The site makes the best use Performance the A96 Nairn Community Focus Group. of technology and successfully contributes to Analysis Future Intelligent Transport Strategy (ITS) Transport Scotland’s aim of a safe and efficient Bridges Launched in November 2017, our customer road network while giving road users the Essential maintenance work continued on focused Future ITS Strategy provides us with information they want in the way they want it. our bridges in 2017-18. January 2018 saw the a strategic framework to support our current This again is in line with the NTS, and will allow Accountability opening of the new £1.4 million A830 Criche and future activities in Intelligent Transport us to provide a safe and efficient road network, Report Corporate Bridge, the sixth bridge to be replaced in the Systems (ITS) across Scotland’s trunk road while recognising the growth in digital Governance last five years as part of our investment and motorway network. This approach will connectivity and demand for information. programme. inform strategic decisions, prioritise investment in appropriate new technologies and innovations for ITS infrastructure and Accountability services, aligned with the National Transport Report Strategy (NTS) outcomes to deliver a safe Remuneration and efficient customer focused network. & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 13 | Performance Report Performance Analysis
Title
Trunk Roads & Bus Operations cont’d... Contents
Air Quality and Low Emission Zones (LEZ’s) Smart Ticketing Also during the autumn the Transport Minister The commitment to work in partnership Early in 2017 we worked with Renfrewshire launched contactless bank payment services with local authorities to introduce LEZ’s Council Employability Hub and Young Scot, for a number of bus operators across Performance into Scotland’s four biggest cities between to develop a product aimed at helping young Scotland, thus accelerating smart payment Report 2018 and 2020, was strengthened in the people (16-25) to get back into employment, methods. At the end of 2017, we supported Overview Programme for Government. In the Autumn of by providing free travel tickets on the Young the development of, and Ministerial launch for, 2017 we published the Building Scotland’s Scot Smartcard, for use on McGill’s buses. Glasgow’s smartzone, which introduced Low Emission Zone consultation which We also supported ScotRail with their roll unlimited travel on one smartcard accepted Performance received 972 responses. The LEZ Leadership out of a wider range of smart tickets on by multiple bus operators in the Glasgow area, Report Group, established by ministers, met for the saltirecards and the capability to buy thus augmenting the successful Aberdeen Performance first time in December 2017 and we are smart tickets on trains, was introduced and Dundee smartzones launched last year. Analysis currently supporting local authorities in the in September 2017. creation of LEZ Delivery Groups in Glasgow and Edinburgh. Accountability Average Speed Cameras Report Corporate In October 2017, an average speed camera Governance system went live on the A90. This is aimed at improving safety by encouraging better driver behaviour on a route which has consistently been a problem area, with one of the highest Accountability collision statistics across the trunk road Report network. Remuneration & Staff
‘We are supporting local authorities Annual in the creation of Accounts LEZ Delivery Groups.’
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 14 | Performance Report Performance Analysis
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Major Transport Infrastructure Projects
Contents
Queensferry Crossing On 4 September 2017, her Majesty The Queen The Queensferry Crossing opened to traffic and HRH the Duke of Edinburgh, watched by on 30 August 2017 and operated for two days the First Minister, declared the Queensferry Performance before traffic moved back onto the Forth Road Crossing officially open on the South side of Report Bridge to allow for a series of opening events, the Forth before travelling across the new Overview organised to meet unprecedented demand bridge, exactly 53 years to the day she opened from the public, media, stakeholders, schools the Forth Road Bridge. On 5 September, and local communities. These generated 10,000 local residents, social groups, charities, Performance significant interest with almost 250,000 school and nursery pupils from the area were Report applications from across the world. also given the opportunity to walk on the Performance bridge. The Queensferry Crossing hosted Analysis A spectacular light show illuminated the in the region of 70,000 people over the Queensferry Crossing on Monday 28 course of the events before being re-opened September 2017, and launched a week of to traffic before the morning peak on celebrations to commemorate the opening Thursday 7th September. Accountability of the new iconic structure. The Queensferry Report Corporate Crossing Experience on Saturday 2 and The crossing provides two lanes in each Governance Sunday 3 September provided a once in direction, reflecting Scottish Government’s a lifetime opportunity to walk across the commitment that road provision across the new bridge. Forth will not be increased. The Queensferry Crossing motorway regulations came into effect Accountability on 1 February 2018 and the public transport Report corridor over the Forth Road Bridge then fully Remuneration opened, thus providing additional infrastructure & Staff capacity for sustainable forms of travel.
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 15 | Performance Report Performance Analysis
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Major Transport Infrastructure Projects cont’d...
Contents
The A9 Dualling In July 2017, a £50 million design contract The A9 Kincraig to Dalraddy project is the was awarded to carry out route option first section of the A9 Dualling Programme development and assessment work for Performance to be completed and became fully operational dualling the eastern section of the A96 Report on 30 September 2017. Completion of between East of Huntly and Aberdeen. Overview this project provides safer overtaking It is expected that the route option opportunities, reduces driver frustration assessment process work will take and supports businesses, communities approximately two years to complete. Performance and tourism by improving access to and Work has also continued on the development Report from the Highlands. Procurement of the and assessment of the route options for the Performance second section to be dualled between dualling of the A96 between Hardmuir and Analysis Luncarty to Pass of Birnam is currently Fochabers. The preferred option for this in dialogue with the main construction scheme is expected to be identified later contract expected to be awarded in the in 2018. first half of 2018. Accountability Report Corporate Governance
Accountability Report Remuneration & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 16 | Performance Report Performance Analysis
Title
Major Transport Infrastructure Projects cont’d...
Contents
Technology to promote Tourism on the A9 Connecting Communities A new Highland Discovery tourism app was In June 2017 we announced that the A82 released in September 2017, as a result of the Tarbet to Inverarnan Improvement Scheme Performance A9 Dualling programme. The app has been will developed as a 7.3 mile wide carriageway, Report produced as part of the Scottish Government’s with the aim of improving road safety and Overview innovative CivTech® Challenge which invites journey time reliability as well as connecting new technology businesses to solve businesses and communities in the Highlands technological challenges. Transport Scotland and Islands and the central belt. Progress Performance and CivTech® worked together to identify a continues with a view to preparing draft Report means of developing appropriate technology orders for the scheme in 2018-19. Performance to act as a catalyst for tourism growth on the Analysis A9, as part of the £3 billion commitment to As part of the Scottish Government’s dual the route. The app seeks to help all of commitment within the £315 million Scotland’s rural communities to maximise the Inverness and Highland City-Region Deal, economic potential of tourism and creates an we announced in October 2017 the preferred Accountability in-car audio experience, which allows tourists option for the A9/A96 Inshes Smithton Report Corporate to make connections with the passing Link Road. The scheme will reduce traffic Governance landscape, history and culture of Scotland, on the A9 and A96 passing through Raigmore and help them navigate the many visitor Interchange and improve safety by reducing attractions in and around the A9 corridor. traffic levels on key parts of the local road. The app will be released in both Android Accountability and IOS formats in 2018. Work continues to progress on the £745 Report million Aberdeen Western Peripheral Route/ Remuneration Balmedie to Tipperty (AWPR/B-T) Project. & Staff This is scheduled to open to traffic in late ‘Transport Scotland Autumn 2017-18, and is anticipated that this and CivTech® worked much needed new infrastructure will cut together in partnership journey times across Aberdeen by up to half to act as a catalyst for at peak times and enable local authorities Annual tourism growth on the A9.’ to develop public transport solutions. Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 17 | Performance Report Performance Analysis
Title
Major Transport Infrastructure Projects cont’d...
Contents
Improving Congestion The £500 million M8 M73 M74 Motorway Future Project Development In April 2017 we announced that the Improvements Project opened to traffic in This year saw the procurement process preferred option for the Sheriffhall June 2017. Road users are now able to enjoy get underway on a number of discrete Performance Roundabout Improvement Scheme would peak journey time savings of up to 20 minutes construction projects across Scotland. Report be taken forward with a view to publishing on the M8 and up to 15 minutes at Raith These included; the A77 Maybole Bypass, Overview draft Orders for the scheme in 2019. Junction, as well as enhanced safety and (award of the main construction contract Two Stakeholder Workshops were held in reduced emissions. is currently scheduled for Autumn 2018); August and October 2017, which focused the A737 Den Realignment scheme Performance on the development of active travel and gave The A737 Dalry Bypass contract was (contract award is anticipated in Spring 2018); Report key stakeholders the opportunity to consider awarded in May 2017 with work commencing the A90/A96 Haudagain Improvement Project Performance the relative merits of emerging active travel on site in July 2017. The project will involve (commenced with the publication of a contract Analysis options. The aim will be to improve access the construction of a new bypass to the east notice in June 2017, with site preparation for all modes of transport allowing Edinburgh of Dalry and associated junctions which will advance works set to commence in 2018) City Bypass traffic to pass directly over the connect with the existing A737 trunk road. and finally, the A9 Berriedale Braes roundabout, significantly reduce congestion These works will also include the construction Improvement Project, (the award of the Accountability and through provision of active travel facilities, of a viaduct over the River Garnock and the construction contract is currently scheduled Report Corporate enhance accessibility and safety for Glasgow to Ayr railway line. The result will be for Summer 2018 but ground investigation Governance pedestrians and cyclists. reduced conflict between local and strategic work commenced in December 2017). traffic, improved road safety and journey time reliability. Construction is expected to be complete by the end of 2019. Accountability ‘The M8 is a vital link in the Report central belt and this newly Since appointing design consultants in Remuneration completed section will help September 2016, we have been working hard & Staff connect people to business, to identify and undertake an initial assessment leisure and education of options for the planned improvements at Laurencekirk. The emerging options under opportunities.’ consideration were presented to the public at an exhibition on 30 October 2017 with Annual the preferred option itself expected to be Accounts announced later in 2018, and draft Order published in 2019.
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 18 | Performance Report Performance Analysis
Title
Aviation, Maritime, Freight & Canals
Contents
Aviation Ferries In June 2017, Norwegian Air Shuttle launched The UK’s first liquefied natural gas (LNG) its long-haul operations from Edinburgh to passenger ferry, MV Glen Sannox was Performance east coast USA, complementing their well launched at Ferguson Marine Engineering Report established short haul offering. New routes Limited’s (FMEL) Port Glasgow shipyard in Overview commenced to Stewart International for New November 2017 by First Minister, Nicola York, Providence Rhode Island and Bradley Sturgeon. The 102 metre, roll-on/roll-off Connecticut airports. Around 130 direct jobs vehicle passenger ferry, can operate on Performance were created to support the new base. liquefied natural gas (LNG) and marine gas Report Norwegian also allocated two of their brand oil (MGO). LNG is significantly cleaner and Performance new B737 MAX aircraft to the Edinburgh base. will help to reduce emissions and meet Analysis These are the latest generation, most ambitious Scottish Government targets. advanced 737s. The new LEAP engines use 15% less fuel than the standard aircraft; NOx emissions are 50% less than the industry Accountability standards and Co2 emissions per aircraft Report Corporate are 5,000 tonnes less per year than the Governance older models.
The Air Discount Scheme has continued on the PSO routes to Campbeltown, Barra and Accountability Tiree with providers continuing to promote Report day trip packages to help extend the season Remuneration for summer visitors to these areas. & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 19 | Performance Report Performance Analysis
Title
Aviation, Maritime, Freight & Canals cont’d...
Contents
Scottish Canals Ports and Shipping Ports continued to develop and maximise As well as continuing to invest in and maintain In November 2017, we hosted a well-attended their contribution to the local, regional and the canals, Scottish Canals completed the Scottish Cruise Summit with a record national economy, with projects underway or Performance purchase of the former Diageo site, in Port attendance from across a range of ports and completed at Peterhead, Lerwick, Dundee Report Dundas as part of its ambitious plans for destinations, including senior representatives and Aberdeen. The Minister for Transport and Overview regeneration in the area. from major cruise lines. Given its significance, the Islands attended the launch of the Scottish the event was jointly hosted by the Cabinet Maritime Cluster at London International A £2 million Scottish Government funded Secretary for Rural Economy and Connectivity Shipping Week in 2017 and work commenced Performance project saw the 200 year old Ness Weir, at the and the Cabinet Secretary for Culture, with the Maritime Industry on the Report mouth of Loch Dochfour and the River Ness, Tourism and External Affairs. development of A Scottish Maritime Performance reinforced with 500 metres of steel piling to Strategy due for completion in 2018/19. Analysis strengthen the structure and safeguard it for future generations. Accountability Report Corporate Governance
Accountability Report Remuneration & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 20 | Performance Report Performance Analysis
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Rail
Contents
Edinburgh Glasgow Improvement Enhancing Journeys The fleet will be gradually introduced during Project (EGIP) Over £475 million is being invested 2018 to run between Scotland’s seven main December 2017 saw the introduction of the in ScotRail’s fleet, delivering major cities, delivering 40% more seats on those Performance first electric passenger services on the newly enhancements to facilities and increasing routes. Existing trains are also undergoing Report electrified Edinburgh Glasgow (via Falkirk High) seating capacity by 23% by 2019. The new significant enhancements, including at-seat Overview Route. The electrification of 150 kilometres of fleet of C385 electric trains have just power sockets, Wi-Fi, lighting, new seats single track on Scotland’s busiest rail corridor completed the final phase of testing and and livery. paves the way for the introduction of the new will run on the newly electrified Edinburgh- Performance class 385 electric trains to the route during Glasgow route in 2018. In addition the fully Abellio ScotRail continues to progress a range Report 2018 and a cleaner greener and quieter refurbished fleet of 26 High-Speed-Trains of rolling stock projects and 200 additional Performance railway with lower carbon emissions. The (HSTs) have begun upgrade works and carriages will be rolled out into service over Analysis electrification and the new trains will allow driver training is well underway. the next 18 months taking the total fleet to travellers to benefit from improvements in in excess of 1,000 carriages – an increase of service choice and faster journey times on more than 50% since 2007. modern, attractive and energy efficient trains. Accountability Report Corporate Over £475 million Governance is being invested in ScotRail’s fleet. Accountability Report Remuneration & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 21 | Performance Report Performance Analysis
Title
Rail cont’d...
Contents
Community Rail Partnerships (CRPs) Aberdeen to Inverness Line Rannoch Timber by Rail Project Over £0.281 million has been committed Scotland’s newest station officially opened Transport Scotland established a taskforce to CRPs and community initiatives since in Forres in October 2017. The new station in October 2017, chaired by the Cabinet Performance 2015, with over £0.07 million committed in is part of Phase One of the Aberdeen to Secretary for the Rural Economy and Report the last 12 months. Those launched so far Inverness Rail Improvement Project, which is Connectivity, to focus all partners on delivering Overview include an Art Project at Rutherglen (Rail 74), transforming rail travel between the two cities a proposal to move timber by rail from a Children’s Engagement Project (Highland by increasing services and cutting journey Rannoch to the BSW Sawmill at Corpach. Mainline), and Tourism Promotion Project times. The facility was completed as part of The project will replace 3,200 lorry journeys Performance (Borders CRP). Potential for further CRP’s the planned 10-day closure of the line, during and some 300,000 road miles per year. Report are being explored in Cowdenbeath, Kyle, which the railway was moved onto a straighter, Funding of up to 100% of the cost of the Performance the Shotts line and Artline (Fife). double-tracked alignment to the north of the rail works has been approved through Analysis old station. The two platform station offers the Scottish Strategic Rail Freight Abellio ScotRail Integration improved passenger facilities and a fully Investment Fund. During 2017 ScotRail have continued to accessible footbridge and lifts. invest in passenger facilities at railway stations Accountability throughout Scotland and are supporting Report Corporate integrated rail travel. Enhancements have Governance been made at station car parks with an increase of nearly 200 spaces, recharging options are available at 50 stations with the installation of 100 electric car parking spaces Accountability and Pay & Display machines have been Report upgraded across the network. Improvements Remuneration to information on the go have also been & Staff made with the delivery of over 20 cross modal customer information screens. Investment continues to be made in cycling with over 900 additional cycle spaces installed at stations in 2017. Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 22 | Performance Report Performance Analysis
Title
Transport Policy
Contents
Strategic Reviews In 2018, we will be running a national We are also the Lead Partner in delivering In January 2018, we published our refreshed programme of engagement on the review the Strategic Intervention (SI) for Low Carbon NTS (www.transport.gov.scot/publication/ with organisations and the public, using Travel and Transport with up to £13.9 million Performance national-transport-strategy-nts/), which online channels, social media, dedicated allocated until the end of 2018 under the Report will culminate in the production of a successor events and community engagement. European Regional Development Fund (ERDF) Overview strategy in 2019, setting out a vision and 2014-2020 programme. Our focus is on framework for transport over the next 20 Contributions to the review are also delivering Active Travel Hubs to provide years. The strategy will consider transport welcome at [email protected] focal points for cycling and walking routes, Performance connectivity within Scotland, with the UK, The review will work towards a formal public to provide refuelling facilities for a range of Report and internationally, and it will set out the consultation on the draft strategy in early alternative fuels and transport modes and a Performance evidence base for future transport needs 2019 with a view to publishing the National Integrated Smart Ticketing Scheme. Analysis identifying specific needs between rural, successor strategy in summer 2019. coastal, islands, city, and urban areas. This Round of the Fund is supporting Challenge Fund 4 projects to deliver hubs in the Lowlands Our approach is focused on collaborative A second round of the Low Carbon Travel and Uplands area of Scotland. Accountability working with our partners, developing a and Transport (LCTT) Challenge Fund was Report Corporate robust evidence base and engaging with launched in October 2017. The aim is to deliver Governance stakeholders and citizens across Scotland to active travel and low carbon hubs. Up to 40% give them a greater say in the development ERDF funding is available in the Lowlands of transport policy. We have set up a national and Uplands and up to 70% in the Highlands Partnership Group comprised of key and Islands. Round one in June 2017 saw Accountability stakeholders charged with oversight of the successful bids from five projects across Report review process, and national stakeholder Scotland to support innovative hubs which Remuneration working groups which are now examining will aid the shift towards active or low carbon & Staff the key transport themes of economic growth, modes of transport. addressing inequality, ensuring safety and resilience and moving towards a greener and healthier transport system. Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 23 | Performance Report Performance Analysis
Title
Transport Policy cont’d...
Contents
Smart Ticketing Road Safety Smart Ticketing have launched three The Scottish Government supported the Challenge Fund’s between October 2016 Seat Belts on School Transport (Scotland) Performance and November 2017. The first two rounds Bill, introduced by Gillian Martin MSP, which Report saw five organisations across Scotland being gained Royal Assent in December 2017. Overview awarded funding to support the upgrade It will make seat belts a legal requirement of smart electronic technology machinery. on all dedicated school transport, for home-to- The third Challenge Fund round closed in school journeys and school excursions, Performance December 2017. provided by local authorities and grant-aided Report and independent school providers. Performance Concessionary Travel Analysis A Consultation on Concessionary Travel Road Safety Scotland (RSS) continued to closed on 17 November 2017. It attracted promote and support its learning resources as widespread public and political interest and well as run a number of campaigns focussed just under 3,000 responses were received. mainly on Framework priority areas including Accountability The Concessionary Travel Policy Team speed, age and vulnerable road users. Report Corporate supported the Transport Minister in his Governance personal engagement with older people’s Blue Badge Scheme organisations and groups representing In December 2017, the extension to Blue young modern apprentices. Badge eligibility criteria, to allow a badge to be issued in some cases where someone Accountability Green Buses poses a risk to themselves or others in traffic, Report To date, there have been seven rounds of the was made permanent. Remuneration Scottish Green Bus Fund. Funding of £16.1 & Staff million has seen the introduction of 361 low carbon vehicles to the fleet, with a further £1.3 ‘Our approach million assisting with the purchase of 46 new is focused on low carbon buses. Buses purchased through collaborative the Fund are returning significant fuel savings working, engaging Annual and reduced emissions. Each new bus is with stakeholders and Accounts expected to deliver an average reduction citizens across Scotland.’ in Co2 of around 21 tonnes per year and 300 tonnes over their life-cycle.
