Annual Report and Accounts 2024 - 2025 Notes to the accounts part 2
Overview
These notes relate to the annual accounts for 2024 to 2025.
This page covers notes 10 to 20. See also notes 1 to 9.
This information is also available in the Annual Report and Accounts 2024/25 document (PDF, 9.5 MB).
Note 10: Cash and cash equivalents
|
|
At 31 March 2025 £’000 |
At 31 March 2024 £’000 |
|
Balance at 1 April |
899 |
829 |
|
Net change in cash and cash equivalent balances |
1,447 |
70 |
|
Balance at year end |
2,346 |
899 |
|
The following balances were held in: |
|
|
|
Government banking services |
2,298 |
870 |
|
Commercial banks and cash in hand |
48 |
29 |
|
Balance at year end |
2,346 |
899 |
Note 11: Trade and other receivables
|
|
At 31 March 2025 £’000 |
At 31 March 2024 £’000 |
|
Amounts falling due within one year |
|
|
|
Trade receivables |
2,688 |
2,198 |
|
Less expected credit loss |
(993) |
(813) |
|
Net trade receivables |
1,695 |
1, 385 |
|
Other trade receivables |
27 |
26 |
|
Prepayments and accrued income |
3,307 |
2,553 |
|
|
5,029 |
3,964 |
|
Amounts falling due greater than one year |
|
|
|
Prepayments and accrued income |
232 |
225 |
|
Total trade and other receivables |
5,261 |
4,189 |
Included in the outstanding balances are £292k outstanding from other government bodies, £13k from local authorities and £11k from NHS bodies. In year we recovered £0.09m of previously impaired debt. As at March 2025, the bad debt impairment balance included a provision for expected credit losses of £0.8m.
Note 12: Trade and other payables
|
|
At 31 March 2025 £’000 |
At 31 March 2024 £’000 |
|
Amounts falling due within one year |
|
|
|
Trade payables |
(2,264) |
(981) |
|
Other taxes and social security |
(2,741) |
(2,743) |
|
VAT |
(142) |
(84) |
|
Accruals and deferred income |
(8,536) |
(7,398) |
|
Total |
(13,683) |
(11,206) |
Included in the outstanding balances are £1,712k payable to local authorities and £1,776k to other government bodies.
Note 13: Financial instruments
Our resource requirements are met from Scottish Government via the annual grant in aid provision and from other income generated from charging schemes and other activities. We have no power to borrow funds, and all surplus funds are held in interest bearing deposit accounts. Other than financial assets and liabilities which are generated by day-to-day operational activities, we hold no financial instruments. The financial instruments shown below exclude any statutory amounts imposed by government (e.g. taxes) or where there is no entitlement to cash (e.g. prepayments and deferred income).
|
Year to 31 March 2025 |
Floating interest rate (linked to base rate) £’000 |
Non-interest bearing £’000 |
Total at 31 March 2025 £’000 |
Total at 31 March 2024 £’000 |
|
Trade and other receivables |
0 |
4,124 |
4,124 |
3,513 |
|
Cash at bank and in hand |
2,346 |
0 |
2,346 |
899 |
|
Total financial assets |
2,346 |
4,124 |
6,470 |
4,412 |
|
Trade and other payables |
0 |
(9,115) |
(9,115) |
(10,315) |
|
Total financial liabilities |
0 |
(9,115) |
(9,115) |
(10,315) |
Note 14: Provision for liabilities and charges to March 2025
|
Year to 31 March 2025 |
Unfunded pension liabilities £’000 |
Provision for leased property decommissioning £’000 |
Other provision £’000 |
Total provision for liabilities and charges £’000 |
|---|---|---|---|---|
|
Balance at 1 April 2024 |
1,402 |
4,246 |
588 |
6,236 |
|
Actuarial valuation changes |
28 |
7 |
234 |
269 |
|
Decommissioning revaluation |
0 |
96 |
0 |
96 |
|
New |
0 |
0 |
75 |
75 |
|
Utilised in year |
(158) |
(65) |
(163) |
(386) |
|
At 31 March 2025 |
1,272 |
4,284 |
734 |
6,290 |
|
Liabilities due greater than 1 year |
1,116 |
4,284 |
659 |
6,059 |
|
Liabilities due less than 1 year |
156 |
0 |
75 |
231 |
|
At 31 March 2025 |
1,272 |
4,284 |
734 |
6,290 |
The unfunded pension liabilities represent liabilities in respect of pension commitments inherited by us from predecessor bodies and a former SEPA Chair. These liabilities are mainly payable to other authorities for the costs of former employee pensions and include one direct payment to a pensioner. Other provisions include cover for life assurance liability. As at 31 March 2025, Hymans Robertson estimated our liability to pay death in service benefits on all staff in post at the end of the year at £659k. The property decommissioning provision is the potential cost of reinstating leased properties to their original floorplan.
