Annual Accounts

Annual Accounts

Annual Accounts

Statement of Comprehensive Net Expenditure for the year ended 31 March 2023

	Note	£'000 Staff Costs	£'000 Other Costs	£'000 Income	2022-23 £'000 Total	2021-22 £'000 Total
Administration costs
Staff costs	2	16,976			16,976	15,146
Other administration costs	3		6,971		6,971	6,919
Total administration costs					23,948	22,066
Programme costs
Staff costs	2	16,706			16,706	15,248
Other programme costs	4		3,102,088		3,102,088	3,164,663
Income	5			(12,544)	(12,544)	(12,995)
Total programme costs					3,106,250	3,166,916
Total		33,682	3,109,059	(12,544)	3,130,198	3,188,982
Net operating costs for the year ended 31 March 2023					3,130,198	3,188,982

Other Comprehensive Net Expenditure

	Note	2022-23 £'000 Total	2021-22 £'000 Total
Items that will not be reclassified to net operating costs:
Net (gain) / loss on:
-revaluation of property, plant, and equipment	6	(4,083,146)	(2,273,228)
-revaluation of intangibles			0
		(4,083,146)	(2,273,228)
Items that may be reclassified subsequently to net operating costs:
Net (gain) / loss on:
-revaluation of assets held for sale	8	0	0
Total comprehensive net expenditure for the year ended 31 March 2023		(952,949)	915,754

All income and expenditure is derived from continuing activities.

Statement of Financial Position as at 31 March 2023

	Note	£'000	31 March 2023 £'000	£'000	31 March 2022 £'000
Non-current assets
Property, plant & equipment	6	27,653,148		23,608,232
Right of Use Asset	6a	27,936		0
Intangible assets	7	0		0
Financial assets	9	348,758		313,290
Other receivables	10	35,000		40,000
Total non-current assets			28,064,842		23,961,522
Current assets
Assets held for sale	8	0		0
Financial assets	9	16,621		10,648
Trade and other receivables	10	110,483		89,064
Cash & cash equivalents		0		0
Total current assets			127,104		99,713
Total assets			28,191,946		24,061,235
Current liabilities
Trade and other payables	11	(276,058)		(376,976)
Provisions	12	(31,564)		(23,775)
Total current liabilities			(307,622)		(400,751)
Total assets less current liabilities			27,884,324		23,660,484
Non-current liabilities
Other payables and financial liabilities	11	(1,061,330)		(1,073,874)
Provisions	12	(3,314)		(3,864)
Total non-current liabilities			(1,064,645)		(1,077,738)
Assets less liabilities			26,819,679		22,582,746
Taxpayers' equity
General fund	SoCTE		12,555,032		12,400,936
Revaluation reserve	SoCTE		14,264,647		10,181,810
Total taxpayers' equity			26,819,679		22,582,746

The notes on pages 116 to 165 form part of these accounts.

Alison Irvine
Interim Chief Executive

The Accountable Officer authorised these financial statements for issue on

Statement of Cash Flows for the year ended 31 March 2023

	Note	2022-23 £'000	2021-22 £'000
(A) Cash flows from operating activities
Net operating cost	SoCNE	(3,130,198)	(3,188,982)
Adjustments for non-cash transactions	3/4	206,534	175,793
Decrease / (increase) in trade and other receivables	1/3	(16,419)	64,488
Adjustment for the revaluation element of assets held for sale	8	0	0
Increase / (decrease) in trade and other payables	13	(77,247)	210,418
Increase / (decrease) in provisions	13	7,239	(1,906)
Adjustment for interest element of PFI contracts	4	71,471	76,741
Net cash outflow from operating activities		(2,938,619)	(2,663,448)
(B) Cash flows from investing activities
Purchase of property, plant, and equipment	6	(169,353)	(176,127)
Acquisition of Right of Use Asset	6a	(28,409)	0
Transfers (note 6 transfer line)		0	33
True Disposal of property, plant and equipment	6	0	197
Increase / (decrease) in capital accruals	13	(26,316)	(123,722)
Increase / (decrease) in Voted loans and Other Funds	9	(41,441)	(45,589)
Net cash outflow from investing activities		(265,519)	(345,208)
(C) Cash flows from financing activities
Funding from the Scottish Government	SoCTE	3,359,926	3,182,200
Inter Entity transfers	SoCTE	(74,437)	(61,210)
Inter Entity Adjustment		20	0
Capital element of payments On Balance Sheet PFI contracts	13	(38,419)	(35,593)
Capital element of payments - IFRS 16 Finance Leases	13	28,519	0
Interest element of PFI contracts	4	(71,471)	(76,741)
Net Financing		3,204,139	3,008,656
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
Cash and cash equivalents at the end of the period		0	0

Statement of Taxpayers' Equity for the year ended 31 March 2023

	Note	General Fund £'000	Revaluation Reserve £'000	Total Reserves £'000
Balance at 31 March 2021		12,184,112	8,180,702	20,364,814
Changes in taxpayers' equity for 2021-22
Net gain / (loss) on revaluation of property, plant, and equipment	6	0	2,273,228	2,273,228
Non-current assets adjustments		0	0	0
Roads trunkings / de-trunkings	6	0	0	0
Roads historic value adjustment	6	12,524	0	12,524
Transfers to Scottish Government	6	0	0	0
Realised element of the revaluation reserve		272,120	(272,120)	0
Inter-Entity transfers		(61,210)	0	(61,210)
Non-cash charges - auditors remuneration	3	190	0	190
Net operating costs for the year	SoCNE	(3,188,981)	0	(3,188,981)
Total recognised income and expense for 2021-22		(2,965,357)	2,001,108	(964,249)
Funding from Scottish Government		3,182,200	0	3,182,200
Balance at 31 March 2022		12,400,955	10,181,810	22,582,765
Changes in taxpayers' equity for 2022-23
Net gain / (loss) on revaluation of property, plant, and equipment	6	(790)	4,141,393	4,140,603
Non-current assets adjustments		0	0	0
Roads trunkings / de-trunkings	6	0	0	0
Roads historic value adjustment	6	(27,716)	(31,454)	(59,171)
Transfers to Scottish Government	6	0	0	0
Realised element of the revaluation reserve		27,102	(27,102)	0
Inter Entity transfers		(74,437)	0	(74,437)
Impact of adopting IFRS 16	6a	0	0	0
Non-cash charges - auditors remuneration	3	191	0	191
Net operating costs for the year	SoCNE	(3,130,198)	0	(3,130,198)
Total recognised income and expense for 2022-23		(3,205,849)	4,082,837	876,988
Funding from Scottish Government		3,359,926	0	3,359,926
Balance at 31 March 2022		12,555,032	14,264,647	26,819,679

Notes to the accounts

The financial statements for the year ended 31 March 2023 have been prepared in accordance with the Accounts Direction given by the Scottish Ministers in pursuance of the Public Finance and Accountability (Scotland) Act 2000, and in accordance with The HM Treasury Financial Reporting Manual (FReM).

The financial statements are consolidated within the Scottish Government Consolidated Accounts.

Significant accounting policies

The areas where accounting judgements have significant impact are outlined within note 1.23 and include the valuation of the trunk road network, recognition and valuation of provisions and accruals.

Valuation of the trunk road network

The trunk road network is valued on the basis of current replacement cost, adjusted to reflect the current condition of the road component and the depreciation of structures and communications assets. This valuation reflects assumptions, estimates and professional judgement that are incorporated in the data input to the model used to produce the valuation known as the Road Authorities Asset Valuation System (RAAVS). Atkins currently provides this model using standard costs to value the individual components of the network asset and indices to revalue these on an annual basis through a joint contract with the other UK Road Authorities.

Recognition and the valuation of provisions

Due to the long-term nature of our road improvement schemes, certain assumptions and judgements are required to be made for the estimated cost of land acquisition and compensation claims. This is due to the often-protracted negotiation periods involved and the initial uncertainty over both the financial value and the final payment date of any compensation.

Valuation of accruals

Due to the timing and availability of final year-end information from external suppliers for concessionary travel, rail and roads maintenance, certain assumptions and judgements are required to be made when determining final accruals.

1. Statement of accounting policies

The financial statements have been prepared on a going concern basis and in accordance with the 2022-23 Government Financial Reporting Manual (FReM) issued by HM Treasury. The particular accounting policies applied by Transport Scotland are described in this section. The accounts are prepared using, where necessary, estimation techniques which are selected as the most appropriate for the purpose of giving a true and fair view in accordance with the principles set out in International Accounting Standard (IAS) 8 - Accounting Policies, Changes in Accounting Estimates and Errors. Changes in accounting policies which do not give rise to a prior year adjustment are reported in the relevant note. There is the possibility that there may be outcomes within the next financial year that differ from those made this year and consequently these may require a material adjustment to the carrying amount of an affected asset or liability.

1.1 Accounting convention

The accounts have been prepared under the historical cost convention, modified by the revaluation of non-current assets and intangible assets to fair value. New or amended accounting standards that are considered relevant and their anticipated impact on the accounts are as follows:

• IFRS 16 - Leases. This replaces IAS 17. This standard has been implemented for central government bodies from 1 April 2022 and is therefore applicable to Transport Scotland. The impact of this eliminates accounting for the majority of operating leases and requires the recognition of the value of all leased and other 'right of use' assets specified to operators, in contracts for the provision of services in the Statement of Financial Position. The impact on the Transport Scotland accounts is related to the potential value of assets that require to be accounted for in terms of right to use and it has been identified that this is specific to property leases.
• IFRS 17- Insurance Contracts. The date of application of IFRS 17 is not yet confirmed and the impact has not yet been determined. The Financial Reporting Advisory Board (FRAB) are considering implementation of the standard in the public sector however the earliest date of mandatory adoption of the Standard, as per the FRAB paper 145 (11) would be from financial year 2024-25.
• A number of narrow-scope amendments to IAS 1 – Presentation of Financial Statements, IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors and IAS 12 – Income Taxes have minimal impact on Transport Scotland.

1.2 Trunkings / de-trunkings

Transport Scotland's accounts reflect the trunk road network that Scottish Ministers have ownership of and responsibility to maintain. Transfers of the responsibility for maintaining sections of the trunk road network to / from the local authority network are referred to as 'de-trunkings' or 'trunkings' respectively and are treated as transfers to / from other government departments at nil consideration through the general fund.