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 24 | Performance Report Performance Analysis
Title
Social & Community Issues
Contents
As the Transport Agency for Scotland, our A96 Dualling Aberdeen Western Peripheral Route/ aim is always to work in partnership with • Supporting nearly 500 engineering jobs Balmedie to Tipperty Project communities and to deliver social benefits in Scotland including over 200 graduate • Provides on average 139 graduate and Performance across Scotland as a consequence of our work. and apprentice jobs apprenticeship positions a year during Report construction phase Overview We have been able to demonstrate this in • During the school session 2017/18 we a number of ways during 2017-18. have supplied training for 86 Primary • Providing 53 construction jobs specifically and 22 Secondary School teachers to deliver for long term unemployed people Performance a programme of STEM related projects Report • During the operation and maintenance Performance • We have provided engineers to support phase there will be 7 graduate and Analysis and engage with 36 primary school and apprenticeship jobs and 5 for long-term 5 secondary school classes unemployed people Accountability Report Corporate Governance 500 Over 100 53 engineering jobs teachers trained long-term supported to deliver STEM unemployed, Accountability programmes employed Report Remuneration 200 139 & Staff graduate and graduate and apprentice jobs apprentice jobs supported provided a year
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 25 | Performance Report Performance Analysis
Title
Social & Community Issues cont’d...
Contents
A9 Dualling Academy 9 Initiative Forth Replacement Crossing Project • We have engaged with 3,160 students • 818 people have completed and 420 teachers to teach more about vocational training Performance what is involved in a major engineering Report project, raising awareness of STEM and • Has provided employment for Overview Civil engineering careers 174 long term unemployed people
• During the construction phase over Performance 75,000 people engaged with the Contact Report and Education Centre through the project Performance exhibition, outreach programmes and Analysis community group visits
Accountability Report Corporate Governance 3,160 818 174 75,000 students completed long-term people engaged vocational unemployed, engaged Accountability training employed Report Remuneration & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 26 | Performance Report Performance Analysis
Title
Future Developments
Contents
We are a major contributor to the Scottish Our work on the new National Transport Over the next few years, investment in Government’s Programme for Government Strategy and refreshing our investment active travel such as walking and cycling, 2016-17, which focuses on the themes of an strategy for major transport projects will be will rise significantly and there will be funding Performance education system providing opportunities for key to shaping our ambitions for the future. to support low carbon developments through Report all, an economy with more jobs and fair work, the Low Carbon Travel and Transport Overview public services fit for the future, empowering Ministers have given commitment to Development Challenge Fund. We will people and communities through improving connectivity between our cities continue to develop plans to respond strengthened local democracy and through the dualling of the A9 and A96, the challenge of Brexit and mitigate any Performance safeguarding Scotland’s place in the world. as well as supporting a major programme potential risks to transport in Scotland. Report Good transport links continue to play an of investment in or railways in the current Performance essential role in creating a sustainable control period, up to 2019, and beyond. Analysis economy, and our transport network supports and connects communities and enables people to go about their daily lives. Accountability Report Corporate Governance
Accountability Report Remuneration & Staff
‘Good transport links continue to play an essential role in Annual creating a sustainable Accounts economy.’
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 27 | Performance Report Performance Analysis
Title
Financials
Contents
The financial statements for the year ended The model used to produce the valuation (M77-Connect, M6 DBFO-Autolink and M80 31 March 2018 have been prepared in is known as the Road Authorities Asset Highway Management (Scotland) Limited). accordance with the Accounts Direction given Valuation System (RAAVS), and work is These arrangements meet the definition Performance by the Scottish Ministers in pursuance of the currently undertaken by WS Atkins using of Service Concession Arrangements in Report Public Finance and Accountability (Scotland) standard costs to value the individual accordance with the disclosure Overview Act 2000, and in accordance with The HM components of the network asset and requirements of IPSAS 32. Treasury Financial Reporting Manual (FReM). indices to revalue these on an annual The financial statements are consolidated basis through a joint contract with the We also have PPP agreements in the form Performance within the Scottish Government Consolidated other UK Road Authorities. of Non-Profit Distributing (NPD) contracts Report Resource Accounts. for the M8/M73/M74 Motorway Performance • Recognition and the valuation Improvements Project, with Scottish Roads Analysis These financial statements were authorised of provision Partnership (SRP) and Aberdeen Roads for issue on 22 August 2018. Due to the long term nature of our road Limited (ARL) for the new AWPR / B-T. and rail improvement schemes certain Both SRP and ARL are contractually obliged Our Annual Review is also published on our assumptions and judgements are required to provide the infrastructure and related Accountability website at transport.gov.scot and the to be made for the estimated cost of land services to the public on our behalf. We will Report Corporate Scottish Government Consolidated acquisition and compensation claims. This retain overall control of the related assets Governance Resource Accounts at scotland.gov.uk is due to the often protracted negotiation and account for them on the Statement periods involved and the initial uncertainty of Financial Position (SFP). Significant accounting policies over both the financial value and the final The areas where accounting judgements payment date of any compensation. We have reviewed the degree of control Accountability have significant impact are outlined below: exercised by each of the parties in existing Report • Valuation of accruals PPP contracts and conclude that the degree Remuneration • Valuation of the Trunk Road Network Due to the timing and availability of final of control we retain satisfies the requirements & Staff The trunk road network is valued on the year end information from external suppliers that the related assets created are required basis of current replacement cost, adjusted for Concessionary Travel, Rail and Roads to be accounted for on our SFP. Details of the to reflect the current condition of the maintenance, certain assumptions and accounting treatment can be found in notes road component and the depreciation judgments are required to be made 1 and 16 to the annual accounts. of structures and communications assets. when determining final accruals. Annual To produce this valuation requires the For details of the differences between NPD Accounts use of assumptions, estimates and • Public Private Partnerships (PPP) and PFI contracts, see the Scottish Futures professional judgement. We have three Public Private Partnerships Trust website at scottishfuturestrust.org.uk (PPP) agreements in the form of Private Finance Initiative (PFI) contracts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex
28 | Performance Report Performance Analysis
Title
Sources of funding
Contents
Rail Infrastructure The major projects specified by Scottish Financial performance and use Our responsibility for rail includes setting Ministers for Network Rail to undertake in of resources strategic outcomes for Network Rail in relation the remainder of CP5 are funded through Resources to fund our operating costs and Performance to the Operation, Maintenance, Renewal and a ring-fenced borrowing limit within this capital investment programme were allocated Report Enhancement of the rail infrastructure in agreement to protect the delivery of Network in the Scottish Government Budget 2017-18. Overview Scotland, as well as the services to be Rail’s programme in Scotland. Under these The choice between public and private funding delivered through the ScotRail and Caledonian arrangements we are not required to account is governed by suitability for alternative forms Sleeper franchises, and defining the level of for a share of any residual debt incurred on of finance (including value for money). Performance public expenditure available to support this. our behalf, although payments in respect of Report the servicing of the debt are reflected in the The policy decision set out in the 2017-18 Performance Network Rail outputs and associated funding Network Rail deed of grant payments made. budget is to maximise investment by utilising Analysis for Control Period 5 from 1 April 2014 to 31 all available forms of finance (whilst working March 2019 in Scotland was determined by The equivalent funding for activities in Control within a 5% affordability envelope for revenue the Office of Rail and Road Regulation (ORR). Period 6 from 1 April 2019 to 31 March 2024 financed schemes) in light of significant capital Following their reclassification as a central will be payable directly to Network Rail by constraints. Accountability government body in 2014, Network Rail Transport Scotland with an adjustment to Report Corporate borrowing is now financed by the UK the budgetary requirement agreed by HM A total of £2,270 million of budget cover Governance Government. Under a Memorandum of Treasury. The responsibility for servicing of any was allocated from the Scottish Government Understanding agreed with the UK residual debt from previous control periods Departmental Expenditure Limit (DEL) budget Government following reclassification, will then rest entirely with HM Treasury. (16-17: £2,150 million). Annually Managed the Scottish Government, with regulatory Expenditure (AME) of £20 million (16-17: NIL) Accountability oversight from the ORR, continues to relates to movement in provisions for both Report manage its own relationship with Network land compensation claims and orders for Remuneration Rail in respect of the delivery and funding of investment in land required to progress & Staff specified outputs on the Scottish rail network. projects. The £136 million ODEL budget (16-17: £244 million) funds expenditure in respect of on-balance sheet PFI/PPP projects. Of this, £131 million is scored against resource and includes payments for the, M77, M80 and Annual M6 schemes. The capital element relates to Accounts the construction costs of the M8 M73 M74 project. These form part of the overall budget of the Scottish Government.
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 29 | Performance Report Performance Analysis
Title
Outturn Analysis
Contents
The DEL underspend of £61.3 million, The underspend in non-cash is a result of The total underspend of £106.8 million comprises a cash underspend of £16.3 million lower than anticipated depreciation of the (16-17: £65.5 million underspend) and a non-cash underspend of £45.0 million. road network. The AME outturn reflects represents approximately 4% (16-17: 2.0%) Performance The cash underspend reflects the net position the fact that provisions that were initially of the overall budget. Report of savings and slippage offset by pressures estimated were not required at year, with Overview and advanced expenditure and the the negative expenditure representing The Statement of Comprehensive reclassification of Fixed Track Access a net overall reduction in these provisions. Net Expenditure (SoCNE) identifies Charges (£160 million) from Operating The ODEL resource underspend reflects net operating costs of £1,840 million. Performance Costs to Investment to ensure consistency deferred unitary charge payments on the Capital expenditure is not recognised Report across the Rail Control Period representing Aberdeen Western Peripheral Route/Balmedie as in-year expenditure within the SoCNE, Performance the most significant element of the to Tipperty (AWPR/B-T) Project. but the following table provides a Analysis variances in these categories. reconciliation of overall outturn to SoCNE.
Outturn Analysis Accountability Report Transport Scotland Budget Actual Variance £000’s Corporate 2017-18 £000’s £000’s £000’s Governance Net Operating Costs per SoCNE 1,839,837 Resource - Operating Costs 940,742 795,162 (145,580) Add: Additions to Intangible Assets (note 7) - Resource – Investment 672,407 882,171 209,764 Add: Additions to PPE (note 6) 411,351 Accountability Report Resource Depreciation (non-cash) 97,511 52,526 (44,985) Add: Additions to Investments (note 9) 73,487 Remuneration Capital 559,687 479,205 (£80,482) Less: Disposals of Intangible Assets (note 7) - & Staff DEL total 2,270,347 2,209,064 (61,283) Less: Disposals of PPE (note 6) (785) AME 20,000 (-4,268) (24,268) Less: Repayments of Investments (note 9) (4,160) PFI Resource (ODEL) 131,176 109,976 (21,200) Less: Disposals on Assets held for Sale (note 8) - Annual PFI Capital (ODEL) 5,000 4,958 (42) Less: De-trunkings (note 6) - Accounts Total 2,426,523 2,319,730 (106,793) Add: De-trunkings depreciation (note 6) - Outturn per Management Commentary 2,319,730
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 30 | Performance Report Performance Analysis
Title
Outturn Analysis cont’d...
Contents
The majority of Transport Scotland’s budget Ferry Administration Other is spent, either directly or indirectly, with Services 2% external suppliers. Only 2% is utilised on the Transport 5% Performance on-going Agency running costs. The chart Net Roads Net Report on the right shows the percentage spent Overview Investment Investment on each of the main areas of service 1% provision identified in the budget. Air 5% Roads Services Performance The total asset base is £19.2 billion,the Other 8% Resource Report majority of which relates to the trunk road Transport 12% Performance network. Additions to the value of the asset Analysis in year include, the new Queensferry Crossing Resource and the new M8/M73/M74 Improvements. 1% Accountability Concessionary Report Travel Corporate 13% Capital Governance Expenditure 21% Accountability Rail Net Report Remuneration Investment & Staff 25% Rail Resource 7% Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 31 | Performance Report Performance Analysis
Title
Outturn Analysis cont’d...
Contents
Relationship with suppliers Future Spending Plans We are committed to prompt payment of bills The Scottish Budget Draft Budget 2018-19, for goods and services and aim to settle all provides details of our spending plans that Performance undisputed invoices within contract terms will help deliver sustainable economic growth. Report and also in line with the Scottish Government These allocations are included in the table on Overview 10 day payment policy. We settled 96% of this page for the coming financial year. invoices within this timescale (16-17: 96%). The amount owed to trade creditors at the 2018-19* Performance year-end as a proportion of the aggregate £000’s Report amount invoiced during the year, represented Resource – Operating Costs 829,805 Performance 0.3 days in proportion to the total number Analysis of days in 2017-18 (16-17: 1.4 days). Resource – Investment 829,805 Non-Cash 143,135 Fraud Detection and Prevention Transport Scotland has a dedicated Fraud Capital 367,467 Accountability Prevention Officer, who links directly with the Report Total 2,217,306 Corporate Scottish Government Fraud Prevention Team. Governance There is a published fraud prevention plan ODEL 154,792 which is updated with relevant legislative Total 2,372,098 changes as they occur and provides clear guidance on the Agency’s approach to, and * Source – Scottish Draft Budget 2018-19 Accountability methodology for, anti corruption and bribery. Report Additional information can be found at Remuneration www.gov.scot/Topics/Government/ & Staff Finance/spfm/fraud/fraudannex1
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 32 | Performance Report Performance Analysis
Title
Sustainability
Contents
The Climate Change (Scotland) Act 2009 Corporate Operational requires us to report on corporate operational Carbon Emission 2017-18 emissions across activities such as office Performance energy use and business travel. Collectively, Element Metric Baseline in Actual in Actual in % Change 2015-16 2016-17 2017-18 in year Report these actions underpin the commitments Overview in our Carbon Management Plan (CMP). Total Emissions tCO2e 1,377.61 1,398.6 1,025.25 (26%) Energy – Electricity tCO2e 764.98 794.8 643.1 (19%) Our Carbon Management Plan – 3rd Edition, Energy – Gas tCO2e 265.26 279.7 296.2 5.8% Performance sets a corporate carbon emission baseline, Report along with associated targets and projects, Travel – Business tCO2e 187.72 240.1 201.0 (16%) Performance until 2019/20. The emission scope covers both Analysis operational emissions from our buildings and Travel – Commute tCO2e 154.5 78.1 76.5 (2%) travel, as well as trunk road lighting emissions Water tCO2e 3.13 3.67 4.1 11% (also known as Network Energy emissions). Waste tCO2e 2.02 2.23 5.35 139% Accountability The performance against the overall baseline Report Corporate will be reported via the Public Bodies Climate Energy: Emissions from electricity use in our Commute Travel: Emissions associated Governance Change Duties Reporting portal, however for offices (Buchanan House/Victoria Quay/Traffic with commute travel have decreased by 2%. the purposes of this report, information will only Control Centre) have decreased by 19%. Gas relate to the operational Carbon Footprint based consumption has increased by 5.8%, the latter Business Travel: Emissions attributed to on the baseline set using the 2015/16 data. due mainly to extended cold winter weather business travel have decreased by 16% when Accountability and on-going works at Buchanan House. compared to the 2015/16 baseline. Emission Report A detailed Sustainability Report will be reductions were achieved for Underground Remuneration published in late 2018, providing fuller details Water: Consumption Emissions have Travel (Down 99%),Car Hire (Down 26%), Taxi & Staff of our operational carbon footprint. increased by 11%. Travel (Down 57%) Ferry Travel (Down 75%), Bus Travel (Down 96%) and Rail Travel During the course of the financial year Waste: Emissions from waste disposal (Down 34%). Emissions increases are 2017/18, Transport Scotland’s operational have increased by 139%, a direct result attributed to Air Travel (Up 40%). emissions have decreased by 26% when of operations involved in moving towards Annual compared to the previous year. smarter working. Accounts
Roy Brannen Chief Executive, Transport Scotland 22 August 2018
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 33 |
Title
Contents
Performance Report Overview
Performance Report Performance Analysis
Accountability Report Corporate Accountability Governance
Accountability Report Report Remuneration Corporate & Staff Annual Governance Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 34 |
Title Accountability Report This illustrates our accountability requirements to Parliament, Contents incorporating Governance, Remuneration and Parliamentary Accountability Reports, which our auditors have reviewed Performance for consistency with the information contained in the financial Report statements for 2017-18, and their opinion covers these disclosures. Overview
Performance Corporate Governance Report Report Performance The Corporate Governance section explains the composition Analysis and governance structure of the Agency and how that supports Accountability the achievement of our objectives. Report Corporate Governance
Accountability Report Remuneration & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 35 | Accountability Report Corporate Governance
Title
Directors Report
Contents
The Chief Executive is the Accountable Officer Current Directors Appointed Auditors for the Agency. He is supported by a Senior • Roy Brannen; Chief Executive The financial statements for 2017-18 are Management Team comprising six Executive audited by auditors appointed by the Auditor Performance Directors as shown below. The Accountable • Hugh Gillies; Trunk Road & Bus Operations General for Scotland. Audit Scotland carried Report Officer is also supported by an Audit and Risk out this audit and the notional fee for this Overview Committee, chaired by a non-executive • Donald Carmichael; Transport Policy service was £173,100 which related solely member (John Matheson took over from to the provision of the statutory audit service. Susan Dunn as Chair of the Committee on 21 • Bill Reeve; Rail There were no payments made for non-audit Performance July 2017) and including two further external work in the year. Report members: Bill Bound and Pamela Mclauchlan • Michael Baxter; Finance, Performance who served throughout 2017-18. Corporate & Analytical Services Personal Data Related Incidents Analysis There were no personal data related Bill Bound and Pamela Mclauchlan served as • Michelle Rennie; Major Transport incidents in the year (16-17: none). non-executive members during 2017-18. Infrastructure Projects Accountability • John Nicholls; Aviation, Maritime, Report Corporate Freight and Canals Governance Directors and Non-Executive Members Interests Directors’ and Audit & Risk Committee Accountability Non Executive Members’ interests are Report recorded on the electronic HR system. Remuneration The 2017-18 statements of assurance & Staff completed by Directors in post as at 31 March 2018 also confirmed that no conflict of interest arose in the exercise of their duties. Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 36 | Accountability Report Corporate Governance
Title
Statement of Chief Executive’s Responsibilities
Contents
In accordance with section 19(4) of the In preparing the accounts, the Agency The Principal Accountable Officer for the Public Finance and Accountability (Scotland) is required to: Scottish Administration has designated Act 2000, the Scottish Ministers have directed the Chief Executive of Transport Scotland Performance Transport Scotland to prepare a statement • Observe the accounts direction issued as the Accountable Officer for the Agency. Report of accounts for each financial year in by the Scottish Ministers, including the The Accountable Officer’s relevant Overview the form and on the basis set out in the relevant accounting and disclosure responsibilities include the propriety and Accounts Direction. The Accounts Direction requirements and apply suitable regularity of the public finances for which is reproduced at Annex A to these financial accounting policies on a consistent basis he is accountable, keeping proper records Performance statements. and safeguarding the Agency’s assets, Report • Make judgements and estimates as set out in the Memorandum to Accountable Performance The accounts are prepared on an accruals on a reasonable basis Officers issued by the Scottish Government. Analysis basis and must show a true and fair view of the Agency’s state of affairs at the year end • State where applicable accounting The Accountable Officer has taken all the and of its income and expenditure, changes standards have been followed and necessary steps to make himself aware of in taxpayers’ equity and cash flows for the disclose and explain any material any relevant audit information and to establish Accountability financial year. departures in the financial statements that the body’s auditors are aware of that Report Corporate information. There is no relevant audit Governance • Prepare the financial statements on information of which the body’s auditors the going concern basis unless it is are unaware. inappropriate to presume that Transport Scotland will continue in operation The annual report and accounts as a Accountability whole are fair, balanced and understandable Report and the Accountable Officer takes personal Remuneration responsibility for the annual report and & Staff accounts and the judgements required for determining that it is fair, balanced and understandable.
