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← West College Scotland

2025-07-31-accounts

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CONTENTS

PERFORMANCE REPORT

1. Principal and Chief Executive’s Statement on Performance 4
2. Finance 5
3. Legal Status 6
4. Business Model and OperatingEnvironment 6
5. Vision and Values 7
6. Strategic Priorities 8
7. KeyIssues and Risks 9
8. Performance Summaryand Overview - 14
9. Performance Analysis 15
10. Financial Review Summary 16
11. Adjusted OperatingPosition(AOP) 18
12. Taxation Status 19
13. TreasuryManagement 19
14. Supplier Payment Policy 19
15. SustainabilityReport 20
16. Infrastructure 22
17. GoingConcern 23
18. Professional Advisors 23
19. Equality, Diversity and Inclusion 23
ACCOUNTABILITY REPORT
20. Director’s Report 25
21. Statement of Board of Management’s Responsibilities 28
22. Governance Statement 30
23. Risk Management and Internal Control 32
24. Statement on Internal Control 33
25. GoingConcern 34
26. Remuneration and Staff Report 36
27. Compensation for Loss of Office 39
28. Facilitytime 40
29. Our People 40
30. Modern SlaveryAnd Human Trafficking 41
31. Independent Auditor’s Report 42

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FINANCIAL STATEMENTS

Statement of Comprehensive Income and Expenditure 45
Statement of Change in Reserves 46
Balance Sheet 47
Statement of Cashflows 48
NOTES TO THE ACCOUNTS
1 Statement of Principal AccountingPolicies 49
2. Tuition Fees and Education Contracts 53
3. FundingBodyGrants 53
4. Other Grant Income 53
5. Other OperatingIncome 53
6. Investment Income 53
7. Staff Costs 54
8. Senior Post-Holders' Emoluments 56
9. Other OperatingExpenses 56
10. Interest Payable 57
11. Taxation 57
12. Tangible Fixed Assets 57
13. Trade And Other Debtors 58
14. Creditors: Amounts FallingDue Within One Year 58
15. Creditors: Amounts FallingDue After One Year 58
16. Provisions 58
17. Analysis Of Borrowings Of The College 59
18. Funded Pension Asset 59
19. Unfunded Pension Provision 59
20. Analysis Of Net Cash /(Debt) 60
21. Financial Commitments 60
22. Capital Commitments 60
23. Related PartyTransactions 60
24. Pension Schemes 61
25. FE BursaryAnd Other Student Support Funds 66
26. Childcare Funds 67
27. Contingent Liabilities And Contingent Assets 67
28. Post Balance Sheet Events 67
29. Impact Of Depreciation Budget On Statement Of Comprehensive Income 67
30. Adjusted Operating Position (AOP) 67

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It contains a statement from the new Principal, Anne Campbell, who took up post on 7 July 2025 following the retirement of Liz Connolly. It also provides background to our purpose, operating environment, business model and objectives, and discusses the principal risks that the College faces.

1. PRINCIPAL AND CHIEF EXECUTIVE’S STATEMENT ON PERFORMANCE

As one of the largest colleges of further and higher education in Scotland, West College Scotland is a critical skills partner with the ambition, talent, and assets to shape the future delivery of education and skills in the West of Scotland and beyond.

At West College Scotland, we transform people’s lives. We provide our learners with the knowledge and skills that enable them to access work, to reskill and change career or to upskill. Our learners are also equipped with the knowledge and skills that will enhance their lives and enable them to make a meaningful and valuable contribution to society. West College Scotland’s expert and experienced team is dedicated to giving our 5,000 full-time and 12,000 part-time fundable students innovative, high-quality exceptional experiences. We offer a wide range of inspirational learning experiences from essential skills to graduate degree programmes.

Thanks to the efforts of our students and staff, the College continues to improve, develop and strengthen. We continue to adapt and improve our portfolio and our delivery of learning and teaching, to meet the needs of our learners, our wider stakeholders, and the economy. Our relationships with schools, universities and businesses continue to grow, building great partnerships and opportunities that will serve us well in the future. Our adaptability, agility and resilience continue to shine through. A significant focus is providing a wide range of appropriate support services to our students to empower them to flourish.

The College is operating in an extremely challenging operating environment. It will work in partnership with key stakeholders to mitigate these financial challenges and seek to exploit additional opportunities to ensure the sustainability of our services.

Amongst other things we will:

West College Scotland is committed to being student-centred in all that we do. Our aim is to transform the lives of our students through inspirational learning and teaching, enabling them to develop their full potential with life enhancing skills, knowledge, experience, and resilience that will shape their future success. In all of this, we are acutely aware of the need to exercise sound stewardship and achieve continuous improvement and value for money across all parts of the College.

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2. FINANCE

The College’s financial objectives are to plan and manage their activities to remain sustainable and financially viable. The College must respond to the economic needs of the region; ensuring resources are allocated to areas which meet the needs of learners and the economy. In 202425, with the downward pressure on core public sources, commercial income and financing resulted in the College generating an operating deficit of £0.620million,

The College’s attention is now turning to the financial outlook for 2025-26 and beyond. Robust financial planning remains a key priority in this time of challenge and uncertainty for the sector. Due to reductions in overall funding from the Scottish Funding Council (SFC) the College will be required to make significant savings over the next several years, however the College will undertake to do this while endeavouring to ensure:

In preparing the financial outlook several different scenarios have been considered; the main sources of pressure are likely to be from:

Given the continued volatility in college finances and the challenging fiscal outlook, it is evident that substantial savings will be required in the coming years to achieve a balanced budget. To date, the College has addressed these pressures through enhanced productivity measures, cost efficiencies, and voluntary severance. However, it is recognised that these approaches are no longer sufficient to deliver the scale of savings required.

Consequently, the College recognises the need to implement transformational changes to its delivery model to ensure long-term sustainability and financial resilience. In response, it is progressing a Transformational Plan, currently in the early stages of development through the SOFT programme. The College has formally engaged with the College Transformation Framework, led by the Scottish Funding Council (SFC), signalling a clear commitment to strategic service redesign and institutional reform. These initiatives are essential to achieving operational efficiencies, enhancing value for money, and restoring financial equilibrium over the medium to long term. To enable this transition effectively, significant upfront investment will be required. As such, support from the Scottish Government, both financial and strategic, will be critical to the successful delivery of these reforms and the College’s ability to meet future challenges.

The Leadership Team continues to work with the Board of Management and its committees to review financial information and key performance to ensure proper governance across the college.

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It contains a statement from the new Principal, Anne Campbell, who took up post on 7 July 2025 following the retirement of Liz Connolly. It also provides background to our purpose, operating environment, business model and objectives, and discusses the principal risks that the College faces.

3. LEGAL STATUS

The College is incorporated under the Further and Higher Education (Scotland) Act 1992 and is funded directly by the Scottish Funding Council. The College is a charity (Scottish charity number SC021185) registered with the Office of the Scottish Charity Regulator and is recognised by HM Revenue and Customs as a charity for the purposed of Section 505, Income and Corporation Taxes Act 1988. As such, the College is exempt from corporation tax on its charitable activities. The College receives no similar exemption in respect of Value Added Tax.

4. BUSINESS MODEL AND OPERATING ENVIRONMENT

The College actively aligns its strategic priorities with the Scottish Government’s national policy drivers, ensuring its contribution to key social, economic, and educational outcomes. In doing so, it works collaboratively with regional partners and local businesses to enhance opportunities for individuals and communities across the West of Scotland.

This includes supporting young people in their transition to employment or further study, fostering pathways into higher education, and delivering targeted programmes that respond to the evolving needs of the labour market. The College also plays a vital role in strengthening the regional economy by offering professional development and workforce upskilling opportunities that help businesses remain competitive and resilient.

Through this integrated approach, the College continues to position itself as a responsive and forward-looking institution, committed to inclusive growth and lifelong learning.

In 2024-25 the College enrolled around 17,979 (2023-24: 17,000) fundable students, with approximate 27% (2023-24: 29%) studying full-time and the remaining 73% (2023-24: 71%) studying part-time. The College employed on average 728 FTE (2023-24: 739) Staff across the range of its business activities.

Located in the heart of the West of Scotland, the College delivers a broad spectrum of education and training opportunities designed to meet the evolving needs of individuals, communities, and employers across the region. Its primary College-owned campuses are situated in Clydebank, Greenock (across two sites), and Paisley, complemented by two leased community-based training centres that extend its reach and accessibility.

The College’s Infrastructure Strategy underscores a commitment to maintaining a strong regional presence while tailoring the educational offer at each campus to reflect the distinct needs of local learners and industry partners. This strategic approach ensures that each site contributes uniquely to the College’s mission, fostering innovation, inclusion, and economic growth.

A key priority within the Infrastructure Strategy is the ongoing enhancement of college-owned facilities. These improvements are aimed at creating flexible, future-ready learning environments that support the ambitions of students, empower staff, and respond to the expectations of stakeholders in a rapidly changing educational landscape.

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5. VISION AND VALUES

Work is underway on the College’s Corporate Strategy, which is scheduled for publication and finalisation in January 2026 along with three enabling strategies, Learning, Teaching, and Student Experience Strategy, Finance and Infrastructure Strategy and People Strategy.

As part of this process, the College has held a series of workshops and consultations to explore our current and potential Vision and Values.

OUR VALUES

Our values are our guiding principles that shape our culture and underpin our vision.

THE OUTCOMES TO DATE ARE SET OUT BELOW:

OUR VISION

Placing the learning, welfare, and wellbeing of our students at the heart of everything we do.

Behaving in a manner that attracts people’s trust by holding ourselves accountable, embracing our responsibilities and being aware of the consequences of our actions. It means being honest, considerate of ourselves and those around us, while displaying integrity.

Ensuring our college community behaves with openness and is mindful of how actions impact those around us and the environments we live and work in. It means accepting people as they are and for who they are and treating all people the same - regardless of background, race, religion, gender, sexual orientation, age or ability.

Choosing to undertake change and development to create value for our students, staff and partners. It means acting without constraint of what has been done in the past or by what others are doing today.

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6. STRATEGIC PRIORITIES

Guiding expectations for impact, accountability, and improvement across Scotland’s tertiary education system Guiding expectations for impact, accountability, and improvement across Scotland’s tertiary education system Guiding expectations for impact, accountability, and improvement across Scotland’s tertiary education system Guiding expectations for impact, accountability, and improvement across Scotland’s tertiary education system Guiding expectations for impact, accountability, and improvement across Scotland’s tertiary education system Guiding expectations for impact, accountability, and improvement across Scotland’s tertiary education system Guiding expectations for impact, accountability, and improvement across Scotland’s tertiary education system Guiding expectations for impact, accountability, and improvement across Scotland’s tertiary education system
Unlocking Potential. Enabling Success.
Student-Centred Trust Respect Innovation
Our Students
Commitment to
delivering a high-quality,
inclusive student
experience through a
responsive curriculum,
personalised learning,
embedded transferable
skills, excellent
wellbeing support, and
strong student voice
engagement.		 Our People
We will build
organisational capacity
and optimise our
workforce by developing
leadership, supporting
staff to grow and adapt,
embracing flexibility
and technology, and
nurturing wellbeing.
All whilst nurturing
connected and one
college culture.		 Our Partners
We will work
collaboratively
with employers and
regional agencies to
shape a responsive
curriculum, lead on
future skills planning,
and contribute to
cross-institutional
partnerships that
support economic and
workforce development.		 Our Sustainability
We are committed to
long-term financial
sustainability through
effective resource
management, while
also playing a key
role in addressing the
challenges of the green
and blue economy
and protecting natural
resources.		 Our Future
We aim for financial
stabilisation but our
long-term ambition is
to be sector-leading,
offer an exceptional
student experience,
enabled by a skilled,
engaged workforce and
driven by continuous
improvement and strong
leadership.
Learning, Teaching and Student Engagement Strategy
Finance and Infrastructure Strategy
People Strategy
Employer and Stakeholder Engagement Strategy
Supporting Frameworks
My Conversations FAST Goals

Image above shows our strategic strategy map

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7. KEY ISSUES AND RISKS

The Board of Management has an established Strategic Risk Register, which considers matters which may impact on the College’s ability to deliver on its strategic priorities. Risks and mitigating factors are kept under review by the Executive and Senior Management Team and reported to the Board of Management. The Audit & Risk Committee undertakes the oversight function of the College risk management process.