1.3 Property, plant, and equipment

All property, plant and equipment assets will be accounted for as non-current assets unless they are deemed to be 'Held for Sale' (see Note 1.6). Title to the freehold land and buildings shown in the accounts of Transport Scotland is held by Scottish Ministers.

1.4 Capitalisation policy

The trunk road network is recognised as a single infrastructure asset in accordance with FReM. However, it comprises four distinct elements that are accounted for differently: land, road pavement, structures, and communications. Subsequent expenditure is capitalised where it adds to the service potential or replaces the existing elements of assets that were previously identified in the Road Authorities Asset Valuation System (RAAVS). Expenditure that does not replace or enhance service potential will be expensed as a charge to the Statement of Comprehensive Net Expenditure. Where a scheme is subsequently cancelled, the capital costs already incurred are written off to the Statement of Comprehensive Net Expenditure. Any retained land or building assets are transferred to the land and buildings category where it is not currently possible to market them for sale or to Assets Held for Sale where they are being marketed for sale.

Other non-current assets are capitalised where expenditure exceeds the following thresholds:

Land & Buildings £10,000

Leasehold Improvements £10,000

Information & Communication Technology (ICT) £25,000

Plant & Machinery £5,000

Transport £5,000

Items falling below these limits are charged as an expense and shown in the Statement of Comprehensive Net Expenditure. Furniture and fittings are not capitalised unless part of a specially identified project, such as a major relocation exercise.

Valuation

Land is held at current market values, as assessed by the Valuation Office Agency (VOA). Revaluation exercises are carried out on buildings and dwellings as part of the Scottish Government five-year rolling programme, with indexation applied in the intervening years.

Other items of property, plant and equipment are held at current value in existing use. These assets have not been re-valued from their depreciated historic cost or valuation at 1 April 2007, as the movement in their relevant indices since then was considered to be negligible and the economic lives of the assets so short that the impact of any adjustment was not considered significant.

Infrastructure assets – the trunk road network

The road network is held at its depreciated replacement cost based on service potential and classed as a specialist asset for which a market valuation is not available. Land is valued at rates supplied by the VOA.

The road pavement, structures and communications elements are valued using agreed rates determined to identify the gross replacement cost of applicable types of road, structure or communications on the basis of new construction on a greenfield site. These rates are re-valued annually using indices to reflect current prices and are also updated when new construction costs become available as comparators to the costs previously identified for specific road types. However, special structures, which tend to be one off by their nature, are valued using specific costs that are updated to current prices.

Depreciation is accounted for in respect of the road pavement by reference to the service potential assessed by condition surveys that are carried out over the whole network as part of a rolling programme that covers every section of road at least every five years. The structures and communications elements are depreciated using the straight-line method applied to the re-valued replacement costs, and also inspected every five years to identify any other changes. Land is not depreciated.

The indexation factors applied are:

• Road Pavement, Structures and Communications: Baxter Index, published quarterly by the Department for Business, Energy, and Industrial Strategy (BEIS).
• Land: Land indices produced by VOA.

Upwards movements in value are taken to the revaluation reserve. Downward movements in value are set off against any credit balance held in the revaluation reserve until the credit is exhausted and thereafter expensed in the Statement of Comprehensive Net Expenditure. Historic valuation adjustments in respect of minor corrections to prior year measurements and valuations of the road network are separately identified in the Statement of Changes in Taxpayers' Equity and Property Plant and Equipment (Note 6) note and not treated as prior year adjustments.

Assets under construction

Road building schemes in the course of construction are capitalised at actual cost with no indexation. Assets under construction are not depreciated.

Land and buildings

Land and buildings released from road schemes deemed surplus to requirements are transferred to, and accounted for as, Assets Held for Sale (see Note 1.6).

Information technology

Information technology assets are stated at historical cost with no indexation applied.

1.5 Depreciation

Infrastructure assets

The road network and associated street furniture is surveyed over a five-year rolling period to assess the estimated remaining useful lives and the resultant assessment is used to determine their valuation, with any changes reflected as a condition variance. The variance is valued according to the rates applied to the respective sections of road. The useful economic lives of elements of the road valuation are assessed according to the following design lives:

	Life in years
Road surface, sub-pavement layer, fencing, drainage, and lighting	20 to 50
Road bridges, tunnels, and underpasses	20 to 120
Culverts, retaining walls and gantries	20 to 120
Road communications assets	15 to 50

The annual depreciation charge for the road surface is determined by the annual condition variance. This information is provided by Atkins and is based on output from the condition surveys carried out within the financial year.

Structures and communications assets are depreciated on a straight-line basis relative to their remaining life and any renewals over the period.

Non-infrastructure assets

With the exception of surplus land and properties awaiting sale, non-infrastructure assets are depreciated on a straight-line basis over the expected life of the particular asset category as follows:

	Life in years
Freehold buildings	5 to 100
Leasehold buildings	Shorter of length of lease or specific asset life
IT Equipment	3 to 10
Plant and Machinery	5

1.6 Assets held for sale

A property is derecognised and held for sale under IFRS 5 Non-current Assets Held for Sale and Discontinued Operations when all of the following requirements are met:

• It is available for immediate sale in its present condition.
• A plan is in place, supported by management, and steps have been taken to actively market the asset and conclude a sale at a reasonable price in relation to its current fair value; and
• A sale is expected to be completed within 12 months.

Assets classified as held for sale are measured at the lower of their carrying amounts immediately prior to their classification as held for sale and their fair value less costs to sell. Assets classified as held for sale are not subject to depreciation or amortisation.

1.7 Right of use assets and leases

For government bodies reporting under the FReM, IFRS 16 Leases has been implemented from 1 April 2022; this introduces a single lessee accounting model that requires a lessee to recognise assets and liabilities for all leases (apart from the exemptions included below) and replaces IAS 17 Leases. In accordance with IFRS 16, contracts, or parts of a contract that convey the right to use an asset in exchange for consideration are accounted for as leases, including peppercorn leases. The FReM expands the scope of IFRS 16 to include arrangements with nil consideration. The standard also applies to arrangements with other public sector organisations which share accommodation, often through MOTO (Memorandum Of Terms of Occupation) agreements.

Contracts for services are evaluated to determine whether they convey the right to control the use of an identified asset, as represented by rights both to obtain substantially all the economic benefits from that asset and to direct its use. In such cases, the relevant part is treated as a lease.

Contracts for low-value items, in line with the capitalisation levels for property plant and equipment noted above in Note 1.4, provided they are not highly dependent on or integrated with other items; and contracts with a term shorter than twelve months, are excluded.

At the commencement of a lease (or the IFRS 16 transition date, if later), a right-of-use asset and a lease liability are recognised. The lease liability is measured at the present value of the payments for the remaining lease term, net of irrecoverable value added tax, discounted either by the rate implicit in the lease, or, where this cannot be determined, the rate advised by HM Treasury for that calendar year which was 0.95% for leases entered into prior to 31 December 2022. The liability includes payments that are fixed, or in-substance fixed, excluding, for example, changes arising from future rent reviews or changes in an index. The right-of-use asset is measured at the value of the liability, adjusted for any payments made or amounts accrued before the commencement date; lease incentives received; incremental costs of obtaining the lease; and any costs related to restoration at the end of the lease. However, for peppercorn or nil consideration leases, the asset is measured at its existing use value.

The asset is subsequently measured using the fair value model. The cost model is considered to be a reasonable proxy except for leases of land and property without regular rent reviews. For these leases, the asset is carried at a revalued amount. In these financial statements, right-of-use assets held under index-linked leases have been adjusted for changes in the relevant index, while assets held under peppercorn or nil consideration have been valued using market prices or rentals for equivalent land and properties. The liability is adjusted for the accrual of interest, repayments, reassessments and modifications. These are measured by re-discounting the revised cash flows.

Expenditure includes interest, straight-line depreciation, any asset impairments, and changes in variable lease payments not included in the measurement of the liability during the period in which the triggering event occurred. Lease payments are debited against the liability. Rental payments for leases of low-value items or shorter than twelve months are expensed.

1.8 Intangible non-current assets

Intangible non-current assets are capitalised where expenditure of £25,000 or more is incurred in acquiring them. In accordance with the FReM, Intangible assets are accounted for in line with the requirements of IAS 38 Intangible Assets and are valued at depreciated replacement cost. Revaluations are carried out according to IAS 38 for assets over a valuation threshold.

Future economic benefit has been used as the criteria in assessing whether an intangible asset meets the definition and recognition criteria of IAS 38 Intangible Assets for assets that do not generate income. IAS 38 defines future economic benefit as, 'revenue from the sale of products or services, cost savings, or other benefits resulting from the use of the asset by the entity.' Intangible assets other than assets under development are amortised on a straight-line basis over their estimated useful lives. Impairment reviews are carried out if there are any indicators that impairment should be considered. Intangible assets under development are not amortised.

1.9 Financial assets

Loans, trade receivables and accrued income are accounted for in accordance with IFRS 9 Financial Instruments. These financial assets were previously categorised as loans and receivables under IAS 39 Financial Instruments: Recognition and Measurement and have been categorised as financial assets held at amortised cost under IFRS 9.

Loans and receivables are recognised initially at fair value, plus transaction costs. Fair value is usually the contractual value of the transaction. Thereafter, loans and receivables are held at amortised cost in accordance with IFRS 9 where the agency's business model is to hold them to collect the cash flows and where the cash flows are solely payments of principal and interest on the outstanding principal.

Where material and not specifically excluded by the FReM, credit loss allowances are recognised. Credit loss allowances for trade receivables and similar arrangements are measured at the lifetime expected credit loss. Credit loss allowances for formal loans are measured at the twelve-month expected credit loss where the credit risk on the loan has not increased significantly since initial recognition. We have provided for anticipated credit losses in respect of those loans where there is evidence to indicate that we may not be able to recover the full value of their amortised cost and deducted these values from the carrying amounts as required under IFRS 9.

Loans and receivables are only derecognised under the following circumstances:

• When the rights to the cash flows expire.
• When the assets have been transferred; or
• When the assets have been written off because there is no reasonable expectation of recovering them.

1.10 Investment in equities

Investments in entities that are not classified to central government are financial instruments within the scope of IFRS 9. They are all classified as equity instruments measured at fair value through other comprehensive income and available-for-sale financial assets.