Note 14: Provision for liabilities and charges to March 2024 continued
|
Year to 31 March 2024 |
Unfunded pension liabilities £’000 |
Provision for leased property decommissioning £’000 |
Other provision £’000 |
Total provision for liabilities and charges £’000 |
|
Balance at 1 April 2023 |
1,503 |
3,967 |
410 |
5,880 |
|
Actuarial valuation changes |
55 |
0 |
206 |
261 |
|
Decommissioning revaluation |
0 |
439 |
0 |
439 |
|
New |
0 |
58 |
0 |
58 |
|
Utilised in year |
(156) |
(218) |
(28) |
(402) |
|
At 31 March 2024 |
1,402 |
4,246 |
588 |
6,236 |
|
Liabilities due greater than 1 year |
1,246 |
4,189 |
588 |
6,023 |
|
Liabilities due less than 1 year |
156 |
57 |
0 |
213 |
|
At 31 March 2024 |
1,402 |
4,246 |
588 |
6,236 |
Note 15: Financial commitments
There are capital commitments at 31 March 2025 of £0.1m (2023/24: £0.8m). The commitments at 31 March 2025 relate to Information Technology (IT) and scientific equipment.
|
|
At 31 March 2025 £’000 |
At 31 March 2024 £’000 |
|
Assets under construction |
89 |
803 |
|
|
89 |
803 |
Note 16: Leases
Right of use assets
At transition to International Financial Reporting Standards (IFRS) 16 on 1 April 2022, we recognised qualifying leases as right of use assets. In line with the requirements of the standard, the assets were initially measured at cost which equated to the discounted value of future lease payments less incentives. In line with the policy applied to our own buildings, Avison Young (Royal Institute of Chartered Surveyors), were asked to provide a right of use valuation as at 31 March 2025 based on market rental.
|
|
Property at 31 March 2025 £’000 |
Vehicles at 31 March 2025 £’000 |
Total at 31 March 2025 £’000 |
|
At 31 March 2024 |
5,335 |
235 |
5,570 |
|
Additions in year |
210 |
145 |
355 |
|
Disposals in year |
(166) |
0 |
(166) |
|
Revaluation 31 March 2025 |
74 |
0 |
74 |
|
At 31 March 2025 |
5,453 |
380 |
5,833 |
|
Depreciation |
|
|
|
|
At 31 March 2024 |
0 |
(17) |
(17) |
|
Charge for the year |
(1,073) |
(65) |
(1,138) |
|
Disposal |
30 |
0 |
30 |
|
Revaluation write back |
1,043 |
0 |
1,043 |
|
At 31 March 2025 |
0 |
(82) |
(82) |
|
Net book value 31 March 2025 |
5,453 |
298 |
5,751 |
|
Net book value 31 March 2024 |
5,335 |
218 |
5,553 |
Obligation under leases
On transition to IFRS 16, lease liabilities were measured at the discounted cost of the remaining lease payments at 1 April 2022. The discount rates applied to revaluations and new leases was 4.72% in line with treasury guidance.