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RISK
RISK DESCRIPTION RISK MITIGATION/CONTROLS IN PLACE
SCORE
Financial Sustainability 25 1. Developed 3-year budget model identifying the gap between
income and expenditure.
There is a significant risk that insufficient funding
2. Engage with SFC on a regular basis to ensure College funding
from the Scottish Funding Council (SFC) will lead to a
requirements are clear - the impact on current funding
reduction in educational services and hinder our capacity
allocation and the actions the College is taking to balance the
to implement strategic initiatives and sustain current
budget.
operational performance levels.
3. Work with the Board of Management and College Committees
to strengthen financial approach to ensure sustainability of
the College in short to medium term.
4. Provide regular financial updates to the Board of Management
and College Committees.
5. Implement the Shaping Our Future Together (SOFT) initiatives
identified to date, ensuring that they are tracked and
monitored.
6. Engage proactively with the FDN group, highlighting the
sector wide 5-year position that has been collated.
CIVICA - Implementation 25 1. A technical lead will be established with clear linkage into
SLT and Board and project and focus teams are in place
Over the past year, the College has implemented a new to oversee the rest of the implementation and monitor
College Management System CIVICA. There is a risk that progress.
the system will not deliver the required outcome.
2. Regular meetings with CIVICA representatives are held
to address technical and functional issues promptly this
includes project, development and senior leadership.
3. Any further rollout is being staged to allow for testing,
feedback, and iterative improvement, reducing the risk of
widespread system failure.
4. Learning sessions and guidance materials are being
developed and provided to ensure staff understand how
to use the system effectively.
5. Ongoing checks are conducted to ensure data accuracy
and reliability within the system.
6. Channels have been established for users to report issues
and present ideas for improvement, which are tracked and
resolved in a systematic manner.
CIVICA - Operation of the Contract 25 1. Regular engagement with curriculum and support area
leads to gather operational insights and ensure alignment
Incomplete embedding of the CIVICA system may with system needs.
compromise operational efficiency, reporting accuracy,
2. Initial process documentation exercises have been
and strategic decision-making.
undertaken to inform future development.
3. Collaborative working between key user groups supports
knowledge sharing and operational coherence.
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7. KEY ISSUES AND RISKS

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RISK
RISK DESCRIPTION RISK MITIGATION/CONTROLS IN PLACE
SCORE
Cash Flow 25 1. Cash free days is calculated as part of the monthly
management accounts and reported to SMT and Board.
There is a significant risk that insufficient funding from
2. Aged debtors are monitored and chased from the credit
the Scottish Funding Council (SFC) will adversely impact
control team.
West College Scotland›s cash position. This could result
in the College lacking the necessary liquidity to sustain 3. Supplier payments are also reviewed, ensuring discounts are
day-to-day operations. taken and payments are made to the agreed terms.
4. Engage with the SFC through the preparation of the 3-year
budget submissions on the cash flow projections, clearly
communicating when cash is likely to run out and ensure all
funding options and timings are considered.
5. Net Cash position forms part of the performance indicators
now shared with Committees and Boards.
Cyber Security 25 1. Fully embed the Scottish Government Cyber Essentials
Framework within the College.
There is a risk that WCS IT estate is at risk due to a
2. Consideration of strength of key general computer
failure to fully and continually mitigate the risk of Cyber-
controls addressing the impact of unauthorised entry at
attack which will result in a failure of the College to
each level of IT infrastructure.
continue normal operation on a day-to-day basis for all
staff and students. 3. Regular penetration testing of all entry points to WCS
infrastructure and of core College applications to ensure
vulnerabilities are assessed and addressed across full
infrastructure.
4. Disaster Recovery Plan and Cyber Incident Response Plan
in place
5. Immutable backups are held off-site (in cloud)
6. MFA enforced for web use of M365
7. Cyber Security Manager in place
Change Management 25 1. The Organisational Change Policy is in place, ensuring all
change is managed inclusively, transparently, and with a
There is a risk that as the College implements changes people-first approach.
through the SOFT and College Transformation
2. Early staff engagement has taken place through
Framework there will be resistance to organisational,
structured sessions (CQLs, Operational Managers, SLT,
or process change may lead to low adoption, delays, or
and Heads) to communicate reasons, benefits, and need
failure to achieve intended outcomes.
for change
3. Union consultation is embedded in the process, with clear
articulation of change rationale and all policies subject to
formal consultation.
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7. KEY ISSUES AND RISKS

RISK MITIGATION/CONTROLS IN PLACE

Job Evaluation

The withdrawal of SFC-held funding for the national job evaluation exercise, and its return to the Scottish Government, has created uncertainty over the College’s ability to recognise this income. While the Government has confirmed it will meet the obligation, it is no longer reflected in the College’s financial statements. The national job evaluation process, ongoing since 2018 and requiring retrospective application, continues to face delays and lack of outcomes. This increases the risk of:

  1. The national project is supported through CES governance arrangements.

  2. The College updates support staff as appropriate on progress in relation to job evaluation project.

  3. The integrity of the current support staff organisational structure is maintained through the College›s own job evaluation tool to safeguard against future equal pay grievances

  4. WCS is playing a fundamental part in the sectors initiation of a Technical Accounting Group. This group will be directly working with the FDN, SFC and Employers Scotland to ensure that any updates in the technical accounting treatments are understood and discussed appropriately. The treatment of Job Evaluation will be a material area of discussion and focus.

  5. Destabilisation of existing pay and grading structures

  6. Employee relations issues and staff grievances due to lack of progress

  7. The College having to resource and deliver a local job evaluation and pay/grading project of significant scale

Maintaining Estate

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7. KEY ISSUES AND RISKS

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RISK
RISK DESCRIPTION RISK MITIGATION/CONTROLS IN PLACE
SCORE
Meeting evolving changes to regional, national 20 1. Curriculum Review and ongoing adaptations, ensure that
and student needs the courses on offer and the delivery modes for courses are
relevant to student needs and demand.
There is a risk that course provision does not align with
2. Requirement to attract students to the College through many
regional, national and/or student needs resulting in the
channels
College failing to deliver the required student credit and
income targets. • - Advertising
• - Schools engagement programme
• - Maintaining and growing the apprentice programme
3. Development of website and student streamlined application
process
4. Analysis of trends, student feedback and destinations through
the Portfolio Review and Curriculum Review processes.
Reputational Risk 16 1. For any change, having a clear communications plan in
place which articulates at a strategic level the reason
There is a risk that the College is looked upon negatively for change - the opportunity for improvement through
by students and staff as the result of changes the change, the benefit it brings, what this is and why the
College makes to balance future years budgets leading College is taking this approach.
to a fall in student numbers and staff being disengaged
2. Whilst change occurs there is a still a significant amount
in their role.
of good work carried out each day furthering students’
positive destinations and making the College the choice
for students and staff.
3. Agree common messaging for all managers on the change
message ensuring underpinned with clear visibility of
plans which people can buy in to.
4. Regularly test how people are feeling around change
through focused engagement so action can be taken in
a timely manner to address concerns raised by students
and staff.
Workload Management 16 1. For any change occurring from staff turnover, having a
clear plan in place that allows the re-alignment of staff
Over the last number of years the College has and workload to be carried out in a timely manner.
undertaken VS schemes as a method of managing staff
2. Monitor the Establishment report and ensure changes
costs and the efficiency of headcount. There is a risk
through VS and natural turnover are being reviewed.
that if when re-aligning the headcount, the reduction
in resource has negatively impacted teams leading to 3. Whilst change occurs there is still a significant amount of
staff being disengaged in their role and an inefficient good work carried out each day making the College the
operating structure. choice for students and staff.
4. Ensure staff wellbeing remains a priority. Regularly test
how people are feeling through focused engagement
so action can be taken in a timely manner to address
concerns raised by staff.
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7. KEY ISSUES AND RISKS

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RISK
RISK DESCRIPTION RISK MITIGATION/CONTROLS IN PLACE
SCORE
Alternative Income Generation 16 1. Sector Operation Planning combined with Curriculum
Development Planning and Digital Strategy used to identify
Challenges in generating consistent levels of alternative potential opportunities for activity and associated income
income or to grow alternative income streams due to generation.
impact of external or internal factors, this may impact
2. Annual activity and income plans generated in partnership
on college objectives and delivery plans.
with delivery Sectors and Departments taking cognisance of
local, regional and national opportunities and changes.
3. Commercial Income Group meet monthly to review income v
target, project/sales pipeline to provide forecasts and address
any challenges in delivering alternative income.
4. Reporting and monitoring on activity and progress is subject to
review by Learning, Teaching and Quality Committee.
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||||| |---|---|---|---| |RDEL/CDEL|16|1.|Engage with SFC and SG to highlight the risks/ outcomes| |associated with the change in policy.| |There is a risk to the College arising from changes in| |2.|Engage with SFC and SG to gain clarity around the| |the Scottish Funding Council (SFC) policy on capital| |reporting changes required and the support available.| |and revenue departmental expenditure limits. As of| |September 2025, there is no formal confirmation that|3.|Ensure mitigating plans are in place that will reduce the| |the RDEL/CDEL accounting treatment will continue|financial impact resulting from the changing practice.| |beyond April 2025, creating uncertainty that could| |4.|WCS is playing a fundamental part in the sectors| |directly impact the College’s year-end financial position.| |initiation of a Technical Accounting Group. This group| |will be directly working with the FDN, SFC and Employers| |Scotland to ensure that any updates in the technical| |accounting treatments are understood and discussed| |appropriately. The treatment of RDEL/ CDEL will be a| |material area of discussion and focus.|

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To effectively manage and mitigate risks across all campuses, a comprehensive suite of measures has been implemented. These include the development and execution of a strategic IT framework, regular internal audits, and rigorous systems testing protocols. Physical security has been enhanced through the deployment of preventative technologies, while inter campus connectivity benefits from a resilient architectural design. Threat levels are continuously monitored in collaboration with external partners, and data integrity is safeguarded using secure, cloudbased repositories. Additionally, targeted staff training ensures that personnel remain informed and equipped to uphold best practices in risk management.

The College’s overall risk management process and internal control review are noted in detail within the Corporate Governance Statement.

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8. PERFORMANCE SUMMARY AND OVERVIEW

The College has developed a range of performance measures that report progress to the Board and the Senior Management Team regularly throughout each year. The College has 4 key areas of focus that takes the form of a balance score card approach:

Actual
Target
Difference
Learning and Teaching and the Student Experience
Retention:
FE Full Time
80.4%
76%
4.4%
FE Part Time
94.1%
94%
0.1%
HE Full Time
73.9%
78%
-4.1%
HE Part Time
96.9%
95%
1.9%
Attainment
FE Full Time
67.5%
68%
-0.5%
FE Part Time
66.4%
75%
-7.5%
HE Full Time
65.6%
65%
0.6%
HE Part Time
72.3%
73%
-0.7%
SFC Student Satisfaction Engagement Survey
95%
96%
Employers Business and Stakeholders
Commercial Income
£2,399,514
£2,489,641
Apprenticeship Contracts
Contracted
293
348
Non-Contracted
147
People
Vacancies
40.61
35.95
4.66
Staff Absence rate
4%
Staff satisfaction
3.03
5.00
-1.97
Business Effectiveness
Adjusted Operating Position
-£612,000
-£476,000
-£136,000
Cash Position
£987,000
£2,500,000
-£1,513,000
Credits
141,230
140,450
780

The target KPIs will be reviewed as part of the College 2025-26 annual planning cycle and will be updated accordingly along with the new Corporate Strategy.

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9. PERFORMANCE ANALYSIS

For the last few years, the Scottish Funding Council have required an in-year Regional Outcome Agreement rather than a forward focused agreement. The Regional Outcome Agreement has been signed off by SFC. This makes up the basis of the College’s activity in terms of the volume and subject area of credit activity agreed with SFC, along with outlining the College’s role within the key priority areas which are set by Scottish Government. The College also develops a financial plan annually including alternative income, commercial delivery and SFC- funded activity.

Overall activity is managed by the Senior Leadership Team at fortnightly meetings where student activity targets are monitored along with performance against budget and achievement of planned activities for the year. High level data sets are now reported through the Student Engagement and Quality Enhancement Committee on a quarterly basis. Financial performance is also monitored quarterly by both the Corporate Development Committee and the Board of Management. The Board of Management are informed of the progress made towards key targets and performance, through individual business reports and the Chief Executive’s Report.

Key points to note:

The College continues to face significant financial pressures, compounded by broader sector-wide uncertainty. Considering sustained reductions in core funding allocations from the Scottish Funding Council (SFC), the College is required to deliver substantial cost savings over the coming years to maintain financial viability.

To proactively address these challenges, the College has initiated a strategic transformation programme - SOFT - designed to drive efficiencies, modernise service delivery, and support long-term sustainability. In parallel, the College has formally enrolled in the College Transformation Framework, led by the SFC, reinforcing its commitment to comprehensive institutional reform and strategic service These initiatives represent a critical shift in operational approach and signal the College’s intent to align with national priorities while safeguarding educational quality and access.

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10. FINANCIAL REVIEW SUMMARY

These financial statements have been prepared in accordance with the Statement of Recommended Practice: Accounting for Further and Higher Education 2019 Edition; the Financial Reporting Standards FRS 102 and the Government Financial Reporting Manual (FReM) issued by HM Treasury and in accordance with applicable Accounting Standards. They conform to the SFC Accounts Direction and other guidance issued by the Scottish Funding Council.