As all financial assets previously categorised as available-for-sale financial assets have been re-categorised as equity instruments held at fair value through other comprehensive income. Measurement at fair value may require the use of accounting estimates and so may give rise to estimation uncertainty.

In valuing instruments for which there is no active market, we have used estimation techniques which reflect, as far as practicable, those that would be used by market participants, making maximum use of observable inputs.

Shareholdings are de-recognised when the agency's rights to receive cash flows expire or have been transferred, provided that the transfer transaction also transfers substantially all of the risks and rewards of ownership and control of the financial asset.

1.11 Trade and other payables

These are financial liabilities other than those classified as held at fair value through profit and loss and those classified as financial guarantee contracts.

They are valued at fair value, with the transaction value regarded as the fair value at the date of initial recognition. Thereafter, where the time value of money is considered to be material, they are held at amortised cost using the effective interest rate to discount future cash flows. They are derecognised when all obligations are settled.

1.12 Service concession arrangements

Private finance transactions are accounted for in accordance with IFRIC 12, Service Concession Arrangements which sets out how these transactions are to be accounted for. We have five such arrangements, three Private Finance Initiative (PFI) schemes and two Non-Profit Distributing (NPD) schemes (see Note 16 for more details). The private sector operator is contractually obliged to provide the services related to the infrastructure that they construct, which is recognised as a non-current asset. The asset is measured by using the fair value approach. The fair value of the asset determines the amount to be recorded as an asset with an offsetting liability. The total unitary payment is then divided into three: the service charge element, repayment of the capital element of the contract obligation and the interest expense on it (using the interest rate implicit in the contract).

1.13 Provisions

Legal and constructive obligations that are of uncertain timing or amount are provided for in the Statement of Financial Position at 31 March on the basis of the best estimate available. These are accounted for under IAS 37 Provisions, Contingent Liabilities and Contingent Assets. Provisions are charged to the Statement of Comprehensive Net Expenditure unless they are capitalised as part of additions to non-current assets. Major projects provisions relate to compensation claims made in respect of work done under the projects that have not yet been fully settled.

1.14 Other infrastructure expenditure

Other infrastructure expenditure is differentiated between capital and resource for budgeting purposes. However only the expenditure that is capital in nature that relates to assets reflected in these accounts is capitalised. Expenditure that relates to assets reflected by external bodies is charged as expenditure.

1.15 Operating income

Operating income relates to operating activities and principally comprises fees and charges for services provided on a full-cost basis to external customers in both the public and private sectors. It includes not only income retained but also income due to the Scottish Government Consolidated Fund. Operating income is stated net of VAT.

1.16 Administration and programme expenditure

The Statement of Comprehensive Net Expenditure is analysed between administration and programme costs. Administration costs reflect the costs of running the agency and include staff costs as well as accommodation, services, and supplies. Programme costs reflect the costs of operating, maintaining, managing, and improving the road, rail, aviation, and maritime infrastructure for which we have responsibility as well as those incurred in delivering transport policies, such as concessionary fares, and grants and subsidies to contribute to the provision of rail, bus, ferry, and air services. The allocation of costs between administration and support of the programme work is reviewed in year and can result in reallocation of staff costs and a consequential reduction in expenditure classed as administration.

1.17 Grants payable

Grants payable are recorded as expenditure in the period that the underlying activity giving entitlement to the grant occurs. Where necessary, obligations in respect of grant schemes are recognised as liabilities.

1.18 Pensions

Past and present employees are mainly covered by the provisions of the Principal Civil Service Pension Scheme (PCSPS) and the Civil Servants and Others Pension Scheme or Alpha Scheme, more details of which can be found in Note 2. The PCSPS is an unfunded multi-employer defined benefit scheme. Transport Scotland's contributions are recognised as a cost in the year. The Alpha Scheme provides benefits on a career average basis with a normal pension age equal to the member's State Pension Age (or sixty-five if higher).

1.19 Contingent liabilities

Contingent liabilities include those required to be disclosed under IAS 37 Provisions, Contingent Liabilities and Contingent Assets and other liabilities arising from indemnities and guarantees (which are not financial guarantee contracts) included for parliamentary reporting and accountability. They are disclosed in respect of:

• possible obligations arising from past events whose existence will be confirmed by the occurrence of uncertain future events out with Transport Scotland's control; or
• present obligations arising from past events where it is not likely that resources will be required to settle the obligation, or it is not possible to measure it reliably.

1.20 Value added tax (VAT)

Irrecoverable VAT is charged to the relevant expenditure category or included in the capitalised purchase cost of non-current assets. Transport Scotland is part of the Scottish Government VAT registration and any outstanding VAT balances are accounted for by the Scottish Government.

1.21 Segmental reporting

IFRS 8 Segmental Reporting requires operating segments to be identified on the basis of internal reports about components. Transport Scotland identifies components of expenditure which are regularly reviewed by the Senior Management Team in order to manage financial performance.

1.22 Employee benefits

A short-term liability and expense is recognised for holiday days, holiday pay, bonuses, and other short-term benefits when employees render service that increases their entitlement to these benefits. As a result, an accrual has been made for leave earned but not taken.

1.23 Critical accounting estimates

Critical accounting estimates are used determining the valuation of certain assets and liabilities included in the annual accounts. Significant estimates have been outlined below:

• Valuation of the Trunk Road Network The trunk road network is valued on the basis of current replacement cost, adjusted to reflect the current condition of the road pavement component and the depreciation of structures and communications assets. This valuation reflects assumptions, estimates and professional judgement that are incorporated in the data input to the model used to produce the valuation known as the Road Authorities Asset Valuation System (RAAVS). This model is currently provided by Atkins using standard costs to value the individual components of the network asset and indices to revalue these on an annual basis through a joint contract with the other UK Road Authorities.
• Recognition and the valuation of provisions Due to the long-term nature of our road improvement schemes, certain assumptions and judgements are required to be made for the estimated cost of land acquisition and compensation claims. This is due to the often-protracted negotiation periods involved and the initial uncertainty over both the financial value and the final payment date of any compensation.
• Valuation of accruals Due to the timing and availability of final year-end information from external suppliers for concessionary travel, network support grant, rail and roads maintenance, certain assumptions and judgments are required to be made when determining final accruals.

2. Staff numbers and costs

The costs of staff employed on the design, procurement and management of capital projects undertaken by Transport Scotland have been charged to capital expenditure in respect of the projects identified in the year.

These have been identified in the table below along with prior year figures to reflect costs similarly capitalised in that year. These costs are included with the project costs in Note 4.

Permanent employed staff are civil servants who have an employment contract with Transport Scotland, others are agency staff. The below table shows the year on year average.

Average number of staff employed

2022-23	Permanent Staff (FTE)	Others (Headcount)	Total	2021-22	Permanent Staff	Others (Headcount)	Total
AMFC	58	1	59	AMFC	49	1	50
BAAT	87	3	90	BAAT	87	4	91
Finance and Other	66	5	71	Finance and Other	66	3	69
LCE	29	1	30	LCE	29	1	30
Major Projects	47	18	65	Major Projects	47	11	58
Rail	59	1	60	Rail	59	1	60
Roads	96	40	136	Roads	96	36	132
TSA	58	5	63	TSA	58	4	62
TOTAL	499	74	573	TOTAL	490	61	551

Wages and salaries include gross salaries, performance pay, or bonuses received in year, overtime, recruitment and retention allowances, private office allowances, ex-gratia payments and any other allowances to the extent that it is subject to UK taxation. The payment of legitimate expenses is not part of salary.

Staff costs comprise:

	2022-23 Permanently Employed Staff £'000	Others £'000	Total £'000	2021-22 Permanently Employed Staff £'000	Others £'000	Total £'000
Administration:
Wages and salaries costs	12,016	702	12,719	10,562	625	11,188
Social security costs	1,254	0	1,254	1,125	0	1,125
Other pension costs	3,004	0	3,004	2,834	0	2,834
Early retirement costs	0	0	0	0	0	0
	16,274	702	16,976	14,521	625	15,146
Programme:
Wages and salaries costs	11,511	694	12,204	9,685	1,781	11,466
Social security costs	1,376	0	1,376	1,116	0	1,116
Other pension costs	3,125	0	3,125	2,666	0	2,666
	16,012	694	16,706	13,467	1,781	15,248
Total staff costs to be charged to Comprehensive Net Expenditure	32,286	1,396	33,682	27,988	2,406	30,395
Capitalised Programme:
Wages and salaries costs	4,231	62	4,292	4,088	62	4,150
Social security costs	287	0	287	259	0	259
Other pension costs	689	0	689	657	0	657
Running Costs	132	0	132	0	0	0
	5,339	62	5,400	5,003	62	5,066
Total staff costs charged to capital expenditure	5,339	62	5,400	5,003	62	5,066
Total Staff Costs	37,625	1,457	39,083	32,992	2,468	35,460

Pension costs

The Principal Civil Service Pension Scheme (PCSPS) is an unfunded multi-employer defined benefit scheme and as a result, Transport Scotland is unable to identify its share of the underlying liabilities. The scheme is therefore accounted for as a defined contribution scheme. The scheme Actuary valued the scheme liabilities at 31 March 2022. Details can be found in the resource accounts of the Cabinet Office.

Pension benefits are provided through the Civil Service pension arrangements. From 1 April 2015 a new pension scheme for civil servants was introduced – the Civil Servants and Others Pension Scheme or alpha, which provides benefits on a career average basis with a normal pension age equal to the member's State Pension Age (or 65 if higher). From that date, all newly appointed civil servants and the majority of those already in service joined alpha. Prior to that date, civil servants participated in the Principal Civil Service Pension Scheme (PCSPS). The PCSPS has four sections: three providing benefits on a final salary basis (classic, premium, or classic plus) with a normal pension age of sixty; and one providing benefits on a whole career basis (nuvos) with a normal pension age of sixty-five.

These statutory arrangements are unfunded with the cost of benefits met by monies voted by Parliament each year. Pensions payable under classic, premium, classic plus, nuvos and alpha are increased annually in line with Pensions Increase legislation. Existing members of the PCSPS who were within 10 years of their normal pension age on 1 April 2012 remained in the PCSPS after 1 April 2015. Those who were between 10 years and 13 years and 5 months from their normal pension age on 1 April 2012 switched to alpha between 1 June 2015 and 1 February 2022.

