Annual Accounts

Annual Accounts

Statement of Comprehensive Net Expenditure for the year ended 31 March 2025

Note £’000 Staff Costs £’000 Other Costs £’000Income 2024-25 £’000Total 2023-24 £’000Total
Administration costs
Staff costs 2 17,782 354 - 18,136 16,122
Other administration costs 3 - 3,814 - 3,814 10,398
Total administration costs - - - - 21,950 26,520
Programme costs
Staff costs 2 19,790 394 - 20,184 17,971
Other programme costs 4 - 3,136,949 - 3,136,949 3,001,906
Income 5 - - (12,243) (12,243) (13,615)
Total programme costs - - - - 3,144,890 3,006,263
Total - 37,572 3,141,512 (12,243) 3,166,841 3,032,783
Net operating costs for the year ended 31st March 2025 - - - - 3,166,841 3,032,783

Other Comprehensive Net Expenditure

Note 2024-25 £’000 Total 2023-24 £’000 Total
Items that will not be reclassified to net operating costs:
Net (gain)/loss on:
-revaluation of property, plant, and equipment 6 (196,416) (379,290)
-revaluation of intangibles
(196,416) (379,290)
Items that may be reclassified subsequently to net operating costs:
Net (gain)/loss on:
-revaluation of assets held for sale 8 - -
Total comprehensive net expenditure for the year ended 31 March 2025 2,970,425 2,653,494

Statement of Financial Position as at 31 March 2025

Note £’000 31 March 2025 £’000 £’000 31 March 2024 £’000
Non-current assets
Property, plant & equipment 6 27,755,102 27,952,298
Right of Use Asset 7 26,967 28,587
Intangible assets 8 - 69
Financial assets 9 464,261 406,536
Other receivables 10 25,621 30,000
Total non-current assets 28,271,950 28,417,490
Current assets
Financial assets 9 26,802 15,009
Trade and other receivables 10 128,530 100,518
Cash & cash equivalents 15 -
Total current assets 155,348 115,527
Total assets 28,427,297 28,533,017
Current liabilities
Trade and other payables incl IFRS 16 leases 11 (283,963) (302,808)
Provisions 12 (10,128) (11,491)
Total current liabilities (294,091) (314,298)
Total assets less current liabilities 28,133,206 28,218,719
Non-current liabilities
Other payables and financial liabilities incl IFRS 16 leases 11 (975,154) (1,018,894)
Provisions 12 (8,948) (4,743)
Total non-current liabilities (984,103) (1,023,635)
Assets less liabilities 27,149,103 27,195,083
Taxpayers’ equity
General fund SoCTE 12,187,205 12,471,914
Revaluation reserve SoCTE 14,961,898 14,723,169
Total taxpayers’ equity 27,149,103 27,195,083

The notes on pages 103-149 of the PDF form part of these accounts.

Alison Irvine
Chief Executive

The Accountable Officer authorised these financial statements for issue on 19 September 2025.

Statement of Cash Flows for the year ended 31 March 2025

Note 2024-25 £’000 2023-24 £’000
(A) Cash flows from operating activities
Net operating cost SoCNE (3,166,841) (3,032,783)
Adjustments for non-cash transactions 3/4 82,758 169,786
Decrease/(increase) in trade and other receivables 13 (23,633) 14,965
Adjustment for the revaluation element of assets held for sale 8 - -
Increase/(decrease) in trade and other payables 13 16,368 (15,825)
Increase/(decrease) in provisions 13 2,844 (18,645)
Adjustment for interest element of PFI contracts 4 73,517 74,962
Net cash outflow from operating activities (3,014,988) (2,807,541)
(B) Cash flows from investing activities
Purchase of property, plant and equipment 6 (215,787) (138,217)
Acquisition of Right of Use Asset 6a - (2,231)
Purchase of Intangible Asset 8 - (69)
Transfers (note 6 transfer line) 6 - -
True Disposal of property, plant and equipment 6 -
Investment Balance Adjustment to General Fund SoCTE (942)
Increase/(decrease) in capital accruals 13 (36,085) 40,772
Increase/(decrease) in Voted loans and Other Funds 9 (69,519) (63,586)
Net cash outflow from investing activities (321,390) (164,273)
(C) Cash flows from financing activities
Funding from the Scottish Government SoCTE 3,452,777 3,153,129
Inter Entity transfers SoCTE - (65,718)
Inter Entity Adjustment - -
Capital element of payments On Balance Sheet PFI contracts 13 (41,885) (40,806)
Capital element of payments – IFRS 16 Finance Leases 13 (982) 173
Interest element of PFI contracts 4 (73,517) (74,962)
Net Financing 3,336,393 2,971,816
Net increase/(decrease) in cash and cash equivalents in the period 15 -
Cash and cash equivalents at the beginning of the period - -
Cash and cash equivalents at the end of the period 15 -