The challenges identified in the Audit Scotland Report ‘Scotland’s colleges 2024’ are pertinent and highlights the current issues facing the Sector that will continue to have an impact on the financial position of the College.

The Statement of Comprehensive Income and Expenditure reports a deficit of £2.8m for the year, compared to a deficit of £3.7 million in 2023/24, as well as material one-off or distorting items required under the Statement of Recommended Practice (SORP) or other factors beyond the College’s control, and excluding the unrealised revaluation surplus of £2.6 million relating to land and buildings, Pension revaluation of £1.9million the College recorded an underlying deficit on continuing operations of £7.3m (2023-24: £9.5m deficit). The Scottish Funding Council (SFC) Accounts Direction for 2024/25 confirms that there is no change to the accounting treatment for the funding and costs associated with the support staff and middle management job evaluation exercise. Although the administration of this funding was transferred from SFC to the Scottish Government during 2023/24, the guidance continues to require institutions to recognise a provision for the associated costs. The 2024/25 Accounts Direction reaffirms this position, maintaining the existing accounting approach.

While the College acknowledges this is a technical adjustment, it is important to note that the Scottish Government has confirmed its ongoing responsibility for meeting the funding commitments when the job evaluation process is concluded. However, due to the absence of corresponding income recognition, this treatment has resulted in an additional cost of £0.935 million in year. This has been included in the Statement of Comprehensive Income (SoCI) for 2024/25, bringing the total provision on the Balance sheet recognised to £6.4 million.

This expenditure movement has been reflected in the adjusted operating position (refer to Page 71), and it has adversely impacted both the income and expenditure reserve and the reported deficit on continuing operations after tax. Until the funding is formally received and meets the criteria for income recognition, the financial statements will continue to show a liability without the matching accrued income.

The Statement of Comprehensive Income (SOCI) outlines the College’s financial performance for the reporting period in accordance with the Statement of Recommended Practice (SORP). However, the College’s principal financial indicator is the adjusted operating position, which is designed to reflect the underlying operational performance. This metric excludes material one-off or distorting items required by SORP, as well as other factors beyond the College’s direct control, providing a clearer view of core financial sustainability. For 2024-25 the adjusted AOP reported an operating deficit of £0.620m compared to a £0.1m surplus in the prior year.

During the year, the College implemented two additional voluntary severance programmes. Under the terms of the scheme, staff departures are expected to be self-financing, with settlement payments capped at a maximum of six months’ salary. Concurrently, the College has continued to pursue opportunities to diversify and enhance its income streams, while maintaining a disciplined approach to cost management across both staffing and non-staffing expenditure.

During 2024/25, the College benefitted from a continued reduction in the employer contribution rate to the Strathclyde Pension Fund, which remains payable at 6.5% for both 2024/25 and up until March 2026. This temporary reduction has provided short-term financial relief and has been factored into current year budgeting. However, the rate is scheduled to rise significantly to 17.5% in 2026, and this anticipated increase has been incorporated into the College’s medium-term financial planning to ensure sustainability and mitigate future cost pressures. Income at £60.2m shows an increase of £6.3m in comparison to 2023/24. The main movements in year are outlined below:

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10. FINANCIAL REVIEW SUMMARY

Expenditure

Expenditure at £67.6m, which is £4.3m higher in comparison to 2023-24. The main movements are listed below:

National Insurance Contributions: Effective April 2025, the employer rate increased from 13.8% to 15%, resulting in an estimated additional cost of £0.300m.

During the year, the College incurred significant expenditure on estates maintenance projects, an overall increase of £2.2m on the prior year, with investment directed toward key priority areas. This included £1.1 million for the replacement of windows at the Oakshaw building within the Paisley campus and £1.9 million for internal structural works at the work block in the Finnart St campus. In addition to planned capital works, reactive maintenance costs, necessary for the ongoing upkeep of ageing campus infrastructure increased by £0.230 million compared to the prior year.

Balance Sheet

As at 31 July 2025, the College’s fixed assets totalled £121,280 million, representing a net decrease of £3.6 million compared to the prior year. This reduction primarily reflects depreciation charges of £6.2 million incurred during the year. No capital expenditure was recognised in 2024/25, as no new assets were acquired or capitalised. However, an indexation exercise was undertaken, resulting in a net uplift of £2.6 million to the College’s asset base. This revaluation has been reflected in the financial statements and contributes to the overall carrying value of fixed assets, despite the absence of new capital investment.

Net current liabilities increased by £1.4m in year. On 31 July 2025, the College had an accumulated surplus of £2.60m (2023-24: £3.3m surplus) on its Income and Expenditure Reserve.

Cash Flow

The number of free days cash at the 31 July 2025 is 6.5 days. The year-end cash balance remains high due to the ongoing costs still to be paid, RACC, Carpark costs, Paisley front door and creditors’ payments. This matter is further discussed in the Treasury Management section.

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11. ADJUSTED OPERATING POSITION (AOP)

The Statement of Comprehensive Income (SOCI) presents the financial performance during the accounting period in accordance with SORP. The AOP is intended to reflect the underlying operating performance after allowing for material one-off or distorting items required by the SORP or other items out with the control of the College. The AOP is therefore designed to smooth any volatility in reported results arising from FRS102 and to recognise that some of the reported costs do not have an immediate cash impact on the College. The College’s Underlying Operating Position can be illustrated as:

Note 2024-25 2023-24
£’m £’m
DEFICIT BEFORE OTHER GAINS AND LOSSES
ADD BACK:		 (7.35) (9.5)
Depreciation net of deferred capital grant releases
1
Pension adjustment – Net service costs
2
Pension adjustment – Net interest costs
3
Cost of middle management job evaluation exercise not matched by
revenue
4
DEDUCT:		 4.8
0.0
0.4
0.94		 4.3
0.0
0.4
5.5
Pension adjustment – Net interest receivable
5
Pension adjustment – Net service income
2
Revenue funding allocated to loan repayments
6		 0.0
0.9
(0.31)		 0.0
(0.2)
(0.4)
ADJUSTED OPERATING DEFICIT (0.62) 0.1

Commentary on adjusting items:

Note 1:

Depreciation is a non-cash item and is therefore excluded when calculating the adjusted cash operating position.

Note 2:

The adjustments to the pensions charge represent the non-cash element of service cost (i.e., including the present value of projected benefits resulting from employee service in the current year) less cash contributions paid.

Note 3:

The net interest cost is the interest accumulated on pension liability, and this is offset against the current year’s interest earned on pension assets. This is a non-cash adjustment.

Note 4:

The accrued/provided costs of middle management/support staff job evaluation not matched by revenue to date.

Note 5:

The increase in the discount rate used in assessing the year-end pension asset/liability. There is no pension interest receivable this year. This is a non-cash adjusting item.

Note 6:

The loans payments and the unfunded pensions payments are not reflected in the SOCI therefore this amount is adjusted.

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12. TAXATION STATUS

The College has been entered into the Scottish Charity Register, and is entitled, in accordance with section 13(1) of the Charities and Trustee Investment (Scotland) Act 2005, to refer to itself as a Charity registered in Scotland. The College is recognised by HM Revenue and Customs as a charity for the purposes of section 505, Income and Corporation Taxes Act 1988 and is exempt from corporation tax from its charitable activities. The College receives no similar exemption in respect of Value Added Tax.

13. TREASURY MANAGEMENT

Treasury management at the College encompasses the strategic oversight of cash flow operations, banking relationships, and associated financial risks, with a focus on achieving optimal returns within a controlled risk environment. These activities are governed by the College’s Financial Regulations, which align with the Scottish Funding Council (SFC) Financial Memorandum and ensure compliance across all treasury and borrowing arrangements.

Following the reclassification of the College on 1 April 2014, it is subject to enhanced regulatory controls and is prohibited from entering into new loan agreements without prior authorisation from the SFC.

As of 31 July 2025, the College reported a cash balance of £11.1 million. This figure is notably higher than typically expected at year-end, primarily due to the carry-forward of several significant balances from 2024/25. These funds are earmarked for payment during the 2025/26 financial year and include:

This means that the underlying year-end cash balance was £6.0m, which the College contends is sufficient for working capital requirements.

14. SUPPLIER PAYMENT POLICY

The College complies with the CBI Prompt Payment Code and has a policy of paying its suppliers within 30 days of invoice unless the invoice is contested. All disputes are handled as quickly as possible. Supplier payment runs are completed fortnightly, paying all invoices due and those falling due in the next 2 weeks to ensure all payments are made within 30 days unless the invoice is contested, or alternative terms have been arranged. Suppliers’ invoices were paid within 27 days in the year to 31 July 2025 (2023-24: 27 days). The College did not make any late interest payments during the year.

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15. SUSTAINABILITY REPORT

Sustainability Framework Progress Report – 2024/25

The College’s Sustainability Framework sets out a clear and ambitious vision, with a commitment to achieving Net Zero carbon emissions by 2040. Over the course of 2024/25, the College has continued to embed the objectives outlined in the overarching framework and implement the associated Sustainability Action Plan.

While meaningful progress has been made, it is recognised, consistent with the wider public sector that sustaining and accelerating this trajectory will require increased investment and support from the Scottish Government.

Progress Achieved During 2024/25

The College remains committed to environmental responsibility and sustainability, integrating these priorities into its strategic decisionmaking processes. As a public body, the College supports the national outcome to “value and enjoy our built and natural environment, protect it, and enhance it for future generations.”

Oversight of sustainability activity is provided by the Sustainability Oversight Group, chaired by the Vice Principal of Operations. The group includes representation from staff, students, and trade unions, and met quarterly throughout the year to monitor progress and guide implementation.

Key actions undertaken include:

Key Achievements in 2024/25

  1. Governance Integration: All Board and Committee papers now include a dedicated section on Environmental Impacts to ensure sustainability is considered in strategic decisions.

  2. Heating & Cooling Policy: A new policy has been introduced to reduce carbon emissions. Building Energy Management Systems (BEMS) at the Paisley campus are being upgraded, including sub-meter integration for remote control and monitoring of energy usage.

  3. Estates Improvements: The Oakshaw building at Paisley underwent single-glazing window replacement and external wall insulation, significantly reducing heat loss, carbon emissions, and energy costs.

  4. EV Infrastructure: College EV chargers were registered for public use via ChargePlace Scotland, with tariffs introduced for all users. This initiative supports broader access and contributes to reduced vehicle emissions.

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Statutory Duties and Reporting

Under Section 44 of the Climate Change (Scotland) Act, public bodies are required to:

In line with these duties, the College submitted its ninth Annual Climate Change Report for the year.

Planned Activities for 2025/26

To further progress towards Net Zero, the College will undertake the following initiatives:

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16. INFRASTRUCTURE STRATEGY

The College’s Infrastructure Strategy 2025-30 sets out a long-term vision to address the evolving needs of students and staff across its campuses and is due for publication in January 2026.

The Infrastructure Strategy 2025-2030 sets out a five-year plan to modernise and optimise West College Scotland’s physical and digital infrastructure. It is informed by data-driven assessments and stakeholder engagement, and aligns with corporate priorities, the SFC Infrastructure Strategy, and national sustainability goals.

The College has developed a five-year Physical Infrastructure Capital Priority Plan to ensure its campuses remain safe, fit for purpose, and operationally sustainable. The Plan was shaped by detailed condition surveys and extensive stakeholder consultation. It identifies a total capital requirement of approximately £42 million over the next five years, of which £30 million has been prioritised as urgent. Notably, these figures exclude the costs of furniture renewal, equipment replacement, inflation, and professional fees, underscoring the wider financial pressures associated with maintaining and modernising the estate.

Accordingly, capital investment must be strategically aligned and phased, with priority given to:

Annual capital allocation will be governed through an action plan, approved by the Executive and Senior Leadership Teams. The plan will include clear targets, costs, and outcomes, with regular monitoring and reporting.

Oversight of the Strategy’s implementation is led by the Vice Principal Operations, supported by the Estates Team. Governance is provided by the Corporate Development Committee, with the Board of Management receiving annual progress updates.

In parallel, the Scottish Funding Council (SFC) is developing a sector-wide Infrastructure Investment Plan. This plan will outline a collective approach to identifying investment needs across the college sector, including priorities such as achieving net zero, upgrading training equipment, and enhancing digital infrastructure. Once published, the College will be well positioned to review to ensure alignment with national priorities and funding opportunities.

Progress in 2024/25

During the current year, the College has delivered several significant estates maintenance projects:

The College continues to explore opportunities for external ‘green funding’ to support sustainability-focused improvements. However, it is recognised that maintaining ageing properties presents increasing financial challenges, particularly in relation to mechanical and electrical systems, which can consume a disproportionate share of the maintenance budget.

