Scottish Government

The Scottish Executive
Annual Report
For the year ended 31 March 2006

Introduction/Background

Basis of Accounts

1. These accounts have been prepared in accordance with the accounts direction issued by the Scottish Ministers under section 19(4) of the Public Finance and Accountability (Scotland) Act 2000. The accounts direction is reproduced at page 94 to these accounts.

Departmental Accounting Boundary

2. These accounts reflect the consolidated assets and liabilities and the results of all entities within the Scottish Executive departmental accounting boundary as defined in the Government Financial Reporting Manual ( FReM). This consists of the seven internal Departments, supported by Administration, their Executive Agencies (each linked to a specific department), the Crown Office and Procurator Fiscal Service and the NHS Bodies responsible for the planning, promotion, commissioning and the delivery of healthcare. The bodies within the boundary are as follows:

Core Departments:

• Environment and Rural Affairs Department ( SEERAD)
• Development Department ( SEDD)
• Education Department ( SEED)
• Enterprise, Transport and Lifelong Learning Department ( SEETLLD)
• Finance and Central Services Department ( SEFCSD)
• Health Department ( SEHD)
• Justice Department ( SEJD)

Executive Agencies:

• Environment and Rural Affairs:
  • Scottish Agricultural Science Agency ( SASA)
  • Scottish Fisheries Protection Agency ( SFPA)
  • Fisheries Research Services ( FRS)
• Development Department:
  • Communities Scotland ( CS)
  • Scottish Building Standards Agency ( SBSA)
  • Office of the Scottish Charity Regulator ( OSCR)
• Education Department:
  • Her Majesty's Inspectorate of Education ( HMIE)
  • Historic Scotland ( HS)
  • Social Work Inspection Agency (from 1 April 2005) ( SWIA)
• Enterprise, Transport and Lifelong Learning Department:
  • Student Awards Agency for Scotland ( SAAS)
  • Transport Agency (1 January 2006) ( TA)
• Finance and Central Services:
  • Scottish Public Pensions Agency ( SPPA)
• Health Department
  • Mental Health Tribunal (from 1 April 2005) ( MHT)
• Justice Department:
  • Scottish Prison Service ( SPS)
  • Scottish Court Service ( SCS)
  • Accountant in Bankruptcy ( AIB)

The Crown Office and Procurator Fiscal Service

The NHS Bodies in Scotland responsible for the planning, promotion, commissioning and delivery of health care.

Within the accounts, the Core Departments are referred to as 'Core' while the other consolidated bodies including the Executive Agencies, Crown Office and Procurator Fiscal Service and the Health Bodies are referred to as 'Other'.

The Scottish Executive is also the shareholder and sponsor of two nationalised industries - Caledonian MacBrayne Limited and Highland and Islands Airports Limited: a shareholder in Partnerships UK Limited, and sponsor of a number of executive, advisory and tribunal Non Departmental Public Bodies. These bodies are regarded as related parties with which the Scottish Executive has had various transactions during the year but do not fall within the departmental accounting boundary. Further details of Scottish Public Bodies are available from the Scottish Executive website - www.scotland.gov.uk/government/publicbodies.

3. The Crown Office and Procurator Fiscal Service, the Executive Agencies and the individual Health Bodies also produce and publish their own annual accounts. These accounts can be accessed via the Scottish Executive website at www.scotland.gov.uk. Up to the year ended 31 March 2003, the Scottish Executive published separate Core Departments' accounts along with the consolidated accounts. Following a proposal in 2004, supported by the Scottish Executive Audit Committee and approved by the Audit Committee of the Scottish Parliament, separate accounts for the Core Departments are no longer published. Useful information on the Core Departments is however provided in a separate balance sheet (see page 40) and accompanying notes (see pages 52 to 93).

Comparison of Budget to Outturn

4. These accounts seek to report actual outturn compared to the budget authorised by the Scottish Parliament. The annual budget authorised by the Scottish Parliament, however, is the budget for the wider Scottish Administration. It therefore includes the funding of activities which are not within the Scottish Executive, and not, therefore, dealt with in these accounts. There are also some differences between the budgeting rules and the accounting requirements that have to be accommodated in any comparison. These accounts therefore seek to compare the actual outturn to the budget stated on the same basis, with a reconciliation and explanation of the budget reflected in the accounts with that shown in the annual budget documents provided in Note 24.