All members who switch to alpha have their PCSPS benefits 'banked,' with those with earlier benefits in one of the final salary sections of the PCSPS having those benefits based on their final salary when they leave alpha. (The pension figures quoted for officials show pension earned in PCSPS or alpha – as appropriate. Where the official has benefits in both the PCSPS and alpha, the figure quoted is the combined value of their benefits in the two schemes.) Members joining from October 2002 may opt for either the appropriate defined benefit arrangement or a 'money purchase' stakeholder pension with an employer contribution (partnership pension account).

Employee contributions are salary-related and range between 4.6% and 8.05% for members of classic, premium, classic plus, nuvos and alpha. Benefits in classic accrue at the rate of 1/80th of final pensionable earnings for each year of service. In addition, a lump sum equivalent to three years initial pension is payable on retirement. For premium, benefits accrue at the rate of 1/60th of final pensionable earnings for each year of service. Unlike classic, there is no automatic lump sum. Classic plus is essentially a hybrid with benefits for service before 1 October 2002 calculated broadly as per classic and benefits for service from October 2002 worked out as in premium. In nuvos, a member builds up a pension based on their pensionable earnings during their period of scheme membership.

At the end of the Alpha scheme year (31 March) the member's earned pension account is credited with 2.32% of their pensionable earnings in that scheme year and the accrued pension is uprated in line with Pensions Increase legislation. Benefits in alpha build up in a similar way to nuvos, except that the accrual rate is 2.32%. In all cases, members may opt to give up (commute) pension for a lump sum up to the limits set by the Finance Act 2004.

The partnership pension account is a stakeholder pension arrangement. The employer makes a basic contribution of between 8% and 14.75% (depending on the age of the member) into a stakeholder pension product chosen by the employee from a panel of providers. The employee does not have to contribute, but where they do make contributions, the employer will match these up to a limit of 3% of pensionable salary (in addition to the employer's basic contribution).

Employers also contribute a further 0.5% of pensionable salary to cover the cost of centrally provided risk benefit cover (death in service and ill health retirement).

The accrued pension quoted is the pension the member is entitled to receive when they reach pension age, or immediately on ceasing to be an active member of the scheme if they are already at or over pension age. Pension age is sixty for members of classic, premium, and classic plus, sixty-five for members of nuvos, and the higher of sixty-five or State Pension Age for members of alpha. (The pension figures quoted for officials show pension earned in PCSPS or alpha, as appropriate. Where the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the two schemes but note that part of that pension may be payable from different ages.)

Further details about the Civil Service pension arrangements can be found at the website www.civilservicepensionscheme.org.uk

New career average pension arrangements were introduced on 1 April 2015 and the majority of Classic, Premium, Classic Plus and Nuvos members joined the new scheme. Further details of this new scheme are available at alpha scheme guide - Civil Service Pension Scheme

For 2022-23, employers' contributions of £6,819,000 (2021-22: £6,157,000) were payable to the PCSPS at one of four rates in the range 26.6% to 30.3% of pensionable pay, based on salary bands. The scheme Actuary reviews employer contributions every four years following a full scheme valuation. The contribution rates are set to meet the cost of the benefits accruing during 2022-23 to be paid when the member retires, and not the benefits paid during this period to existing pensioners.

3. Other administration costs

	Note	2022-23 £'000	2021-22 £'000
Rentals under operating leases		632	1,326
Accommodation		850	3,031
Office costs and supplies		2,095	1,578
Hospitality		5	0
Travel		213	60
Training		38	30
Consultancy		366	173
Programme Running Costs		1,216	0
Non-cash items
Depreciation		1,364	532
Auditors' remuneration and expenses – external	22	191	190
Total administration costs		6,971	6,919

4. Programme costs

	Note	2022-23 £'000	2021-22 £'000
Other programme expenditure Roads
Capital maintenance		205,933	201,459
Current maintenance		142,277	128,753
PFI interest charges		71,471	76,741
PFI service charges		39,196	51,842
Rail
Franchise *		724,645	831,649
Rail infrastructure in Scotland **		472,965	532,053
Other		1,883	875
Bus Services
Smartcard applications		1,531	4,871
Concessionary travel schemes		268,075	232,228
Other public transport
Major public transport projects – rail ***		193,717	158,610
Transport information		560	521
Ferry services in Scotland		287,157	233,389
Air services in Scotland		76,670	90,094
Bus services in Scotland		140,645	145,107
Other transport directorate programmes		52,591	139,083
Low Carbon and Active Travel		139,222	92,060
Central Government grants to Local Authorities		82,467	55,255
Resource AME Transactions (EST Loans Only)		(3,896)	15,000
Non-cash items
Depreciation	6/7	204,980	175,072
Total other programme costs		3,102,088	3,164,663

* Cash Grant in Aid Payments to Scottish Rail Holdings (£382 million plus Fixed Track Access Charges of £313m) and Serco (£30 million) totalled £725 million.

** The Rail Infrastructure in Scotland Capital Figure of £473 million was paid directly to 'Network Rail'.

***Enhancement grant of £180m was paid directly to network rail and is disclosed in the'Major public transport projects - rail' line

5. Operating income

Operating income principally arises from:

• Interest receivable from loans to Caledonian Maritime Assets Limited (CMAL).
• Rental income from land and properties acquired for road schemes and now surplus to requirements.
• Sale of land and property which is surplus to the requirements of the road or rail scheme.
• European Structural Funding.
• Other income including re-imbursement from local authorities for work done.

	2022-23 £'000	2021-22 £'000
Programme income
Interest receivable – loans	(5,210)	(5,204)
Rental income – land & properties	(64)	(9)
Other income	(3,937)	(5,557)
European Structural Fund income	(2,162)	(2,422)
Ports income	0	0
Dividends	0	0
Profit on disposal of land	(1,171)	197
Total operating income	(12,544)	(12,995)

6. Property, plant, and equipment

2022-23	Road Network £'000	Land £'000	Buildings £'000	Transport £'000	IT £'000	Leasehold Improvements £'000	Assets under Construction £'000	Total £'000
Cost or Valuation
At 1st April 2022	28,135,763	6,476	11,810	135	4,608	1,508	544,540	28,704,839
Detrunkings	0	0	0	0	0	0	0	0
Additions	48,273	(16)	0	0	0	0	121,095	169,353
Disposals	0	(790)	0	0	0	0	0	(790)
Revaluation	5,109,361	528	966	0	0	0	0	5,110,855
Current valuation adjustments	0	0	0	0	0	0	0	0
Historic valuation adjustments	(35,202)	0	0	0	0	0	0	(35,202)
Transfers and reclassifications	0	0	0	0	0	0	0	0
Transfers (to) / from assets under construction	140,870	0	0	0	0	0	(172,324)	(31,454)
Balance at 31 March 2023	33,399,065	6,198	12,775	135	4,608	1,508	493,311	33,917,601
Depreciation
At 1st April 2022	5,085,655	0	4,729	106	4,608	1,508	0	5,096,605
Detrunkings	0	0	0	0	0	0	0	0
Charge for the year	204,980	0	482	25	0	0	0	205,487
Disposals	0	0	0	0	0	0	0	0
Revaluation	970,750	0	384	0	0	0	0	971,133
Current valuation adjustments	0	0	0	0	0	0	0	0
Historic valuation adjustments	(8,773)	0	0	0	0	0	0	(8,773)
Transfers and reclassifications	0	0	0	0	0	0	0	0
Balance at 31 March 2023	6,252,611	0	5,594	131	4,608	1,508	0	6,264,452
Net Book Value at 31 March 2023	27,146,454	6,198	7,181	4	0	0	493,311	27,653,149
Net Book Value at 31 March 2022	23,050,108	6,476	7,081	29	0	0	544,540	23,608,234
Asset Financing
Owned	23,148,630	6,198	7,099	4	0	0	493,311	23,655,242
Finance-Leased	0	0	0	0	0	0	0	0
On Balance Sheet PFI	3,997,824	0	0	0	0	0	0	3,997,824
Donated	0	0	82	0	0	0	0	82
Net Book Value at 31 March 2023	27,146,454	6,198	7,181	4	0	0	493,311	27,653,148

2021-22	Road Network £'000	Land £'000	Buildings £'000	Transport £'000	IT £'000	Leasehold Improvements £'000	Assets under Construction £'000	Total £'000
Cost or Valuation
At 1st April 2021	25,202,207	6,656	11,036	84	4,609	1,507	551,801	25,777,900
Detrunkings	0	0	0	0	0	0	0	0
Additions	61,885	16	0	51	0	0	114,175	176,127
Disposals	0	(197)	0	0	0	0	0	(197)
Revaluation	2,724,683	0	0	0	(1)	1	0	2,724,683
Current valuation adjustments	0	0	0	0	0	0	0	0
Historic valuation adjustments	26,323	0	0	0	0	0	0	26,323
Transfers and reclassifications	0	0	0	0	0	0	0	0
Transfers (to) / from assets under construction	120,664	0	774	0	0	0	(121,438)	0
Balances at 31 March 2022	28,135,762	6,475	11,810	135	4,608	1,508	544,538	28,704,836
Depreciation
At 1st April 2021	4,445,328	0	4,216	55	4,610	1,506	0	4,455,715
Detrunkings	0	0	0	0	0	0	0	0
Charge for the year	175,072	0	513	18	0	0	0	175,603
Disposals	0	0	0	0	0	0	0	0
Revaluation	451,455	0	0	0	(2)	2	0	451,455
Current valuation adjustments	0	0	0	0	0	0	0	0
Historic valuation adjustments	13,799	0	0	0	0	0	0	13,799
Transfers and reclassifications	0	0	0	33	0	0	0	33
Balances at 31 March 2022	5,085,654	0	4,729	106	4,608	1,508	0	5,096,605
Net Book Value at 31 March 2022	23,050,108	6,475	7,081	29	0	(0)	544,538	23,608,231
Net Book Value at 31 March 2021	20,756,878	6,656	6,820	29	(1)	1	551,801	21,322,184
Asset Financing
Owned	19,769,448	6,475	6,999	29	0	(27)	544,538	20,327,462
Finance-Leased	0	0	0	0	0	0	0	0
On Balance Sheet PFI	3,280,660	0	0	0	0	0	0	3,280,660
Donated	0	0	82	0	0	27	0	109
Net Book Value at 31 March 2022	23,050,108	6,475	7,081	29	0	0	544,538	23,608,231

Transfers and reclassifications include roads and associated land and buildings, which have transferred from Local Authority control as a result of the trunking of those particular sections of the road network. There are some adjustments which reflect the transfer of road assets to local authority control, with the corresponding entry flowing through the general fund. These are zero in 2022-23.