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 37 | Accountability Report Corporate Governance
Title
Governance Statement
Contents
The Governance Statement explains Accountable Officer’s scope Transport Scotland Audit our approach to corporate governance, of responsibilities & Risk Committee which is vital to effective financial and Our role is to oversee the operation and The Audit and Risk Committee non-executive Performance risk management. improvement of the trunk road, ferry, inland members bring independent judgement Report waterway and railway networks in Scotland; and challenge to the governance of the Overview The Scottish Public Finance Manual (SPFM) the air facilities and routes in the Highlands Agency. The Committee meets four times summarises the purpose of the Governance and Islands; the air passenger facilities at a year, although the Chair may convene Statement as being to provide a clear Prestwick; the national concessionary travel additional meetings and regularly meets Performance understanding of the organisation’s internal schemes and the provision of travel myself and the Director of Finance, Report control structure and its management of information services. We also support Scottish Corporate & Analytical Services to keep Performance resources. The Statement should provide Ministers in prioritising future transport policy abreast of developments. Audit and Risk Analysis a sense of how successfully the organisation and investments and promoting sustainable Committee meetings will normally be has coped with challenge and risk. transport and road safety. attended by myself as Accountable Officer, the Director of Finance, Corporate & This Governance Statement describes how As Accountable Officer for the Agency, Analytical Services, a representative of Accountability our governance structures work, how they I have responsibility for maintaining a sound Internal Audit and a representative of Report Corporate have performed, and provides an assessment system of internal control that supports the external audit (Audit Scotland). In addition, Governance of how the Agency has been managed, achievement of Transport Scotland’s policies, the Audit and Risk Committee asks other including the effectiveness of the systems aims and objectives set by Scottish Ministers, Transport Scotland officials to attend to of internal control, risk management and whilst safeguarding the public funds and assist it with its discussions where specific accountability. Transport Scotland complies departmental assets for which I am input or expertise is required. Accountability with all governance related guidance in the responsible, in accordance with the SPFM. Report SPFM, the Civil Service Code and relevant I am supported in that role by a Senior The Audit and Risk Committee advises Remuneration elements of the Good Governance Standard Management Team of six Directors and on strategic processes for risk, control and & Staff for Public Services, produced by the an Audit and Risk Committee, chaired by governance; the accounts of the organisation, Independent Commission on Good a non-executive member and including including the process for review of the Governance in Public Services. two further non-executive members. accounts post audit and prior to sign off by myself as Accountable Officer; and assurances relating to the corporate Annual governance requirements. Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 38 | Accountability Report Corporate Governance
Title
Governance Statement cont’d...
Contents
The Audit and Risk Committee receives Principles of Corporate Governance Performance Review copies of minutes of the monthly senior in Transport Scotland All members of the Senior Management management team meetings, as well Corporate governance is the system Team are subject to annual objectives and Performance as monthly finance reports, and also by which organisations are directed year end performance appraisals, which are Report meets directors individually twice a year. and controlled and is concerned with the both formally recorded. These are focussed Overview In addition, the Committee meets with structures and processes for decision-making on Transport Scotland’s delivery priorities, Internal Audit and also Audit Scotland and accountability. All public bodies must which are closely linked to the Governments separately once a year. have a group which is responsible for: National Outcomes. Performance Report The Audit and Risk Committee also • Giving leadership and strategic direction Performance against our objectives within Performance produces an Annual Report, which supports the Corporate Business Plan is monitored Analysis this Governance Statement. The report • Defining control mechanisms throughout the year and measured against summarises the committee’s work over to safeguard public resources targets at year end. Progress, including actual the past year and assesses: performance, on key achievements is • Supervising the overall management highlighted. In addition, every Directorate Accountability • The reliability and comprehensiveness of the body’s activities within the Agency sets key performance Report Corporate of assurances received indicators for the service it provides and Governance • Reporting on stewardship and performance progress against these is reviewed at Senior • Issues pertinent to this Management level. We have an annual target governance statement Within Transport Scotland, that group to achieve overall efficiency savings as a is the Senior Management Team which percentage of our budget and progress on Accountability • Financial reporting adheres closely to robust principles of this is reported to the Scottish Government Report Corporate Governance, as follows. and published at the end of each financial year. Remuneration • The quality of both internal & Staff and external audit
• Its view of its own effectiveness
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 39 | Accountability Report Corporate Governance
Title
Governance Statement cont’d...
Contents
Accountability Our budgets are set in the context of the I am supported by an Investment Decision The Senior Management Team ensures that Scottish Government’s annual budget process, Making Board, made up of senior managers, the Scottish Public Finance Manual is applied, and forecast expenditure, in addition to in reviewing and approving the key stages Performance with appropriate arrangements in place to internal financial management and reporting in all of Transport Scotland’s major projects Report ensure that the public funds they are within Transport Scotland, is continuously and procurements. Overview accountable for are properly safeguarded and monitored with Scottish Government used economically, efficiently and effectively. Finance Directorate. I set objectives for the Directors within Transport Scotland to undertake regular Performance Delegated Authority Programme and Project Management review processes to ensure that improvement Report I, as Chief Executive and Accountable Officer All investment projects are overseen by a in the assurance and control environment Performance for Transport Scotland, formally delegate Project Board, chaired by the Project Sponsor, within Transport Scotland is monitored closely Analysis financial management responsibilities to each incorporating appropriate procurement, legal, and, where appropriate, actions are in place to Director for the propriety, regularity and good technical and financial expertise. In addition address any weaknesses identified to ensure financial management of expenditure within non-executive members of the Audit and Risk the continuous improvement of the system. their Directorate. This delegation is formally Committee are included on the Boards of the Accountability recorded and reviewed each year by the most significant projects. The Project Board’s The System of Internal Control Report Corporate Finance Directorate. role is to oversee the delivery of the projects, The system of internal control is designed Governance including associated risk management. to manage rather than eliminate the risk Financial Management This includes the development and approval of failure to achieve our policies, aims and The Senior Management Team reviews of associated business cases in line with objectives. Consequently, reasonable and financial performance monthly as well as the requirements of the Scottish Public not absolute assurance of its effectiveness Accountability ensuring the timely production of the Annual Finance Manual. can be provided. The system of internal Report Report and Accounts, in compliance with control is based on an on-going process Remuneration relevant standards of Corporate Governance. Gateway Reviews and other appropriate designed to identify and prioritise risks, & Staff Monthly financial reports considered by the external reviews are undertaken at relevant to evaluate their likelihood and impact and Senior Management Team are shared with stages to ensure that projects are capable to manage them efficiently, economically External Audit and Risk Committee Members. of delivering their stated objectives. and effectively. This system of internal As Accountable Officer, I am the control has been in place for the year ended nominated Investment Decision Maker. 31 March 2018 and up to the date of approval Annual of the Annual Report and Accounts. It is in Accounts accordance with the guidance from Scottish Ministers.
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 40 | Accountability Report Corporate Governance
Title
Governance Statement cont’d...
Contents
Review of Effectiveness Our internal audit function is provided by Internal audit is taking action to ensure that I, as the Accountable Officer, have the Scottish Government Internal Audit all of these improvements are addressed. responsibility for reviewing the effectiveness Directorate and they submit regular Audit Scotland confirmed that this review Performance of the system of internal control. This is reports to the Audit and Risk Committee did not identify any internal audit reports Report informed by the work of Internal Audit, on the adequacy and effectiveness of the where the underlying evidence would suggest Overview the managers within the Agency, the Audit organisation’s system of internal control, an incorrect audit opinion or conclusion. and Risk Committee and the external together with any recommendations auditors in their reports. for improvement. Follow up work is The Performance Audit Group (company Performance carried out to confirm the effective Turner & Townsend), working in association Report Assurance is provided by Directors’ annual implementation of recommendations with PricewaterhouseCoopers) audits, Performance certificates of assurance covering their areas agreed as a result of the audits. monitors and reports on an independent basis Analysis of responsibility. This is underpinned by an on the financial, technical and performance internal control checklist, covering all areas In their role as external auditors, Audit aspects of the work carried out by the Trunk of corporate governance. The content of Scotland assess the extent to which Road Operating Companies, and this provides this checklist is reviewed each year. it can place reliance on the individual external assurance for trunk road maintenance. Accountability reviews undertaken by Internal Audit Report Corporate In addition we maintain an assurance map, to inform their opinion on the financial Governance which sets out both corporate and directorate statements, depending on their direct processes that provide assurance on relevance to their work on the statements. achievement of our objectives and identifies Alongside this, each year Audit Scotland officers responsible for ensuring these are undertakes a review of our Internal audit Accountability accurate and up to date. This document is arrangements. In 2017/18 Audit Scotland Report shared with internal and external audit, and identified some areas for improvement in Remuneration reviewed by the Audit and Risk Committee. complying with internal audit standards, & Staff principally in relation to audit planning, documentation and reporting and management review.
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 41 | Accountability Report Corporate Governance
Title
Governance Statement cont’d...
Contents
Internal Audit Reports 2017-18 Audit Area & Scope Outcome The overall work undertaken in 2017-18 and the substantial rating for the ScotRail review, Performance 1. A9 Dualling Programme Assurance Provided: Reasonable alongside the results of a number of Gateway Report reviews and Audit Scotland Reports, the 2. Contract Management of ScotRail Franchise Assurance Provided: Substantial Overview implementation of audit recommendations 3. ICT Security of TS Hosted Systems Assurance Provided: Reasonable and general management approach and engagement, has resulted in Internal Audit 4. Management of Clyde & Hebrides Ferry Services Assurance Provided: Reasonable (CHFS) 2 Contract Performance providing ‘Substantial’ Assurance in respect Report of Transport Scotland’s risk management, Performance control and governance arrangements. Analysis
Accountability Report Corporate Governance
Accountability Report Remuneration & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 42 | Accountability Report Corporate Governance
Title
Governance Statement cont’d...
Contents
Efficient Government A Best Value review on Information Each Directorate has a designated risk The Scottish Government sets a target of 3% Management was undertaken in 2017-18, co-ordinator who is responsible for Efficiency Savings to be achieved each year, which demonstrated a robust and forward facilitating an effective and regular review Performance with the challenge being to use resources looking approach to the area and made a of risks to the delivery of objectives. Report in a more efficient and effective way so that number of key recommendations for further Overview more can be delivered for the same or less improvement. These related to continuing There is a robust framework of responsibility cost. Transport Scotland has consistently staff engagement, guidance and training for risk management in accordance with the achieved or exceeded this target, and for in preparation for the new General Data SPFM. The system for assessment and control Performance 2017-18 the Agency has once again Protection Regulations (GDPR), which will of risk is as follows: Report demonstrated its commitment to deal with be enforced from May 2018. Information Performance cost pressures and live within its budget Asset Champions drive the new agenda • I, as Chief Executive, in conjunction with Analysis allocation. Regular performance reporting forward and the good work being done the Directors, review the strategic and illustrates the extent to which we use on the development of the new ICT Digital operational risks to the Agency’s business efficiencies to protect the quality of our Strategy continues. All of this will be throughout the year, and this is a regular work and deliver our objectives. progressed in 2018-19. item at the monthly Senior Management Accountability Team meetings Report Corporate Best Value A follow up review was also conducted Governance All public bodies in Scotland are responsible on Procurement. Significant progress has • The Audit and Risk Committee has provided for achieving Best Value through ensuring been made in this area and actions from oversight of the Agency’s risk management sound governance, good management, the previous review have been taken forward. processes and strategy and Corporate Risk public reporting on performance and a We continue to demonstrate Best Value Register throughout the year Accountability focus on improvement. Best Value provides in this area. Report a common framework for continuous • Managers identify and evaluate risks to Remuneration improvement in public services in Scotland, In 2018-19, it is the intention to conduct successfully deliver the Agency’s objectives & Staff and is a key foundation of the Scottish a further Best Value review on Challenge when they prepare and monitor directorate Government’s Public Service Reform agenda. and Improvement. and business management plans We demonstrate achievement of best value by undertaking reviews of our Risk Management • I, as Chief Executive, hold regular meetings achievement on specific areas each Risks are managed at the level most able to with Ministers where both strategic and Annual year, using the Audit Scotland deal with them, with the most serious risks operational risks are discussed Accounts self-assessment toolkit. being escalated to the Senior Management Team. The Director of Finance, Corporate & Analytical Services is the Transport Scotland Risk Champion.
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 43 | Accountability Report Corporate Governance
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Governance Statement cont’d...
Contents
Our overall Risk Strategy sets out a consistent • The impact of compensation claims In addition, we follow the Scottish approach to the implementation of risk related to the M8/M73/M74 Motorway Government key principles for good management at strategic, programme and Improvements Project information management that: Performance project levels. The Risk Management Group Report (Chaired by the Director of Finance, Corporate • Management of the condition of the • We treat information as a Scottish Overview and Analytical Services) is responsible for trunk road network Government resource developing and maintaining the Corporate Risk Register and for facilitating the on-going • The delivery of the Aberdeen Western • We are all responsible for our information Performance production and management of risk registers Peripheral Route funding to support Report within project teams and Directorates and for low carbon developments • We make information accessible to Performance enhancing the management of risk across others who have a need to use it Analysis all areas of the business. The group comprises The Risk Management Framework has been representatives from each directorate and reviewed again in year, and all Directorate risk • We keep records of what we do meets quarterly with appropriate registers have been further enhanced to communication between meetings. ensure accuracy and consistency in layout and • Our information is accurate and Accountability Minutes of the meetings are shared with terminology and rigour of review. In addition, fit for purpose Report Corporate Directors and the Audit and Risk Committee. the previous Internal Audit Review of the Governance systems for Risk Management within the • Our information complies with The most significant highest scoring risks Agency, has provided substantial assurance regulations and legal requirements currently identified by the Agency include: that Transport Scotland demonstrated best practice in this area. All our users of Information Technology Accountability • The funding and delivery of the A9 must comply with the Scottish Government Report and A96 dualling programmes Managing information IT Code of Conduct. Remuneration & information security & Staff • The delivery of major rail improvement We are committed to ensuring information projects by Network Rail including the is managed and valued, with appropriate Edinburgh Glasgow Improvement protection and use of our information assets. Programme on budget and with The handling of data and information carries minimum disruption to passengers significant risks and we take information Annual security very seriously, in compliance with Accounts • Timeous delivery of rail rolling stock Scottish Government sponsored and improvement programmes adopted Security Frameworks and Data Handling policies. • Funding for Network Rail Control Period 6
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 44 | Accountability Report Corporate Governance
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Governance Statement cont’d...
Contents
Counter Fraud / Review of risk Details of cases of actual or attempted fraud Business Continuity of financial loss that come to light during the financial year Our Business Continuity Plan has been All cases of actual or suspected fraud are (NIL in 2017-18 (2016-17: NIL)) are reported reviewed and updated during 2017-18. Performance investigated promptly and appropriate action within the Fraud Log and reported to the Audit The objectives of the plan are: Report is taken, in accordance with our fraud, bribery and Risk Committee. Details are also shared Overview and whistleblowing procedures which specify with Police Scotland where this is deemed • To identify risks how cases will be dealt with and how staff appropriate. We actively participate in the can report suspicions or concerns. fraud alerts system run by the National Fraud • To establish clear areas of responsibility Performance Authority, which seeks to share intelligence Report We also have a designated Fraud Officer about specific fraud risks encountered • To ensure Transport Scotland continues Performance and a Fraud Response Plan in place to ensure across Government. to provide essential functions and services Analysis that timely and effective action is taken in the event of a fraud. The Plan is reviewed There is a separate Concessionary Fares Fraud • To identify measures to recover/ repair on an annual basis and it includes detailed Team due to its unique operating environment. assets damaged or lost guidance which is designed to increase We participate in the National Fraud Initiative Accountability awareness of both ‘bribery and corruption’ (NFI) in Scotland, led by Audit Scotland. This is • To identify a medium and long term Report Corporate and ‘whistleblowing in the public sector’, a data matching process to help public sector recovery strategy Governance and these are also subject to regular staff bodies to prevent and detect fraud and error notices and awareness sessions. We also in their financial systems, using computerised The plan has been successfully deployed have a dedicated fraud hotline for the national techniques to compare information about during the past year to cover incidents where concessionary fares scheme and are using individuals held by different public bodies access to office accommodation in Glasgow Accountability more integrated fraud alert systems. on different systems. was restricted on two occasions and it was Report demonstrated to operate effectively, a number Remuneration The Agency has also continued to increase Cyber Resilience is high on the agenda of lessons were also learned and the Plan & Staff the level and profile of training in this area, throughout the Agency, and the Cyber has been updated accordingly. and has encouraged all staff to undertake Resilience Team review and develop best training and review regular updates and practice, improve staff awareness and monitor staff notices distributed by the Fraud Officer all of the Agency’s systems. The Cyber to raise awareness of fraud identification Steering Group has the responsibility of Annual and prevention. overseeing the Cyber Resilience Plan and Accounts the Agency is a catalyst organisation for Cyber Resilience, putting it right at the forefront of Scotland wide Cyber efforts.