The College remains committed to working closely with its governing bodies to ensure the estate remains operationally effective and continues to improve in terms of functional suitability for all users.

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17. GOING CONCERN

As at 31 July 2025, the College’s Balance Sheet reflects net current liabilities of £7.1 million, an adverse movement £1.5m from £5.6 million in 2023/24. Total Net Assets stand at £86.5 million, compared to £89.3 million in the prior year.

The Scottish Funding Council (SFC) has confirmed expected funding levels for 2024/25, and the College Board has subsequently approved the budget for 2025/26, along with financial forecasts through to 2028, based on this guidance.

The approved budget and forecast for 2025/26 indicate an annual adjusted overspend of £3.5 million. The college has tentatively identified savings of £1.8 million in 2025/26. Through the soft programme the college will look at initiatives to identify savings. These savings are contingent upon the successful delivery of planned reductions in both staff and non-staff expenditure.

The comments on pages 34-36 to these financial statements outline the Board’s assessment of going concern. Accordingly, the Board considers that it is appropriate to consider that the College is a going concern, and these financial statements have been prepared on that basis.

18. PROFESSIONAL ADVISORS

Financial Statement Auditors

Azets Audit Services, Titanium 1, King›s Inch Place, Renfrew, PA4 8WF

Banker

Royal Bank of Scotland, 36 St Andrew Square, Edinburgh, EH2 2YB

Student and SFC Credit Funding Auditor

Solicitor

Anderson Strathern, 1 Rutland Court, Edinburgh, EH3 8EY

Wylie & Bisset LLP, 168 Bath Street, Glasgow, G2 4TP

Internal Auditor

Wylie & Bisset LLP, 168 Bath Street, Glasgow, G2 4TP

The Performance Report is approved by the Principal and Chief Executive: Anne Campbell Principal and Chief Executive

16 December 2025

19. EQUALITY, DIVERSITY AND INCLUSION

Equality, Diversity and Inclusion (EDI) at West College Scotland sits at the heart of our values and ambitions. It shapes how we work, learn and lead, ensuring that every individual feels respected, represented and empowered to succeed. Our approach goes beyond compliance; it’s about creating a culture of belonging where difference is recognised as a strength. Through our 2023–2027 Equality Outcomes, we are advancing equality across key priorities including disability, gender equality, gender-based violence, racial equality, LGBTQIA+ inclusion and socio-economic disadvantage. From reducing the gender pay gap and implementing the ED&I action plan to embedding anti-racist practice and celebrating LGBTQIA+ visibility, our collective efforts reflect a shared commitment to fairness, compassion and opportunity for all.

EDI is governed by the Equality, Diversity and Inclusion Committee with membership spanning the organisation and including representation from the student body.

Equality Mainstreaming Report

23

The Accountability Report comprises the Corporate Governance Report and the Remuneration and Staff Report and is signed by the Chair and the Principal.

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20. DIRECTOR’S REPORT

The undernoted individuals were Members of the Board of Management during the year and up to the date of signing this report:

Name Status of Appointment Interest (Employer) Date Appointed /
Reappointed		 Term End Date Date
Resigned
A Barron Non-Executive Member 27 January 2025 26 January 2029 N/A
H Cameron Non-Executive MemberHead of Rails Business Support Section
Transport Scotland		 1 September 2023 31 August 2027 N/A
A Campbell Principal & Chief Executive 7 July 2025 Ex officio
E. Connolly Principal and Chief Executive Principal, West College Scotland 1 September 2018 Ex officio 4 July 2025
G Cooper Non-Executive Member Head Teacher Bearsden Academy 24 June 2024 23 June 2028 N/A
J. Couto-
Phoenix		 Non-Executive Member Head of Skills and Talent, Sustainable
Aquaculture
Innovation Centre		 1 December 2022 30 November 2026 N/A
T Dillon Non-Executive Member Snr Programme Manager Skills
Development Scotland		 1 September 2023 31 August 2027 N/A
D Donaldson TU Board Member (EIS/FELA) West College Scotland 8 October 2024 7 October 2028 N/A
W. Hatton Non-Executive Regional Chair Business Consultant 3 March 2024 2 March 2028 N/A
G. Hunt Non-Executive College Development Network, Senior
Manager, Research & Development		 1 February 2025 31 January 2029 N/A
National Film and Television School
J Kerr Non-Executive Member (NFTS Scotland)
HEI/Training Provider/		 27 January 2025 26 January 2029 N/A
Development Manager
B Logan Co-opted Chief Executive, Capability Scotland 21 March 2025 30 June 2026 N/A
R. Leitch Non-Executive Chief Operating Officer, AGS Airports 1 December 2025 30 November 2029 N/A
S Mason Student Board Member WCS Student Association 23 March 2025
1 July 2025		 30 June 2025
30 June 2026		 N/A
J. McKie Non-Executive Retired 1 December 2025 30 November 2029 N/A
F McLaren Support Staff West College Scotland 9 October 2023 8 October 2027 N/A
D. McMahon Non-Executive Diageo 1 February 2022 31 January 2026 N/A
J McNicol Student President WCS Student Association 1 July 2024 30 June 2025 31 Dec
2024
K Mohamed Student President WSC Student Association 13 Feb 2025 30 June 2025 N/A
J O’Neill Co-opted Member Director of Children’s Services
Renfrewshire Council		 29 May 2024 28 May 2025 N/A
G. Rice Teaching Staff West College Scotland 10 October 2022 9 October 2026 N/A
J. Russell Non-Executive Retired 1 December 2022 30 November 2026 N/A
J Scott Non- Executive Member Director of Facilities
NHS Golden Jubilee		 24 June 2024 23 June 2028 N/A

1 Re-appointment (2nd term)

2 Re-appointment (2nd term)

25

20. DIRECTOR’S REPORT

The Governance Professional during the period is Susan McDonald.

In addition to the Principal and Chief Executive, other members of the Executive Team who can influence the decisions made by the College are:

Details of transactions with members of the Board are given in Notes 23 to the financial statements.

As at 31 July 2025, the Board of Management had 19 Members, 9 of which are female and 10 are male.

Scottish Parliament passed amendments to the 1992 Act and the 2005 Act to allow Trade Union Members on Boards of Management in December 2023. UNISON/UNITE member remains unfilled.

The Board of Management has formally constituted several committees with terms of reference. These Committees act with delegated authority. Membership of key Committees during the year to 31 July 2025 is as follows:

Audit & Risk Committee

Chair – R. Leitch

Vice Chair – J. Russell

Members – T. Dillon

Co-optee – B. Logan

Chair – G. Hunt

Vice Chair – J. McKie

Members - G. Rice, J. Couto-Phoenix, G. Cooper, D. Donaldson (from 8 Oct 24), K. Mohamed (from 13 Feb 25- 30 June 2025)

Corporate Development Committee

Chair - J. Leburn (to 31 Dec 24) / D. McMahon (from 1 Jan 25)

Vice Chair - D. McMahon (to 31 Dec 24) / H. Cameron (from 1 Jan 25)

Members – L. Johnston (to 31 Dec 2024), H. Cameron, F. McLaren, J. Scott, A. Barron (from 27 Jan 25), J. Kerr (from 27 Jan 25), K. Mohamed (from 13 Feb 25 to 30 June 2025)

Remuneration Committee

Chair - L. Johnston (to 31 Dec 24) / G. Hunt (from 1 Jan 25)

Vice Chair – J. Leburn (to 31 Dec 24) / J. McKie (from 1 Jan 25)

Members – G. Hunt, W. Hatton, J. McKie, R. Leitch, J. Couto-Phoenix (from 1 Jan 25), D. McMahon (from 1 Jan 25)

Nominations Committee

Chair – W. Hatton

Vice Chair – J. Couto Pheonix

Members – L. Johnston (to 31 Dec 24), J. Leburn (to 31 Dec 24), G. Rice, G. Hunt (from 1 Jan 25), R. Leitch (From 1 Jan 25) D. McMahon (from 1 Jan 25)

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20. DIRECTOR’S REPORT

Board Member attendance at Board and Committee meetings for the year to 31 July 2025 is as follows:

==> picture [524 x 393] intentionally omitted <==

----- Start of picture text -----
Learning,
Corporate
Board Member Board Audit & Risk Teaching & Remuneration Nominations
Development
Quality
A Barron 3 of 4 - - 1 of 2 - -
H Cameron 5 of 6 - - 5 of 5 - -
L. Connolly 6 of 6 - 4 of 4 5 of 5 - -
G Cooper 6 of 6 - 4 of 4 - - -
J. Couto-Phoenix 6 of 6 - 3 of 4 - - 1 of 1
T Dillon 4 of 6 4 of 4 - - - -
D Donaldson 2 of 5 - 0 of 3 - - -
W. Hatton 6 of 6 - 4 of 4 5 of 5 1 of 1 1 of 1
G. Hunt 6 of 6 - 4 of 4 - 1 of 1 1 of 1
J Kerr 4 of 4 - - 1 of 2 - -
L. Johnston 2 of 2 - - 2 of 3 - -
J. Leburn 2 of 2 - - 3 of 3 - -
R. Leitch 5 of 6 4 of 4 - - 1 of 1 1 of 1
B Logan (cooptee) - 3 of 4 - - - -
S Mason 2 of 3 - - - -
J. McKie 6 of 6 - 3 of 4 - 1 of 1 -
F McLaren 4 of 6 - - 4 of 5 - -
D. McMahon 3 of 6 - - 3 of 5 0 of 1 0 of 1
J McNicol 1 of 3 0 of 3
K Mohamed 1 of 3 2 of 2 1 of 2 - -
J O’Neill (cooptee) - - 2 of 4 - - -
G. Rice 4 of 6 - 1 of 4 - - 1 of 1
J. Russell 6 of 6 3 of 4 - - - -
J Scott 6 of 6 - 4 of 5 - -
----- End of picture text -----

Whilst senior executives attend meetings of the Audit & Risk Committee as necessary, they are not members, and once a year the Committee members meet both the internal and external auditors independently.

The Board has established an annual evaluation process for reviewing its effectiveness. This includes a suite of evaluations – Board, Committees, Chair, Committee Chairs, individual Board Members and Governance Manager. The annual process reflects sector guidance issued in “Guidance Notes for Boards in the College Sector: A Board Development Framework”.

The Board of Management seeks to comply fully with the Code of Good Governance for Scotland’s Colleges without exception. The College continues to comply with all the principles of the 2016 Code of Good Governance for Scottish Colleges, and it has complied throughout the year ended 31 July 2025.

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21. STATEMENT OF BOARD OF MANAGEMENT’S RESPONSIBILITIES

In accordance with the Further and Higher Education (Scotland) Act 1992, the Board of Management is responsible for the administration and management of the College’s affairs, including ensuring an effective system of financial control, and is required to present audited financial statements for each financial year.

The Board of Management is responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position if the College and to enable it to ensure that the financial statements are prepared in accordance with the Further and Higher Education (Scotland) Act 1992, and the 2019-20 Government Financial Reporting Manual (FreM) issued by the Scottish Government and other relevant accounting standards. In addition, within the terms and conditions of the Financial Memorandum agreed between the Scottish Funding Council and the College’s Board of Management, the Board of Management, through its designated office holder, is required to prepare financial statements for each financial period that give a true and fair view of the College’s situation and of the surplus or deficit and cash flows for that period.

As Accountable Officer for the college sector, the Scottish Funding Council Chief Executive is required to provide a governance certificate of assurance covering all colleges to the Principal Accountable Officer of the Scottish Government. This is based upon certificates of assurance from each college, which confirm that the principal has undertaken a review of the internal control arrangements of the College and that these controls have been, and are, working well.

In preparing the financial statements, the Board of Management is required to:

The Board of Management has taken reasonable steps to:

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21. STATEMENT OF BOARD OF MANAGEMENT’S RESPONSIBILITIES

The key elements of the College’s system of internal financial control that is designed to discharge the responsibilities set out above include the following:

Auditor

The Auditor General for Scotland has appointed Azets Audit Services to undertake the audit for the year ending 31 July 2025.

Disclosure of Information to Auditors

The Board members who held office at the date of approval of this report confirm that, so far as they are each aware, there is no relevant audit information of which the College’s auditors are unaware; and each Board member has taken all the steps that he or she ought to have taken to be aware of any relevant audit information and to establish that the College’s auditors are aware of that information.

Non-Audit Fees

No payments were made to the External Auditor, Azets Audit Services, other than in respect of the statutory audit fee (see note 9).

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22. GOVERNANCE STATEMENT

Introduction

The College is committed to exhibiting best practice in all areas of corporate governance. The following summarises the corporate governance principles which have been applied during the year.

This governance statement is designed to supplement the information provided in the financial statements. It sets out the governance structures, risk management and internal control processes operating in the College in the year to 31 July 2025 and reports the Board’s assessment of these arrangements’ effectiveness.