Statement of Changes in Taxpayers’ Equity for the year ended 31 March 2025

Note General Fund £’000 Revaluation Reserve £’000 Total Reserves £’000
Balance at 31 March 2023 12,547,612 14,264,647 26,812,259
Changes in taxpayers’ equity for 2023-24
Net gain/(loss) on revaluation of property, plant and equipment 6 - 379,290 379,290
Financial assets adjustments 9 (942) - (942)
Roads trunkings/de-trunkings 6 - - -
Roads historic value adjustment 6 (50,352) - (50,352)
Realised element of the revaluation reserve (79,232) 79,232 -
Inter-Entity transfers (65,718) - (65,718)
Impact of adopting IFRS 16 6a - - -
Non-cash charges – auditors remuneration 3 202 - 202
Net operating costs for the year SoCNE (3,032,784) - (3,032,784)
Total recognised income and expense for 2023-24 (3,228,826) 458,522 (2,770,304)
Funding from Scottish Government 3,153,129 - 3,153,129
Balance at 31st March 2024 12,471,914 14,723,169 27,195,083
Changes in taxpayers’ equity for 2024-25
Net gain/(loss) on revaluation of property, plant and equipment 6 (196,416) (196,416)
Financial asset adjustment - - -
Roads trunkings/de-trunkings 6 - - -
Roads historic value adjustment 6 (135,500) - (135,500)
Transfers to Scottish Government - - -
Realised element of the revaluation reserve 6 (435,145) 435,145 -
Impact of adopting IFRS 16 6a - - -
Non-cash charges – auditors remuneration 3 206 - 206
Net operating costs for the year SoCNE (3,167,046) - (3,167,046)
Total recognised income and expense for 2024-25 (3,737,485) 238,728 (3,498,757)
Funding from Scottish Government 3,452,777 - 3,452,777
Balance at 31st March 2025 12,187,206 14,961,897 27,149,103

Notes to the accounts

The financial statements for the year ended 31 March 2025 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 1.22.

1. Statement of accounting policies

The financial statements have been prepared on a going concern basis and in accordance with the 2024-25 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 S1 and IFRS S2. Para 5.4.15 of the FReM explains that Scottish Bodies should report in accordance with guidance from the Scottish Government and the Task Force of Climate – related Financial Disclosures (TCFD) requirements do not apply in 2024-25.
  • IAS 37 Disclosure of remote contingent liabilities. There are no known contingent liabilities that are considered too remote to Transport Scotland that have not been disclosed in Note 19.
  • IFRS 17- Insurance Contracts. IFRS 17 replaces the previous standards on insurance contracts, IFRS 4. Under the IFRS 17 model, insurance contract liabilities will be calculated as the present value of future insurance cash flows with a provision for risk. The Standard will be adapted and interpreted for the public sector context. One major difference from the private sector is that the implementation of IFRS 17 has been delayed from 1 January 2023 (its effective date in the private sector). HM Treasury have used application guidance for IFRS 17, which states that the date of initial application is 1 April 2025. The impact of IFRS 17 has not yet been determined but this will be assessed when further implementation guidance is forthcoming from HM Treasury.
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. 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 roads, 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:

  • For Road Pavement, Structures and Communications we uplift rates using the Price Adjustment Formulae Indices published by Building Cost Information Service (BCIS). We have a bespoke model for re-basing these rates which combines fourteen individual indices to produce a single Baxter figure used for uplifts on a quarterly basis. The weightings used in this model are regularly reviewed by professional advisors and are deemed to be still representative of current construction practices.
  • Land – Land indices produced by VOA

Upwards movements in value are added to the revaluation reserve. Downward movements in value are off set against any credit balance held in the revaluation reserve until the credit is exhausted and thereafter expensed in the Statement of Comprehensive Net Expenditure. The values in our 2023-24 annual accounts reflected a closing Baxter Index of 3113.19. The values in the 2024-25 annual accounts reflect the average January, February and March 2025 provisional Baxter indices run on 23rd April which is the latest indices data available. We also adjust the revaluation reserve annually to ensure that the values in our accounting system and RAAVS are aligned. This takes into consideration the differences between the actual costs captured for assets under construction in our accounting system versus the unit rates used to value assets added to the network in RAAVS.

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 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.

Information technology

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

1.5 Depreciation
Infrastructure assets

The road network 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
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 made up of two components.

  • Capitalised Maintenance Depreciation. The valuation of the road network is calculated based upon condition surveys. Capitalised Maintenance schemes are performed to ensure that the condition of the road network is maintained at a steady state. Capitalised Maintenance schemes are not treated for accounting purposes as having an impact on the valuation of the road network because any related improvement in road condition will be reflected within the surveys. On this basis, we depreciate 100% of Capitalised Maintenance expenditure in the year that it is incurred and account for the charge in net expenditure.
  • Condition Depreciation. The annual condition depreciation charge for the road surface is determined by the annual condition variance. This information is provided by AtkinsRealis 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 Right of use assets and leases

For government bodies reporting under the FReM, IFRS 16 Leases was implemented from 1 April 2022; this introduced 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. 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, and 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.

1.7 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.

1.8 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.
1.9 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. Shares held in public sector bodies are valued at historic cost (less transaction costs) in the absence of an active market.

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.

1.10 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.

1.11 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).

1.12 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.

1.13 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.

1.14 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.

1.15 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.