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 45 |
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Contents
Performance Report Overview
Performance Report Performance Analysis
Accountability Report Corporate Accountability Governance
Accountability Report Report Remuneration Remuneration & Staff Annual & Staff Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 46 |
Title Accountability Report
Remuneration & Staff Contents This shows our remuneration policy for directors and reports on how Performance it has been implemented, along with the amounts paid to directors, Report together with staff composition and policies and details on staff Overview numbers and related expenditure. Performance Report Performance Analysis
Accountability Report Corporate Governance
Accountability Report Remuneration & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 47 | Accountability Report Remuneration & Staff
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Staff Report
Contents
Equal opportunities and diversity Gender Chief Employees Total The procedures are aimed to: Our equal opportunities and diversity policy Executive aims to ensure that each and every member & Directors • Be supportive and positive Performance of staff feels comfortable, valued, and free to Female 1 189 190 Report contribute fully and to the best of their ability. • Promote fair and consistent treatment Overview Transport Scotland is committed to increasing Male 6 298 304 for everyone the diversity of staff within the organisation. Figures based on Agency numbers at the end of March 2018 We aim to develop our staff and we will • Encourage, assist and make it easy Performance positively value their different perspectives The Department for Work and Pensions is for people to stay in work Report and skills and make full use of these in our responsible for developing, formulating and Performance work. It is our aim to be fully reflective of disseminating equal opportunities guidance • Explain employees’ entitlements Analysis the people of Scotland. We are an equal for the Civil Service as a whole, but operational and roles and responsibilities opportunities employer with policies in place responsibility rests with individual to guard against bullying, harassment or departments. In 2017-18 an average of 7.5 working days discrimination and to ensure against barriers (16-17: 6.5) were lost due to sickness absence Accountability to employment or advancement. We are also Staff relations per staff year for Transport Scotland. Report Corporate committed to meeting our duties under the We give a high priority to the development Governance Equality Act 2010, and to ensuring that all staff of all our staff. Training, development and are treated equally irrespective of their sex, learning is quality assured through our marital/civil partnership status, maternity/ commitment to the Investor in People (IiP) paternity status, age, race, ethnic origin, Scheme. Accountability sexual orientation, disability, religion or belief, Report working pattern, employment status, gender We recognise that the success of any Remuneration identity (transgender), caring responsibility, organisation depends largely on the effective & Staff or trade union membership. performance and full attendance of all its employees. People are a valued resource, and The breakdown for the financial year, of the as an employer our attendance management number of persons of each gender employed procedures are designed to maintain a happy, within the agency is as follows: well-motivated and healthy workforce. Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 48 | Accountability Report Remuneration & Staff
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Staff Report cont’d...
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Health and Safety Staff Category Headcount Headcount We are committed to promoting the highest at 31 March 2018 at 31 March 2017 standards of health and safety for our staff, Performance Permanent Staff 398 394 visitors, contractors and others who could be Report affected by our acts or omissions. We seek to Agency Staff 18 19 Overview promote a positive health and safety climate Consultants Employed 67 48 and culture and seek continuous improvement through relevant and compulsory training and Total 483 461 Performance e-learning, with the support of the Health & Report Safety Adviser. Our policy is in alignment with Performance Scottish Government Occupational Health & Employment of disabled persons Staff Costs Analysis Safety strategies. We are a “Confident about Disabled People Details of Agency staff numbers and costs Employer”, which recognises our commitment for the year are contained within Note 2 to the Trade Union Membership and our positive attitude towards our disabled Accounts. We incurred £18.9 million in relation Transport Scotland values strong employee applicants and staff. to staff costs in the year 2017-18 (2016-17: Accountability relations and has a Partnership Board in place. £18.2 million). Of this, £17.7 million was in Report Corporate Our partnership agreement sets out the terms In doing so, we offer interviews to all disabled relation to permanent staff, who are civil Governance of reference for the board on matters affecting applicants and staff who meet the minimum servants with an employment contract with the conditions of service of staff. criteria for any post; reminding line managers Transport Scotland (2016-17: £17 million). of their management responsibilities; helping The balance of £1.2 million related to agency The Board itself is made up of Transport staff balance their work and their disability; staff (2016-17: £1.2 million). Accountability Scotland management with a representative and offering advice and training to staff and Report from Transport Scotland Human Resources managers about issues related to disability. In addition, the agency paid £5.3 million Remuneration as well as representatives from The Scottish in professional consultancy costs in 2017-18 & Staff Government Trade Unions. The Board meets The number of staff as at 31 March 2018 (2016-17: £3.7 million) in relation to on a quarterly basis throughout the year or who had declared a disability employed by professional services required in the additionally on special request by board Transport Scotland was 44 (2016-17: 36). procurement of key projects and the delivery members. of the Agency’s transport objectives. Annual At the end of financial year 2017-18, the Accounts Agency headcount totalled 483, analysed in the table above. The full time equivalent (FTE ) figure of Permanent staff was 392.7.
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 49 | Accountability Report Remuneration & Staff
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Remuneration Report
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Pension liabilities • The funds available to departments as Service Contracts The pension entitlements of the Executive set out in the Government’s departmental The Constitutional Reform and Governance Directors of Transport Scotland are contained expenditure limits Act 2010 requires Civil Service appointments Performance within the remuneration report. An indication to be made on merit on the basis of fair and Report of how pension liabilities are treated in the • The Government’s inflation target open competition but also includes the Overview accounts, and references to relevant pension circumstances when appointments may schemes, are also contained within the Performance based pay awards are based otherwise be made. Remuneration Report and in Note 2 to on an assessment of performance against Performance the Accounts. objectives agreed between the individual and Unless otherwise stated below, the officials Report line manager at the start of the reporting year. covered by this report hold appointments Performance Remuneration Policy Performance will also have an effect on any which are open-ended. Early termination, Analysis The remuneration of senior civil servants is set bonus element awarded. other than for misconduct, would result in in accordance with the rules set out in chapter the individual receiving compensation as set 7.1, Annex A of the Civil Service Management Further information about the work out in the Civil Service Compensation Scheme. Code and in conjunction with independent of the SSRB can be found at: Accountability advice from the Senior Salaries Review Body www.gov.uk/government/organisations/ Further information about the work of the Report Corporate (SSRB). In reaching its recommendations, review-body-on-senior-salaries Civil Service Commissioners can be found at Governance the SSRB is to have regard to the following www.civilservicecommission.org.uk considerations: The remuneration of staff below senior civil service level is determined by the Scottish Whilst Transport Scotland does not have • The need to recruit, retain and motivate Government. In determining policy, account a Board with non-executive directors, the Accountability suitably able and qualified people to exercise is taken of the need for pay to be set at a level Audit and Risk Committee has three external Report their different responsibilities which will ensure the recruitment, retention members to ensure independent oversight Remuneration and motivation of staff. Also taken into and challenge : Susan Dunn - appointed & Staff • Regional/local variations in labour markets account is the Government’s policy on the December 2014, took over as chair January and their effects on the recruitment Civil Service and public sector pay and the 2017 and resigned May 2017; John Matheson and retention of staff need to observe public spending controls. was appointed as Chair on 21 July 2017. Pamela Mclauchlan – appointed May 2015 • Government policies for improving the and Bill Bound appointed November 2016. Annual public services including the requirement Accounts on departments to meet the output targets for the delivery of departmental services
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 50 | Accountability Report Remuneration & Staff
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Remuneration Report cont’d...
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Remuneration Group Directors Remuneration Where an individual has been a member Remuneration for Transport Scotland’s senior (Salary, benefits in kind and pensions) of the senior management team for only part civil servants is considered by the Scottish The single total figure of remuneration, of the year but they have been employed by Performance Government’s Remuneration Group. This comprising the salary, the value of any the Agency throughout the year, their annual Report Remuneration Group has six members, bonuses or taxable benefits in kind and the salary has been reported on a “days served” Overview two of whom are non-executive Directors. pension benefits of the directors for the year basis as well as the full year equivalent salary. Their remit is to consider: 2017-18, along with comparative figures are Any amounts payable on early termination shown in the table overleaf. of a contract will be in accordance with the Performance • Annual pay proposals for chief executives individual’s circumstances. Report and board members and make Salary Performance recommendations to Ministers Salary and allowances cover both pensionable Fees Analysis and non-pensionable amounts and include: External members of the Audit and Risk • Annual guidelines for flat rate increases gross salaries; overtime; recruitment and Committee are entitled to receive fees for chief executives and senior civil servants retention allowances; private-office allowances for regular attendance at Audit and Risk and consider the Public Sector Pay policies or other allowances to the extent that they are Committee meetings. External members’ Accountability which will apply for the annual pay round subject to UK taxation. This total remuneration expenses incurred in attending these Report Corporate and make recommendations to Ministers is shown in the figures above. It does not meetings are also reimbursed. Governance include employers’ pension contributions • Pay remits which look at pay proposals or amounts which are a reimbursement of The fees which the external members for public bodies in Scotland expenses directly incurred in the performance of the Audit and Risk Committee were of an individual’s duties or employers’ entitled to for 2017-18 are as follows: Accountability The Remuneration Group will, as a minimum, national insurance. Report report annually to the Scottish Government John Matheson £232 daily rate Remuneration Strategic Board. Where a Director has joined or left Transport Pamela Mclauchlan £232 daily rate & Staff Scotland during the year, their salary reflects Bill Bound £232 daily rate The following section of the Remuneration only that which they received whilst a member Susan Dunn £232 daily rate Report pertaining to salaries and pensions of the senior management team. is subject to audit. This is in line with core Scottish Government remuneration of external members. Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 51 | Accountability Report Remuneration & Staff
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Remuneration Report cont’d...
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Single total figure of remuneration
Directors Salary Bonus Payments Benefits in Kind Pension Benefits Total (Banding £000) (£000) To nearest £100 To nearest £1,000 (Banding £000) Performance Report Overview 2017-18 2016-17 2017-18 2016-17 2017-18 2016-17 2017-18 2016-17 2017-18 2016-17
Mike Baxter 75-80 70-75 - - - - 17,000 29,000 90-95 100-105 Performance Report Roy Brannen 95-100 95-100 - - - - 24,000 113,000 120-125 205-210 Performance Donald 70-75 70-75 - - - - 12,000 26,000 2 80-85 95-100 1 Analysis Carmichael 1 Hugh Gilles 70-75 70-75 - - - - 24,000 45,000 95-100 115-120 Accountability John Nicholls 70-75 70-75 - - - - 12,000 25,000 80-85 95-100 Report Bill Reeve 2 105-110 50-55 - - - - 49,000 48,000 155-160 100-105 Corporate Governance Michelle 70-75 70-75 - - - - 24,000 32,000 95-100 100-105 Rennie
The value of pension benefits accrued during the year is calculated as Accountability the real increase in pension multiplied by 20, less the contributions made by the individual. The real increase excludes increases due to inflation Report or any increase or decrease due to a transfer of pension rights. Remuneration
1 Donald Carmichael – 2016/17 recalculated due to change in pension. & Staff
2 Bill Reeve took up his post as Director of Rail on 5 October 2016. The £50k-£55k represents his salary from that date. Full year equivalent banding £100k-£105k.
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 52 | Accountability Report Remuneration & Staff
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Remuneration Report cont’d...
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Pay multiples Civil Service and other The pension figures shown relate to the Reporting bodies are required to disclose Compensation Scheme benefits that the individual has accrued as the relationship between the remuneration Within Transport Scotland, no members of a consequence of their total membership of Performance of the highest paid director in the organisation staff agreed departures under the Civil Service the pension scheme, not just their service in Report and the median remuneration of the Compensation Scheme rules in 2017-18. a senior capacity to which disclosure applies. Overview organisation’s workforce. There were no members of staff who agreed departures under the scheme in 2016-17. The figures include the value of any pension The full year equivalent banded remuneration No members of staff retired on ill health benefit in another scheme or arrangement Performance of the highest paid director was £105k – £110k grounds in 2017-18. which the member has transferred to the Report (16-17: £95k – £100k). This was 2.7 times Civil Service pension arrangements. They also Performance (16-17: 2.7 times) the median remuneration Pensions include any additional pension benefit accrued Analysis of the workforce, which was £40,185 Accrued pension represents the director’s to the member as a result of their buying (16-17: £39,787). total future entitlement to benefits payable additional pension benefits at their own cost. from the Civil Service pension schemes CETVs are worked out in accordance with In 2017-18, one (16-17: one) employee based on reckonable service at 31 March The Occupational Pension Schemes Accountability received remuneration in excess of the 2018. The accrued pension includes service (Transfer Values) (Amendment) Regulations Report Corporate highest paid director. Remuneration across previous to becoming a Director and/or 2008 and do not take account of any actual Governance Transport Scotland ranged from £18k – £164k service in other departments. or potential reduction to benefits resulting (16-17: £17k – £118k). from Lifetime Allowance Tax which may be A Cash Equivalent Transfer Value (CETV) due when pension benefits are taken. Total remuneration includes salary, non- is the actuarially assessed capitalised value Accountability consolidated performance related pay and of the pension scheme benefits accrued Report benefits in kind. It does not include employer by a member at a particular point in time. Remuneration pension contributions and the cash equivalent The benefits valued are the member’s accrued & Staff transfer value of pensions. benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement Annual when the member leaves a scheme and Accounts chooses to transfer the benefits accrued in their former scheme.
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 53 | Accountability Report Remuneration & Staff
Title
Remuneration Report cont’d...
Contents
The real increase in CETV quoted in the table Lump Sum Real Accrued Real CETV Real below represents the increase that is funded at NRA Increase in Pension at age Increase in CETV At 31 Increase by the employer. It does not include the At 31 Lump Sum NRA Pension At 31 March in CETV Performance increase in accrued pension due to inflation, March 2018 At age NRA At 31March At age NRA March 2018 2017 2017-18 Report or contributions paid by employees (including £000’s £000’s 2018 £000’s £000’s £000’s £000’s Overview £000’s the value of any benefits transferred from another pension scheme or arrangement) Mike Baxter 5-10 0-2.5 30-35 0-2.5 526 488 5 and uses common market valuation factors Roy 85-90 0-2.5 35-40 0-2.5 634 587 8 Performance Brannen for the start and end of the period. Report Donald 90-95 0-2.5 30-35 0-2.5 760 732 12 Performance Transport Scotland’s contributions to the Carmichael Analysis scheme in respect of the Senior Management Hugh Gillies 0 0 20-25 0-2.5 338 305 10 Team amounted to £137,682 for the year to 31 March 2018. The external members of the John 85-90 0-2.5 25-30 0-2.5 606 558 10 Audit and Risk Committee do not participate Nicholls Accountability in the Civil Service pension scheme. Bill Reeve 55-60 0-2.5 45-50 0 1204 1134 42 Report Corporate Michelle 0 0 10-15 0-2.5 182 159 9 Governance Further details on the different schemes Rennie available to employees can be found in Note 2 to the accounts. Accountability The pension entitlements of the Executive Calculated on normal retirement age (NRA) From 2015-16, the majority of staff within Report Directors of Transport Scotland are shown where pension entitlement due at that age the civil service pension scheme changed Remuneration in the following table: or current age if over NRA. from the PCSP to the Alpha scheme. & Staff Consequently, the figures included above, The above pension data was supplied to provided by MyCSP, contain figures for both Transport Scotland by MyCSP for all of the schemes for directors – Mike Baxter, Roy Directors, with the exception of Bill Reeve, Brannen, Hugh Gillies, Michelle Rennie. whose information was supplied by RPMI. Annual Further details about the Civil Service pension Accounts arrangements can be found at the website www.civilservice.gov.uk/pensions
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 54 | Accountability Report Remuneration & Staff
Title
Parliamentary Accountability Report
Contents
This summarises all our key accountabilities, Fees and Charges Losses and Special Payments including the Audit Report for the year. We do not raise any significant income There were none that exceeded £250,000. through fees and charges. Full details are identified within Note 23 of Performance Regularity of Expenditure the Financial Statements. Report The expenditure and income in the financial Remote Contingent Liabilities Overview statements were incurred or applied in The Financial Reporting Manual states that Gifts accordance with any applicable enactments where information about contingent liabilities There were none. and guidance issued by the Scottish Ministers, is not required to be disclosed because the Performance the Budget (Scotland) Act covering the likelihood of a transfer of economic benefits Report financial year and sections 4 to 7 of the is considered too remote, they should be Performance Public Finance and Accountability (Scotland) disclosed separately for parliamentary Roy Brannen Analysis Act 2000; and the sums paid out of the reporting and accountability purposes. Chief Executive Transport Scotland Scottish Consolidated Fund for the purpose Transport Scotland has a number of 22 August 2018 of meeting the expenditure shown in the these liabilities and they are disclosed financial statements were applied in in Note 19 (c) to the Annual Accounts. Accountability accordance with section 65 of the Report Corporate Scotland Act 1998. Governance
Accountability Report Remuneration & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 55 | Accountability Report Remuneration & Staff
Title
Independent Auditors’ Report on the audit of the Report financial statements
Contents
Independent auditor’s report to Transport Opinion on financial statements • Have been properly prepared in accordance Scotland, the Auditor General for Scotland I have audited the financial statements in with IFRSs as adopted by the European and the Scottish Parliament the annual report and accounts of Transport Union, as interpreted and adapted by the Performance This report is made solely to the parties Scotland for the year ended 31 March 2018 2017/18 FReM Report to whom it is addressed in accordance under the Public Finance and Accountability Overview with the Public Finance and Accountability (Scotland) Act 2000. The financial statements • Have been prepared in accordance with (Scotland) Act 2000 and for no other purpose. comprise the Statement of Comprehensive the requirements of the Public Finance In accordance with paragraph 120 of the Code Net Expenditure, the Statement of Financial and Accountability (Scotland) Act 2000 Performance of Audit Practice approved by the Auditor Position, the Cash Flow Statement, and directions made thereunder by the Report General for Scotland, I do not undertake to the Statement of Changes in Taxpayers’ Scottish Ministers Performance have responsibilities to members or officers, Equity and notes to the financial statements, Analysis in their individual capacities, or to third parties. including a summary of significant accounting Basis of opinion policies. The financial reporting framework I conducted my audit in accordance with that has been applied in their preparation applicable law and International Standards is applicable law and International Financial on Auditing (UK) (ISAs (UK)). My responsibilities Accountability Reporting Standards (IFRSs) as adopted by under those standards are further described Report Corporate the European Union, and as interpreted and in the auditor’s responsibilities for the audit of Governance adapted by the 2017/18 Government Financial the financial statements section of my report. Reporting Manual (the 2017/18 FReM). I am independent of the body in accordance with the ethical requirements that are relevant In my opinion the accompanying financial to my audit of the financial statements in the Accountability statements: UK including the Financial Reporting Council’s Report Ethical Standard, and I have fulfilled my other Remuneration • Give a true and fair view in accordance ethical responsibilities in accordance with & Staff with the Public Finance and Accountability these requirements. I believe that the audit (Scotland) Act 2000 and directions made evidence I have obtained is sufficient and thereunder by the Scottish Ministers of the appropriate to provide a basis for my opinion. state of the body’s affairs as at 31 March 2018 and of its net operating costs for Annual the year then ended Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 56 | Accountability Report Remuneration & Staff
Title
Report on the audit of the financial statements cont’d...