Statement of Compliance

The College complies with all the principles of the 2022 Code of Good Governance for Scotland's Colleges, and it has complied throughout the financial year ended 31 July 2025.

Governing Body

The Board of Management has responsibility for overseeing the business of the College, determining its future direction, and fostering an environment in which the College vision and values are achieved, and the potential of all learners is maximised. The Board of Management must also ensure compliance with the statutes, ordinances and provisions regulating the College and its framework of governance and, subject to these, take all final decisions on matters of fundamental concern to the College.

The operation of the Board of Management is defined in a Governance Manual which includes its Standing Orders, Scheme of Delegation, Code of Conduct, and detailed Terms of Reference for the Board and each of its committees. In addition to Board of Management meetings, the following Standing Committees have also been established with the remit to:

Audit & Risk Committee

Learning, Teaching and Quality Committee

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22. GOVERNANCE STATEMENT

Corporate Development Committee

Remuneration Committee

Nominations Committee

Evaluation

In accordance with Paragraph D.23 of The Code of Good Governance for Scotland’s Colleges, “the board must keep its effectiveness under annual review and have in place a robust self-evaluation process. There should also be an externally facilitated evaluation of its effectiveness at least every three to five years. The board must send its self-evaluation (including an externally facilitated evaluation) and board development plan (including progress on previous year’s plan) to its funding body and publish them online”.

As part of our governance framework and the Board’s commitment to continuous improvement, an internal review of board effectiveness was conducted this year, focusing on governance, strategic oversight, and board performance against the Code of Good Governance Framework.

The review highlighted several strengths, including a well-functioning board, open and transparent communication, a clear committee structure, and a strong balance of skills and experience among our Board Members.

Actions in the coming year include more focused agenda planning, allowing additional time for in-depth discussion of key issues, enhancing performance reporting, and increasing opportunities for board development, sector engagement, and the student voice. With a new Executive Team in place, there is a valuable opportunity to strengthen collaboration with the Board and maximise the impact of their contributions. Progress in these areas will support more effective governance as we continue to deliver on our strategic objectives.

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23. RISK MANAGEMENT AND INTERNAL CONTROL

The College Risk Management Policy is owned by the Board of Management and sets out the College’s underlying approach to risk management, including the College’s overall Risk Appetite Statement, to ensure that appropriate risk management arrangements are in place and that these have been embedded throughout the whole College. The Policy also documents the roles and responsibilities of the Board, the Senior Management Team, and other key parties, and outlines key aspects of the risk management process, identifying the main reporting procedures.

The Audit & Risk Committee has specific duties in relation to Internal Control and Risk Management:

The Committee also has specific duties in relation to Internal Audit, External Audit, and Value for Money.

The Board of Management, with the Senior Leadership Team, maintains a Strategic Risk Register. The Register identifies, against each Strategic Priority, actual critical risks that the College is facing. An overall strategic risk appetite is detailed along with a risk appetite for each Strategic Priority. Details of current controls and further actions to be taken to mitigate each risk along with the current level of risk control are also provided alongside risk scorings.

The Strategic Risk Register is reviewed regularly by the Senior Leadership Team, with the document considered by the Board Standing Committees as a standing item at each of its meetings. The Strategic Risk Register is reflected upon during the setting up of the College’s Annual Internal Audit Programme. The College addresses operational risks through its Departmental Operational Plans, which cross reference relevant risks included in the Strategic Risk Register. The Plans are ‘live’ documents which are key to the College’s quality enhancement and improvement planning processes and are referred to and reported on throughout the academic year. Individual risk registers and risk assessments are also completed for significant College projects.

The College’s system of internal control incorporates risk management. This system encompasses several elements that together facilitate effective and efficient operation, enabling the College to respond to a variety of operational, financial, and commercial risks. These elements include policies and procedures; monthly reporting; business planning and budgeting; strategic themes, goals, and objectives; risk registers; internal audit programme; and external audit.

The Board of Management is responsible for reviewing the effectiveness of internal control of the College, based on information provided by the Executive Team. For each significant risk identified, the Board, as part of the corporate planning and review process:

In making its decision, the Board considers control of environment; on-going identification and evaluation of significant risks; Information and communication; and monitoring and corrective action.

In addition, the remit of the Board’s Audit & Risk Committee includes the review of the comprehensiveness, reliability, and integrity of assurances, including the College’s governance, risk management and internal control frameworks and make recommendations to the Board of Management as appropriate.

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24. STATEMENT ON INTERNAL CONTROL

The Board of Management is responsible for the College’s system of internal control and for reviewing its effectiveness. Such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss.

The Board of Managements Committees and Executive Team receive reports setting out key performance and risk indicators and considers control issues brought to their attention by early warning mechanisms which are embedded within the College’s academic sectors and teams and reinforced by risk awareness training. The Executive Team and the Audit & Risk Committee also receive regular reports from internal audit that include recommendations for improvement and identify areas of good practice.

The Audit & Risk Committee’s role in this area is confined to a high-level review of the arrangements for internal control.

The Board of Management agenda includes items relating to the consideration of risk and control at key points of the College’s planning and reporting cycle and receives reports thereon from the Executive Team and the Audit & Risk Committee. The emphasis is on obtaining the relevant degree of assurance and not merely reporting by exception.

The Board of Management is of the view that there is an ongoing process for identifying, evaluating, and managing the College’s significant risks that has been in place throughout the year ended 31 July 2025 and up to the date of approval of the annual report and accounts.

A programme of internal audit work has been undertaken, and the results have provided evidence to the Board that there are strong or substantial controls in most areas under review. The areas reviewed during 2024-25 were:

The following area was graded as weak, with one high priority recommendation.

In its Annual Report to the Board, the internal auditor highlighted that it had made 19 recommendations during the year (2024-25) and that these were organised as follows:

They also highlighted that the College has an overall lower number of recommendations in comparison with the colleges it has been benchmarked against.

Twenty-six areas of best practice were noted across all audit reports.

High priority risks highlight areas of major weakness that the auditors consider need to be brought to the attention of the Audit & Risk Committee and require them to be addressed by the College as a matter of urgency. Actions have been, or planned to be, taken to address the identified recommendations and strengthen controls in the identified areas.

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24. STATEMENT ON INTERNAL CONTROL

To ensure that internal audit recommendations are implemented as agreed a rolling plan of follow-up reviews is included as part of the Annual Internal Audit Plan. This provides the Board, via the Audit & Risk Committee, with independent assurance that recommendations have been fully implemented by the College and can therefore be removed from the Rolling Audit Action Plan. If any issues remain outstanding beyond the agreed implementation deadline this is also highlighted if a recommendation requires to be reviewed due to changed circumstances.

The internal auditor has expressed the opinion that the Board of West College Scotland has adequate and effective risk management, control, and governance processes to manage its achievement of the College’s objectives at the time internal audit work was undertaken and that the College has proper arrangements to promote and secure value for money. However, they have only been able to provide a weak level of assurance on the Human Resources – Succession Planning review.

Significant Lapses of Data Security

There were no significant lapses in data security, i.e., reportable to the Information Commissioner’s Office, during 2024-25 or up to the date of signing this report.

25. GOING CONCERN

In accordance with the FreM, the College has prepared its financial statements on a going concern basis as we have not been informed by the Scottish Government through the Scottish Funding Council of the intention for dissolution without transfer of services or function to another entity of the Higher and Further Education provision.

The College recorded a deficit on continuing operations for the year of £7.35m million before other gains and losses during the financial year and total comprehensive income of £60.2 million.

The College reported an adjusted operating deficit of £7.35m million after accounting for technical pension adjustments of depreciation net of capital grants of £4.8m, job evaluation £.935m, pension of £1.3m and loan repayments £.310m.

Cash decreased by £2.7 million during the year to £11.1 million. On 31 July 2025, the College held borrowings of £.140m and reported a net asset position in these financial statements of £86.5 million (2023-24: £89 million). This includes a pension liability of £6.3m million for a historic unfunded pension provision at 31 July 2024-25 (2023-24: £6.9million).

At the Board meeting held on 23 June, a year-end overspend for the 2024/25 financial year was approved, initially projected at approximately £480k. This figure subsequently increased by a further £225k due to the Scottish Funding Council (SFC) not fully covering the rise in employer pension contributions, less some underspends across the directorates, resulting in a final out-turn of £620k.

Following the Board meeting, the Executive Leadership Team (ELT) and the Director of Finance met with representatives from the SFC to review the financial out-turn and to discuss the deteriorating financial outlook for the period 2025/26 through 2027/28. The meeting also addressed concerns regarding the college’s declining cash position and the implications for its capital investment plans, including future funding requirements and potential constraints.

The activities of the College are approx. 80% funded by the Scottish Government through the Scottish Funding Council to provide Higher and Further Education. The Board and the Executive Team are responsible for ensuring that these funds are used to meet this purpose and the operations within the College to achieve this support to ensure financial sustainability for the College.

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25. GOING CONCERN

The College has in place a strategic plan outlining its key strategic priorities. One of the key strategic outcomes is sustainability, which seeks to achieve sustainable levels of funding in support of our core activities from the Scottish Funding Council and maximise income from alternative income sources. The financial landscape across the sector is becoming more challenging and the savings required are becoming more significant. The College has been meeting the challenge of declining income and high-cost base inflation through improved operating/ cost efficiencies supported by several voluntary redundancy schemes. However, such schemes are now of limited benefit. The College is currently establishing mitigating initiatives within our Transformational plan called the ‘SOFT’ programme and the college transformational framework which will deliver future savings. Although these plans require transformational change so will be harder to deliver and will require support from the Scottish Government. The Transformational Plan and framework will be crucial in achieving efficiencies and driving long-term financial sustainability and includes:

The Transformational Plans enables assessment of the financial needs and resources required to support and meet organisational objectives and outcomes, and in doing so, plan for continued development where possible to enable success and sustainability.

The College has recently updated its financial forecast through to 2027–28, in accordance with planning assumptions provided by the Scottish Funding Council (SFC). These assumptions are based on colleges taking appropriate measures each year to achieve a balanced underlying financial position. As it currently stands and in the absence of fully identified and delivered savings the College is projecting annual overspends of £3.479 million in 2025/26, £5.601 million in 2026/27, and £7.078 million in 2027/28. Against this backdrop, savings targets identified to date are £1.790 m for 2025/26, £1.837 m for 2026/27, and £1.885m for 2027/28.

Based on the latest planning assumptions, and contingent on full delivery of all currently identified savings, the College is forecast to remain in deficit over the planning horizon. Projected net overspends stand at £1.689m in 2025/26, £3.764 million in 2026/27, and £5.193 million in 2027/28.

Despite the continuing financial pressures, the College is expected to maintain its liquidity. Currently college is forecasting a negative cash position of £10m by 2027/28

The Board and the Corporate Development Committee have had full view of the financial forecasts as they have progressed. These forecast positions will remain fluid and will be regularly reviewed by the College.

Conclusion

The Board is responsible for the College’s system of internal control and for reviewing its effectiveness. Such a system was designed to manage rather than eliminate the risk of failure to achieve business objectives and could only provide reasonable and not absolute assurance against material misstatement or loss.

The 2024-25 Audit & Risk Committee agendas included consideration of risk, control, and reports thereon from the Executive Team and the Internal Auditors. The emphasis was on obtaining the relevant degree of assurance and not merely reporting by exception.

The Board is aware of the on-going process for identifying, evaluating, and managing the College’s significant risks, that it had been in place for the year ended 31 July 2025 and up to the date of approval of the annual report and accounts.

The Board of Management complies with all the principles of the 2022 Code of Good Governance for Scotland’s Colleges, and it has complied throughout the year ended 31 July 2025. The Board of Management is content that the arrangements in place relating to corporate governance are effective.