|
|
Property at 31 March 2025 £’000 |
Vehicles at 31 March 2025 £’000 |
Total at 31 March 2025 £’000 |
Total at 31 March 2024 £’000 |
|
As at 31 March 2024 |
7,709 |
172 |
7,881 |
8,928 |
|
Additions |
210 |
145 |
355 |
549 |
|
Disposals |
(154) |
0 |
(154) |
(230) |
|
Payments |
(1,301) |
(101) |
(1,402) |
(1,451) |
|
Discount unwinding |
90 |
11 |
101 |
85 |
|
At 31 March 2025 |
6,554 |
227 |
6,781 |
7,881 |
|
Less than 1 year |
1,210 |
96 |
1,306 |
1,321 |
|
1 to 5 years |
3,354 |
131 |
3,485 |
4,540 |
|
Greater than 5 years |
1,990 |
0 |
1,990 |
2,020 |
|
|
6,554 |
227 |
6,781 |
7,881 |
Note 17: IAS 19 - Pension asset and liabilities
In accordance with International Accounting Standard 19 (IAS 19) Employee Benefits, we are required to account for the net pension position for the financial year ended 31 March 2025, as valued by Hymans Robertson, the actuaries to the Falkirk Council Pension Fund. The actuary’s estimate is based on standard financial and demographic assumptions.
|
Membership status |
Number at 31 March 2023 |
Total salaries/pensions at 31 March 2023 £’000 |
Average age at 31 March 2023 |
|
Actives |
1,184 |
46,903 |
52 |
|
Deferred pensioners |
864 |
3,953 |
52 |
|
Pensioners |
533 |
6,868 |
68 |
The membership data summarised in table 53 is at the most recent funding valuation date of 31 March 2023.
|
|
31 March 2025 (% per annum) |
31 March 2024 (% per annum) |
|
Pension increases |
2.75 |
2.75 |
|
Salary increases |
3.25 |
3.25 |
|
Discount rate |
5.80 |
4.85 |
|
Current or future pensioners
|
Average life expectancy Males |
Average life expectancy Females |
|
Current pensioners |
21.6 years |
23.6 years |
|
Future pensioners |
22.3 years |
25.2 years |
|
Membership status |
31 March 2025 |
31 March 2024 |
|
Assets |
482,495 |
458,831 |
|
Obligations |
342,154 |
387,812 |
|
Net asset/(liability) |
140,341 |
71,019 |
|
Effect of asset ceiling |
(140,341) |
(49,492) |
|
Net asset/(liability) |
0 |
21,527 |
The accounting standard IAS 19 restricts the amount of surplus that can be disclosed (the asset ceiling) where an employer’s assets are greater than its funded obligations. The net defined pension asset is limited to the lower of the surplus in the plan and the asset ceiling. The surplus as at 31st March 2025 was £140m (£71m prior year) however, as the asset ceiling has been calculated at £0, a net asset restriction of £140m (£49m prior year) has been applied. Resulting in a net asset position as at 31 March 2025 of £0m (prior year £21.5m).
A detailed breakdown of the movement in assets and liabilities is provided in table 57.
|
Pensions deficit |
Assets £'000 |
Obligations £'000 |
Impact of asset ceiling adjustment £’000 |
Net (liability) asset £'000 |
|
Fair value of employer assets |
458,831 |
0 |
0 |
458,831 |
|
Present value of funded liabilities |
0 |
387,812 |
0 |
(387,812) |
|
Net asset restriction applied |
0 |
0 |
(49,492) |
(49,492) |
|
Opening position at 31 March 2024 |
458,831 |
387,812 |
(49,492) |
21,527 |
|
Service cost |
|
|
|
|
|
Current service cost 25 |
0 |
11,168 |
0 |
(11,168) |
|
Past service cost |
0 |
1,210 |
0 |
(1,210) |
|
Total service cost |
0 |
12,378 |
0 |
(12,378) |
|
Net interest |
|
|
|
|
|
Interest income on plan assets |
22,371 |
0 |
0 |
22,371 |
|
Interest cost on defined benefit obligation |
0 |
18,960 |
0 |
(18,960) |
|
Interest on the effect of the asset ceiling |
0 |
0 |
(2,400) |
(2,400) |
|
Total net interest |
22,371 |
18,960 |
(2,400) |
1,011 |
|
Total defined benefit cost recognised in profit or (loss) |
22,371 |
31,338 |
(2,400) |
(11,367) |
|
Cash flows |
|
|
|
|
|
Plan participants' contributions |
3,728 |
3,728 |
0 |
0 |
|
Employer contributions |
11,082 |
0 |
0 |
11,082 |
|
Benefits paid |
(9,262) |
(9,262) |
0 |
0 |
|
Expected closing position |
486,750 |
413,616 |
(51,892) |
21,242 |
|
Re-measurements |
|
|
|
|
|
Change in demographic assumptions |
0 |
(67,692) |
0 |
67,692 |
|
Change in financial assumptions |
0 |
(629) |
0 |
629 |
|
Other experience |
0 |
(3,141) |
0 |
3,141 |
|
Return on assets excluding amounts included in net interest |
(4,255) |
0 |
0 |
(4,255) |
|
Changes in the effect of the asset ceiling |
0 |
0 |
(88,449) |
(88,449) |
|
Total re-measurements recognised in other comprehensive income |
(4,255) |
(71,462) |
(88,449) |
(21,242) |
|
Fair value of employer assets |
482,495 |
0 |
0 |
482,495 |
|
Present value of funded liabilities |
0 |
342,154 |
0 |
(342,154) |
|
Net asset restriction applied |
0 |
0 |
(140,341) |
(140,341) |
|
Expected closing position at 31 March 2025 |
482,495 |
342,154 |
(140,341) |
0 |
Footnote
[25]. The current service cost includes an allowance for administrative expenses of 0.3% of payroll. The employers’ fair value of plan asset is approximately 14% of the Fund’s total.