Contents
Conclusions relating to going concern In preparing the financial statements, the Other information in the annual basis of accounting Accountable Officer is responsible for using report and accounts I have nothing to report in respect of the the going concern basis of accounting unless The Accountable Officer is responsible Performance following matters in relation to which the deemed inappropriate. for the other information in the annual Report ISAs (UK) require me to report to you where: report and accounts. The other information Overview Auditor’s responsibilities for the comprises the information other than • The use of the going concern basis of audit of the financial statements the financial statements, the audited part accounting in the preparation of the My objectives are to achieve reasonable of the Remuneration and Staff Report, Performance financial statements is not appropriate assurance about whether the financial and my auditor’s report thereon. My opinion Report statements as a whole are free from material on the financial statements does not cover Performance • The body has not disclosed in the misstatement, whether due to fraud or error, the other information and I do not express Analysis financial statements any identified and to issue an auditor’s report that includes any form of assurance conclusion thereon material uncertainties that may cast my opinion. Reasonable assurance is a high except on matters prescribed by the Auditor significant doubt about its ability to level of assurance, but is not a guarantee General for Scotland to the extent explicitly continue to adopt the going concern that an audit conducted in accordance stated later in this report. Accountability basis of accounting for a period of at with ISAs (UK) will always detect a material Report Corporate least twelve months from the date misstatement when it exists. In connection with my audit of the financial Governance when the financial statements are Misstatements can arise from fraud or error statements, my responsibility is to read all authorised for issue and are considered material if, individually the other information in the annual report or in the aggregate, they could reasonably and accounts and, in doing so, consider Responsibilities of the Accountable Officer be expected to influence the economic whether the other information is materially Accountability for the financial statements decisions of users taken on the basis inconsistent with the financial statements Report As explained more fully in the Statement of these financial statements. or my knowledge obtained in the audit or Remuneration of Chief Executive’s Responsibilities, the otherwise appears to be materially misstated. & Staff Accountable Officer is responsible for the A further description of the auditor’s If I identify such material inconsistencies preparation of financial statements that responsibilities for the audit of the financial or apparent material misstatements, give a true and fair view in accordance with statements is located on the Financial I am required to determine whether there the financial reporting framework, and for Reporting Council’s website www.frc.org.uk/ is a material misstatement in the financial such internal control as the Accountable auditorsresponsibilities. This description statements or a material misstatement of the Annual Officer determines is necessary to enable forms part of my auditor’s report. other information. If, based on the work I have Accounts the preparation of financial statements performed, I conclude that there is a material that are free from material misstatement, misstatement of this other information, whether due to fraud or error. I am required to report that fact. I have nothing to report in this regard.
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 57 | Accountability Report Remuneration & Staff
Title
Report on regularity of Report on other expenditure and income requirements
Contents
Opinion on regularity Opinions on other prescribed matters Matters on which I am required to report In my opinion in all material respects: In my opinion, the audited part of the by exception Remuneration and Staff Report has been I am required by the Auditor General for Performance • The expenditure and income in the properly prepared in accordance with the Scotland to report to you if, in my opinion: Report financial statements were incurred or Public Finance and Accountability (Scotland) Overview applied in accordance with any applicable Act 2000 and directions made thereunder • Adequate accounting records have enactments and guidance issued by the by the Scottish Ministers. not been kept Scottish Ministers, the Budget (Scotland) Performance Act covering the financial year and sections In my opinion, based on the work undertaken • The financial statements and the auditable Report 4 to 7 of the Public Finance and in the course of the audit: part of the Remuneration and Staff Report Performance Accountability (Scotland) Act 2000 are not in agreement with the accounting Analysis • The information given in the Performance records • The sums paid out of the Scottish Report for the financial year for which the Consolidated Fund for the purpose of financial statements are prepared is • I have not received all the information meeting the expenditure shown in the consistent with the financial statements and and explanations I require for my audit Accountability financial statements were applied in that report has been prepared in accordance Report Corporate accordance with section 65 of the with the Public Finance and Accountability I have nothing to report in respect of Governance Scotland Act 1998 (Scotland) Act 2000 and directions made these matters. thereunder by the Scottish Ministers Responsibilities for regularity The Accountable Officer is responsible for • The information given in the Governance Accountability ensuring the regularity of expenditure and Statement for the financial year for which Report Mark Taylor CPFA income. I am responsible for expressing an the financial statements are prepared is Remuneration Audit Director & Staff opinion on the regularity of expenditure and consistent with the financial statements and Audit Scotland income in accordance with the Public Finance that report has been prepared in accordance 102 West Port and Accountability (Scotland) Act 2000. with the Public Finance and Accountability Edinburgh EH3 9DN (Scotland) Act 2000 and directions made thereunder by the Scottish Ministers Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 58 |
Title
Contents
Performance Report Overview
Performance Report Performance Analysis
Accountability Report Corporate Governance
Accountability Report Remuneration Annual & Staff Annual Accounts Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 59 | Annual Accounts
Title
Transport Scotland Annual Accounts 2017-18
Contents
Statement of Comprehensive 2017-18 2016-17 Net Expenditure for the year £000’s £000’s £000’s £000’s £000’s ended 31 March 2018 Note Staff Costs Other Costs Income Total Total Performance Administration costs Report Overview Staff costs 2 13,421 13,421 13,302 Other administration costs 3 5,565 5,565 4,685 Total administration costs 18,986 17,987 Performance Report Programme costs Performance Staff costs 2 5,480 5,480 4,875 Analysis Other programme costs 4 1,825,137 1,825,137 1,677,955
Income 5 (9,766) (9,766) (5,645) Accountability Total programme costs 1,820,851 1,677,185 Report Corporate Total 18,901 1,830,702 (9,766) 1,839,837 1,695,172 Governance Net operating costs for the year ended 31 March 2018 1,839,837 1,695,172
All income and expenditure is derived from continuing activities. Note 2017-18 2016-17 Accountability £000’s £000’s Report Items that will not be reclassified to net operating costs: Remuneration Net (gain) / loss on: & Staff - revaluation of property, plant and equipment 6 (90,807) (715,636) - revaluation of intangibles 0 0 (90,807) (715,636) Annual Items that may be reclassified subsequently to net operating costs: Accounts Net (gain) / loss on: - revaluation of assets held for sale 8 0 0 Total comprehensive net expenditure for the year ended 31 March 2018 1,749,030 979,536
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 60 | Annual Accounts
Title
Transport Scotland Annual Accounts 2017-18
Contents
Statement of Financial Position 31 March 31 March as at 31 March 2018 Note 2018 2017 £000’s £000’s £000’s £000’s Performance Non-current assets Report Overview Property, plant & equipment 6 20,372,280 19,931,009 Intangible assets 7 59 86 Financial assets 9 260,872 191,664 Performance Report Other receivables 10 36,663 15,665 Performance Total non-current assets 20,669,874 20,138,424 Analysis Current assets
Assets held for sale 8 0 0 Accountability Financial assets 9 4,197 4,077 Report Corporate Trade and other receivables 10 33,714 51,674 Governance Cash & cash equivalents 0 0 Total current assets 37,911 55,751 Accountability Total assets 20,707,785 20,194,175 Report Current liabilities Remuneration & Staff Trade and other payables 11 (180,321) (177,908) Provisions 12 (33,256) (34,122) Total current liabilities (213,577) (212,030) Total assets less current liabilities 20,494,208 19,982,145 Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 61 | Annual Accounts
Title
Transport Scotland Annual Accounts 2017-18
Contents
Statement of Financial Position 31 March 31 March as at 31 March 2018 cont’d... Note 2018 2017 £000’s £000’s £000’s £000’s Performance Non-current liabilities Report Overview Other payables and financial liabilities 11 (1,238,318) (1,106,505) Roy Brannen Chief Executive Provisions 12 (44,352) (49,893) Transport Scotland 22 August 2018 Total non-current liabilities (1,282,670) (1,156,398) Performance The notes on pages 66 to 109 Report form part of these accounts. Assets less liabilities 19,211,538 18,825,747 Performance Taxpayers' equity Analysis General fund SoCTE 11,329,833 10,608,165
Revaluation reserve SoCTE 7,881,705 8,217,582 Accountability Total taxpayers' equity 19,211,538 18,825,747 Report Corporate Governance
Accountability Report Remuneration & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 62 | Annual Accounts
Title
Transport Scotland Annual Accounts 2017-18
Contents
Cash Flow Statement for the year Note 2017-18 2016-17 ended 31 March 2018 £000’s £000’s Performance (A) Cash flows from operating activities Report Overview Net operating cost SoCNE (1,839,837) (1,695,172) Adjustments for non-cash transactions 3/4 52,699 80,155 Decrease / (increase) in trade and other receivables 13 (3,038) 13,389 Performance Report Adjustment for the revaluation element of assets held for sale 8 0 0 Performance Increase / (decrease) in trade and other payables 13 (1,243) 2,066 Analysis Increase / (decrease) in provisions 13 (6,407) 993
Adjustment for interest element of PFI contracts 4 48,512 29,236 Accountability Net cash outflow from operating activities (1,749,314) (1,569,333) Report Corporate (B) Cash flows from investing activities Governance Purchase of property, plant and equipment 6 (411,351) (591,564) Purchase of intangible assets 7 0 (63) Accountability Roads developer contribution 0 0 Report Transfer of assets held for sale to property, plant and equipment 6/8 0 (106) Remuneration & Staff Disposal of property, plant and equipment 6 86 74 Impairment of property, plant and equipment 0 0 Increase / (decrease) in capital accruals 13 (2,724) 5,439 Voted loans 9 (69,328) (42,083) Annual Net cash outflow from investing activities (483,317) (628,303) Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 63 | Annual Accounts
Title
Transport Scotland Annual Accounts 2017-18
Contents
Cash Flow Statement for the year Note 2017-18 2016-17 ended 31 March 2018 cont’d... £000’s £000’s Performance (C) Cash flows from financing activities Report Overview Funding from the Scottish Government SoCTE 2,203,850 (5,539,501) Inter Entity transfers (60,900) 7,437,275 Capital element of payments - finance leases and On Balance 13 138,193 329,098 Performance Sheet PFI contracts Report Interest element of PFI contracts 4 (48,512) (29,236) Performance Analysis Net Financing 2,232,631 2,197,636 Net increase / (decrease) in cash and cash equivalents in the period 0 0 Cash and cash equivalents at the beginning of the period 0 0 Accountability Report Cash and cash equivalents at the end of the period 0 0 Corporate Governance
Accountability Report Remuneration & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 64 | Annual Accounts
Title
Transport Scotland Annual Accounts 2017-18
Contents
Statement of Changes in Taxpayers’ Note General Revaluation Total Equity for the year ended 31 March 2018 Fund Reserve Reserves £000’s £000’s £000’s Performance Balance at 31 March 2016 10,385,288 7,646,284 18,031,572 Report Overview Changes in taxpayers' equity for 2016-17 Net gain / (loss) on revaluation of property, plant and 6 0 715,636 715,636 equipment Performance Non-current assets adjustments 108 0 108 Report Roads trunkings / de-trunkings 6 (44) 0 (44) Performance Analysis Roads historic value adjustment 6 (124,167) 0 (124,167) Transfers to Scottish Government 6 (131) 0 (131) Realised element of the revaluation reserve 144,338 (144,338) 0 Accountability Report Inter-Entity transfers 7,437,275 0 7,437,275 Corporate Non-cash charges - auditors remuneration 3 171 0 171 Governance Net operating costs for the year SoCNE (1,695,172) 0 (1,695,172)
Total recognised income and expense for 2016-17 5,762,378 571,298 6,333,676 Accountability Funding from Scottish Government (5,539,501) 0 (5,539,501) Report Remuneration Balance at 31 March 2017 10,608,165 8,217,582 18,825,747 & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 65 | Annual Accounts
Title
Transport Scotland Annual Accounts 2017-18
Contents
Statement of Changes in Taxpayers’ Note General Revaluation Total Equity for the year ended 31 March 2018 Fund Reserve Reserves cont’d... £000’s £000’s £000’s Performance Changes in taxpayers' equity for 2017-18 Report Overview Net gain / (loss) on revaluation of property, 6 0 90,807 90,807 plant and equipment Non-current assets adjustments 137 0 137 Performance Roads trunkings / de-trunkings 6 (699) 0 (699) Report Roads historic value adjustment 6 (7,740) 0 (7,740) Performance Analysis Transfers to Scottish Government 6 0 0 0 Realised element of the revaluation reserve 426,684 (426,684) 0 Inter Entity transfers (60,900) 0 (60,900) Accountability Report Non-cash charges - auditors remuneration 3 173 0 173 Corporate Net operating costs for the year SoCNE (1,839,837) 0 (1,839,837) Governance Total recognised income and expense for 2017-18 (1,482,182) (335,877) (1,818,059)
Funding from Scottish Government 2,203,850 0 2,203,850 Accountability Balance at 31 March 2018 11,329,833 7,881,705 19,211,538 Report Remuneration & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 66 | Annual Accounts
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Notes to the Accounts
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1 Statement of 1.1 Accounting Convention • Other Standards issued, not yet effective, Accounting Policies The accounts have been prepared under include IFRS15 and IFRS9,(both effective the historical cost convention, modified for accounting periods after 1 January 2018 Performance The accounts have been prepared in by the revaluation of non-current assets and will therefore be applicable for 2018-19), Report compliance with the principles and disclosure and intangible assets to fair value. New or IFRS17 (effective for accounting periods after Overview requirements of the Government Financial amended accounting standards that are 1 January 2021) and IFRS23 (effective for Reporting Manual (FRem). The particular considered relevant and their anticipated accounting periods after 1 January 2019). impact on the accounts are as follows: These are currently being reviewed and the accounting policies applied by Transport Performance Scotland are described below. The accounts impact on the Agency is being considered, Report are prepared using, where necessary, • IFRS 16 – Leases. This replaces IAS 17. although it is anticipated that they will have Performance estimation techniques which are selected FRAB has considered the applicability minimal relevance to Transport Scotland. The Analysis as the most appropriate for the purpose of within the FReM, and has now issued impact of amendments to IAS 7 (effective for giving a true and fair view in accordance with an exposure draft for consultation. accounting periods after 1 April 2018) is also This standard would effectively eliminate being considered but it is again anticipated that the principles set out in International Accountability Accounting Standard 8. Changes in accounting accounting for operating leases and impact on Transport Scotland will be minimal. recognise ‘right of use’ assets specified Report policies which do not give rise to a prior year Corporate adjustment are reported in the relevant note. to operators in contracts for the provision 1.2 Trunkings / Detrunkings Governance There is the possibility that there may be of services. It will apply from 2019-20 The accounts reflect ownership and outcomes within the next financial year that and is likely to have considerable impact responsibility to maintain the trunk road differ from those made this year and on Transport Scotland Accounts in terms network. Transfers of the responsibility for Accountability consequently these may require a material of assets that require to be accounted maintaining sections of the trunk road network for in terms of the right of use. The potential to/from the Local Authority network are Report adjustment to the carrying amount of an Remuneration affected asset or liability. scope may extend to transport infrastructure referred to as ‘detrunkings’ or ‘trunkings’ required by contracts for the provision respectively and are treated as transfers to/ & Staff of ferry, rail and air services and also from other Government Departments at nil specialised assets required under consideration through the General Fund. contracts for the maintenance of the trunk road network and railway in Scotland 1.3 Property, Plant and Equipment (PPE) All PPE assets will be accounted for as Annual non-current assets unless they are deemed Accounts to be held-for-sale (see 1.6). Title to the freehold land and buildings shown in the accounts of Transport Scotland is held by Scottish Ministers.
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 67 | Annual Accounts
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Notes to the Accounts cont’d...
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1.4 Capitalisation Policy Other non-current assets are capitalised Other items of property, plant and equipment The trunk road network is recognised as a where expenditure exceeds the are held at current value in existing use. single infrastructure asset in accordance with following thresholds: Since 1 April 2007 these assets have not been Performance FReM. However it comprises four distinct re-valued, as the movement in their relevant Report elements that are accounted for differently: Land & Buildings £10,000 indices was considered to be negligible and Overview Land; Road Pavement; Structures; and Leasehold £10,000 the economic lives of the assets so short Communications. Improvements that the impact of any adjustment was not considered significant. Information & £25,000 Performance Subsequent expenditure is capitalised where Communication Technology (ICT) Report it adds to the service potential or replaces Infrastructure Assets - the road network Performance the existing elements of assets that were Plant & Machinery £5,000 The road network is held at its depreciated Analysis previously identified in the Road Authority replacement cost based on service potential Asset Valuation System (RAAVS). Expenditure and classed as a specialist asset for which that does not replace or enhance service Items falling below these limits are charged a market valuation is not available. Land is potential will be expensed as a charge to the as an expense and shown in the Statement valued at rates supplied by the VOA. Accountability Statement of Comprehensive Net Expenditure. of Comprehensive Net Expenditure. Furniture Report Corporate Where a scheme is subsequently cancelled and fittings are not capitalised unless part of The road pavement, structures and Governance the capital costs are written off to the a specially identified project, such as a major communications elements are valued using Statement of Comprehensive Net Expenditure. relocation exercise. agreed rates determined to identify the gross Any retained land or building assets are replacement cost of applicable types of road, transferred to the land and buildings category Valuation structure or communications on the basis of Accountability where it is not currently possible to market Land is held at current market values, as new construction on a greenfield site. These Report them for sale or to Assets Held for Sale assessed by the Valuation Office Agency rates are re-valued annually using indices to Remuneration where they are being marketed for sale. (VOA). Revaluation exercises are carried out on reflect current prices and are also updated & Staff buildings and dwellings as part of the Scottish when new construction costs become Government five year rolling programme, with available as comparators to the costs indexation applied in the intervening years. previously identified for specific road types. However special structures, which tend to be one off by their nature, are valued using Annual specific costs that are updated to Accounts current prices.
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 68 | Annual Accounts
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Notes to the Accounts cont’d...
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Depreciation is accounted for in respect of Historic valuation adjustments in respect of The variance is valued according to the rates the road pavement by reference to the service minor corrections to prior year measurements applied to the respective sections of road. potential assessed by condition surveys that and valuations of the road network are The useful economic lives of elements of Performance are carried out over the whole network as part separately identified in the Statement of the road valuation are assessed according Report of a rolling programme that covers every Changes in Taxpayers’ Equity and Property to the following design lives: Overview section of road at least every five years. The Plant and Equipment note and not treated Structures and Communications elements are as prior year adjustments. Life in years depreciated using the straight line method Road surface, sub- 20 to 50 Performance applied to the re-valued replacement costs, Assets Under Construction pavement layer, fencing, Report and also inspected every five years to identify Road building schemes in the course of drainage and lighting Performance any other changes. Land is not depreciated. construction are capitalised at actual cost Road bridges, tunnels 20 to 120 Analysis with no indexation. and underpasses The indexation factors applied are: Culverts, retaining walls 20 to 120 Land and Buildings and gantries Road Pavement and Baxter Index, published Land and buildings released from road Accountability Structures quarterly by the Road communications 15 to 50 schemes deemed surplus to requirements Report Department for assets Corporate Business, Innovation and are transferred to, and accounted for as, Governance Skills Assets Held For Sale (see Note 1.6). Communications Traffic Scotland provide new gross and Information Technology The annual depreciation charge for the calculated depreciated Information technology assets are stated at road surface is determined by the annual Accountability values each year historical cost with no indexation applied. condition variance. Report Land Land indices produced Remuneration by VOA 1.5 Depreciation Structures and communications assets & Staff Infrastructure assets – the road network are depreciated on a straight line basis Roads and associated street furniture are over the expected useful lives above. Upwards movements in value are taken to the surveyed over a five year rolling period to revaluation reserve. Downward movements assess their estimated remaining useful Non-Infrastructure Assets in value are set off against any credit balance lives and the resultant assessment is used With the exception of surplus land and Annual held in the revaluation reserve until the credit to determine their valuation, with any properties awaiting sale, non-infrastructure Accounts is exhausted and thereafter expensed in the changes reflected as a condition variance. assets are depreciated on a straight line basis Statement of Comprehensive Net Expenditure. over the expected life of the particular asset category as follows:
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 69 | Annual Accounts
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Notes to the Accounts cont’d...