Atkins (RICS Regulated) carry out an annual valuation of the trunk road network. Revaluation is based on Baxter's indexation for all road network assets with the exception of land. Land is valued at market rates based on information supplied by the VOA. All revaluation movements are reflected in the revaluation reserve.

6a. Right of use assets

This is a new note for 2022-23 as this is the first year of adoption of IFRS 16 Leases. See Note 1.7 for more information on the adoption of this standard. Transport Scotland has one right of use asset, and this is in relation to a finance lease entered into in November 2022.

	2022-23 Building £'000	2022-23 Total £000
Cost or Valuation Balance at 1st April 2022	0	0
On transition	0	0
Additions	28,409	28,409
Disposals	0	0
At 31 March 2023	28,409	28,409
Depreciation Balance at 1st April 2022	0	0
Charged in year	473	473
Disposals	0	0
At 31 March 2023	473	473
Net book value	27,936	27,936
Analysis of asset financing:
Owned	0	0
Finance-Leased	27,936	27,936
Net book value	27,936	27,936

7. Intangible assets

Purchased computer software licences are capitalised as intangible non-current assets where expenditure of £25,000 or more is incurred. These are valued at historic cost and amortised on a straight-line basis over the expected life of the asset.

	2022-23 £'000	2021-22 £'000
At replacement cost or valuation
At 1 April	0	554
Additions	0	0
Disposals	0	0
Balance at 31 March	0	554
Accumulated amortisation
At 1 April	0	554
Charge for the year	0	0
Revaluations	0	0
Disposals	0	0
Balance at 31 March	0	554
Net Book Value at 31 March	0	0

8. Assets held for sale

There were no assets presented for sale by Transport Scotland in 2022-23 (2021-22: nil). Assets classified as held for sale are measured at the lower of their carrying amount immediately prior to their classification as held for sale and their fair value less costs to sell. Assets held for sale are not subject to depreciation or amortisation.

	2022-23 £'000	2021-22 £000
Balance at 1 April	0	0
Transfers to non-current assets	0	0
Transfers from non-current assets	0	0
Disposals	0	0
Change arising on revaluation	0	0
Balance at 31 March	0	0

9. Financial assets

Investments in entities that are not classified to central government are financial instruments within the scope of IFRS 9 Financial Instruments.

As at 31 March 2023, Scottish Ministers, represented by Transport Scotland, are the sole shareholder in Caledonian Maritime Assets Ltd (CMAL), David MacBrayne Ltd (DML), Highlands and Islands Airports Ltd (HIAL), TS Prestwick HoldCo Ltd and Scottish Rail Holdings Ltd (SRH).

Scottish Ministers hold the following share investments:

Caledonian Maritime Assets Ltd	1,500,000 ordinary shares of £10 each
David MacBrayne Ltd	5,500,002 ordinary shares of £1 each
Highlands and Islands Airports Ltd	50,000 ordinary shares of £1 each
TS Prestwick Holdco Ltd	1 ordinary shares of £1
Scottish Rail Holdings Ltd	1 ordinary shares of £1

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 and accounts. The net assets and results of the above bodies are summarised overleaf.

2022-23	Interests in Nationalised Industries & Limited Companies £'000	Voted Loans £'000	Other Funds £'000	Total Reserves £'000
Balance at 1st April 2022	20,550	166,204	137,184	323,938
Advances and repayments
Cash advances	0	48,616	11,907	60,523
Transfers	0	0	(11,626)	(11,626)
Repayments	0	(8,936)	(2,417)	(11,352)
Discounting of EST Loans	0	0	323	323
Effective Interest Receivable	0	0	3,573	3,573
Balance at 31 March 2023	20,550	205,884	138,943	365,379
Analysed by:
Loans repayable within 12 months in Current Assets	0	9,058	7,564	16,622
Loans repayable after 12 months in Non Current Assets	20,550	196,826	131,380	348,757

2021-22	Interests in Nationalised Industries & Limited Companies £'000	Voted Loans £'000	Other Funds £'000	Total Reserves £'000
Balance at 1st April 2021	20,550	137,912	119,888	278,350
Advances and repayments
Cash advances	0	37,094	33,432	70,526
Transfers	0	0	0	0
Repayments	0	(8,801)	(1,137)	(9,938)
Discounting of EST Loans	0	0	(21,484)	(21,484)
Effective Interest Receivable	0	0	6,484	6,484
Balance at 31 March 2022	20,550	166,204	137,184	323,938
Analysed by:
Loans repayable within 12 months in Current Assets	0	8,928	1,720	10,648
Loans repayable after 12 months in Non Current Assets	20,550	157,276	135,463	313,290

	Scottish Rail Holdings Ltd	Highlands & Islands Airports Ltd	Caledonian Maritime Assets Ltd	David MacBrayne Ltd
	£m	£m	£m	£m
Net assets / (liabilities) as at 31 March 2023	48	171.5	138.5	40.9
Turnover	274	27.1	44.1	220.6
Profit / (loss) for the financial year	(696.9)	(37.9)	(6.4)	17.0

Highlands and Islands Airports Limited (HIAL)

Scottish Ministers are the sole shareholder in HIAL. The company's purpose is to maintain the safe operation of its airports to support economic and social development in the Highland and Islands. HIAL currently operates 11 airports; 10 in the Highlands and Islands and also Dundee, which it operates via a wholly owned subsidiary company, Dundee Airport Ltd.

Caledonian Maritime Assets Limited (CMAL)

Scottish Ministers are the sole shareholder in Caledonian MacBrayne Ltd, which became known as Caledonian Maritime Assets Ltd (CMAL) following a restructure in 2006, and retained ownership of the vessels and ports, which it leases to the operator of the Clyde & Hebrides Ferry services.

David MacBrayne Limited (DML)

Scottish Ministers are the sole shareholder in David MacBrayne Ltd, which became the holding company for CalMac Ferries Ltd following the restructuring in 2006. CalMac Ferries Ltd provides the Clyde & Hebrides Ferry Services under a subsidised public service contract with Scottish Ministers.

TS Prestwick HoldCo Limited

Scottish Ministers are the sole shareholder in TS Prestwick Holdco Ltd, which became the holding company of Glasgow Prestwick Airport in 2013 purchased through Transport Scotland. Transport Scotland advanced loan funding to the Group to cover the cash deficit arising from its operating deficit and capital expenditure. To re-align governance arrangements the loan was transferred to Strategic Commercial Assets Division in SG on 25 January 2023 and is no longer held as an Investment in Transport Scotland accounts. Transport Scotland no longer has a continuing involvement in this Financial Asset.

Scottish Rail Holdings Limited (SRH)

Scottish Ministers are the sole shareholder of SRH, which is the holding company of ScotRail Trains Limited (SRT), which took over the operation of ScotRail services on 1 April 2022. SRH is responsible for providing oversight and managing the provision of rail passenger services by SRT under the terms of a Grant Agreement.

Voted Loans

These represent loans that Transport Scotland provides to CMAL for the procurement of new shipping and to HIAL to renew and improve commercial airport infrastructure.

Other funds

These represent loans that Transport Scotland provides to the Energy Savings Trust to fund energy efficient transport initiatives.

In respect of IFRS 12, it should be noted that Scottish Rail Holdings, HIAL and David MacBrayne are classed as Non-Departmental Public Bodies (NDPBs) and are treated in accordance with the HM Treasury Consolidated Budgeting Guidance.

Transport Scotland has taken account of these bodies' forecast expenditure within its budget.

Transport Scotland also sponsors (but does not own) British Waterways Scotland, trading as Scottish Canals, under a framework agreement. British Waterways is a statutory body, is classed as an NDPB, and as such is treated in accordance with the HM Treasury Consolidated Budgeting Guidance.

CMAL is classed as a public corporation.

10. Trade receivables and other assets

Loans, trade receivables and accrued income are accounted for in accordance with IFRS 9 Financial Instruments. Trade receivables are shown net of a provision for impairment.

10a Analysis by classification	As at 31/03/23 £'000	As at 31/03/22 £'000
Amounts falling due within one year: Trade and other receivables
Trade and other receivables	8,917	6,264
Damage claims	933	1,975
Prepayments and accrued income	100,633	80,825
	110,483	89,064
Amounts falling due after more than one year:
Prepayments and other receivables	35,000	40,000
	35,000	40,000

10b Intra-Government balances	As at 31/03/23 £'000	As at 31/03/22 £'000
Amounts falling due within one year: Intra-Government balances
Other Central Government bodies	57,682	35,165
Local Authorities	23	8,734
Public corporations and trading funds	7,706	0
	65,411	43,898
Balances with bodies external to Government	45,072	45,166
Total receivables	110,483	89,064
Amounts falling due after more than one year: Intra-Government balances
Other Central Government bodies	0	0
Local Authorities	0	0
Public corporations and trading funds	0	0
	0	0
Balances with bodies external to Government	35,000	40,000
Total receivables	35,000	40,000

Trade receivables are shown net of a provision for impairment as follows:

	As at 31/03/23 £'000	As at 31/03/22 £000
At 1 April	0	0
Charge for the year	0	0
Unused amount released	0	0
Utilised during the year	0	0
At 31 March	0	0

11. Trade payables and other liabilities

Trade payables and other liabilities are accounted for in accordance with IFRS 9 Financial Instruments.

11a Analysis by classification	As at 31/03/23 £'000	As at 31/03/22 £'000
Amounts falling due within one year: Trade and other payables
Trade payables	8,935	47,871
Accruals	151,106	238,053
Other payables	74,870	52,550
Financial liabilities – IFRS 16 Leases	258	0
Financial liabilities – PFI	40,806	38,419
Deferred income	83	83
	276,058	376,976
Amounts falling due after more than one year:
Other payables	292	292
Financial liabilities – IFRS 16 Leases	28,261	0
Financial liabilities – PFI	1,032,777	1,073,583
	1,061,330	1,073,875

11b Intra-Government balances	As at 31/03/23 £'000	As at 31/03/22 £'000
Amounts falling due within one year: Intra-Government balances
Other Central Government bodies	3,131	2,524
Local Authorities & Health Boards	53,101	42,603
Public corporations and trading funds	19,117	61,991
	75,349	107,118
Balances with bodies external to Government	200,709	269,858
Total payables	276,058	376,976
Amounts falling due after more than one year: Intra-Government balances
Other Central Government bodies	0	0
Local Authorities & Health Boards	0	0
Public corporations and trading funds	0	0
	0	0
Balances with bodies external to Government	1,061,330	1,073,875
Total payables	1,061,330	1,073,875

12. Provisions for liabilities and charges

Land and property acquisition

Land and property acquisition provision relates primarily to the estimates made of the likely compensation payable in respect of planning blight, discretionary and compulsory acquisition of property from property owners arising from physical construction of a road or rail scheme. When land is acquired by compulsory purchase, it is often not known when compensation settlements will be made. A provision for the estimated total cost of land acquired is created when it is expected that a General Vesting Declaration (GVD) will be published in the near future. It may take several years from the announcement of a scheme to completion and final settlement of all liabilities. The estimates provided by the VOA are reviewed biannually.