1.16 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.

1.17 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).

1.18 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.
1.19 Value added tax (VAT)

In line with revised guidance issued by Scottish Government, following the transition to Oracle, Transport Scotland is now required to account for VAT. Previously, VAT was accounted for centrally on behalf of Transport Scotland by the Scottish Government.

Expenditure in the Statement of Comprehensive Net Expenditure is reported inclusive of irrecoverable VAT. Where VAT is recoverable amounts are presented net of VAT. This represents a change in accounting policy. The effect of the change is that VAT balances (recoverable and payable) are now recognised on the Statement of Financial Position.

1.20 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.

1.21 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.

1.22 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 NetworkThe 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. This model is currently provided by AtkinsRealis 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. The valuation contains multiple areas of judgement and estimation uncertainty due to the inherent complexity of the data required to inform the Roads valuation methodology. This includes, asset volumes, costing rates, indexations and assumptions as well the complexity of the overall methodology. The Indices used for the 2025 End of Year valuation is the average of January, February and March 2025 provisional figures run on 23rd April with the latest data available indices for the respective 3 months. The valuation is sensitive to these indices and a 1.8% movement would result in a material movement of £606 million. The below table shows the monthly movement to the Indices applied:
  • Recognition and the valuation of provisionsDue 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 accrualsDue to the timing and availability of final year-end information from external suppliers for concessionary travel, rail and roads maintenance, certain assumptions and judgments are required to be made when determining final accruals.
2. Staff 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 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. 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:

2024-25 Permanently Employed Staff £’000 Others £’000 Total £’000 2023-24 Permanently Employed Staff £’000 Others £’000 Total £’000
Administration:
Wages and salaries costs 12,827 354 13,181 11,240 403 11,643
Social security costs 1,460 1,460 1,295 1,295
Other pension costs 3,495 3,495 3,184 3,184
Early retirement costs - - - -
17,782 354 18,136 15,719 403 16,122
Programme:
Wages and salaries costs 14,275 394 14,669 12,613 478 13,091
Social security costs 1,625 1,625 1,444 1,444
Other pension costs 3,890 3,890 3,437 3,437
Early retirement costs - - - -
19,790 394 20,184 17,494 478 17,972
Total staff costs to be charged to Comprehensive Net Expenditure 37,572 748 38,321 33,213 881 34,094
Capitalised Programme:
Wages and salaries costs 3,149 300 3,448 3,917 42 3,959
Social security costs 360 360 296 296
Other pension costs 900 900 723 723
Running Costs - - 121 121
4,408 300 4,707 5,057 42 5,099
Total staff costs charged to capital expenditure 4,408 300 4,707 5,057 42 5,099
Total Staff Costs 41,980 1,048 43,028 38,270 923 39,193
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 2020. 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 2024-25, employers’ contributions of £8.3m million (2023-24, £7.3 million) 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 2023-24 to be paid when the member retires, and not the benefits paid during this period to existing pensioners.

3. Other administration costs
Note 2024-25 £’000 2023-24 £’000
Rentals under operating leases 19 312
Accommodation1 (146) 1,175
Office costs and supplies 1,618 1,709
Hospitality 12 13
Travel 151 263
Training 49 77
Consultancy 285 216
Loan Impairments - 3,691
Programme Running Costs - 678
Non-cash items
Depreciation 6/7 1,620 2,062
Auditors' remuneration and expenses – external 22 206 202
Total administration costs 3,814 10,398

4. Programme costs

Note 2024-25 £’000 2023-24 £’000
Other programme expenditure Roads
Capital maintenance 215,392 171,266
Current maintenance 183,709 158,699
PFI interest charges 73,517 74,962
PFI service charges 29,424 25,905
Rail
Rail services* 818,572 749,106
Rail infrastructure** 465,133 418,406
Other 480 1,382
Concessionary travel
Smartcard applications 3,181 1,899
Concessionary travel schemes 397,543 355,610
Other public transport
Major public transport projects – rail*** 178,934 178,350
Transport information 370 527
Ferry services 334,421 337,624
Air services 75,045 68,872
Bus services 44,142 32,277
Other transport directorate programmes 45,742 58,808
Low Carbon and Active Travel 157,919 118,820
Central Government grants to Local Authorities 41,763 90,863
Resource AME Transactions (EST Loans Only) (10,725) (8,992)
Non-cash items
Depreciation 6/7 82,388 167,522
Total other programme costs 3,136,949 3,001,906