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Life in years 1.7 Intangible Non-Current Assets 1.10 Operating Income Intangible non-current assets are capitalised Operating income relates to operating Freehold buildings 5 to 100 where expenditure of £25,000 or more is activities and principally comprises fees and Performance Leasehold buildings Shorter of length incurred in acquiring them. These are valued charges for services provided on a full-cost Report of lease or specific at historic cost and amortised on a straight basis to external customers in both the public Overview asset life line basis over the expected life of the asset. and private sectors. It includes not only IT Equipment 3 to 10 income retained but also income due to 1.8 Financial Instruments the Consolidated Fund. Operating income Plant and Machinery 5 Performance Financial instruments are measured in is stated net of VAT. Report accordance with IAS32, IAS39, and IFRS7, Performance as interpreted and adapted by the 1.11 Administration and Analysis 1.6 Assets Held For Sale Government Financial Reporting Manual Programme Expenditure A property is derecognised and held for (FReM). The extent of the financial instruments The Statement of Comprehensive sale when: disclosures included in the Annual Report Net Expenditure is analysed between and Accounts reflects Transport Scotland’s administration and programme. Accountability • It is available for immediate sale financial risk exposure. Administration costs reflect the costs of Report Corporate running the Agency and include staff costs as Governance • A plan is in place, supported by 1.9 Other Infrastructure Expenditure well as accommodation, services and supplies. management, and steps have been Other infrastructure expenditure is Programme costs reflect the costs of taken to conclude the sale differentiated between capital and resource operating, maintaining, managing and for budgeting purposes. However only the improving the road, rail, aviation and maritime Accountability • It is actively marketed and there is an expenditure that is capital in nature that infrastructure for which we have responsibility, Report expectation that the sale will be made relates to assets reflected in these accounts as well as those incurred in delivering Remuneration in less than 12 months is capitalised with that which relates to assets transport policies, such as concessionary & Staff reflected by external bodies charged as fares, and grants and subsidies to contribute Assets held for sale are those we expect to expenditure. Such expenditure includes to the provision of rail, bus, ferry and sell within one year. Assets classified as held Network Rail grant, Fixed Track Access air services. for sale are measured at the lower of their and Regulated Asset Base charges. carrying amounts and their fair value less cost Annual of sale. Assets classified as held for sale are Accounts not subject to depreciation or amortisation.
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 70 | Annual Accounts
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Notes to the Accounts cont’d...
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1.12 Grants Payable The unitary charge payments comprise The treatment of Leases will be impacted Grants payable are recorded as expenditure service charges, repayment of capital and in future years by the applicability, from in the period that the underlying activity interest and are accounted for as such. 2019-20, of IFRS16. Performance giving entitlement to the grant occurs. Report Where necessary, obligations in respect of 1.15 Leases 1.16 Provisions Overview grant schemes are recognised as liabilities. At their inception, leases are classified as Legal and constructive obligations that are operating or finance leases, based on the of uncertain timing or amount are provided 1.13 Pensions allocation of the risks and rewards of for in the Statement of Financial Position at Performance Past and present employees are mainly ownership of the underlying assets. 31 March on the basis of the best estimate Report covered by the provisions of the Principal Civil Land and buildings elements are separately available. Provisions are charged to the Performance Service Pension Scheme (PCSPS) and the Civil accounted for where applicable. Statement of Comprehensive Net Expenditure Analysis Servants and Others Pension Scheme or, unless they will be capitalised as part of Alpha Scheme, more details of which can be Arrangements whose fulfilment is dependent additions to non-current assets. Major projects found in Note 2. The PCSPS is an unfunded on the use of a specific asset or which convey provisions relates to compensation claims multi-employer defined benefit scheme. a right to use an asset, are assessed at their made in respect of work done under the Accountability Transport Scotland’s contributions are inception to determine if they contain a lease. projects that have not yet been fully settled. Report Corporate recognised as a cost in the year. The Alpha If an arrangement is found to contain a lease, Governance Scheme provides benefits on a career average that lease is then classified as an operating or 1.17 Contingent Liabilities basis with a normal pension age equal to the finance lease. Contingent Liabilities are disclosed in member’s State Pension Age (or 65 if higher). respect of: Rentals under operating leases are charged Accountability 1.14 Private Finance Transactions to the Statement of Comprehensive Net • Possible obligations arising from past events Report (PFI/PPP/NPD) Expenditure. Where the arrangement includes whose existence will be confirmed by the Remuneration Private finance transactions that meet the incentives, such as rent-free periods, the value occurrence of uncertain future events out & Staff definition of service concession arrangements is recognised over the lease term. Where the with Transport Scotland’s control are accounted for in accordance with IPSAS substantial risks and rewards of ownership are 32. We have three such existing operational borne by the Agency, the asset is recorded as • Present obligations arising from past events PFI schemes and two Non Profit Distributing property, plant and equipment and a liability where it is not likely that resources will be (NPD) schemes currently under construction to the lessor is recorded of the minimum lease required to settle the obligation or it is not Annual (see Note 16 for more details). The private payments discounted by the interest rate possible to measure it reliably Accounts sector operator is contractually obliged to implicit in the lease. The interest element of provide the services related to the the finance lease payment is charged to the infrastructure that they construct, which Statement of Comprehensive Net Expenditure is recognised as a non-current asset. over the period of the lease.
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 71 | Annual Accounts
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Notes to the Accounts cont’d...
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1.18 VAT 1.21 Trade Payables Irrecoverable VAT is charged to the relevant Trade payables are valued at their expenditure category or included in the carrying amount. Performance capitalised purchase cost of non-current Report assets. Transport Scotland is part of the 1.22 Employee Benefits Overview Scottish Government VAT registration and A short term liability and expense is any outstanding VAT balances are accounted recognised for leave entitlement, bonuses and for by the Scottish Government. other short-term benefits when employees Performance render service that increases their entitlement Report 1.19 Segmental Reporting to these benefits. As a result an accrual has Performance Segmental reporting identifies components been made for leave earned but not taken. Analysis of expenditure that are regularly reviewed by the Senior Management Team in order to 1.23 Critical Accounting Estimates manage financial performance. Critical accounting estimates are used in the calculation of the valuations for the road Accountability 1.20 Trade Receivables network, for the recognition and valuation Report Corporate Trade receivables are valued at their carrying of provisions, for the Concessionary Travel Governance amount. A provision for impairment is made Scheme and for the Private Finance where there is objective evidence that arrangements. These are detailed in the Transport Scotland will not be able to collect section on Significant Accounting Policies all amounts due according to the original contained within the Performance Report. Accountability terms of the receivables. Report Remuneration & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 72 | Annual Accounts
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Notes to the Accounts cont’d...
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2 Staff Numbers and Costs Staff costs comprise 2017-18 2016-17 Permanently Permanently Performance Employed Employed Report Staff Others Total Staff Others Total Overview £000’s £000’s £000’s £000’s £000’s £000’s Administration: Wages and salaries costs 9,869 420 10,289 9,749 362 10,111 Performance Report Social security costs 1,056 0 1,056 1,065 0 1,065 Performance Other pension costs 2,018 0 2,018 2,057 0 2,057 Analysis Early retirement costs 58 0 58 69 0 69
13,001 420 13,421 12,940 362 13,302 Accountability Programme: Report Corporate Wages and salaries costs 3,617 740 4,357 3,051 854 3,905 Governance Social security costs 391 0 391 332 0 332 Other pension costs 732 0 732 638 0 638 Accountability 4,740 740 5,480 4,021 854 4,875 Report Total staff costs to be 17,741 1,160 18,901 16,961 1,216 18,177 Remuneration charged to Comprehensive & Staff Net Expenditure
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 73 | Annual Accounts
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Notes to the Accounts cont’d...
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The costs of staff employed on the design, Staff costs comprise cont’d... procurement and management of capital projects undertaken by Transport Scotland 2017-18 2016-17 Permanently Permanently Performance have been charged to capital expenditure in Employed Employed Report respect of the projects identified in the year. Staff Others Total Staff Others Total Overview These have been identified in the table on the £000’s £000’s £000’s £000’s £000’s £000’s right along with prior year figures to reflect Capitalised Programme: costs similarly capitalised in that year. These Wages and salaries costs 3,275 48 3,323 2,933 6 2,939 Performance costs are included with the project costs in Report Note 4. The cost of early retirements in the Social security costs 339 0 339 300 0 300 Performance table overleaf, include the costs in year and Analysis also continuing payments in relation to Other pension costs 646 0 646 599 0 599 previous years’ packages. 4,260 48 4,308 3,832 6 3,838 Total staff costs charged 4,260 48 4,308 3,832 6 3,838 Accountability Permanent employed staff are civil servants to capital expenditure who have an employment contract with Report Total Staff Costs 22,001 1,208 23,209 20,793 1,222 22,015 Corporate Transport Scotland, others are agency staff. Governance Wages & salaries include gross salaries, performance pay or bonuses received in year, overtime, recruitment and retention Accountability allowances, private office allowances, Report ex-gratia payments and any other Remuneration allowances to the extent that it is subject & Staff to UK taxation. The payment of legitimate expenses is not part of salary.
From April 2017, the changes in apprenticeship funding have resulted Annual in the payment of an apprenticeship Accounts levy. This is being paid centrally for the entire Scottish Government Group and is therefore accounted for through core Scottish Government activities.
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 74 | Annual Accounts
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Notes to the Accounts cont’d...
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Pension Costs These statutory arrangements are unfunded Employee contributions are salary-related and The Principal Civil Service Pension Scheme with the cost of benefits met by monies voted range between 4.6% and 8.05% for members (PCSPS) is an unfunded multi-employer by Parliament each year. Pensions payable of classic, premium, classic plus, nuvos and Performance defined benefit scheme and as a result under classic, premium, classic plus, nuvos alpha. Benefits in classic accrue at the rate Report Transport Scotland is unable to identify its and alpha are increased annually in line with of 1/80th of final pensionable earnings for Overview share of the underlying liabilities. The scheme Pensions Increase legislation. Existing each year of service. In addition, a lump sum is therefore accounted for as a defined members of the PCSPS who were within 10 equivalent to three years initial pension is contribution scheme. The scheme Actuary years of their normal pension age on 1 April payable on retirement. For premium, benefits Performance valued the scheme liabilities at 31 March 2012. 2012 remained in the PCSPS after 1 April 2015. accrue at the rate of 1/60th of final Report Details can be found in the resource accounts Those who were between 10 years and 13 pensionable earnings for each year of service. Performance of the Cabinet Office at years and 5 months from their normal pension Unlike classic, there is no automatic lump sum. Analysis www.civilservicepensionscheme.org.uk age on 1 April 2012 will switch into alpha Classic plus is essentially a hybrid with benefits sometime between 1 June 2015 and 1 for service before 1 October 2002 calculated Pension benefits are provided through the Civil February 2022. All members who switch to broadly as per classic and benefits for service Service pension arrangements. From 1 April alpha have their PCSPS benefits ‘banked’, from October 2002 worked out as in premium. Accountability 2015 a new pension scheme for civil servants with those with earlier benefits in one of the Report Corporate was introduced – the Civil Servants and Others final salary sections of the PCSPS having those In nuvos a member builds up a pension Governance Pension Scheme or alpha, which provides benefits based on their final salary when they based on his pensionable earnings during their benefits on a career average basis with a leave alpha. (The pension figures quoted for period of scheme membership. At the end normal pension age equal to the member’s officials show pension earned in PCSPS or of the scheme year (31 March) the member’s State Pension Age (or 65 if higher). From that alpha – as appropriate. Where the official has earned pension account is credited with 2.3% Accountability date all newly appointed civil servants and the benefits in both the PCSPS and alpha the of their pensionable earnings in that scheme Report majority of those already in service joined figure quoted is the combined value of their year and the accrued pension is uprated in line Remuneration alpha. Prior to that date, civil servants benefits in the two schemes.) Members joining with Pensions Increase legislation. Benefits in & Staff participated in the Principal Civil Service from October 2002 may opt for either the alpha build up in a similar way to nuvos, except Pension Scheme (PCSPS). The PCSPS has four appropriate defined benefit arrangement or that the accrual rate in 2.32%. In all cases sections: 3 providing benefits on a final salary a ‘money purchase’ stakeholder pension with members may opt to give up (commute) basis (classic, premium or classic plus) with a an employer contribution (partnership pension for a lump sum up to the limits set normal pension age of 60; and one providing pension account). by the Finance Act 2004. Annual benefits on a whole career basis (nuvos) Accounts with a normal pension age of 65.
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 75 | Annual Accounts
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Notes to the Accounts cont’d...
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The partnership pension account is a Further details about the Civil Service pension For 2017-18, employers’ contributions of stakeholder pension arrangement. The arrangements can be found at the website £3,397k (2016-17, £3,294k) were payable to employer makes a basic contribution of www.civilservicepensionscheme.org.uk the PCSPS at one of four rates in the range Performance between 8% and 14.75% (depending on 20% to 24.5% of pensionable pay, based on Report the age of the member) into a stakeholder New career average pension arrangements salary bands. The scheme Actuary reviews Overview pension product chosen by the employee were introduced on 1 April 2015 and the employer contributions every four years from a panel of providers. The employee majority of Classic, Premium, Classic Plus following a full scheme valuation. does not have to contribute, but where they and Nuvos members joined the new scheme. Performance do make contributions, the employer will Further details of this new scheme are The contribution rates are set to meet the Report match these up to a limit of 3% of pensionable available at cost of the benefits accruing during 2017-18 Performance salary (in addition to the employer’s basic www.civilservicepensionschemw.org.uk/ to be paid when the member retires, and not Analysis contribution). Employers also contribute a members/the-new-pension-scheme-alpha/ the benefits paid during this period to further 0.5% of pensionable salary to cover existing pensioners. the cost of centrally-provided risk benefit cover (death in service and ill health Average numbers of persons employed Accountability retirement). Report Corporate 2017-18 2016-17 Governance The accrued pension quoted is the pension Permanent Permanent the member is entitled to receive when they Staff Others Total Staff Others Total reach pension age, or immediately on ceasing Trunk roads major projects 76 4 80 69 10 79 to be an active member of the scheme if they Accountability are already at or over pension age. Pension Trunk road maintenance 119 5 124 114 9 123 Report age is 60 for members of classic, premium Rail 55 1 56 55 3 58 Remuneration and classic plus, 65 for members of nuvos, & Staff Finance and other 62 3 65 61 4 65 and the higher of 65 or State Pension Age for members of alpha. (The pension figures Aviation, maritime, 31 0 31 29 0 29 quoted for officials show pension earned in freight & canals PCSPS or alpha – as appropriate. Where the Transport policy 51 4 55 44 3 47 official has benefits in both the PCSPS and Annual Total average Accounts alpha the figure quoted is the combined staff numbers 393 17 410 373 29 402 value of their benefits in the two schemes, but note that part of that pension may be The above figures exclude consultants, in post and not in post. payable from different ages.)
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 76 | Annual Accounts
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3 Other Administration Costs Note 2017-18 2016-17 £000’s £000’s
Rentals under operating leases 1,221 1,212 Performance Report Accommodation 1,274 789 Overview Office costs and supplies 1,419 1,310 Hospitality 40 40 Performance Travel 429 407 Report Training 111 86 Performance Analysis Consultancy 239 53 Non-cash items Depreciation 6/7 659 617 Accountability Report Auditors' remuneration and expenses - external 22 173 171 Corporate Total administration costs 5,565 4,685 Governance
Accountability Report Remuneration & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 77 | Annual Accounts
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4 Programme Costs Note 2017-18 2016-17 Other programme expenditure £000’s £000’s Roads Performance Capital maintenance 96,968 103,138 Report Overview Current maintenance 134,996 101,556 Other 0 0 PFI interest charges 48,512 29,236 Performance PFI service charges 61,464 43,928 Report Rail Performance ScotRail franchise* 169,800 265,870 Analysis Rail infrastructure in Scotland** 585,446 463,588 Other 657 1,664 Accountability Concessionary travel Report Smartcard applications 1,899 1,055 Corporate Concessionary travel schemes 198,650 193,398 Governance Other public transport Major public transport projects - rail 5,487 6,189 Transport information 1,137 1,010 Accountability Ferry services in Scotland 187,418 188,801 Report Remuneration Air services in Scotland 44,005 38,542 & Staff Bus services in Scotland 51,344 54,444 Other transport directorate programmes 140,128 65,598 Scottish Futures Fund projects 18,123 18,890 Central Government grants to Local Authorities 27,236 21,681 Non-cash items Annual Accounts Depreciation 6/7 51,867 79,367 Total other programme costs 1,825,137 1,677,955
* Payments to Abellio (£147m) and Serco (£23m) totalled £170m. ** The Rail Infrastructure in Scotland Capital Figure of £585m was paid directly to Network Rail.
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 78 | Annual Accounts
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5 Operating Income 2017-18 2016-17 £000’s £000’s Operating income principally arises from: Performance Programme income Report • Interest receivable from loans to Overview Interest receivable – loans (5,961) (4,709) Caledonian Maritime Assets Limited (CMAL) Rental income - land & properties (20) (24) • Rental income from land and properties Other income (60) (153) Performance acquired for road schemes and now Report surplus to requirements European Structural Fund (ESF) income (2,363) (419) Performance Ports income (8) (14) Analysis • Sale of land and property which is surplus to the requirements of the road or rail scheme Land sales (1,316) 0 Profit on disposal of land (38) (326) Accountability • Port income fees for authorising works Borders roof tax income 0 0 Report to ports and harbours Corporate Total operating income (9,766) (5,645) Governance • ESF funding
Accountability Report Remuneration & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 79 | Annual Accounts
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6 Property Plant and Equipment Performance Detrunkings reflect the transfer of road Atkins (RICS Regulated) carry out an annual Report assets to Local Authority control, with the valuation of the trunk road network. Overview corresponding entry flowing through the General Fund (SoCTE). Transfers and Revaluation is based on Baxter’s indexation for reclassifications include roads and associated all road network assets with the exception of Performance land and buildings, which have transferred land. Land is valued at market rates based on Report from Local Authority control as a result of information supplied by the Valuation Office Performance the trunking of those particular sections Agency. All revaluation movement is reflected Analysis of the road network. through the revaluation reserve (SoCTE).