Major Projects

Major projects provision relates to compensation claims made in respect of work done on projects that have not yet been fully settled.

Other

Transport Scotland agreed to meet the additional costs of benefits payable to specific employees who retired early until they reach the age of 60, at which point the liability is assumed by the PCSPS. The cost of these benefits is provided in full when the employee retires.

12a Provisions for liabilities and charges

	Land and Property Acquisition £'000	Major Projects £'000	Other £'000	Total £'000
2022-23
Balance as at 1st April 2022	24,580	0	3,059	27,639
Provided in year	9,200	3,270	6,522	18,992
Provisions not required written back	(5,258)	0	(3,043)	(8,301)
Provisions utilised in year	(3,278)	0	(4)	(3,282)
Discount amortised	(179)	0	9	(170)
Balance as at 31 March 2023	25,065	3,270	6,543	34,878
2021-22
Balance as at 1st April 2021	26,494	0	3,051	29,545
Provided in year	0	0	7	7
Provisions not required written back	0	0	0	0
Provisions utilised in year	(1,692)	0	0	(1,692)
Discount amortised	(222)	0	1	(221)
Balance as at 31 March 2022	24,580	0	3,059	27,639

12b Analysis of expected timing of discounted flows

	Land and Property Acquisition £'000	Major Projects £'000	Other £'000	Total £'000
In the remainder of the period to 2024	22,415	2,610	6,539	31,564
Between 2025 and 2028	2,650	660	4	3,314
Between 2028 and 2033	0	0	0	0
Thereafter	0	0	0	0
Balance as at 31 March 2023	25,065	3,270	6,543	34,878
In the remainder of the period to 2023	20,743	0	3,032	23,775
Between 2024 and 2027	3,837	0	27	3,864
Between 2026 and 2030	0	0	0	0
Thereafter	0	0	0	0
Balance as at 31 March 2022	24,580	0	3,059	27,639

13. Movement on working capital balances

	Note	As at 31/03/23 £'000	As at 31/03/22 £'000	2022-23 Net Movement £'000	2021-22 Net Movement £'000
Receivables
Due within one year	10	110,483	89,064	(21,419)	54,488
Due after more than one year	10	35,000	40,000	5,000	10,000
Net (increase) / decrease		145,483	129,064	(16,419)	64,488
Payables
Due within one year	11	276,058	376,976	(100,918)	89,523
Due after more than one year	11	1,061,330	1,073,875	(12,545)	(38,419)
		1,337,388	1,450,851	(113,463)	51,104
Less: IFRS 16 Liabilities included in above	11	28,519	0	28,519
Less: PFI creditors included in above	11	1,073,583	1,112,002	(38,419)	(35,593)
Less: Capital accruals included in the above		(70,740)	(44,424)	(26,316)	(123,721)
Net increase / (decrease)		306,026	383,273	(77,247)	210,418
Provisions	12	34,878	27,639	7,239	(1,906)
Net increase / (decrease)		34,878	27,639	7,239	(1,906)
Net movement increase / (decrease)		486,387	539,976	(53,590)	144,025

14. Capital commitments

Transport Scotland's capital commitments relate to future payments on major road schemes currently under construction and capital infrastructure contracts. The contracts have been awarded and the loans agreed. These commitments have not been reflected elsewhere in the accounts.

	Value of Commitment Payable
Transport Scotland Directorates	In 1 Year £'000	2-5 Years £'000	> 5 years £'000	Total £'000
Major Projects	1,787	702	0	2,489
Roads	67,296	171,740	25,298	264,334
Total contracted capital commitments for which no provision has been made	69,082	172,442	25,298	266,823

15. Commitments under IFRS 16 leases

Commitments under leases now fall under IFRS 16 Leases.

The below tables show commitments for a low value and less than 12-month operating lease that Transport Scotland entered into in February 2023, and a finance lease entered into in November 2022.

Commitments for Low value / less than 12 month Operating Leases

	As at 31 Mar 2023 £000s	As at 31 Mar 2022 £000s
Land and Buildings
Within one year	294	1,335
Within two to five years (inclusive)	0	0
After five years	0	0
Total	294	1,335

Split of costs

	As at 31 Mar 2023 £000s
Land and Buildings Rental Costs - Operating Leases
Operating Lease Rentals	294
Total Rental Costs	294

Commitments for Finance Leases also shown as Right of Use Assets

	As at 31 Mar 2023 £000s
Land and Buildings Obligations under finance leases
The total future lease payments under finance leases
Total lease payments due within one year	262
Total lease payments due between within two to five years	2,789
Total lease payments due thereafter	25,468
Sub-total	28,519
Less interest element	3,997
Present Value of Obligations under Finance Lease	24,523

	As at 31 Mar 2023 £000s
Land and Buildings Obligations under finance leases
The total future lease payments under finance leases
Total lease payments due within one year	(8)
Total lease payments due between within two to five years	1,514
Total lease payments due thereafter	23,017
Present Value of Obligations under Finance Lease	24,523

16. Service concession arrangements

Transport Scotland has entered into the following PFI contracts for the design, build, finance, and maintenance of assets reflected on the Statement of Financial Position:

M6 (A74M) – the contract covers the design, construction, and financing of 28.3km of new motorway, as well as the operation and maintenance of 90km of existing motorway. Payments are made under a shadow toll regime. The toll period began in July 1997 and expires in July 2027.

M77 – the contract is a Public Private Partnership (PPP) entered into with East Renfrewshire and South Lanarkshire Councils. The project covers the design, construction, financing, and operation of 15km of motorway and 9km local road to the A726 trunk road. Payments are made under a shadow toll regime. The toll period began in April 2005 and expires in April 2035.

M80 – the contract covers the design, build and financing of approximately 18 km of motorway and associated roads, junctions, structures and associated works and their on-going maintenance for a period of 30 years. Unitary charge payments commenced in September 2011 and will cease in September 2041.

Under IFRIC 12 Service Concession Arrangements, the substance of these PFI contracts is that of a finance lease, with the asset being recognised. Payments under PFI contracts comprise two elements: imputed finance lease charges including interest and services charges.

We have reviewed the degree of control exercised by each of the parties in existing PFI contracts and conclude that the degree of control we retain satisfies the requirements that the related assets created are required to be accounted for on our Statement of Financial Position.

We also have the following design, build, finance and operate (DBFO) contracts, under the NPD model.

The M8, M73, M74 Motorway Improvements Project involved upgrades to the A8 Baillieston to Newhouse, completion of the M8 between Glasgow and Edinburgh, and included improvements to the M74 Raith Interchange and the widening of other key sections of the M8, M73 and M74. The NPD contract also incorporates the management, operation, and maintenance of this section of the motorway for the next 30 years. The new improvements opened to traffic in April 2017. The unitary charge payments are committed and will cease in 2047.

The AWPR / B-T (Aberdeen Western Peripheral Route / Balmedie-Tipperty) project involved the construction of a new dual carriageway around the City of Aberdeen and upgrading of the road between Balmedie and Tipperty to dual carriageway. The NPD contract also incorporates the management, operation, and maintenance of these roads for the next 30 years. The unitary charge payments became committed in phases from Autumn 2016 and will cease in 2048. The final phase of the project opened to traffic in February 2019.

Commitments under PFI Contracts

	As at 31/03/23 £'000	As at 31/03/22 £'000	As at 31/03/21 £'000
Imputed finance lease obligations under PFI contracts comprise:
Rentals due within one year	115,768	114,979	113,642
Rentals due within two to five years	439,375	460,696	461,565
Rentals due thereafter	1,465,123	1,563,445	1,676,246
	2,020,266	2,139,120	2,251,453
Less: Interest element (finance cost)	(946,683)	(1,027,117)	(1,103,858)
Total capital cost	1,073,583	1,112,003	1,147,595

	As at 31/03/23 £'000	As at 31/03/22 £'000	As at 31/03/21 £'000
Imputed service charge obligations under PFI contracts comprise:
Service charge due within one year	29,846	38,326	57,333
Service charge due within two to five years	161,036	137,810	136,521
Service charge due thereafter	1,029,306	1,091,265	1,132,189
Total service charge	1,220,188	1,267,401	1,326,043

17. Other financial commitments

	Value of Commitment Payable
Transport Scotland Directorates	In 1 Year £'000	2-5 Years £'000	> 5 years £'000	Total £'000
Rail	1,344,655	5,159,464	1,243,324	7,747,443
Air	4,032	0	0	4,032
Ferries	273,201	215,704	0	488,905
Roads	5,510	0	0	5,510
Transport Strategy and Analysis	15,000	0	0	15,000
Total	1,642,398	5,375,168	1,243,324	8,260,890

Rail

The table above takes into consideration the below key outcomes.

• The Scottish Government announced a decision to terminate the contract to run the Caledonian Sleeper service seven years early, and so from 26 June 2023, the Caledonian Sleeper Service will no longer be operated within the terms of the current franchise agreement with Serco. The Scottish Government subsequently considered and decided that Caledonian Sleeper Ltd (CSL) services will be delivered via the existing NDPB (Scottish Rail Holdings).
• Network Rail outputs and associated funding for Control Period 7 (CP7) from 1 April 2024 to 31 March 2029 was determined by the Office of Rail Regulation (ORR). The overall funding available for Network Rail in CP7 was published in the Statement of Funds Available (SoFA). The Determinations for the current control period, CP6 and subsequent control period, CP7 are included in the table above. SoFA for CP7 varies from previous control periods in that Enhancements no longer form part of the determination. From 2023-24, commitments in the above table exclude values for Enhancement projects not yet agreed.