Brief History

5. The Scottish Executive is the devolved administration in Scotland and inherited the vast majority of the policy and administrative responsibilities of its predecessor, The Scottish Office. The Scottish Executive was established at devolution in 1999. From 1 July 1999 the Scottish Executive and Scottish Parliament assumed legislative responsibility for a wide range of devolved matters, including agriculture, economic development, education, environment, fisheries, food standards, forestry, health, housing, local government, planning, social work, some aspects of transport, and tourism. Matters such as the constitution, defence, foreign policy, national taxation and social security are reserved to the UK Parliament.

Principal Activities and Key Aims

6. The principal activities and key aims of the Scottish Executive are set out below by Ministerial portfolio. The operating Departments and Ministerial portfolios are aligned in broad terms, although in some cases a Department will support more than one portfolio. The aims and objectives of all operating departments are provided in the Statements of Resources by Departmental Aims at pages 43 to 51 of these accounts.

Ministers and Senior Officers

7. The responsibilities of Scottish Ministers during the financial year were:

First Minister

Head of the Scottish Executive, responsible for the development, implementation and presentation of Executive policies. Also responsible for the strategic relationship with the UK government, the European Union and other external relations.

Deputy First Minister and Minister for Enterprise and Lifelong Learning

With the First Minister, responsible for the development, implementation and presentation of Executive policies. As Enterprise and Lifelong Learning Minister, responsible for the economy, business and industry including Scottish Enterprise, Highlands and Islands Enterprise, European Structural Funds, trade and inward investment, energy (including renewable energy), further and higher education, lifelong learning and training and science, and devolved interests in telecommunications and post offices.

Minister for Communities

Responsible for tackling poverty, housing and area regeneration, the land use planning system and building standards, equality issues, voluntary sector, religious and faith organisations and charity law.

Minister for Education and Young People

Responsible for school education, nurseries and childcare, Gaelic, children's services, social work, Her Majesty's Inspectorate of Education, Her Majesty's Social Work Inspectorate and the Scottish Qualifications Authority.

Minister for Environment and Rural Development

Responsible for environment and natural heritage, land reform, water, sustainable development, agriculture, fisheries and rural development including aquaculture and forestry.

Minister for Finance and Public Service Reform

Responsible for the Scottish Budget, public service delivery, modernising government including civil service reform, local government, cities and community planning, and external relations issues and Scotland's international image.

Minister for Health and Community Care

Responsible for NHS, community care, health service reform, health improvement, health promotion, public health, allied healthcare services, acute, primary and mental health services, addiction services, pharmaceutical services, performance, quality and improvement framework and food safety.

Minister for Justice

Responsible for tackling anti-social behaviour, criminal justice, youth justice, victims support, criminal justice social work, police, prisons and sentencing policy, courts, law reform including civil law and fire services.

Minister for Parliamentary Business

Responsible for Parliamentary affairs and the management of Executive business in the Parliament.

Minister for Transport

Responsible for transport policy and delivery, public transport, road, rail services, air and ferry services.

Minister for Tourism, Culture and Sport

Responsible for tourism, culture and the arts, sport, major events strategy, built heritage, architecture, Historic Scotland and lottery funding.

Further information on Ministerial responsibilities is available from the Scottish Parliament and Scottish Executive websites:

www.scottish.parliament.uk/home.htm

www.scotland.gov.uk/Home

8. The Scottish Ministers, Law Officers an ^d their Deputies during the financial year were:

9. The Scottish Executive Management Group ( MG) is responsible for ensuring that the Executive is organised and managed in the most effective way to support Ministers in the implementation of their policies. The composition of MG during the year was as follows:

The non-executive members bring an external perspective to the consideration of corporate management issues such as staffing, administration costs, monitoring of programme expenditure, training and development, accommodation strategy and relations with stakeholders.