* Cash Grant in Aid Payments to Scottish Rail Holdings totalling £833 million

** Rail Infrastructure in Scotland Payment of £465 million was paid directly to Network Rail

*** Rail Infrastructure Improvement grant of £167 million 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.
  • 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.
2024-25£’000 2023-24£’000
Programme income
Interest receivable – loans (12,083) (9,017)
Rental income – land & properties (60) (30)
Other income - -
European Structural Fund (ESF) income (101) (3,452)
Ports income - (4)
Dividends - -
Profit on disposal of land - (1,111)
Total operating income (12,243) (13,614)
6. Property, Plant, and Equipment
2024-25 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 2024 33,854,756 6,198 8,959 135 - - 515,876 34,385,923
Detrunkings - - - - - - - -
Additions 144,057 - - - - 2,755 68,975 215,787
Disposals - - - - - - - -
Revaluation (383,351) - - - - - - (383,351)
Historic valuation adjustments (165,742) - - - - - - (165,742)
Transfers and reclassifications - - - - - - - -
Transfers (to)/from assets held for sale 39,351 - - - - - (39,351) -
Balance at 31 March 2025 33,489,071 6,198 8,959 135 - 2,755 545,499 34,052,616
2024-25 Road Network £’000 Land £’000 Buildings £’000 Transport £’000 IT £’000 Leasehold Improvements £’000 Assets under Construction £’000 Total £’000
Depreciation
At 1st April 2024 6,431,233 - 2,256 135 - - - 6,433,624
Detrunkings - - - - - - - -
Charge for the year 81,909 - 479 - - - - 82,388
Disposals - - - - - - - -
Revaluation (186,936) - - - - - - (186,936)
Current valuation adjustments - - - - - - - -
Historic valuation adjustments (31,562) - - - - - - (31,562)
Transfers and reclassifications - - - - - - -
Balance at 31 March 2025 6,294,645 - 2,735 135 - - - 6,297,515
Net Book Value at 31 March 2025 27,194,426 6,198 6,224 - - 2,755 545,499 27,755,102
Net Book Value at 31 March 2024 27,423,523 6,198 6,703 - - - 515,875 27,952,298
Asset Financing
Owned 23,309,040 6,198 6,224 - - 2,755 542,872 23,867,089
Finance-Leased - - - - - - - -
On Balance Sheet PFI 3,885,386 - - - - - 2,627 3,888,013
Donated - - - - - - - -
Net Book Value at 31 March 2025 27,194,426 6,198 6,224 - - 2,755 545,499 27,755,102
2023-24 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 2023 33,399,065 6,198 12,775 135 4,608 1,508 493,311 33,917,601
Detrunkings - - - - - - - -
Additions 61,544 - - - - - 76,673 138,217
Disposals - - (3,817) - (4,608) (1,508) - (9,933)
Revaluation 407,474 - - - - - - 407,474
Current valuation adjustments - - - - - - - -
Historic valuation adjustments (67,436) - - - - - - (67,436)
Transfers and reclassifications - - - - - - - -
Transfers (to)/from assets held for sale 54,110 - - - - - (54,110) -
Balance at 31 March 2024 33,854,756 6,198 8,959 135 - - 515,875 34,385,922
2023-24 Road Network £’000 Land £’000 Buildings £’000 Transport £’000 IT £’000 Leasehold Improvements £’000 Assets under Construction £’000 Total £’000
Depreciation
At 1st April 2023 6,252,611 - 5,594 131 4,608 1,508 - 6,264,452
Detrunkings - - - - - - - -
Charge for the year 167,522 - 479 4 - - - 168,005
Disposals - - (3,817) - (4,608) (1,508) - (9,933)
Revaluation 28,185 - - - - - - 28,185
Current valuation adjustments - - - - - - - -
Historic valuation adjustments (17,084) - - - - - - (17,084)
Transfers and reclassifications - - - - - - - -
Balance at 31 March 2024 6,431,233 - 2,256 135 - - - 6,433,624
Net Book Value at 31 March 2024 27,423,523 6,198 6,703 - - - 515,875 27,952,298
Net Book Value at 31 March 2023 27,146,454 6,198 7,181 4 - - 493,311 27,653,149
2023-24 Road Network £’000 Land £’000 Buildings £’000 Transport £’000 IT £’000 Leasehold Improvements £’000 Assets under Construction £’000 Total £’000
Asset Financing
Owned 23,488,938 6,198 6,703 - - - 515,875 24,017,714
Finance-Leased - - - - - - - -
On Balance Sheet PFI 3,934,585 - - - - - - 3,934,585
Donated - - - - - - - -
Net Book Value at 31 March 2023 27,423,523 6,198 6,703 - - - 515,875 27,952,298

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 (de-trunking), with the corresponding entry flowing through the general fund.

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.

7. Right of use assets
2024-25 Total £000
Cost or Valuation Balance as at 1 April 2024 30,639
Additions -
Disposals -
At 31 March 2025 30,639
Depreciation Balance as at 1 April 2024 2,053
Charged in year 1,620
Disposals
At 31 March 2025 3,672
Net Book Value 26,967
Analysis of asset financing:
Owned
Finance-Leased 26,967
Net book value 26,967
2023-24 Total £000
Cost or Valuation Balance at 01 April 2023 28,409
Additions 2,231
Disposals
At 31 March 2024 30,640
Depreciation Balance at 01 April 2023 473
Charged in year 1,580
Disposals
At 31 March 2024 2,053
Net book value 28,587
Analysis of asset financing:
Owned 0
Finance-Leased 28,587
Net book value 28,587
7b Lease Liabilities
As at 31 March 2025 £’000 As at 31 March 2024 £’000
Within one year 1,281 1,255
Between 2 and 5 years 5,126 3,252
After 5 years 25,905 28,452
Less accrued interest (3,461) (3,734)
Total 28,851 29,225
8. 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.