|
Category |
Quoted £’000 |
Unquoted £’000 |
Total £’000 |
% |
|
Equities |
260,189 |
1,654 |
261,843 |
54 |
|
Bonds |
81,333 |
0 |
81,333 |
17 |
|
Property |
|
26,112 |
26,112 |
5 |
|
Infrastructure |
|
70,454 |
70,454 |
15 |
|
Cash/other |
34,448 |
8,305 |
42,753 |
9 |
|
Totals |
375,970 |
106,525 |
482,495 |
100 |
|
Change in assumption |
Approximate % increase in employers’ liability |
Approximate monetary amount £’000 |
|
0.1% decrease in real discount rate |
2% |
6,822 |
|
0.1% increase in salary increase rate |
0% |
503 |
|
0.1% increase in pension increase rate |
2% |
6,504 |
|
1 year increase in member life expectancy |
4% |
13,686 |
|
|
Year to 31 March 2025 £’000 |
Year to 31 March 2024 £’000 |
|
Charge to operating costs |
|
|
|
Current service cost |
11,168 |
10,399 |
|
Past service cost |
1,210 |
0 |
|
Total service cost |
12,378 |
10,399 |
|
Employer contribution |
(11,082) |
(10,262) |
|
Added to staff costs (see note 4) |
1,296 |
137 |
|
Projected return on employers’ assets |
(21,360) |
(17,114) |
|
Actual return on employer assets |
22,371 |
17,189 |
|
Interest due (note 7) |
1,011 |
75 |
Further technical detail, including actuarial methodology and judgements, are detailed in the actuary’s report which is available on request.
Note 18: Grant in aid funding (GiA)
|
|
Year to 31 March 2025 £’000 |
Year to 31 March 2024 £’000 |
|
Cash GiA received to meet expenditure |
48,236 |
46,210 |
|
Total |
48,236 |
46,210 |
The amount of GiA provided to us is initially agreed by Ministers, as part of the Scottish budget process. This figure is then subject to adjustments as agreed with the sponsor division (Scottish Government Directorate for Environment and Forestry). Government Financial Reporting Manual instructs that GiA goes directly to the comprehensive net expenditure reserve in the statement of financial position, as financing.
|
|
Year to 31 March 2025 £’000 |
Year to 31 March 2024 £’000 |
|
Authorised grant in aid available (capital) |
6,497 |
6,200 |
|
Authorised grant in aid available (resource) |
43,126 |
40,248 |
|
Total cash that could be drawn down in year |
49,623 |
46,448 |
|
Cash drawn down in year |
(48,236) |
(46,210) |
|
Cash remaining with Scottish Government |
1,387 |
238 |
Note 19: Related party transactions
We are a non-departmental public body sponsored by the Scottish Government Directorate for Environment and Forestry. The Scottish Government is regarded as a related party. During the year, we have had various material transactions mainly in relation to the drawdown of grant in aid and grant funding to support the Water Environment Fund.