2017-18 Road Leasehold Assets under Accountability Network Land Buildings Transport IT Improvements Construction Total Report £000’s £000’s £000’s £000’s £000’s £000’s £000’s £000’s Corporate Cost or Valuation Governance At 1 April 2017 21,541,945 6,781 11,072 62 4,609 1,507 2,254,891 23,820,867 Detrunkings 0 0 0 0 0 0 0 0 Accountability Additions 6,933 783 0 73 0 0 403,562 411,351 Report Remuneration Disposals (1,056) (86) 0 0 0 0 0 (1,142) & Staff Revaluation 250,172 242 400 0 0 0 0 250,814 Current valuation adjustments 0 0 0 0 0 0 0 0 Historic valuation adjustments (9,282) 0 0 0 0 0 0 (9,282) Transfers and reclassifications 1,695,931 0 0 0 0 0 (1,695,931) 0 Annual Accounts Transfers (to)/from assets held for sale 0 0 0 0 0 0 0 0 Balance at 31 March 2018 23,484,643 7,720 11,472 135 4,609 1,507 962,522 24,472,608
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 80 | Annual Accounts
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6 Property Plant and Equipment cont’d... Performance 2017-18 Road Leasehold Assets under Report Network Land Buildings Transport IT Improvements Construction Total Overview £000’s £000’s £000’s £000’s £000’s £000’s £000’s £000’s Depreciation At 1 April 2017 3,880,454 0 3,348 53 4,602 1,401 0 3,889,858 Performance Report Detrunkings 0 0 0 0 0 0 0 0 Performance Charge for the year 51,840 0 487 8 2 26 0 52,363 Analysis Disposals (357) 0 0 0 0 0 0 (357)
Revaluation 159,870 0 137 0 0 0 0 160,007 Accountability Current valuation adjustments 0 0 0 0 0 0 0 0 Report Corporate Historic valuation adjustments (1,543) 0 0 0 0 0 0 (1,543) Governance Transfers and reclassifications 0 0 0 0 0 0 0 0 Balance at 31 March 2018 4,090,264 0 3,972 61 4,604 1,427 0 4,100,328 Accountability Net Book Value at 31 March 2018 19,394,379 7,720 7,500 74 5 80 962,522 20,372,280 Report Net Book Value at 31 March 2017 17,661,491 6,781 7,724 9 7 106 2,254,891 19,931,009 Remuneration & Staff Asset Financing Owned 16,797,551 7,720 7,341 74 5 0 116,338 16,929,029 Finance Leased 0 0 0 0 0 0 0 0
On Balance Sheet PFI 2,596,828 0 0 0 0 0 846,184 3,443,012 Annual Donated 0 0 159 0 0 80 0 239 Accounts Net Book Value at 31 March 2018 19,394,379 7,720 7,500 74 5 80 962,522 20,372,280
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 81 | Annual Accounts
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6 Property Plant and Equipment cont’d... Performance 2016-17 Road Leasehold Assets under Report Network Land Buildings Transport IT Improvements Construction Total Overview £000’s £000’s £000’s £000’s £000’s £000’s £000’s £000’s Cost or Valuation At 1 April 2016 20,777,298 6,535 10,725 62 4,609 1,507 1,690,593 22,491,329 Performance Report Detrunkings (59) 0 0 0 0 0 0 (59) Performance Additions 11,998 0 0 131 0 0 579,436 591,565 Analysis Disposals 0 (74) 0 0 0 0 0 (74)
Revaluation 870,259 214 347 0 0 0 0 870,820 Accountability Current valuation adjustments 0 0 0 0 0 0 0 0 Report Corporate Historic valuation adjustments (132,689) 0 0 0 0 0 0 (132,689) Governance Transfers and reclassifications 15,138 0 0 (131) 0 0 (15,138) (131) Transfers (to) / from assets 0 106 0 0 0 0 0 106 held for sale Accountability Report Balances at 31 March 2017 21,541,945 6,781 11,072 62 4,609 1,507 2,254,891 23,820,867 Remuneration & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 82 | Annual Accounts
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6 Property Plant and Equipment cont’d... Performance 2016-17 Road Leasehold Assets under Report Network Land Buildings Transport IT Improvements Construction Total Overview £000’s £000’s £000’s £000’s £000’s £000’s £000’s £000’s Depreciation At 1 April 2016 3,654,611 0 2,772 41 4,539 1,376 0 3,663,339 Performance Report Detrunkings (15) 0 0 0 0 0 0 (15) Performance Charge for the year 79,300 0 472 12 63 25 0 79,872 Analysis Disposals 0 0 0 0 0 0 0 0
Revaluation 155,080 0 104 0 0 0 0 155,184 Accountability Current valuation adjustments 0 0 0 0 0 0 0 0 Report Corporate Historic valuation adjustments (8,522) 0 0 0 0 0 0 (8,522) Governance Transfers and reclassifications 0 0 0 0 0 0 0 0 Balances at 31 March 2017 3,880,454 0 3,348 53 4,602 1,401 0 3,889,858 Accountability Net Book Value at 31 March 2017 17,661,491 6,781 7,724 9 7 106 2,254,891 19,931,009 Report Net Book Value at 31 March 2016 17,122,687 6,535 7,953 21 70 131 1,690,593 18,827,990 Remuneration & Staff Asset Financing Owned 15,252,141 6,781 7,514 9 7 0 1,558,880 16,825,332 Finance leased 0 0 0 0 0 0 0 0
On Balance Sheet PFI 2,409,350 0 0 0 0 0 696,011 3,105,361 Annual Donated 0 0 210 0 0 106 0 316 Accounts Net Book Value at 31 March 2017 17,661,491 6,781 7,724 9 7 106 2,254,891 19,931,009
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 83 | Annual Accounts
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7 Intangible Assets 2017-18 2016-17 £000’s £000’s Performance Purchased computer software licences are At replacement cost or valuation capitalised as intangible non-current assets Report where expenditure of £25,000 or more is At 1 April 554 491 Overview incurred. These are valued at historic cost Additions 0 63 and amortised on a straight line basis over Disposals 0 0 the expected life of the asset. Performance Balance at 31 March 554 554 Report Performance Accumulated amortisation Analysis At 1 April 468 461 Charge for the year 27 7 Revaluations 0 0 Accountability Report Disposals 0 0 Corporate Balance at 31 March 495 468 Governance Net Book Value at 31 March 59 86
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Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 84 | Annual Accounts
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8 Assets Held For Sale 2017-18 2016-17 £000’s £000’s There were no land assets presented for sale Performance Balance at 1 April 0 204 by Transport Scotland in 2017-18. Assets Report classified as held for sale are measured at the Transfers to non-current assets 0 (106) Overview lower of their carrying amount immediately Transfers from non-current assets 0 0 prior to their classification as held for sale Disposals 0 (98) and their fair value less costs to sell. Assets Performance held for sale are not subject to depreciation Change arising on revaluation 0 0 Report or amortisation. Performance Balance at 31 March 0 0 Analysis
Accountability Report Corporate Governance
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Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 85 | Annual Accounts
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9 Financial Assets Interests in Nationalised Financial Assets have been measured Industries Performance & Limited Voted and presented in accordance with IAS32, Report Companies Loans Other Funds Total Overview IAS39 and IFRS7 as modified by the FReM 2017-18 £000’s £000’s £000’s £000’s (see Note 1.8). Balance at 1 April 2017 20,550 128,650 42,464 191,664 As at 31 March Scottish Ministers, Add element reported within current assets 0 4,077 0 4,077 Performance represented by Transport Scotland, are the Advances and repayments Report sole shareholder in Caledonian Maritime Performance Assets Ltd, David MacBrayne Ltd, Highlands Cash advances 0 59,428 14,060 73,488 Analysis and Islands Airports Ltd and TS Prestwick Repayments 0 (4,077) (83) (4,160) HoldCo Ltd. Scottish Ministers hold the following share investments: Balance at 31 March 2018 20,550 188,078 56,441 265,069 Accountability Loans repayable within 12 months transferred 0 (3,900) (297) (4,197) Report Caledonian Maritime 1,500,000 ordinary to current assets Corporate Assets Ltd shares of £10 each Balance at 31 March 2018 20,550 184,178 56,144 260,872 Governance David MacBrayne Ltd 5,500,002 ordinary shares of £1 each Highlands and Islands 50,000 ordinary shares Accountability Airports Ltd of £1 each Report TS Prestwick Holdco Ltd 1 ordinary share of £1 Remuneration & Staff These organisations are operated and managed independently of the Scottish Government, and do not fall within the Departmental Accounting boundary. The companies all publish an annual report Annual and accounts. The net assets and results of Accounts the above bodies are summarised on p87.
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 86 | Annual Accounts
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9 Financial Assets cont’d... Interests in Nationalised Industries Performance & Limited Voted Report Companies Loans Other Funds Total Overview 2016-17 £000’s £000’s £000’s £000’s Balance at 1 April 2016 20,550 104,176 25,178 149,904 Add element reported within current assets 0 3,754 0 3,754 Performance Advances and repayments Report Performance Cash advances 0 28,726 17,286 46,012 Analysis Repayments 0 (3,929) 0 (3,929) Balance at 31 March 2017 20,550 132,727 42,464 195,741 Accountability Loans repayable within 12 months transferred 0 (4,077) 0 (4,077) Report to current assets Corporate Balance at 31 March 2017 20,550 128,650 42,464 191,664 Governance
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Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 87 | Annual Accounts
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Prestwick Highlands & Caledonian David David MacBrayne Limited HoldCo Ltd Islands Airports Ltd Maritime MacBrayne Ltd Scottish Ministers previously owned 2 shares £m £m Assets Ltd £m of £1 in a dormant company, David MacBrayne Performance £m Ltd. In the course of the restructuring of the Report Net assets / (liabilities) as at 31 March (33.7) (24.8) 89.9 25.6 Caledonian MacBrayne Group in 2006, Overview Scottish Ministers’ shareholding in David Turnover 18.2 24.9 43.3 209.4 MacBrayne Ltd was increased by 5,500,000 Profit / (loss) for the financial year (7.9) (2.2) 8.7 4.1 shares to 5,500,002 ordinary shares of £1. Performance David MacBrayne Ltd is now the holding Report All results are draft and subject to audit with Caledonian Maritime Assets Limited (CMAL) company for the ferry operating companies Performance final accounts yet to be published. Following a restructure of the Caledonian CalMac Ferries Ltd, Argyll Ferries Ltd. Analysis MacBrayne Group in 2006, Caledonian Highlands and Islands Airports Limited (HIAL) MacBrayne Ltd became known as Caledonian TS Prestwick HoldCo Limited Scottish Ministers are the sole shareholder in Maritime Assets Ltd (CMAL) and CalMac In 2013 Transport Scotland purchased the HIAL. The company’s purpose is to maintain Ferries Ltd (CFL) was incorporated. CFL took entire share capital of Prestwick Aviation Accountability Report the safe operation of its airports to support over operation of the Clyde & Hebrides Ferry Holdings Ltd, the holding company of Corporate economic and social development in the Services as successor to Caledonian subsidiaries who own and operate Glasgow Governance Highland and Islands. HIAL currently operates MacBrayne Ltd. CMAL retained ownership Prestwick Airport, through a company set up for 11 airports; 10 in the Highlands and Islands of all vessels and ports, which it leases to this specific purpose – TS Prestwick Holdco Ltd. and also Dundee, which it assumed the operator of the Clyde & Hebrides Ferry Subsequently Transport Scotland advanced responsibility for in December 2007 services (currently CFL). CMAL remains loan funding to the Group to cover the cash Accountability and now operates via a wholly owned wholly owned by Scottish Ministers. deficit arising from its operating deficit and Report subsidiary company, Dundee Airport Ltd. capital expenditure. Remuneration & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 88 | Annual Accounts
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Voted Loans Transport Scotland has taken account of these Transport Scotland provides loans to CMAL to bodies forecast expenditure within its budget. be used for the construction of new shipping Performance and to HIAL to support airport infrastructure. Scottish Canals is currently classed as an Report NDPB, however HM Treasury have agreed not Overview Other Funds to apply the budgeting or accounting impact These represent loans that Transport Scotland of this until the Office of National Statistics provide to Prestwick Airport as noted above, (ONS) complete a planned classification after Performance and to the Energy Savings Trust to fund which they will consider the position. Report energy efficient transport initiatives. Performance CMAL and Prestwick Airport are classed Analysis In respect of IFRS12, it should be noted that as Public Corporations. both HIAL and David MacBrayne are classed as Non Departmental Public Bodies (NDPB’s), and are treated in accordance with the HM Accountability Treasury Consolidated Budgeting guidance Report Corporate which can be found at Governance www.gov.uk/government/publications/ consolidated-budgeting-guidance- 2018-to-2019 Accountability Report Remuneration & Staff
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Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 89 | Annual Accounts
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10 Trade Receivables As at 31/03/18 As at 31/03/17 and Other Assets 10a Analysis by classification £000’s £000’s Amounts falling due within one year: Trade and other receivables Performance Trade and other receivables 193 414 Report Overview Damage claims 1,764 1,320 Prepayments and accrued income 31,757 49,940 33,714 51,674 Performance Amounts falling due after more than one year: Report Prepayments and other receivables 36,663 15,665 Performance 36,663 15,665 Analysis
As at 31/03/18 As at 2016-17 10b Intra-Government balances £000’s £000’s Accountability Report Amounts falling due within one year: Intra-Government balances Corporate Other Central Government bodies 116 0 Governance Local Authorities 12 0 Public corporations and trading funds 6,229 4,161 6,357 4,161 Accountability Balances with bodies external to Government 27,357 47,513 Report Remuneration Total receivables 33,714 51,674 & Staff Amounts falling due after more than one year: Intra-Government balances Other Central Government bodies 0 0 Local Authorities 7,613 15,665 Public corporations and trading funds 0 0 Annual 7,613 15,665 Accounts Balances with bodies external to Government 29,050 0 Total receivables 36,663 15,665
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 90 | Annual Accounts
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10 Trade Receivables and As at 31 March 2017 As at 31 March 2016 Other Assets cont’d... £’000 £’000 Performance At 1 April 0 0 Trade receivables are shown net of a provision Report for impairment as follows: Charge for the year 0 0 Overview Unused amount released 0 0 Utilised during the year 0 0 Performance At 31 March 0 0 Report Performance Analysis
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Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 91 | Annual Accounts
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11 Trade Payables and As at 31/03/18 As at 31/03/17 Other Liabilities 11a Analysis by classification £000’s £000’s Amounts falling due within one year: Trade and other receivables Performance Trade payables 1,048 5,319 Report Overview Accruals 154,378 150,272 Other payables 7,269 10,064 Financial liabilities - PFI 17,458 11,980 Performance Deferred income 168 273 Report 180,321 177,908 Performance Amounts falling due after more than one year: Analysis Other payables 943 1,845 Financial liabilities - PFI 1,237,375 1,104,660 Accountability 1,238,318 1,106,505 Report As at 31/03/18 As at 2016-17 Corporate 11b Intra-Government balances £000’s £000’s Governance Amounts falling due within one year: Intra-Government balances Other Central Government bodies 721 26,354 Local Authorities 23,021 12,489 Accountability Public corporations and trading funds 588 279 Report 24,330 39,122 Remuneration & Staff Balances with bodies external to Government 155,991 138,786 Total payables 180,321 177,908 Amounts falling due after more than one year: Intra-Government balances Other Central Government bodies 0 0 Annual Local Authorities 0 0 Accounts Public corporations and trading funds 0 0 0 0 Balances with bodies external to Government 1,238,318 1,106,505 Total payables 1,238,318 1,106,505 Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 92 | Annual Accounts
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12 Provisions for Liabilities Land and Property Major and Charges 12a Provisions for liabilities and charges Acquisition Projects Other Total 2017-18 £000’s £000’s £000’s £000’s Performance Land and Property Acquisition Balance as at 1 April 2017 73,519 4,953 5,543 84,015 Report Overview Land and property acquisition provision relates Provided in year 0 0 94 94 primarily to the estimates made of the likely compensation payable in respect of planning Provisions not required written back 0 0 (3) (3) blight, discretionary and compulsory acquisition Provisions utilised in year (4,135) (1,549) (107) (5,791) Performance of property from property owners arising from Report physical construction of a road or rail scheme. Discount amortised (680) (29) 2 (707) Performance When land is acquired by compulsory purchase, Balance as at 31 March 2018 68,704 3,375 5,528 77,608 Analysis it is often not known when compensation 2016-17 settlements will be made. A provision for the estimated total cost of land acquired is created Balance as at 1 April 2016 72,141 5,271 5,610 83,022 Accountability when it is expected that a General Vesting Provided in year 0 0 38 38 Report Declaration will be published in the near future. Corporate It may take several years from the Provisions not required written back 0 (145) (1) (146) Governance announcement of a scheme to completion and Provisions utilised in year (275) (149) (108) (532) final settlement of all liabilities. The estimates Discount amortised 1,653 (24) 4 1,633 provided by the VOA are reviewed bi-annually. Accountability Balance as at 31 March 2017 73,519 4,953 5,543 84,015 Report Major Projects Remuneration Major projects provision relates to & Staff compensation claims made in respect of work done on projects that have not yet been fully settled.