2024-25 £’000 2023-24 £’000
At replacement cost or valuation
At 1 April 69 -
Additions 69
Disposals (69)
Balance at 31 March - 69
Accumulated amortisation
At 1 April - -
Charge for the year - -
Revaluations - -
Disposals - -
Balance at 31 March - -
Net Book Value at 31 March - 69
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 2025, 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) 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
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.

2024-25 Interests in Nationalised Industries & Limited Companies £’000 Voted Loans £’000 Other Funds £’000 Total Reserves £’000
Balance at 1st April 2024 20,550 255,882 145,114 421,545
Add element reported within current assets
Advances and repayments
Cash advances - 108,456 387 108,844
Transfers - - - 0
Repayments - (10,144) (47,438) (57,582)
Less
Discounting of EST loans - - 8,793 8,793
Write-off of Financial Transaction -
Expected credit loss - - - -
Effective Interest Receivable 7,478 1,987 9,465
Balance at 31 March 2025 20,550 361,671 108,843 491,063
Loans repayable within 12 months transferred to current assets - 14,239 12,563 26,802
Loans repayable after 12 months non current assets 20,550 347,432 96,279 464,261
Balance at 31 March 2025 20,550 361,671 108,843 491,063
2023-24 Interests in Nationalised Industries & Limited Companies £’000 Voted Loans £’000 Other Funds £’000 Total Reserves £’000
Balance at 1st April 2023 20,550 196,085 141,324 357,959
Add element reported within current assets
Advances and repayments - 63,264 656 63,920
Cash advances - - - -
Transfers - (9,058) (2,167) (11,225)
Repayments - - (322) (322)
Write off EST Loans - - (322) (322)
Expected Credit Loss - - (3,369) (3,369)
Discounting of EST loans - - 6,018 6,018
Effective Interest Receivable - 5,591 2,974 8,565
Balance at 31 March 2024 20,550 255,882 145,114 421,545
Loans repayable within 12 months in Current Assets - 9,207 5,803 15,009
Loans repayable after 12 months transferred to non current assets 20,550 246,675 139,311 406,536
Balance at 31 March 2024 20,550 255,882 145,114 421,545
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 2025 (27.0) 163.5 176.7 51.0
Turnover 417.3 31.7 53.4 328.9
Profit/(loss) for the financial year (821.1) (34.9) (5.2) 5.4

*Results for SRH, Highland & Island Airports Ltd, Caledonian Maritime Assets Ltd and David MacBrayne Ltd are draft and subject to audit with final accounts to be published.

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.

Scottish Rail Holdings Limited (SRH)

Scottish Ministers are the sole shareholder of SRH. SRH is the holding company of ScotRail Trains Limited (SRT), which took over the operation of ScotRail services on 1 April 2022 and Caledonian Sleeper Limited (CSL), which took over the operation of Caledonian Sleeper services on 25 June 2023. SRH is responsible for providing oversight and managing the provision of SRT and CSL rail passenger services under the terms of their Grant Agreements.

Voted Loans

These represent loans that Transport Scotland provides to CMAL for the procurement of new shipping.

Other funds

These represent loans that Transport Scotland provides to the Energy Savings Trust to fund energy efficient transport initiatives and to HIAL to renew and improve commercial airport infrastructure.

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 31/03/25 £’000 As at 31/03/24 £’000
Amounts falling due within one year:Trade and other receivables
Trade and other receivables 3,728 6
VAT 29,979 -
Damage claims 1,876 1,783
Prepayments and accrued income 92,948 98,729
128,530 100,518
Amounts falling due after more than one year:
Prepayments and other receivables 25,621 30,000
25,621 30,000
10b Intra-Government balances As at 31/03/2 5£’000 As at 31/03/24 £’000
Amounts falling due within one year:Intra-Government balances
Other Central Government bodies 56,353 49,945
Local Authorities 1,771 23
Public corporations and trading funds 85 6,920
58,209 56,888
Balances with bodies external to Government 70,321 43,630
Total receivables 128,530 100,518
Amounts falling due after more than one year:Intra-Government balances
Other Central Government bodies - -
Local Authorities - -
Public corporations and trading funds - -
- -
Balances with bodies external to Government 25,621 30,000
Total receivables 25,621 30,000
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 31/03/25 £’000 As at 31/03/24 £’000
Amounts falling due within one year:Trade and other payables
Trade payables 7,609 19,725
Accruals 229,763 206,961
Other payables 2,742 33,171
Financial liabilities – IFRS 16 Leases 553 982
Financial liabilities – PFI 43,187 41,885
Deferred income 110 83
283,963 302,808
Amounts falling due after more than one year:
Other payables 292 292
Financial liabilities – IFRS 16 Leases 27,157 27,710
Financial liabilities – PFI 947,705 990,892
975,154 1,018,894
11b Intra-Government balances As at 31/03/25 £’000 As at 31/03/24 £’000
Amounts falling due within one year:Intra-Government balances
Other Central Government bodies 5,760 3,946
Local Authorities & Health Boards 33,418 64,910
Public corporations and trading funds 40,776 50,916
79,954 119,772
Balances with bodies external to Government 204,009 183,036
Total payables 283,963 302,808
Amounts falling due after more than one year:Intra-Government balances
Other Central Government bodies - -
Local Authorities & Health Boards - -
Public corporations and trading funds - -
- -
Balances with bodies external to Government 975,154 1,018,894
Total payables 975,154 1,018,894
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 bi-annually.