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26. REMUNERATION AND STAFF REPORT

Under the College’s Financial Regulations, the Board of Management has the authority to appoint, grade, suspend, dismiss, and determine the pay and conditions of service of the principal and other senior postholders. Under its Scheme of Delegation, the Board delegates authority to the Remuneration Committee to consider, approve and report to the Board on decisions regarding the remuneration, package, terms, and conditions and, where appropriate, severance payments of the Principal and Chief Executive, Executive Team, Senior Management Team, and Heads The following table provides an overview of staff data:

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----- Start of picture text -----
2024-25 2023-24
FTE % FTE %
People 723 739
Sickness absence 5.84 4.5
Staff turnover 13.3 11.5
Gender:
All staff Male 323 44 272 37
Female 400 56 467 63
Board of Management Male 10 53 9 53
Female 9 47 8 47
Senior Management Team Male 3 17 4 36
Female 14 83 7 64
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Remuneration and Pension Interests – Senior Staff

The following disclosures within the remuneration report are subject to audit: single total figure of remuneration for each senior official, CETV disclosures for each senior official, fair pay disclosures (median remuneration) and exit packages. The following table provides details of the remuneration and pension interests of senior staff:

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----- Start of picture text -----
Year ended 31 July 2025 Year ended 31 July 2024
Pension Benefit Pension Benefit
Name Salary £’000 Total £’000 Salary £’000 Total £’000
£’000 £’000
W Hatton 25-30 0 25-30 25-30 0 25-30
E Connolly 125-130 5-10 135-140 135-140 20-25 155-165
A Campbell 5-10 0-5 10-15 0 0 0
S Gunn 65-70 15-20 80-85 100-105 20-25 120-130
A McDonald 0-5 0 0-5 100-105 10-15 110-120
A Pignatelli 35-40 5-10 40-45 0 0 0
N Connelly 80-85 5-10 85-90 0 0 0
D Leese 60-65 0 60-65 0 0 0
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FTE Salary for 12 months

A. McDonald left July 2024 (£59,090.16)

A. Campbell was appointed on 7 July 2025 (£165,230.88)

D. Leese was appointed on 2 December 2024 and left on 4 July 2025 (£115,972.92)

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26. REMUNERATION AND STAFF REPORT

Remuneration – Board Member

The Chair of the Board of Management received remuneration in accordance with instruction from the Scottish Government. There is no remuneration paid to any other non-executive director posts on the Board of Management. Expenses incurred are paid to Board of Management members because of carrying out the duties of the appointment, including reasonable travel and subsistence

Accrued Pension Benefits

Pension benefits for employees are provided through the Scottish Teacher’s Superannuation Scheme (STSS), a defined benefit scheme, which is notionally funded and contracted out of State Earnings- Related Pension Scheme and the Local Government Pension Scheme (LGPS).

Both STSS and LGPS were final salary schemes until 31 March 2015, meaning that members’ benefits were based on the final year’s pay and the number of years that the person has been a member of the scheme. From 1 April 2015, both schemes became career average schemes, meaning that benefits are based on the career average earnings of the member, and the number of years that the person has been a member of the scheme. The scheme’s normal retirement age is the state retirement age.

Contribution rates are set annually for all employees and depend on the salary of the employee. There is no automatic entitlement to a lump sum. Members may opt to give up (commute) pension for lump sum up to the limit set by the Finance Act 2004. The accrual rate guarantees a pension based on final pensionable pay to 31 March 2015, career average earnings from 1 April 2015, and years of pensionable service.

Further details regarding the pension arrangements for the College can be found in Note 24 in the Financial Statements including contribution rates payable.

Pension Benefits

Pension benefits are provided to senior staff on the same basis as all other staff. The accrued pension benefits for senior staff are set out in the table below, together with the pension contributions made by the College. It should be noted accrued benefits are attributable to contributions made over the period of the individual’s working life, and from their various employers during that time.

Accrued pension Real increase in
Name and lump sum at
pension age on 31		 pension and lump
sum 1 August 2024		 CETV at 31 July
2025		 CETV at 31 July
2024		 Real increase in
CETV
July2025 to 31 July2025
£’000 £’000 £’000 £’000 £’000
E. Connolly 33 3 624 586 38
S. Gunn 172 2 1,178 1,147 31
A. Campbell 126 - 727 - -
N. Connelly 2 - 19 - -
A. Pignatelli 93 - 571 - -

E. Connolly retired on 4 July 2025

S. Gunn retired on 28 March 2025

A. Campbell was appointed on 7 July 2025

A. Pignatelli was appointed on 31 March 2025

N. Connelly appointed on 7 July 2025

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26. REMUNERATION AND STAFF REPORT

Cash Equivalent Transfer Value (CETV)

A Cash Equivalent Transfer Value (CETV) is the actuarially assessed value of the pension scheme benefits accrued by a member at a point in time.

The value of the accrued pension benefits has been calculated based on the age at which the person will first become entitled to receive a pension on retirement without reduction on account of its’ payment at that age; without exercising any option to commute pension entitlement into a lump sum; and without any adjustment for the effects of future inflation. The pension figures shown relate to the benefits that the person has accrued because of total Local Government service and not just their current appointment. In considering the accrued pension benefits figures the following contextual information should be considered:

Real increase in CETV

This reflects the increase in CETV that is funded by the employer. It does not include the increase in accrued pension due to inflation, contributions paid by the employee (including the value of any benefits transferred from another pension scheme or arrangement) and uses common market valuation factors for the start and end of the period.

Notes 7 and 8 to the accounts provide information on senior post holders’ remuneration.

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27. COMPENSATION FOR LOSS OF OFFICE

As of 31 July 2025, 31 employees had left the College under voluntary severance arrangements (2023-24: 29). They received compensation payments totaling £666k (2023-24: £387k) with this figure included pension fund strain costs of £56k (2023-24: £71k). The leavers did not receive any additional compensation.

The table below summaries the total number of agreements by cost band:

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----- Start of picture text -----
2024-25 2023-24
Number and cost of voluntary Number and cost of voluntary
Exit package cost band
redundancies redundancies
< £10,000 5 3
£10,001 - £25,000 21 16
£25,001 - £50,000 5 1
£50,001 - £100,000 1 1
Total number of agreements 32 21
Total Cost (£) £665,656 £387,117
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Fair Pay – Pay Multiples

The highest paid member of the management team was the principal. The principal’s remuneration before pension benefits was in the range £135,000 to £140,000 (2023-24: £135,000-£140,000). This was 4.1 times (2023-24: 4.2 times) the median remuneration paid to West College Scotland staff which was £32,887 (2023- 24: £32,506).

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2024-25 2023-24 Change %
Range of workforce
£136,000 - £1 £137,000 - £1 -1%
remuneration
Highest paid official
£135,677 £136,797 -1%
remuneration
Median (Total pay and benefits) £39,828 £48,928 -19%
Median (Salary only) £32,887 £32,506 -1%
Ratio to highest paid official
3.4 2.8 22%
(Total pay and benefits)
25th percentile (Total pay and
£17,253 £26,460 -35%
benefits)
25th percentile (Salary only) £14,790 £18,252 -19%
Ratio to highest paid official
7.7 5.17 52%
(Total pay and benefits)
75th percentile (Total pay and
£67,834 £68,739 -1%
benefits)
75th percentile (Salary only) £50,957 £40,912 25%
Ratio to highest paid official
2.0 2.0 1%
(Total pay and benefits)
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Salaries and Related Costs

Details of the number of staff and their related costs, including senior postholders and the principal, who received annual emoluments, can be found in Notes 7 and 8 of the Financial Statements.

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28. FACILITY TIME

In accordance with the Trade Union (Facility Time Publication Requirements) Regulations 2017, the College provided the following support through paid facility time for trade union officials working at the College during the year ended 31 March 2025.

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2024-25 2023-24
Trade Union Representatives Number of employees who were trade union officials 22 25
and Full-Time Equivalents
Full-time equivalent employee numbers 19.69 23.08
Percentage of working hours 1% to 50% of working hours 22 25
spent on facility time by band
Percentage of staff costs spent Total cost of facility time £115,679 £119,201
on facility time
Total staff costs £39,677,031 £41,096,267
Percentage of total staff costs spent on facility time 0.29% 0.27%
Paid trade union activities Time spent on disclosed or reportable trade union activities 17.7% 21%
as a percentage of all trade union activities
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Off Payroll working through an intermediary (IR35) – workers engaged through a company

The HM Treasury off payroll working arrangements are in place to ensure that where an individual would have been an employee if they were providing their services directly, they pay broadly the same tax and NICs as an employee. The College has a procedure to ensure that if it plans to offer temporary employment to someone who works through their own intermediary, the off payroll working rules are applied accordingly.

Fair work

The Fair Work Convention’s Framework defines Fair Work as work that offers effective voice, fulfilment, opportunity, respect and security. The College is a fair work employer and demonstrates this through:

29. OUR PEOPLE

West College Scotland wants to have an engaged, flexible, and modern workforce who are proud to work for the College. To enable that ambition the College develops and renews a WCS People Strategy periodically. The current strategy runs until 2030 and has been reviewed awaiting sign off but the Board of Management. The current strategy can be found here.

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30. MODERN SLAVERY AND HUMAN TRAFFICKING

The Board of Management has considered its responsibilities regarding the Modern Slavery Act 2015 and has published its annual Modern Slavery and Human Trafficking Statement here.

Anti-Bribery and Corruption

The Board of Management has considered its obligations under the Bribery Act 2010 and has published its Anti-Bribery and Corruption Policy here.

The following statement is extracted from the Policy:

“The Board of Management is committed to maintaining an honest, open, and well- intentioned atmosphere within the College. It is committed to the deterring, detection, and investigation of any fraud within the College. The Public Interest Disclosure Act 1998 forms a key part of the Board of Management’s policy.

In line with the Public Interest Disclosure Act 1998, the Board of Management wishes to encourage staff or public, to have reasonable suspicion of fraud, to report the incident. It is College policy that no staff member should suffer in any way by reporting in good faith any reasonably held suspicions”.

The Accountability Report is approved by order of the members of the Board of Management and signed on its behalf by:

Waiyin Hatton Chair of Board of Management

Anne Campbell Principal and Chief Executive

Date: 16 December 2025 Date: 16 December 2025

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31. INDEPENDENT AUDITOR’S REPORT TO THE BOARD OF MANAGEMENT OF WEST COLLEGE SCOTLAND, THE AUDITOR GENERAL FOR SCOTLAND AND THE SCOTTISH PARLIAMENT REPORTING ON THE AUDIT OF THE FINANCIAL STATEMENTS

Opinion on financial statements

We have audited the financial statements in the annual report and accounts of West College Scotland for the year ended 31 July 2025 under the Further and Higher Education (Scotland) Act 1992 and section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005. The financial statements comprise the Statement of Comprehensive Income and Expenditure, Statement of Changes in Reserves, Balance Sheet, and Statement of Cashflows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the accompanying financial statements:

Basis for opinion

We conducted our audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Auditor General for Scotland. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We were appointed by the Auditor General on 22nd May 2022. Our period of appointment is five years, covering 2022/23 to 2026/27. We are independent of the college in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Non-audit services prohibited by the Ethical Standard were not provided to the college. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern basis of accounting

We have concluded that the use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the college’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from when the financial statements are authorised for issue.

These conclusions are not intended to, nor do they, provide assurance on the college’s current or future financial sustainability. However, we report on the college’s arrangements for financial sustainability in a separate Annual Audit Report available from the Audit Scotland website.

Risks of material misstatement

We report in our separate Annual Audit Report, the most significant assessed risks of material misstatement that we identified and our judgements thereon.

Responsibilities of the Board of Management for the financial statements

As explained more fully in the Statement of the Board of Management’s Responsibilities, the Board of Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the Board of Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Management is responsible for assessing the college’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless there is an intention to discontinue the college’s operations.

42

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities outlined above to detect material misstatements in respect of irregularities, including fraud. Procedures include:

The extent to which our procedures are capable of detecting irregularities, including fraud, is affected by the inherent difficulty in detecting irregularities, the effectiveness of the college’s controls, and the nature, timing and extent of the audit procedures performed.

Irregularities that result from fraud are inherently more difficult to detect than irregularities that result from error as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skilfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved.

A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

REPORTING ON REGULARITY OF EXPENDITURE AND INCOME

Opinion on regularity

In our opinion in all material respects the expenditure and income in the financial statements were incurred or applied in accordance with any applicable enactments and guidance issued by the Scottish Ministers.

Responsibilities for regularity

The Board of Management is responsible for ensuring the regularity of expenditure and income. In addition to our responsibilities in respect of irregularities explained in the audit of the financial statements section of our report, we are responsible for expressing an opinion on the regularity of expenditure and income in accordance with the Public Finance and Accountability (Scotland) Act 2000.

Reporting on other requirements

Opinion prescribed by the Auditor General for Scotland on the audited parts of the Remuneration and Staff Report

We have audited the parts of the Remuneration and Staff Report described as audited. In our opinion, the audited parts of the Remuneration and Staff Report have been properly prepared in accordance with the Further and Higher Education (Scotland) Act 1992 and directions made thereunder by the Scottish Funding Council.

43

Other information

The Board of Management is responsible for the other information in the annual report and accounts. The other information comprises the Performance Report and the Accountability Report excluding the audited parts of the Remuneration and Staff Report.

Our responsibility is to read all the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon except on the Performance Report and Governance Statement to the extent explicitly stated in the following opinions prescribed by the Auditor General for Scotland.

Opinions prescribed by the Auditor General for Scotland on the Performance Report and Governance Statement

In our opinion, based on the work undertaken in the course of the audit:

the information given in the Performance Report for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Further and Higher Education (Scotland) Act 1992 and directions made thereunder by the Scottish Funding Council; and

the information given in the Governance Statement for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Further and Higher Education (Scotland) Act 1992 and directions made thereunder by the Scottish Funding Council.