Transport Scotland subsidised three rail operators that provide services in Scotland. These were: ScotRail Trains Ltd (SRT) via the NDPB holding company Scottish Rail Holdings Ltd (SRH), of which SRT is a subsidiary; Serco Caledonian Sleeper Limited via the franchise agreement; and First TransPennine Express Limited (Cross Border Services) via a service level agreement (for additional stop to new Reston train station). The total amount charged to the Statement of Comprehensive Net Expenditure reflects the grants paid to Network Rail for OMR and enhancements, Cash Grant In Aid payments for SRH and subsidy payments for Serco Caledonian Sleeper Ltd and Cross Border Services. This is summarised on the next page.

	2022-23 £'000	2021-22 £'000
Network Rail OMR	472,965	532,053
Network Rail Enhancement Grant	180,011	138,595
Scottish Rail Holdings / Abellio ScotRail	694,810	788,857
Serco Caledonian Sleeper Limited & Cross Border Services	29,799	42,791
Total	1,377,585	1,502,296

Ferries

The agency has entered into contracts (which are not leases or PFI contracts or other service concession arrangement) for provision of ferry services in two regions – the Clyde and Hebrides; and Northern Isles.

The Clyde and Hebrides contract (CHFS) runs from October 2016 to October 2024 and is provided by CalMac Ferries Ltd.

The Northern Isles contract (NIFs) runs from 30 June 2020 - 30 June 2028 and is operated by Serco NorthLink Ferries. There is a break clause after CY6 (30 June 2026) in the NIFs contract, so costs after this are not shown in the table above.

Lifeline air services

We support air routes from Glasgow to Barra, Tiree and Campbeltown. While the number of people using these routes is not enough to make them commercially viable for airlines, they nevertheless provide important connectivity to local communities.

To do this, we use Public Service Obligations (PSOs), which are obligations imposed on a route to provide a set specification of service. A PSO imposes obligations to ensure the minimum provision of service on a route in terms of continuity, regularity, pricing, or minimum capacity.

Our contract with Loganair for these three routes runs until 24 October 2023.

PSOs have also been imposed on routes within Shetland, Orkney, Comhairle nan Eilean Siar and Argyll & Bute, all of which are subsidised by the local authorities.

The subsidy ensures that these isolated communities have air links with a main centre. Under Subsidy Control rules, it is necessary to seek competitive bids to allow subsidy to be paid.

Roads

We provide grant funding to the Scottish Police Authority on an annual basis. This is based on the Safety Camera Programme handbook and the operational planning agreement.

Transport Scotland Strategy and Analysis

We provide funding along with Perth and Kinross Council for the Cross Tay Link Road via the Tay Cities Region Deal. The Cross Tay Link Road has been heralded as playing a vital role in the future of Perth and Kinross – both economically and environmentally.

18. Financial instruments

18a Financial Instruments by Category

2022-23	Note	Total Financial Assets at Amortised Cost £'000	Total £'000
Assets per Statement of Financial Position
Trade and other receivables excluding prepayments, reimbursement of provisions and VAT recoverable	-	399,139	399,139
Balance as at 31 March 2023	-	399,139	399,139

2022-23	Note	Other Financial Liabilities £'000	Total £'000
Liabilities per Statement of Financial Position
PFI & IFRS 16 liabilities	15, 16	1,102,103	1,102,103
Trade and other payables excluding statutory liabilities (VAT, income tax and social security)	-	235,286	235,286
Balance as at 31 March 2023	-	1,337,388	1,337,388

2021-22	Note	Total Loans & Receivables £'000	Total £'000
Assets per Statement of Financial Position
Trade and other receivables excluding prepayments, reimbursement of provisions and VAT recoverable.	-	353,360	353,360
Balance as at 31 March 2022	-	353,360	353,360

2021-22	Note	Other Financial Liabilities £'000	Total £'000
Liabilities per Statement of Financial Position
PFI liabilities	16	1,112,003	1,112,003
Trade and other payables excluding statutory liabilities (VAT, income tax and social security)	-	333,849	333,849
Balance as at 31 March 2022	-	1,445,852	1,445,852

18b financial risk factors

Exposure to risk

Due to the largely non-trading nature of its activities and the way in which Government Departments are financed, Transport Scotland is not exposed to the degree of financial risk faced by many other business entities. A high-level review of risk management is now considered at each meeting of the Audit and Risk Committee.

The table below analyses financial liabilities into relevant maturity groupings based on the remaining period at the Statement of Financial Position date to the contractual maturity date. The amounts disclosed are the contractual discounted cash flows. Balances due within 12 months are included at their carrying balances as the impact of discounting is not significant.

2022-23	Carrying value £'000	0-12 months £'000	1-2 years £'000	3-5 years £'000	6-10 years £'000	>10 years £'000
Non-derivative liabilities	1,102,103	41,068	86,172	118,994	249,957	605,911
Derivative liabilities	0	0	0	0	0	0
Total financial liabilities	1,102,103	41,068	86,172	118,994	249,957	605,911

2021-22	Carrying value £'000	0-12 months £'000	1-2 years £'000	3-5 years £'000	5-10 years £'000	>10 years £'000
Non-derivative liabilities	1,112,003	38,419	40,807	128,604	214,544	689,629
Derivative liabilities	0	0	0	0	0	0
Total financial liabilities	1,112,003	38,419	40,807	128,604	214,544	689,629

Cash flow and fair value interest rate risk

Transport Scotland's loans to CMAL accrue interest at the rate set for the National Loans Fund at the rate specified by the European Commission.

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 IFRS 16 lease rentals that are determined in the contracts entered in to and, as such, the related income, expenditure, and cash flows are substantially independent of changes in market interest rates.

19. Contingent liabilities

19a Contingent liabilities disclosed under IAS 37

As part of Transport Scotland's normal course of business, the Forestry Commission grants the right to use a forestry track as an emergency diversion route on the A83 Rest and Be Thankful on the understanding that TS has the liability for any incidents that may occur whilst the track is being used for this purpose. The potential obligation is estimated at £5 million but it is considered unlikely that any liability will occur.

19b Remote contingent liabilities not required under IAS 37 but included for Parliamentary reporting and accountability purposes

The FReM states that where information about contingent liabilities is not required to be disclosed because the likelihood of a transfer of economic benefits is considered too remote, they should be disclosed separately for Parliamentary reporting and accountability purposes.

i. Contracts held by Transport Scotland should include indemnity clauses where risk is either considered part of the normal course of business or is not quantifiable:

• Operating agreements (Caledonian Sleeper Rail Franchise Agreement and ScotRail Grant) with indemnities to Serco Caledonian Sleeper Ltd commencing 1 April 2015 and ScotRail Trains commencing 1 April 2022, respectively.
• Indemnity clauses in roads contracts to compensate Network Rail for any damage or loss of access

ii. Guarantees / Letters of Comfort issued by Transport Scotland on behalf of Scottish Ministers:

• Guarantees issued under Section 54 of the Railways Act 1993 as part of rail rolling stock procurement process which enables Scottish Ministers to give undertakings regarding the use of rolling stock. These undertakings can specify that Scottish Ministers will require subsequent operators to use the rolling stock. The table below summarises quantifiable contingent liabilities in relation to these guarantees with the amounts disclosed reflecting the highest reasonable estimate of the possible liability.

Guarantees in Place as at 31 Mar 2023	£m
Section 54 guarantee for Caledonian Sleeper Class 385 type Rolling Stock until 31 March 2040	138.5
Section 54 guarantee for Eversholt Class 380 type Rolling Stock until 31 December 2040	76.1
Section 54 guarantee for Porterbrook Class 170 type Rolling Stock until 31 March 2035	20.7
Section 54 guarantee for Class 334 type Rolling Stock until 31 December 2030 (Lease expires on same date)	-
Total	235.3

Note. Scotrail Trains Grant Agreement expires on 31 March 2032 and the liabilities shown above are from that date to the end of the Section 54 guarantee.

Commitment towards the continued funding of the pension obligations of ScotRail Trains Ltd and Serco Caledonian Sleeper Ltd through the Grant and Franchise Agreements.

iii. Other contingent liabilities held by Transport Scotland:

• Under the terms of the Clyde and Hebrides Ferry Services contract, Scottish Ministers are responsible for any increased pension costs due under the Calmac Pension Scheme. During 2021-22, Transport Scotland made an additional capital payment of £10.9 million to reduce the level of a historic deficit, which has accumulated in the scheme, and to reduce the impact on resource budgets until the next tri-ennial review is carried out in April 2024. Whilst this payment addresses some of the more immediate concerns, without further action being taken to restructure the pension scheme, it is inevitable that further deficits will emerge in future years. It is however not possible to predict with any certainty the value of any such future deficits.
• Following the transfer of the operation of ScotRail passenger rail services from Abellio ScotRail to ScotRail Trains after 31 March 2022 a reconciliation of funds paid to Abellio ScotRail under the Emergency (EMA) and Temporary Measures Agreements (TMA) against the net costs incurred was required to be undertaken. This entailed an obligation on either party to recompense the other with the amount of funds due in respect of the difference between the funding paid compared to the net cost of discharging the obligations in these agreements. This represented a contingent liability in respect of a potential settlement that Transport Scotland may have required to reimburse Abellio ScotRail should the reconciliation determine that the net costs incurred exceeded the funding provided. A £10m overspend was realised during 2022-23 re the settlement of the Abellio ScotRail Net Asset Statement. Further obligations are still being reviewed and it is anticipated that a conclusion will be reached in late 2023-24.
• Following the transfer of the operation of Serco Caledonian Services Ltd (SCSL) to CSL (subsidiary of Scottish Rail Holdings Ltd (SRH) after June 2023, a reconciliation of funds paid to SCSL under the TMA against the net costs incurred will be required to be undertaken. This will entail an obligation on either party to recompense the other with the amount of funds due in respect of the difference between the funding paid compared to the net cost of discharging the obligations in these agreements. This represents a contingent liability in respect of a potential settlement that Transport Scotland may require to reimburse SCSL should the reconciliation determine that the net costs incurred exceed the funding provided.
• There are a number of compulsory purchase compensation claims ongoing, upon which some compensation may be payable in the future. These cases are currently ongoing, and the amount payable has not been quantified at this stage.
• During 2022-23 Scottish Ministers signed a legally binding covenant which was issued to the Trustees of the Highlands and Islands Pension Scheme. This covenant provided guarantees to the Trustees that Scottish Ministers would become liable to make any payments due to the pension scheme in the event that the principal employer, Highlands and Islands Airports Ltd, are unable to pay any sum owed to the pension scheme.