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
2024-25
Balance as at 1 April 2024 11,491 3,558 1,183 16,233
Provided in year 8,472 231 8,704
Provisions not required written back (2,428) (2,131) (4,559)
Provisions utilised in year (641) (659) (1,300)
Discount amortised -
Balance as at 31 March 2025 16,893 1,000 1,183 19,077
2023-24
Balance as at 1st April 2023 25,065 3,270 6,543 34,878
Provided in year 4,283 2,600 1,813 8,696
Provisions not required written back (4,346) (255) (6,522) (11,123)
Provisions utilised in year (13,083) (2,034) (16) (15,134)
Discount amortised (428) (22) (635) (1,085)
Balance as at 31 March 2024 11,491 3,558 1,183 16,233
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 2026 9,128 1,000 10,128
Between 2026 and 2029 3,717 1,183 4,900
Between 2029 and 2034 4.048 4,048
Thereafter -
Balance as at 31 March 2025 16,893 1,000 1,183 19,077
In the remainder of the period to 2023 7,790 3,281 420 11,491
Between 2024 and 2027 3,701 288 754 4,743
Between 2026 and 2030 - - - -
Thereafter - - - -
Balance as at 31 March 2024 11,491 3,569 1,174 16,233
13. Movement on working capital balances
Note As at 31/03/25 £’000 As at 31/03/24 £’000 2024-25 Net Movement £’000 2023-24 Net Movement£’000
Receivables
Due within one year 10 128,530 100,518 (28,012) 9,965
Due after more than one year 10 25,621 30,000 4,379 5,000
Net (increase)/decrease 154,151 130,518 (23,633) 14,965
Payables
Due within one year 11 283,963 302,808 (18,845) 26,750
Due after more than one year 11 975,154 1,018,894 (43,739) (42,437)
1,259,117 1,321,702 (62,584) (15,687)
Less: IFRS 16 Liabilities included in above 11 27,710 28,692 (982) 173
Less: PFI creditors included in above 11 990,892 1,032,777 (41,885) (40,806)
Less: Capital accruals included in the above (66,054) (29,969) (36,085) 40,772
Net increase/(decrease) 306,569 290,201 16,368 (15,825)
Provisions 12 19,077 16,233 2,844 (18,645)
Net increase/(decrease) 19,077 16,233 2,844 (18,645)
Net movement increase/(decrease) 479,797 436,952 42,845 (49,435)
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 92,470 123,693 - 216,163
Road 26,290 11,508 - 37,798
Bus Accessibility and Active Travel 1,192 3,721 4,000 8,913
Total contracted capital commitments for which no provision has been made 119,952 138,922 4,000 262,874
15. Commitments under IFRS 16 leases

No Commitments of low value/less than 12 months Operating Lease exited as at 31 March 2025.

Commitments for Low value/less than 12 month Operating Leases

As at 31 March 2025 £000s As at 31 March 2024 £000s
Land and Buildings
Within one year - -
Within two to five years (inclusive) - -
After five years - -
Total - -
Split of costs
As at 31 March 2025 £000s As at 31 March 2024 £000s
Land and Buildings Rental Costs – Operating Leases
Operating Lease Rentals - -
Total Rental Costs - -
Commitments for Finance Leases also shown as Right of Use Assets
As at 31 March 2025 £000s As at 31 March 2024 £000s
Land and BuildingsObligations under finance leases
The total future lease payments under finance leases
Total lease payments due within one year 553 982
Total lease payments due between 1 and 5 years 2,263 2,242
Total lease payments due thereafter 24,893 25,468
Sub-total 27,709 28,692
Less interest element 3,461 3,734
Present Value of Obligations under finance lease 24,248 24,958
As at 31 March 2025 £000s As at 31 March 2024 £000s
Land and BuildingsObligations under finance leases
The total future lease payments under finance leases
Total lease payments due within one year 292 710
Total lease payments due between 1 and 5 years 1,274 1,232
Total lease payments due thereafter 22,682 23,017
Present Value of Obligations under finance lease 24,248 24,958
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 18km 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 31/03/25 £’000 As at 31/03/24 £’000 As at 31/03/23 £’000
Imputed finance lease obligations under PFI contracts comprise:
Rentals due within 1 year 115,417 115,402 115,768
Rentals due within 2 to 5 years 400,337 418,056 439,375
Rentals due thereafter 1,273,343 1,371,040 1,465,123
1,789,096 1,904,498 2,020,266
Less: Interest element (finance cost) (798,204) (871,721) (946,683)
Total capital cost 990,892 1,032,777 1,073,583
As at 31/03/24 £’000 As at 31/03/23 £’000 As at 31/03/22 £’000
Imputed service charge obligations under PFI contracts comprise:
Service charge due within 1 year 34,221 33,585 29,846
Service charge due within 2 to 5 years 185,291 175,572 161,036
Service charge due thereafter 935,721 981,184 1,029,306
Total service charge 1,155,233 1,190,342 1,220,188
17. Other Financial Commitments
Value of Commitment Payable
Transport Scotland Directorate In 1 Year £’000 2-5 Years £’000 > 5 years £’000 Total £’000
Rail 1,415,995 5,736,436 1,369,283 8,521,714
Active Travel 2,387 8,336 5,995 16,718
Air 9,115 13,079 - 22,194
Ferries 159,850 93,420 - 253,270
Road 739 1,712 1,598 4,050
Total 1,588,086 5,852,983 1,376,876 8,817,946
Rail