Matters on which we are required to report by exception

We are required by the Auditor General for Scotland to report to you if, in our opinion:

adequate accounting records have not been kept; or

the financial statements and the audited parts of the Remuneration and Staff Report are not in agreement with the accounting records; or

we have not received all the information and explanations we require for our audit.

We have nothing to report in respect of these matters.

Conclusions on wider scope responsibilities

In addition to our responsibilities for the annual report and accounts, our conclusions on the wider scope responsibilities specified in the Code of Audit Practice are set out in our Annual Audit Report.

USE OF OUR REPORT

This report is made solely to the parties to whom it is addressed in accordance with the Public Finance and Accountability (Scotland) Act 2000 and for no other purpose. In accordance with paragraph 108 of the Code of Audit Practice, we do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties.

Chris Brown (for and on behalf of Azets Audit Services)

Quay 2

139 Fountainbridge Edinburgh EH3 9QG

Date: 17 December 2025

Chris Brown is eligible to act as an auditor in terms of section 21 of the Public Finance and Accountability (Scotland) Act 2000

44

STATEMENT OF COMPREHENSIVE INCOME AND EXPENDITURE

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----- Start of picture text -----
Year ended Year ended
31 July 2025 31 July 2024
Note £000 £000
Income
Tuition fees and education contracts 2 5,870 5,989
Funding body grants 3 51,963 45,605
Other grant income 4 623 538
Other operating income 5 1,810 1,726
Investment income 6 - -
Total Income 60,266 53,858
Expenditure
Staff costs 7 44,089 43,152
Support staff job evaluation 7 935 935
Restructuring costs 7 666 387
Other operating expenses 9 15,334 12,886
Depreciation 12 6,207 5,636
Interest and other finance costs 10 393 399
Total Expenditure 67,624 63,395
Deficit before Tax (7,358) (9,537)
Taxation 11 - -
Deficit on Continuing Operations after tax (7,358) (9,537)
Unrealised surplus on revaluation of land and buildings 12 2,589 5,504
Actuarial gain in respect of pension scheme 24 1,951 341
Total Unrestricted Comprehensive Income for the Year (2,818) (3,692)
----- End of picture text -----

All items of income and expenditure relate to continuing activities.

The Statement of Comprehensive Income is prepared under the FE/HE SORP. Colleges are also subject to Central Government accounting rules but the FE/HE SORP does not permit colleges to include Government non-cash budget for depreciation in the Statement of Comprehensive Income. Note 30 provides details of the adjusted operating position on a Central Government accounting basis.

45

STATEMENT OF CHANGES IN RESERVES

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----- Start of picture text -----
Income and Revaluation Total
Expenditure Reserve
£000
Reserve
£000
£000
Balance at 1 August 2023 8,359 84,677 93,036
Deficit on continuing operations after tax (9,537) - (9,537)
Other comprehensive income -
-
Transfer between revaluation and income and expenditure 4,137 (4,137)
reserve
Revaluation 5,504 5,504
Actuarial gain in respect of pension scheme 386 - 386
Pension asset ceiling adjustment (45) - (45)
Total comprehensive income for the year (5,059) 1,367 (3,692)
Balance at 31 July 2024 3,300 86,044 89,344
Deficit on continuing operations after tax (7,358) - (7,358)
-
Transfer between revaluation and income and expenditure 4,737 (4,737)
reserve
Revaluation 2,589 2,589
Actuarial gain in respect of pension scheme 15,481 - 15,481
Pension asset ceiling adjustment (13,529) - (13,529)
Total comprehensive income for the year (669) (2,148) (2,817)
Balance at 31 July 2025 2,631 83,896 86,527
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BALANCE SHEET

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----- Start of picture text -----
|||||| |---|---|---|---|---| |De|As at 31 July 2025|As at 31 July 2024| |Note|£000|£000|£000|£000| |Non current assets| |a| |SS|Fixed assets|12|121,280|124,897| |a|Funded pension asset|18|-|-| |SS| |a|Current assets| |ae| |a|Trade and other debtors|13|643|1,105| |Cash|20|11,100|13,801| |11,743|14,906| |ae|Current liabilities| |a|Creditors: amounts falling due within one year|14|(12,381)|(15,007)| |Provisions|16|(6,466)|(5,531)| |(18,847)|(20,538)| |ae| |a|Net current liabilities|(7,104)|(5,632)| |ae| |a|Total assets less current liabilities|114,176|119,265| |SS| |a|Creditors: Amounts falling due after one year|15|(21,345)|(22,984)| |SS|Unfunded pension provision|19|(6,304)|(6,935)| |a|Provisions: Other|-| |Total net assets|86,527|89,346| |a|Unrestricted reserves| |a| |a|Income and expenditure reserve|2,631|3,301| |Revaluation reserve|83,896|86,045| |SS| |Total reserves|86,527|89,346|

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The financial statements on pages 45 to 48 were approved by the Board of Management, authorised for issue and signed on its behalf by:

Waiyin Hatton Chair of Board of Management 16 December 2025

Anne Campbell Principal and Chief Executive 16 December 2025

47

Statement of Cashflows

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----- Start of picture text -----
Year ended 31 July Year ended 31 July
2025 2024
Note £000 £000
Cashflow from operating activities
Deficit for the year (7,358) (9,537)
Adjustment for non-cash items
Depreciation 12 6,207 5,636
Asset Impairment 12 - -
Decrease / (Increase) in stock - -
Decrease / (Increase) in debtors 13 461 4,668
(Decrease) / Increase in creditors 14 (4,056) (3,071)
(Decrease) / Increase in provisions 16 935 5,531
Reduction in provisions 107 (29)
Net cost of pension provision 23 1320 103
Adjustment for investing or financing activities
Investment income 6 - -
Interest payable 10 393 399
Net cash inflow from operating activities (1,992) 3,700
Cash flows from investing activities
Investment income 6 -
Proceeds from the sale of asset - -
Purchase of Building Improvements and Equipment 12 - (262)
- (262)
Cash flows from financing activities
Interest paid 10 (393) (399)
Repayments of amounts borrowed 20 (317) (317)
(710) (716)
Increase in cash in the year (2,701) 2,721
Cash at beginning of the year 19 13,801 11,080
Cash at end of the year 19 11,100 13,801
(2,701) 2,721
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48

1. STATEMENT OF PRINCIPAL ACCOUNTING POLICIES

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Financial Statements and there have been no changes to these in the year.

a) Basis of Preparation

The financial statements have been prepared in accordance with the Statement of Recommended Practice (SORP) 2019: ‘Accounting for Further and Higher Education’ and the 2022-23 Government Financial Reporting Manual (FReM) issued by the HM Treasury and in accordance with Financial Reporting Standards (FRS 102). The College is a public benefit entity and has therefore applied the public benefit requirements of FRS102. The College conforms to relevant parts of the Scottish Public Finance Manual (SPFM), the Accounts Direction and other guidance issued by the Scottish Funding Council.

b) Basis of Accounting

The financial statements are prepared under the historical cost convention modified by the revaluation of certain fixed assets.

The accounting policies contained in the Government Financial Reporting Manual (FReM) apply International Reporting Standards as adapted or interpreted for the public sector context. Where the FReM permits a choice of accounting policy, the accounting policy which is judged to be more appropriate to the College for the purposes of giving a true and fair view has been selected. The particular policies adopted by the College in dealing with items that are considered material to the Financial Statements are set out in these notes.

c) Going Concern

The activities of the College, together with the factors likely to affect its future development and performance are set out in the Performance Report. The financial position of the College, its cashflow, liquidity and borrowings are presented in the Financial Statements and accompanying notes. The College currently has £0.150m of a bank loan outstanding. The bank loan is due to be fully repaid by December 2025.

The College’s forecasts and financial projections indicate that it will be able to operate within the existing bank loan covenant for the foreseeable future. Accordingly, the College has a reasonable expectation that it has adequate resources to continue in operational existence for the foreseeable future, and for this reason will continue to adopt the going concern basis in the preparation of its Financial Statements.

d) Recognition of Income

Fee income is stated gross of any expenditure which is not a discount and credit to the Statement of Comprehensive Income and Expenditure over the period in which students are studying.

Income from the sale of goods or services is credited to the Statement of Comprehensive Income and Expenditure when the goods or services are supplied to external customers or the terms of the contract have been satisfied.

All income from short-term deposits is credited to the Statement of Comprehensive Income and Expenditure in the year in which it is earned.

e) Agency Arrangements

The College acts as an agent in the collection and payment of all Student Support Funds except for childcare funding. These funds are excluded from the College Statement of Comprehensive Income and Expenditure, and movements have been disclosed in the notes to the accounts.

Where the College has more discretion in the manner in which specific funds are disbursed, and those funds do not meet the definition of agency funds (childcare funding), the income and expenditure relating to those funds are shown in the College Statement of Comprehensive Income and Expenditure.

f) Grant Funding

Government revenue grants including the recurrent grants from the Scottish Funding Council are recognised in income over the periods in which the College recognises the related costs for which the grant is intended to compensate. Where part of a government grant is deferred it is recognised as deferred income within creditors and allocated between credits due within one year and due after more than one year as appropriate.

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Grants from non-recurrent sources are recognised in income when the College is entitled to the income and performance related conditions have been met. Income received in advance of performance related conditions being met is recognised as deferred income within creditors on the balance sheet and released to income as the conditions are met.

g) Donations and Endowments

Non exchange transactions without performance related conditions are donations and endowments. Donations and endowments with donor-imposed restrictions are recognised in income when the College is entitled to the funds. Income is retained within the restricted reserve until such time that it is utilised in line with such restrictions at which point the income is released to general reserves through a reserve transfer.

Donations with no restrictions are recognised in income when the College is entitled to the funds.

Investment income and appreciation of endowments is recorded in income in the year in which it arises and as either restricted or unrestricted income according to the terms other restriction applied to the individual endowment fund.

h) Capital Grants

Government capital grants are recognised in income over the expected useful life of the asset. Other capital grants are recognised in income when the College is entitled to the funds subject to any performance related conditions being met. The funds will be held in deferred income within creditors until conditions are met.

i) Fixed assets

1. Tangabile Assets

In line with the FReM all tangible assets must be carried at fair value.

2, Land and buildings

Land and buildings are measured using the revaluation model. Under the revaluation model, assets are revalued to fair value. Depreciated Replacement Cost has been used as a measure of fair value for land and buildings, otherwise Market Value has been used. The College has a policy of ensuring a full revaluation takes place at least every 5 years, with an interim valuation carried out after 3 years, such that the fair value is not materially different to the current value. Last year a full revaluation was undertaken. This financial year an indexation valuation exercise was carried out and is reflected in the financial statements. Depreciation and impairment losses are subsequently charged on the revalued amount.

Finance costs, which are directly attributable to the construction of land and buildings, are capitalised as part of the cost of those assets.

Costs incurred in relation to land and buildings after initial purchase or construction, and prior to valuation, are capitalised to the extent that they increase the expected future benefits to the College.

A review for impairment of a fixed asset is carried out if events or changes in circumstances indicate that the carrying amount of any fixed asset may not be recoverable.

Assets under construction are accounted for at cost, based on the value of architects’ certificates and other direct costs. They are not depreciated until they are brought into useful life.

Heritable land is not depreciated as it is considered to have an indefinite useful life. Freehold buildings are depreciated on a straight-line basis over their expected useful lives.

Depreciation is calculated on a straight-line basis over the expected useful life of the buildings which vary from 10 to 60 years as determined by professional opinion and valuation.

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3. Buildings owned by third parties

Where land and buildings are used, but the legal rights are held by a third party, for example a charitable trust, they are only capitalised if the College has rights or access to on-going future economic benefit.

These assets are then depreciated over their expected useful economic life on a straight-line basis.

4. Equipment

Equipment costing less than £5,000 per individual item and motor vehicles costing less than £5,000 are written off to expenditure in the year of acquisition. All other equipment and vehicles are capitalised and carried at depreciated historical costs, which is used as a proxy for fair value. Assets of lesser value may be capitalised where they form part of a group of similar assets purchased in the same financial year and costing over £20,000 in total.

Capitalised equipment is depreciated over its useful economic life ranging from between 3 and 10 years on a straight-line basis.

Depreciation methods, useful lives and residual values are reviewed at the date of preparation of each balance sheet.

j) Finance Leases

Leasing agreements that transfer to the College substantially all the benefits and risks of ownership of an asset are treated as if the asset had been purchased outright. The relevant assets are included under fixed assets, and the capital element of leasing commitments is shown as an obligation under finance leases.

The lease rentals are treated as consisting of capital and interest elements. The capital element is applied to reduce the outstanding obligations, and the interest element is charged to the Statement of Comprehensive Income and Expenditure account in proportion to the reducing capital element outstanding.

Assets held under finance leases are depreciated over the shorter of the lease term or the useful economic lives of equivalent owned assets.