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Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 93 | Annual Accounts
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12 Provisions for Liabilities Land and Property Major and Charges cont’d... 12b Analysis of expected timing of Acquisition Projects Other Total discounted flows £000’s £000’s £000’s £000’s Performance Other In the remainder of the period to 2019 24,434 3,375 5,448 33,257 Report Overview Transport Scotland agreed to meet the Between 2020 and 2023 44,271 0 81 44,352 additional costs of benefits payable to specific employees who retired early until they reach the Between 2024 and 2028 0 0 0 0 age of 60, at which point the liability is assumed Thereafter 0 0 0 0 Performance by the PCSPS. The cost of these benefits is Report provided in full when the employee retires. Balance as at 31 March 2018 68,705 3,375 5,528 77,608 Performance In the remainder of the period to 2018 24,156 4,500 5,466 34,122 Analysis Between 2019 and 2022 49,363 453 77 49,893
Between 2023 and 2027 0 0 0 0 Accountability Thereafter 0 0 0 0 Report Corporate Balance as at 31 March 2017 73,519 4,953 5,543 84,015 Governance
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Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 94 | Annual Accounts
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13 Movement on Working 2017-18 2016-17 Capital Balances As at As at Net Net Note 31/03/18 31/03/17 Movement Movement Performance £000’s £000’s £000’s £000’s Report Receivables Overview Due within one year 8/10 33,714 51,674 17,960 (1,611) Due after more than one year 10 36,663 15,665 (20,998) 15,000 Performance Net (increase) / decrease 70,377 67,339 (3,038) 13,389 Report Payables Performance Analysis Due within one year 11 180,321 177,908 2,413 7,525 Due after more than one year 11 1,238,318 1,106,505 131,813 329,078 1,418,639 1,284,413 134,226 336,603 Accountability Report Less: Lease and PFI creditors included in above 11 1,254,833 1,116,640 138,193 329,098 Corporate Less: Capital accruals included in the above 4,996 7,720 (2,724) 5,439 Governance Net increase / (decrease) 158,810 160,053 (1,243) 2,066
Provisions 12 77,608 84,015 (6,407) 993 Accountability Net increase / (decrease) 77,608 84,015 (6,407) 993 Report Remuneration Net movement increase / (decrease) 306,795 311,407 (4,612) (10,330) & Staff
Annual Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 95 | Annual Accounts
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14 Capital Commitments As at 31/03/18 As at 31/03/17 £000’s £000’s Transport Scotland’s capital commitments Performance relate to future payments on major road Property, plant and equipment 3,301,103 3,059,367 Report schemes currently under construction. The Overview Total contracted capital commitments for which main works contracts have been awarded and no provision has been made 3,301,103 3,059,367 the loans agreed. These commitments have not been reflected elsewhere in the accounts. Performance Report Performance Analysis
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Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 96 | Annual Accounts
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15 Commitments under Obligations under operating leases comprise: As at 31/03/18 As at 31/03/17 Operating Leases £000’s £000’s Performance Commitments under operating leases to pay Land & buildings Report Overview rentals during the year following the year of Due within 1 year 1,290 1,290 these accounts are given in the table below, analysed according to the period in which Due after 1 year but not more than 5 years 2,579 3,869 the lease expires. Commitments thereafter 0 0 Performance Report 3,869 5,159 Performance Analysis
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Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 97 | Annual Accounts
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16 Commitments under c) M80 - the contract covers the design, Under IPSAS 32, the substance of these PFI PFI Contracts build and financing of approximately 18 km contracts is that of a finance lease, with the of motorway and associated roads, junctions, asset being recognised. Payments under PFI Performance Transport Scotland has entered into the structures and associated works and their contracts comprise two elements; imputed Report following PFI contracts for the design, build, on-going maintenance for a period of 30 years. finance lease charges and services charges. Overview finance and maintenance of assets reflected Unitary charge payments commenced in on the Statement of Financial Position: September 2011 and will cease in We have also entered into the following September 2041. contracts for the design, build, finance and Performance a) M6 (A74M) - the contract covers the design, maintenance of assets yet to be completed. Report construction and financing of 28.3km of new d) M8, M73, M74 Motorway Improvements – Performance motorway, as well as the operation and the project upgraded the A8 Baillieston to AWPR / B-T - the project will construct a new Analysis maintenance of 90km of existing motorway. Newhouse, completing the M8 between dual carriageway around the City of Aberdeen Payments are made under a shadow toll Glasgow and Edinburgh, and includes and upgrade the road between Balmedie improvements to the M74 Raith Interchange and Tipperty to dual carriageway. The NPD regime. The toll period began in July 1997 Accountability and expires in July 2027. and the widening of other key sections of the contract also incorporates the management, M8, M73 and M74. The NPD contract also operation and maintenance of these roads Report Corporate b) M77 - the contract is a Public Private incorporates the management, operation and for the next 30 years. The unitary charge Governance Partnership (PPP) entered into with East maintenance of this section of the motorway payments will become committed in phases Renfrewshire and South Lanarkshire Councils. for a 30 year period. The unitary charge from Autumn 2016 until after construction The project covers the design, construction, payments became committed as sections of completion in 2018 and will cease in 2048. Accountability financing and operation of 15km of motorway the road became available in 2017 and will cease on March 15 2047. Report and 9km local road to the A726 trunk road. Remuneration Payments are made under a shadow toll & Staff regime. The toll period began in April 2005 and expires in April 2035.
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Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 98 | Annual Accounts
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16 Commitments under PFI Imputed finance lease obligations As at 31/03/18 As at 31/03/17 As at 31/03/16 Contracts cont’d... under PFI contracts comprise: £000’s £000’s £000’s Rentals due within 1 year 40,407 40,407 40,407 Performance Transport Scotland does not have any Rentals due within 2 to 5 years 161,627 161,627 161,627 Report Overview commitments under PFI contracts in Rentals due thereafter 1,385,769 1,276,003 976,141 respect of assets that are not reflected 1,587,803 1,478,037 1,178,175 in the Statement of Financial Position. Less: Interest element (finance cost) (332,970) (361,397) (390,633) Performance Total capital cost 1,254,833 1,116,640 787,542 Report Performance Analysis Imputed service charge obligations As at 31/03/18 As at 31/03/17 As at 31/03/16 under PFI contracts comprise: £000’s £000’s £000’s Service charge due within 1 year 54,430 55,284 52,831 Service charge due within 2 to 5 years 145,483 178,612 194,441 Accountability Report Service charge due thereafter 292,854 314,155 348,791 Corporate Total service charge 492,767 548,051 596,063 Governance
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Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 99 | Annual Accounts
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17 Other Financial The total amount charged to the Statement Commitments – Rail of Comprehensive Net Expenditure in respect of these schemes is: Performance Transport Scotland is committed to pay an Report 2017-18 2016-17 Overview income stream to Network Rail in accordance £000’s £000’s with the Deed of Grant and to Abellio ScotRail Ltd and Serco Caledonian Sleeper Ltd under Network Rail 585,446 463,588 the Franchise Agreements. Performance Abellio ScotRail 147,217 249,677 Report Network Rail – Control Period 4 ran from April Serco Caledonian Sleeper Limited 22,532 19,085 Performance 2009 to March 2014. The Determination for the Analysis current control period, CP5 from April 2014 to Total 755,195 732,350 March 2019, was set by the Office of Rail and Road for the Deed of Grant and track access Following expiry of the contract with First Accountability charges and is reflected on this page. Group, further contracts from April 2015 were Report awarded to Abellio for the ScotRail franchise, Corporate The total amount charged to the Statement and to Serco for the Caledonian Sleeper Governance of Comprehensive Net Expenditure in respect franchise. Amounts due under these contracts of these schemes reflects the cessation of in future years, analysed between those the First ScotRail franchise on 31 March 2015 periods where the commitment falls are: Accountability and the commencement on 1 April 2015 of Report the Abellio ScotRail and Serco Caledonian Network Rail Serco Deed of Abellio Caledonian Remuneration Sleeper franchises. Grant ScotRail Sleeper & Staff £000’s £000’s Limited Total £000’s £000’s Expiry within 0-12 months 335,610 381,196 27,207 744,013 Expiry within 1 to 2 years 670,000 389,048 20,792 1,079,840 Annual Expiry within 2 to 5 years 2,010,000 1,205,437 57,979 3,273,416 Accounts Total 3,015,610 1,975,681 105,978 5,097,269
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18 Financial Instruments 18a Financial Instruments by Category 2017-18 Assets at Fair Assets per Statement of Financial Position Value through Loans & Note Profit & Loss Receivables Total Performance £000’s £000’s £000’s Report Trade and other receivables excluding Overview prepayments, reimbursement of provisions and VAT recoverable 0 282,412 282,412 Balance as at 31 March 2018 0 282,412 282,412 Performance Liabilities per Statement of Financial Position Report Performance PFI liabilities 16 0 1,254,833 1,254,833 Analysis Trade and other payables excluding statutory liabilities (VAT, income tax and social security) 0 163,806 163,806
Balance as at 31 March 2018 0 1,418,639 1,418,639 Accountability Report 18a Financial Instruments by Category 2016-17 Assets at Fair Corporate Assets per Statement of Financial Position Value through Loans & Governance Note Profit & Loss Receivables Total £000’s £000’s £000’s
Trade and other receivables excluding Accountability prepayments, reimbursement of provisions and VAT recoverable 0 217,302 217,302 Report Remuneration Balance as at 31 March 2017 0 217,302 217,302 & Staff Liabilities per Statement of Financial Position PFI liabilities 16 0 1,116,640 1,116,640 Trade and other payables excluding statutory 0 liabilities (VAT, income tax and social security) 200,499 200,499 Annual Balance as at 31 March 2017 0 1,317,139 1,317,139 Accounts
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 101 | Annual Accounts
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18 Financial Instruments 2017-18 Carrying 0-12 5-10 >10 cont’d... value months 1-2 years 3-5 years years years £000’s £000’s £000’s £000’s £000’s £000’s Performance 18b Financial Risk Factors Non-derivative liabilities 1,254,833 12,850 13,785 47,700 96,353 1,084,145 Report Overview Exposure to Risk Derivative liabilities 0 0 0 0 0 0 Due to the largely non-trading nature of its activities and the way in which Government Total financial liabilities 1,254,833 12,850 13,785 47,700 96,353 1,084,145 Departments are financed, Transport Scotland Performance Report is not exposed to the degree of financial risk 2016-17 Carrying 0-12 5-10 >10 faced by many other business entities. value months 1-2 years 3-5 years years years Performance A high level review of risk management is £000’s £000’s £000’s £000’s £000’s £000’s Analysis now considered at each meeting of the Non-derivative liabilities 1,116,640 11,980 12,850 44,449 98,693 948,668 Audit and Risk Committee. Derivative liabilities 0 0 0 0 0 0 Accountability The table on the right analyses financial Total financial liabilities 1,116,640 11,980 12,850 44,449 98,693 948,668 Report liabilities into relevant maturity groupings Corporate based on the remaining period at the Governance Statement of Financial Position date to the Cash Flow and Fair Value Interest Rate Risk contractual maturity date. The amounts Transport Scotland’s loans to CMAL accrue disclosed are the contractual discounted cash interest at the rate set for the National Loans Accountability flows. Balances due within 12 months are Fund and those to Prestwick at the rate Report included at their carrying balances as the specified by the European Commission. Remuneration impact of discounting is not significant. & Staff Income, expenditure and cash flows are dependent on changes in market interest rates that affect this. Transport Scotland has interest bearing liabilities in respect of PFI schemes and minor lease rentals that are Annual determined in the contracts entered in to Accounts and, as such, the related income, expenditure and cash flows are substantially independent of changes in market interest rates.
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 102 | Annual Accounts
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19 Contingent Liabilities 19c Possible Contingent Liabilities not required under IAS37 but included for 19a Contingent Assets disclosed parliamentary reporting and Performance under IAS37 accountability purposes Report Overview • Transport Scotland successfully defended • The FReM states that where information an allegation of GARL copyright about contingent liabilities is not required to be disclosed because the likelihood of a infringement, and a subsequent appeal Performance which was dismissed in May 2012. The transfer of economic benefits is considered Report process of recovering the expenses awarded too remote, they should be disclosed Performance by the Court of Session is now in the separately for parliamentary reporting Analysis hands of the Accountant in Bankruptcy and accountability purposes
19b Contingent Liabilities disclosed i. Contracts held by Transport Scotland Accountability under IAS37 should include indemnity clauses where risk is either considered part of the normal Report Corporate • As part of Transport Scotland’s normal course of business or is not quantifiable: Governance course of business, the Forestry Commission grants the right to use a forestry track as an • Operating agreements (ScotRail and emergency diversion route on the A83 Rest Caledonian Sleeper Rail Franchise and Be Thankful on the understanding that Agreements) with indemnities to Abellio Accountability Transport Scotland has the liability for any ScotRail Ltd and Serco Caledonian Sleeper Report Ltd commencing 1 April 2015 Remuneration incidents that may occur whilst the track is & Staff being used for this purpose. The potential obligation is estimated at £5 million but it • Indemnity clauses in roads contracts to is considered unlikely that any liability compensate Network Rail for any damage will occur. or loss of access
• Liability agreement for any issues caused Annual by the GARL ground investigation work for Accounts over the next 4 years
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Contents ii. Guarantees/Letters of Comfort This was calculated on a deliberately issued by Transport Scotland on prudent basis to mitigate the risk of any behalf of Scottish Ministers: requirement for a future additional payment. Performance There is therefore a contingent liability in Report • S54 guarantees issued as part of rail respect of any further payment required. Overview rolling stock procurement process It is however, not possible to predict what any subsequent valuation of the pension • Scottish Government underwriting the deficit will be to inform any further contribution Performance pension funds of Abellio ScotRail Ltd required by Transport Scotland Report and Serco Caledonian Sleeper Ltd from Performance 1 April 2015 in line with that provided • Transport Scotland received advance Analysis to other train operators by the DfT payments from the Department for Transport, in relation to the Arc Atlantique • Guarantee to Strathclyde Pension Fund Project, to improve the efficiency of the road in relation to admission of Scottish Canals network. As these monies are Pre-financing Accountability payments there is an outside risk that Report Corporate iii.Other contingent liabilities held by Transport Scotland could fail to meet all Governance Transport Scotland: the obligations and requirements set out by the Grant Agreement and as such may • Monklands Canal - maintenance be required to return part thereof or all of pipes under trunk roads these payments Accountability Report • There is a contingent liability in respect of Remuneration any further payment required to the Lothian & Staff Pension Fund in respect of employees transferred from the Forth Estuary Transport Authority (in excess of the agreed settlement amount for the value of the cessation deficit if it subsequently exceeds the prudent Annual basis on which it was calculated). This is Accounts considered to be a remote possibility due to the assumptions made in the calculation of the deficit payment.
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20 Related Party Transactions Transport Scotland paid grants to British Waterways Scotland, trading as Scottish Transport Scotland is an Executive Agency Canals, for the operation and maintenance Performance of the Scottish Government. The Scottish of Scottish canals and related infrastructure Report Government is regarded as a related party and capital grants for related investments Overview with which it had various material transactions during the year. during the year. David MacBrayne Ltd, Transport Scotland also had significant CMAL, TS Prestwick HoldCo Ltd and HIAL Performance are wholly owned subsidiaries of the Scottish transactions with Local Authorities, Sustrans, Report Government, with whom it also had various the Energy Saving Trust, Loganair, Forth Performance material transactions during the year. Bridges Operation Company, Serco North Analysis Link Ferries, Cycling Scotland, Strathclyde Loans were advanced to and repaid by Partnership for Transport, Scottish Water, CMAL to fund vessel construction, and to Network Rail and the Tay Road Bridge Joint Accountability HIAL to support airports infrastructure. Board during the year, principally in relation to payment of grants to deliver specific Report Grants were paid to HIAL to subsidise its Corporate operating and capital expenditure and also transport objectives. Governance to CMAL to fund agreed pier and harbour infrastructure projects. David MacBrayne Ltd All interests declared by members of the is the parent company of Calmac Ferries Ltd Transport Scotland Senior Management Team and Argyll Ferries Ltd who operated ferry are of a minor nature and have no impact on Accountability services under contracts with Transport the awarding of contracts and commissions. Report Remuneration Scotland, and which Transport Scotland & Staff supported via the payment of subsidies. TS Prestwick Holdco Limited is the parent company of the group of subsidiaries who own and operate Glasgow Prestwick Airport. Transport Scotland advanced loan funding to the Group to cover the cash deficit arising Annual from its operating deficit and capital Accounts expenditure.
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21 Segmental Reporting 2017-18 Total continuing Net 21a Business Segments - Statement segments Resource Investment Income Non Cash AME ODEL Total Performance £000’s £000’s £000’s £000’s £000’s £000’s £000’s of Comprehensive Net Expenditure Report Roads 114,361 118,746 (2,981) 51,840 0 109,976 391,942 Overview Rail 170,457 591,525 0 0 0 0 761,982 Concessionary travel 252,676 756 (672) 27 0 0 252,787 & bus services Performance Report Other public transport 23,142 0 0 659 0 0 23,801 Performance Ferry services in Scotland 180,985 6,492 (4,979) 0 0 0 182,498 Analysis Air services in Scotland 34,969 9,036 (989) 0 0 0 43,016 Other transport 28,332 110,261 (144) 0 0 0 138,449 directorate programmes Accountability Report Scottish Futures Fund 5 18,119 0 0 0 0 18,124 Corporate Grants to Local Authorities 0 27,236 0 0 0 0 27,236 Governance 804,927 882,171 (9,765) 52,526 0 109,976 1,839,835
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21 Segmental Reporting 2016-17 cont’d... Total continuing Net segments Resource Investment Income Non Cash AME ODEL Total Performance £000’s £000’s £000’s £000’s £000’s £000’s £000’s 21a Business Segments - Statement Report of Comprehensive Net Expenditure Roads 90,677 115,215 (504) 79,300 0 73,164 357,852 Overview cont’d... Rail 267,534 470,331 0 0 0 0 737,865 Concessionary travel 250,483 (80) (337) 67 0 0 250,133 & bus services Performance Report Other public transport 18,999 0 0 0 0 0 18,999 Performance Ferry services in Scotland 172,625 16,232 (3,978) 0 0 0 184,879 Analysis Air services in Scotland 28,210 10,332 (745) 0 0 0 37,797 Other transport directorate 31,911 35,236 (82) 0 0 0 67,065 programmes Accountability Report Scottish Futures Fund 48 18,845 0 0 0 0 18,893 Corporate Grants to Local Authorities 0 21,681 0 0 0 0 21,681 Governance 860,487 687,792 (5,646) 79,367 0 73,164 1,695,164
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21 Segmental Reporting 2017-18 cont’d... Total continuing segments Trunk Road Capital Other Voted Total Capital Maintenance Projects Assets Loans Expenditure Performance £000’s £000’s £000’s £000’s £000’s 21b Business Segments – Report Capital Expenditure Roads 6,933 402,777 856 0 410,566 Overview Rail 0 0 0 0 0 Other public transport 0 0 0 0 0 Performance Ferry,aviation and other services in Scotland 0 0 0 69,328 69,328 Report 6,933 402,777 856 69,328 479,894 Performance Analysis
2016-17 Total continuing segments Trunk Road Capital Other Voted Total Capital Maintenance Projects Assets Loans Expenditure Accountability £000’s £000’s £000’s £000’s £000’s Report Corporate Roads 11,998 579,319 131 0 591,448 Governance Rail 0 0 0 0 0 Other public transport 0 0 (35) 0 (35) Ferry, aviation and other services in Scotland 0 0 0 42,083 42,083 Accountability Report 11,998 579,319 96 42,083 633,496 Remuneration & Staff
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22 Notional Charges Note 2017-18 2016-17 £000’s £000’s The following notional charges have been Performance included in the accounts: Auditors' remuneration 3 173 171 Report Overview 173 171
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Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 109 | Annual Accounts
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23 Losses and Special Imputed finance lease obligations Number of cases 2017-18 2016-17 Payments under PFI contracts comprise: £000’s £000’s Performance The costs of damage to the trunk road Total cash losses 12 67 484 Report Overview network due to road accidents are charged Details of cases over £250,000 0 0 0 to Transport Scotland as part of the road Including – claims abandoned 12 67 484 maintenance programme. These costs are – active claims 0 0 0 recovered from the party responsible through Performance their insurance company wherever possible, Report except where there has been a fatal injury. Performance The costs are held in a debtor account until Analysis the recovery is successful. There is continuous review of the costs held in the debtor account and those deemed recoverable are identified. Accountability Irrecoverable costs no longer being pursued Report amounted to £0.067 million in respect of 12 Corporate cases and these have now been written off. Governance No individual case exceeded £250,000.
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Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex 111 | Annex
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Transport Scotland Direction by The Scottish Ministers
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IN ACCORDANCE WITH SECTION 19(4) OF THE PUBLIC FINANCE AND ACCOUNTABILITY (SCOTLAND) ACT 2000 Performance Report 1. The statement of accounts for the financial Overview year ended 31 March 2007 and subsequent years shall comply with the accounting principles and disclosure requirements of Performance the edition of the Government Financial Report Reporting Manual (FReM) which is in force Performance for the year for which the statement of Analysis accounts are prepared.
2. The accounts shall be prepared so as to give a true and fair view of the income and Accountability expenditure, recognised gains and losses, Report Corporate and cash flows for the financial year, Governance and of the state of affairs as at the end of the financial year.
3. This direction shall be reproduced as an Accountability appendix to the statement of accounts. Report Remuneration & Staff
Signed by the authority Annual of the Scottish Ministers Accounts Dated 17 January 2006
Transport Scotland Annual Report & Accounts For the year ended 31 March 2018 Annex