The table above takes into consideration that 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 Determination for CP7 is included in the table above.

Transport Scotland subsidised three rail operators that provided services in Scotland. These were: ScotRail Trains Ltd (SRT) and Caledonian Sleeper Ltd (CSL) as wholly owned subsidiaries of Scottish Rail Holdings Ltd (SRH), a company wholly owned by Scottish Ministers; and First TransPennine Express Limited (Cross Border Services) via a service level agreement to serve East Linton and Reston train stations (agreement end date 1 June 2024). The total amount charged to the Statement of Comprehensive Net Expenditure reflects the grants paid to Network Rail for Operation, Maintenance and Renewal (OMR) and enhancements, Cash Grant In Aid payments for SRH and subsidy payments for Cross Border Services. This is summarised below:

2024-25 £’000 2023-24 £’000
Network Rail OMR 465,133 418,406
Network Rail Infrastructure Improvement Grant 166,537 167,200
Scottish Rail Holdings 818,572 765,486
Serco Caledonian Sleeper Limited (2023-24) & Cross Border Services (2024-25) 123 7,467
Total 1,450,365 1,358,559
Active Travel

The table above includes:

  • contractual arrangements for the provision of Digital Travel Data Services (DTDS), which supply real-time and planned travel information to support operational decision-making, public communications, and data integration. These services are essential for delivering accurate, timely travel data across multiple modes of transport, enhancing network resilience and customer experience. The overall aim of the DTDS project is to make public transport journey planning information easier and more accessible for everyone. Building on the legacy Traveline Scotland website and app services the travelling public in Scotland have used for many years, the DTDS project developed and launched the new-look website and app services in September ٢٠٢٤, followed by the first iteration of enhancements in April ٢٠٢٥.
  • a managed service agreement in place for the Euclid Reimbursement System, which administers and processes concessionary travel scheme reimbursements to operators. The service includes system hosting, maintenance, user support, and ongoing software enhancements to ensure compliance.
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) was from October 2016 to October 2024 and is provided by CalMac Ferries Ltd. We made arrangements to extend the existing CHFS contract for 12 months and progress arrangements for the direct award of the CHFS3 contract from 1 October 2025. Due diligence work on the direct award of the Clyde and Hebrides Ferry Service (CHFS) 3 contract has been completed and the Cabinet Secretary for Transport announced on 8 May 2025 that Scottish ministers agreed a direct award to Calmac Ferries Limited.

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 2027. 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.

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.

Roads

We provide grant funding to the Scottish Police Authority on an annual basis. This is to ensure the continued operation of the Scottish Safety Camera Programme.

18. Financial Instruments
Note Total Financial Assets at Amortised Cost £’000 Tota £’000
Assets per Statement of Financial Position
Trade and other receivables excluding prepayments, reimbursement of provisions and VAT recoverable 485,740 485,740
Balance as at 31 March 2025 485,740 485,740
Note Other Financial Liabilities £’000 Total £’000
Liabilities per Statement of Financial Position
PFI & IFRS 16 liabilities 15, 16 1,019,584 1,019,584
Trade and other payables excluding statutory liabilities (VAT, income tax and social security) 193,794 193,794
Balance as at 31 March 2025 1,213,378 1,213,378
18a Financial Instruments by Category
2023-24 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 444,678 444,678
Balance as at 31 March 2024 444,678 444,678
2023-24 Note Other Financial Liabilities £’000 Total £’000
Liabilities per Statement of Financial Position
PFI & IFRS 16 liabilities 16 1,061,469 1,061,469
Trade and other payables excluding statutory liabilities (VAT, income tax and social security) 260,232 260,232
Balance as at 31 March 2024 1,321,702 1,321,702
18b. Financial Risk Factors

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.