|
Funding received from Scottish Government |
Year to 31 March 2025 £’000 |
Year to 31 March 2024 £’000 |
|
Cash GiA received |
48,236 |
46,210 |
|
Total |
48,236 |
46,210 |
We have material transactions with other entities for which the Scottish Government is regarded as a parent body. These transactions primarily involve income received for licences; charges for the provision of services, rates, leased properties, and partnership contributions. Significant transactions include grants for river restoration projects: £1.3 million to Glasgow City Council Capelrig/Auldhouse, £0.6 million to Dundee City Council for Dighty Burn restoration, £0.6 million to Dumfries and Galloway Council for Black Stank Sanctuary, £0.35 million to Fife Council for the Back Burn, and £0.25 million to Aberdeen City Council for Den Burn. Additionally, we paid the Scottish Government £0.9 million to operate and maintain the Sir John Murray vessel and received £15.5 million in charging income from Scottish Water.
During the year, apart from their service contracts, no Board member or key manager has undertaken any material transactions with us. Board member register of interests are published on our website. Details of those we have determined to be a related party are listed in table 64 along with the registerable interest declared. We have reviewed financial transactions undertaken between SEPA and the related party, there were no material transactions. The majority related to payments received for annual subsistence fees in relation to environmental permits.
|
Board member |
Registerable interest |
Organisation or company |
|
C Evans |
Remuneration |
Accounts Commission for Scotland |
|
C Evans |
Remuneration |
Food Standards Scotland |
|
D Hunter |
Remuneration |
Beam Suntory UK Ltd |
|
L MacDonald |
Remuneration/allowance |
Scottish Social Services Council |
|
L McMillan |
Close family members |
AECOM Limited |
|
L McMillan |
Non-financial interests |
University of Glasgow |
|
L Tennant |
Close family members |
Bairds Malt Limited |
|
N Paterson |
Close family members |
Scottish Canals |
|
S Paterson |
Remuneration |
Scottish Enterprise |
|
S Paterson |
Shares and securities |
Royal Dutch Shell |
|
K Rosser |
Remuneration |
Disclosure Scotland |
|
K Rosser |
Remuneration |
Community Justice Scotland |
Note 20: Segmental analysis for 2024/25
International Financial Reporting Standard (IFRS) 8 requires operating segments to be identified on the basis of internal reports about components of SEPA that are regularly reviewed in order to allocate resources to the segment and to assess its performance. We report segmental information based on the organisations’ portfolios. Table 65 presents management information, produced on an IFRS basis, on income, expenditure and net operating cost as at 31 March 2025.
|
Data, Evidence & Innovation £’000 |
Chief Executive Office £’000 |
Governance, Performance & Engagement £’000 |
People, Workspaces & Development £’000 |
Finance, Modernisation & Digital £’000 |
Regulation, Business & Environment £’000 |
Corporate £’000 |
Total £’000 |
|
|
Income from contracts |
0 |
0 |
0 |
0 |
0 |
0 |
54,182 |
54,182 |
|
Other operating income |
0 |
0 |
0 |
0 |
0 |
0 |
1,208 |
1,208 |
|
Financing income |
0 |
0 |
0 |
0 |
0 |
0 |
1,152 |
1,152 |
|
Total income |
0 |
0 |
0 |
0 |
0 |
0 |
56,542 |
56,542 |
|
Staff costs |
23,448 |
289 |
10,278 |
3,084 |
4,595 |
29,589 |
1,829 |
73,112 |
|
Other operating costs |
6,252 |
12 |
1,500 |
4,985 |
5,089 |
7,246 |
575 |
25,659 |
|
Financing expense |
0 |
0 |
0 |
0 |
0 |
0 |
101 |
101 |
|
Depreciation, impairment & disposal of assets |
0 |
0 |
0 |
0 |
0 |
0 |
6,066 |
6,066 |
|
Total expenditure |
29,700 |
301 |
11,778 |
8,069 |
9,684 |
36,835 |
8,571 |
104,938 |
|
Net expenditure |
(29,700) |
(301) |
(11,778) |
(8,069) |
(9,684) |
(36,835) |
47,971 |
(48,396) |
[26] Note this reflects the portfolio structures as at 31 March 2025.
Documents
- Annual Report and Accounts 2024/25 (PDF, 9.5 MB)
- Highlights of 2024/25 (PDF, 683 kB)
Next page: Appendix 1 - Accounts direction by the Scottish Ministers