20. Related party transactions

Transport Scotland is an Executive Agency of the Scottish Government. The Scottish Government is regarded as a related party with which it had various material transactions during the year. Scottish Rail Holdings Ltd, David MacBrayne Ltd, Caledonian Maritime Assets Ltd, and Highlands and Islands Airports Ltd are wholly owned subsidiaries in the name of the Scottish Ministers, with whom Transport Scotland also had various material transactions during the year. ScotRail Trains Limited and SOLR2 are subsidiaries of Scottish Rail Holdings Limited under the statutory Operator of Last Resort arrangements. SOLR2 subsidiary was re-named after 2 March 2023 when it became Caledonian Sleeper Limited.

For the operation of ScotRail train services from April 2022, two of the companies were mobilised, Scottish Rail Holdings Limited and ScotRail Trains Limited. Caledonian Sleeper Limited (previously SOLR2) is on schedule to mobilise after 25 June 2023 when the current Serco Caledonian Sleeper Rail Franchise terminates.

Transport Scotland's, Bill Reeve (Director of Rail) and Lee Shedden (Head of Rail Finance), were nominated as directors of these companies during the preparatory period. Both Lee Shedden and Bill Reeve resigned as Directors of ScotRail Trains Limited from 1 April 2022 and remain Directors of Caledonian Sleeper Limited). Lee Shedden continues as a Non-Executive Director of Scottish Rail Holdings Ltd.

Loans were advanced to and repaid by CMAL to fund vessel construction, and to HIAL to support airport infrastructure. Grants were paid to HIAL to subsidise its operating and capital expenditure and to CMAL to fund agreed pier and harbour infrastructure projects. David MacBrayne Ltd is the parent company of Calmac Ferries Ltd and Argyll Ferries Ltd who operated ferry services under contracts with Transport Scotland, and which Transport Scotland supported via the payment of subsidies.

Transport Scotland paid grants to British Waterways Scotland, trading as Scottish Canals, for the operation and maintenance of Scottish canals and related infrastructure and capital grants for related investments during the year.

Transport Scotland also had significant transactions with Local Authorities, Strathclyde Partnership for Transport, Scottish Water, and the Tay Road Bridge Joint Board during the year, principally in relation to payment of grants to deliver specific transport objectives.

All interests declared by members of the Transport Scotland Senior Management Team are of a minor nature and have no impact on the awarding of contracts and commissions.

21. Segmental reporting

21a Business Segments – Statement of Comprehensive Net Expenditure

2022-23	Resource £'000	Net Investment £'000	Income £'000	Non Cash £'000	AME £'000	ODEL £'000	Total £'000
Total continuing segments
Roads	147,347	206,888	(1,236)	204,980	8,812	110,666	677,457
Rail	413,849	983,324	(3,765)	0	0	0	1,393,408
Bus services	412,883	1,447	(259)	0	0	0	414,071
Other public transport	21,539	0	(171)	1,363	0	0	22,731
Ferry services in Scotland	212,846	75,477	(5,210)	0	0	0	283,113
Air services in Scotland	59,911	16,759	0	0	0	0	76,670
Other transport directorate programmes	37,087	117,052	(1,891)	0	0	0	152,248
Scottish Futures Fund	92	40,650	0	0	(3,896)	0	36,846
Grants to Local Authorities	33,095	49,371	0	0	0	0	82,466
	1,338,649	1,490,968	(12,532)	206,343	4,916	110,666	3,139,010

2021-22	Resource £'000	Net Investment £'000	Income £'000	Non Cash £'000	AME £'000	ODEL £'000	Total £'000
Total continuing segments
Roads	134,276	201,671	96	175,072	0	128,583	639,698
Rail	541,744	984,198	(5,465)	0	0	0	1,520,477
Bus services	380,590	4,404	(302)	1	0	0	384,693
Other public transport	27,288	0	0	532	0	0	27,820
Ferry services in Scotland	185,524	48,538	(4,181)	0	0	0	229,881
Air services in Scotland	53,901	36,183	(1,023)	0	0	0	89,061
Other transport directorate programmes	47,776	88,334	(2,120)	0	15,000	0	148,990
Scottish Futures Fund	1,049	92,059	0	0	0	0	93,108
Grants to Local Authorities	0	55,254	0	0	0	0	55,254
	1,372,148	1,510,641	(12,995)	175,605	15,000	128,583	3,188,982

21b Business Segments – Capital Expenditure

2022-23	Trunk Road Maintenance £'000	Capital Projects £'000	Other Assets £'000	Voted Loans £'000	Total Capital Expenditure £'000
Total continuing segments
Roads	79,406	80,147	0	0	159,553
Rail	0	0	0	0	0
Other public transport	0	0	28,606	0	28,606
Other transport directorate programmes	0	0	0	9,844	9,844
Ferry, aviation, and other services in Scotland	0	0	(353)	39,680	39,327
	79,406	80,147	28,253	49,524	237,330

2021-22	Trunk Road Maintenance £'000	Capital Projects £'000	Other Assets £'000	Voted Loans £'000	Total Capital Expenditure £'000
Total continuing segments
Roads	61,885	114,046	0	0	175,931
Rail	0	0	0	0	0
Other public transport	0	0	0	0	0
Ferry, aviation, and other services in Scotland	0	0	0	60,589	60,589
	61,885	114,046	0	60,589	236,520

22. Notional charges

The following notional charges have been included in the accounts:

	Note	2022-23 £'000	2021-22 £'000
The following notional charges have been included in the accounts:
Auditors' remuneration	3	191	190
		191	190

23. Losses and Special Payments

	Number of cases	2022-23 £'000	2021-22 £'000
Total cash losses	19	568	313
Details of cases over £250,000	0	0	0
Including
- claims abandoned	19	568	313
- active claims	0	0	0

The costs of damage to the trunk road network due to road accidents are charged to Transport Scotland as part of the road maintenance programme. These costs are recovered from the party responsible through their insurance company wherever possible, except where there has been a fatal injury. The costs are held in a debtor account until the recovery is successful.

There is continuous review of the costs held in the debtor account and those deemed recoverable are identified. Irrecoverable costs no longer being pursued amounted to £0.568 million in respect of nineteen cases and these have now been written off. No individual case exceeded £250,000.

24. Events after the reporting period

In July 2023, the settlement of a long running legal case was agreed. The associated liability has been reflected in Note 12 Provisions.

Glossary

Abbreviation	Detail
ABR	Autumn Budget Review
ACCAR	Approach to Climate Change Adaptation and Resilience
AME	Annually Managed Expenditure
AMFC	Aviation, Maritime, Freight and Canals
ATF	Accessible Travel Framework
AWPR / B-T	Aberdeen Western Peripheral Route / Balmedie-Tipperty
BEAR	Bus Emissions Abatement Retrofit Programme
BEIS	Business, Energy, and Industrial Strategy
CAV	Connected and Autonomous Vehicle
CDEL	Capital Departmental Expenditure Limit
CETV	Cash Equivalent Transfer Value
CFL	CalMac Ferries Limited
CHFS	Clyde and Hebrides Ferry Service
CIEEM	Chartered Institute for Ecology and Environmental Management
CIHT	Chartered Institution of Highways and Transportation
CMAL	Caledonian Maritime Assets Ltd.
CMP	Carbon Management Plan
CPFA	Chartered Public Finance Accountant
CPI	Consumer Price Index
CSL	Caledonian Sleeper Ltd
CSPS	Civil Service People Survey
CWSR	Cycling Walking Safer Routes
DBFO	Design, Build, Finance and Operate
DEL	Departmental Expenditure Limit
DG	Director General
DIAA	Directorate for Internal Audit and Assurance
DML	David MacBrayne Ltd.
EBR	Emergency Budget Review
ESF	European Structural Fund
FFR	Fair Fares Review
FReM	Financial Reporting Manual
FTE	Full Time Equivalent
GVD	General Vesting Declaration
HIAL	Highlands and Islands Airports Limited
HMT	His Majesty's Treasury
IAO	Information Asset Owner
IAR	Information Asset Register
ICO	Information Commissioner's Office
ICT	Information & Communication Technology
IDM	Investment Decision Making Board
IFRIC	International Financial Reporting Interpretations Committee
IFRS	International Financial Reporting Standards
LCE	Low Carbon Economy
LEZs	Low Emission Zones
MICE	Member of the Institution of Civil Engineers
MOTO	Memorandum Of Terms of Occupation
NDPBs	Non-Departmental Public Bodies
NOx	Nitrogen Oxide
NPD	Non-Profit Distributing
NPF	National Performance Framework
NFI	National Fraud Initiative
NTS	National Transport Strategy
ODEL	Outside Departmental Expenditure Limit
PCSPS	Principal Civil Service Pension Scheme
PfG	Programme for Government
PFI	Private Finance Initiative
PPP	Public Private Partnership
PRIME Markings	Perceptual Rider information for Maximising Expertise and Enjoyment Markings
PM	Particulate Matter
PSOs	Public Service Obligations
RAAVS	Road Authorities Asset Valuation System
RDEL	Resource Departmental Expenditure Limit
RSF	Road Safety Framework
RTP	Regional Transport Partnerships
SATE	Sustainable Aviation Test Environment
SBR	Spring Budget Review
SCCAP	Scottish Climate Change Adaptation Programme
ScotZEB	Scottish Zero Emission Bus Challenge Fund
SCSL	Serco Caledonian Services Ltd
SoCNE	Statement of Comprehensive Net Expenditure
SoCTE	Statement of Changes in Taxpayers Equity
SoFA	Statement of Funds Available
SMT	Senior Management Team
SNF	Serco Northlink Ferries
SPFM	Scottish Public Finance Manual
SRH	Scottish Rail Holdings
SRT	ScotRail Trains Limited
SSRB	Senior Salaries Review Body
STAG	Scottish Transport Analysis Guide
STEM	Science, Technology, Engineering and Maths
STPR2	Strategic Transport Projects Review (2)
UAVs	Unmanned Aerial vehicles
ULEVs	Ultra-Low Emission Vehicles
VAT	Value Added Tax