2024-25 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 1,019,584 44,169 80,525 129,917 263,418 501,556
Derivative liabilities - - - - - -
Total financial liabilities 1,019,584 44,169 80,525 129,917 263,418 501,556
2023-24 Carrying value £’000 0-12 months £’000 1-2 years £’000 3-5 years 5-10 years £’000 >10 years £’000
Non-derivative liabilities 1,061,469 42,867 87,829 118,692 262,864 549,217
Derivative liabilities - - - - - -
Total financial liabilities 1,061,469 42,867 87,829 118,692 262,864 549,217
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 of use to a forestry track as an emergency diversion route on the A83 Rest and be Thankful on the understanding that Transport Scotland 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 and reporting 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:

  • 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 specify the future financial obligations that Scottish Ministers will ensure are met to secure availability of the rolling stock. The table below summarises quantifiable contingent liabilities in relation to those guarantees with the amounts disclosed reflecting the highest reasonable estimate of the possible liability in relation to future payments that fall due after the expiry of existing agreements with train operators.
Guarantees in place as at 31 March 2025 £m
Section 54 guarantee for the Caledonian Rail Leasing Limited Class 385 type Rolling Stock until 28 February 2044 200.1
Section 54 guarantee for Eversholt Class 380 type Rolling Stock until 31 December 2040 76.7
Section 54 guarantee for Porterbrook Class 170 Rolling Stock until 31 March 2035 21.4
Section 54 guarantee for Caledonian Rail Sleeper Leasing Limited Mark 5 Rolling Stock until 31 March 2040 33.2
Total 331.4

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. Caledonian Sleeper Grant Agreement expires on 25 June 2033 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 Limited through the Grant and Franchise Agreements.

iii. Other contingent liabilities held by Transport Scotland

  • Under the terms of the Clyde and Hebrides Ferry Service contract, Scottish Ministers are responsible for any increased pension costs due under the Calmac Pension Scheme. The valuation of the pension scheme is subject to a tri-ennial review which will determine future funding requirements. However, factors underpinning the valuation are subject to change over time meaning that the adequacy of the funding for the scheme remains uncertain in future years.
  • 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 Airport Limited, are unable to pay any sum owed to the pension scheme.
20. Related Parties

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 Highland 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 Ltd and Caledonian Sleeper Ltd are subsidiaries of Scottish Rail Holdings Limited under the statutory Operator of Last Resort arrangements.

Loans were advanced to and repaid by CMAL to fund vessel construction, and to HIAL to support air 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 payments 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
2024-25 Resource £’000 Net Investmen t£’000 Income £’000 Non Cash £’000 AME £’000 ODEL £’000 Total £’000
Total continuing segments
Roads 168,814 230,707 - 83,128 2,844 102,941 588,434
Rail 455,257 1,012,295 - 70 - - 1,467,622
Bus services 445,404 1,510 - - - - 446,914
Other public transport 12,845 - - - - - 12,845
Ferry services in Scotland 278,762 72,209 (12,083) - (15,192) - 323,696
Air services in Scotland 59,991 14,980 - - - - 74,972
Other transport directorate programmes 46,891 172,874 (161) 1,620 (10,780) - 210,444
Grants to Local Authorities 41,914 - 41,914
1,509,880 1,504,575 (12,243) 84,817 (23,128) 102,941 3,166,841
2023-24 Resource £’000 Net Investmen t£’000 Income £’000 Non Cash £’000 AME £’000 ODEL £’000 Total £’000
Total continuing segments
Roads 151,088 184,400 (1,141) 167,522 (19,226) 100,867 583,510
Rail 393,350 958,000 - - - - 1,351,350
Bus services 392,536 1,044 (389) - - - 393,191
Other public transport 23,780 - - 2,062 1,690 - 27,532
Ferry services in Scotland 264,914 75,015 (8,168) - - - 331,761
Air services in Scotland 57,753 10,952 - - - - 68,705
Other transport directorate programmes 26,839 130,024 (3,063) - - - 153,800
Scottish Futures Fund - 24,381 - - (8,992) - 15,389
Grants to Local Authorities 41,732 49,131 - - - - 90,863
1,351,993 1,432,947 (12,762) 169,584 (26,528) 100,867 3,016,101
21b Business Segments – Capital Expenditure
2024-25 Trunk Road Maintenance £’000 Capital Projects £’000 Other Assets Voted Loans £’000 Total Capital Expenditure £’000
Total continuing segments
Roads 144,057 68,975 - - 213,032
Rail - - - - -
Other public transport - - - - -
Other transport directorate programmes 2,755 - - (47,051) (44,296)
Ferry, aviation, and other services in Scotland - - - 98,312 98,312
146,812 68,975 - 51,261 267,049
2023-24 Trunk Road Maintenance £’000 Capital Projects £’000 Other Assets £’000 Voted Loans £’000 Total Capital Expenditure £’000
Total continuing segments
Roads 61,543 95,586 - - 157,129
Rail - - - - -
Other public transport - - 923 - 923
Other transport directorate programmes - - - (1,511) (1,511)
Ferry, aviation, and other services in Scotland - - - 54,206 54,206
61,543 95,586 923 52,695 210,747
22. Notional charges

The following notional charges have been included in the accounts:

Note 2024-25 £’000 2023-24 £’000
Auditors’ remuneration 3 206 202
206 202
23. Losses and Special Payments
Number of cases 2024-25 £’000 2023-24 £’000
Total cash losses 19 197 430
Details of cases over £250,000 0 0 0
Including
- claims abandoned 19 197 430
- 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. These costs are held in a debtor account until the recovery is successful.

24. Events after the reporting period

There are no significant events after the reporting period.