Assets held under hire purchase contracts which have the characteristics of finance leases are depreciated over their useful lives.

k) Operating Leases

Leases not meeting the criteria of a finance lease are treated as an operating lease. Expenditure in respect of operating leases is charged on a straight-line basis over the lease term. Any lease premiums or incentives are spread over the minimum lease term.

l) Taxation

The College has been entered into the Scottish Charity Register and is entitled, in accordance with section 13(1) of the Charities and Trustee Investment (Scotland) Act 2005, to refer to itself as a Charity registered in Scotland. The College is recognised by HM Revenue and Customs as a charity for the purposes of section 467, Income and Corporation Taxes Act 2010 and is exempt from corporation tax on its charitable activities. The College receives no similar exemption in respect of Value Added Tax. Irrecoverable VAT on inputs is included in the costs of such inputs and added to the cost of tangible fixed assets as appropriate, where the inputs themselves are tangible fixed assets by nature.

m) Stocks

Stocks are held for issue or resale and are stated at the lower of cost and net realisable value. Where necessary, provision is made for obsolete, slow-moving and defective stocks.

n) Cash

Cash includes cash in hand, deposits repayable on demand and overdrafts. Deposits are repayable on demand if they are in practice available within 24 hours without penalty.

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o) Employment Benefits

Short term employment benefits such as salaries and compensated absences are recognised as an expense in the year in which the employees render service to the College. Any unused benefits are accrued and measured as the additional amount the College expects to pay as a result of the unused entitlement.

p) Maintenance of Premises

The cost of routine corrective maintenance is charged to the Statement of Comprehensive Income and Expenditure in the period it is incurred.

q) Retirement Benefits

All new members of staff have the option of joining a pension scheme. The schemes currently open to new members of staff are the Scottish Teachers Superannuation Scheme (STSS) and the Strathclyde Pension Fund (SPF). Existing employees are entitled to maintain their membership of the STSS.

Full provision has been made for those pension costs which do not arise from externally funded defined benefit schemes.

Scottish Teachers Superannuation Scheme (STSS)

College participates in the Scottish Teachers’ Superannuation Scheme pension scheme providing based on final pensionable pay. The assets of the scheme are held separately from those of the College. The College is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis and therefore, as required by Financial Reporting Standard 102, accounts for the scheme as if it were a defined contribution scheme. As a result, the amount charged to the Statement of Comprehensive Income and Expenditure represents the contributions payable to the scheme in respect of the year.

Strathclyde Pension Fund (SPF)

The Strathclyde Pension Fund is a pension scheme providing benefits based on final pensionable pay. The assets and liabilities of the scheme are held separately from those of the College. Pension scheme assets are measured using market values. Pension scheme liabilities are measured using a projected unit method and discounted at the current rate of return on a high-quality corporate bond of equivalent term and currency to the liability. Contributions to the Scheme are determined by an actuary based on triennial valuations using the Age Attained Method. Variations from regular cost are spread over the expected average remaining working lifetime of members of the scheme, after making allowances for future withdrawals. The amount charged to the Statement of Comprehensive Income and Expenditure represents the net interest expense which is based on the net deficit within the scheme during the year.

The costs of enhanced early retirement benefits are borne directly by the College.

r) Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised in the financial statements when the College has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic benefit will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. This could include but not be limited to a provision for Failure to Educate.

The College has no contingent liabilities or contingent assets at the balance sheet date. Contingent liabilities and contingent assets, should they require to be disclosed, would not be recognised in the Balance Sheet but would be disclosed in the notes to the financial statements (see Note 27).

s) Judgements and key sources of estimation uncertainties

In preparing these financial statements, management have made the following judgements:

1. Determine whether there are indicators of impairment of the College’s tangible assets

Factors taken into consideration in reaching such a decision include the presence of reinforced autoclave aerated concrete, the economic viability and the expected future financial performance of the asset.

Other Key Sources of Estimation Uncertainty

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2. Pensions Valuation

The present value of the Local Government Pension Scheme defined benefit liability depends on several factors that are determined on an actuarial basis using a variety of assumptions. The College has determined that using the asset ceiling methodology in line with FRS 102 is acceptable. As at 31 July 2024 a change of accounting estimate from FWL to perpetuity when calculating the asset ceiling was introduced. As the present value of the defined benefit pension obligations at the reporting date is less than the fair value of plan assets at that date, the plan has recorded a notional surplus. In line with the requirements of FRS 102 the economic benefit available as a reduction in future contributions is floored at £0, therefore the net asset/ liability is £0.

==> picture [525 x 542] intentionally omitted <==

----- Start of picture text -----
Year ended 31 July Year ended 31 July
2025 2024
£000 £000
2. Tuition Fees and Education Contracts
FE fees - UK 2,493 2,613
FE fees - non-EU 221 285
HE fees 2,002 2,036
SDS contracts 1,154 1,055
5,870 5,989
3. Funding Body Grants
FE recurrent grant 44,456 44,647
Childcare funds (Note 26) 575 728
Release of deferred capital grants 1,230 1,126
Other SFC grants - job evaluation - (4,596)
Other SFC grants 691 924
Estates maintenance funding 5,011 2,776
51,963 45,605
4. Other Grant Income
Development grants 448 354
Release of deferred capital grants 175 184
623 538
5. Other Operating Income
Catering 623 542
Other income generating activities 114 90
Support for learning 381 318
Other income 692 776
1,810 1,726
6. Investment Income
Pension interest receivable (Note 24) - -
- -
----- End of picture text -----

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----- Start of picture text -----
Year ended 31 July Year ended 31 July
2025 2024
£000 £000
7. Staff Costs
Wages and salaries 34,127 33,286
Social security costs 3,867 3,512
Pension costs including actuarial cost (Note 24) 6,654 6,770
Increase in holiday pay provision 107 (29)
Support staff job evaluation 935 935
45,690 44,474
Teaching departments 25,615 26,503
Teaching services 4,796 5,208
Administration and central services 9,051 7,875
Premises 1,998 2,044
Other expenditure 1,385 1,500
Catering 294 270
Pension adjustments 950 (249)
Total 44,089 43,152
Support staff job evaluation
Restructuring costs 935 935
Release of deferred capital grants 666 387
Total 45,690 44,474
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The full harmonisation costs of national bargaining support staff and middle management will not be confirmed until the national job evaluation exercise is concluded, the outcome of which will be backdated from 1 September 2018. Up until 2024-25, the College has accrued support staff and middle management costs and the associated grant funding based on Colleges Scotland’s February 2019 costings. Given the ongoing uncertainty about the timing of the conclusion of the job evaluation project, the previous accounting treatment (recognise the liability and the corresponding accrued income) is no longer appropriate. In line with the SFC Accounts Direction the College has not recognised any income in the year but has recognised the costs which in line with previous years.

As at 31 July 2025, the expenditure amounted to £6,465,000. The College expects the Scottish Government at the conclusion of the national job evaluation project to meet this cost in full.

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Staff Numbers:

The average number of full-time equivalent employees, including higher paid employees, during the year was:

==> picture [525 x 327] intentionally omitted <==

----- Start of picture text -----
2025 2024
FTE FTE
Teaching departments 394 409
Teaching services 58 59
Administration and central services 209 225
Premises 57 51
Other expenditure 24 26
Catering 8 8
Average number of FTE directly employed 750 777
Headcount: Teaching 492 507
Headcount: Support 463 478
-
Agency staff costs 86,356 189,002
Average number of agency FTE 2 3
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The number of staff, including senior post-holders and the principal, who are due to receive

annual emoluments in the following ranges are:

==> picture [526 x 213] intentionally omitted <==

----- Start of picture text -----
2025 2024
FTE FTE
£60,001 - £65,000 -
£65,001 - £70,000 12 15
£75,001 - £80,000 10 9
£100,001 - £105,000 3 2
£135,001 - £140,000 1 1
£140,001 - £145,000 1
27 27
----- End of picture text -----

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==> picture [526 x 135] intentionally omitted <==

----- Start of picture text -----
8. Senior Post-Holders’ Emoluments
Number of senior post-holders, including the principal was: 12 12
2024-25 2023-24
Senior post-holders’ emoluments are made up as follows: £000 £000
Salaries 916 981
Pension contributions 103 156
Total Emoluments 1,019 1,137
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The above emoluments include amounts payable to the principal, who is also the highest paid senior post holder, of:

2024-25 2023-24
£000 £000
Principal
137		 137
Pension contributions
11		 20

No senior post-holder received any benefits in kind.

The principal and 9 other senior post holders were members of the Strathclyde Pension Fund, a further 2 senior post holders were members of the Scottish Teachers Superannuation Scheme. All pension contributions were paid at the same rate as for other members of staff.

The members of the Board of Management with the exception of the Chair, the Principal and the staff members, did not receive any payment from the College other than the reimbursement of travel and subsistence expenses incurred in the course of their duties.

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----- Start of picture text -----
Year ended Year ended
31 July 2025 31 July 2024
£000 £000
9. Other Operating Expenses
Teaching departments 2,048 2,176
Catering 330 334
Other income generating activities 288 704
Premises: operating 3,050 2,811
Premises: maintenance 5,174 2,229
Administration 3,869 3,904
FE and HE childcare (Note 26) 575 728
15,334 12,886
Included in Administration expenses are:
Auditors’ remuneration (inclusive of VAT)
Internal audit services 18 14
External audit services 54 58
Other services 12 7
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10. Interest Payable

2024-25
£000		 2023-24
£000
On bank loans, overdrafts and other loans 23 47
Pension interest costs (Note 24) 370 352
393 399

11. Taxation

The Board of Management does not consider that the College is liable for any Corporation Tax arising out of its activities during the year.

12. Tangible Fixed Assets

==> picture [527 x 415] intentionally omitted <==

----- Start of picture text -----
Inherited Land Other Land & Equipment Total
& Buildings Buildings
£000 £000 £000 £000
Cost or valuation
At 1 August 2024 65,995 59,378 3,148 128,521
Additions in year -
Revaluation (2,767) (675) (3,442)
At 31 July 2025 63,228 58,703 3,148 125,079
Depreciation
At 1 August 2024 825 - 2,799 3,624
Charge for year 4,069 1,963 175 6,207
Revaluation (4,069) (1,963) (6,032)
At 31 July 2025 825 - 2,974 3,799
Net book value at:
31 July 2025 62,403 58,703 174 121,280
31 July 2024 65,170 59,378 349 124,897
Analysis of net book value at 31 July 2025
Inherited 27,913 - - 27,913
Financed by capital grant 34,490 - 175 34,664
Other - 58,703 - 58,703
Leased - - -
62,402 58,703 175 121,280
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This year the challenges continue, and the college has undertaken a indexation exercise by Ryden’s which has been agreed with Azet’s our auditors.

57

Land and buildings were independently valued at 31 July 2025 by Ryden, a regulated firm of Chartered Surveyors using indexation factors. The valuation was prepared in accordance with the requirements of RICS Valuation - Professional Standards, January 2022 amendment, FRS 102 and the Government Financial Reporting Manual. The basis of the valuation used was Depreciated Replacement Cost.

Land and buildings with a net book value of £121,105,641 (2024: £124,548,231) have been funded from Exchequer Funds, under the definition found in the Financial Reporting Manual. These assets cannot be disposed of without the prior approval of the Scottish Funding Council, and then any proceeds only used in accordance with their instructions.

Included within Land and Buildings is land with a valuation of £5,924,000 (2024: £5,924,000) which is not depreciated or subject to indexation.

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----- Start of picture text -----
Year ended Year ended
31 July 2025 31 July 2024
£000 £000
The depreciation charge for the year is analysed as follows:
Based on cost 1,470 1,499
Based on valuation 4,737 4,137
6,207 5,636
Analysed:
Owned assets 6,207 5,636
Assets held under finance leases - -
Leased assets - -
6,207 5,636
13. Trade And Other Debtors 1,126
Trade debtors 79 236
Other debtors 21 19
Prepayments and accrued income 544 680
Amounts owed by SFC - 170
Amounts owed by SFC - Other - -
644 1,105
14. Creditors: Amounts Falling Due Within One Year
Bank loans 140 317
Finance lease - -
Trade creditors 1,306 1,421
Other creditors 9 42
Accruals and deferred income 2,596 5,804
Amounts owed to SFC 6,926 6,113
Deferred capital grants SFC 1,230 1,126
Deferred capital grants non-SFC 175 184
12,381 15,007
15. Creditors: Amounts Falling Due After One Year
Bank loans - 139
Deferred capital grant SFC 17,809 19,143
Deferred capital grant non-SFC 3,536 3,702
21,345 22,984
16. Provisions 6,466 5,531
Job Evaluation 6,466 5,531
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17. Analysis Of Borrowings of The College

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----- Start of picture text -----
Year ended Year ended
31 July 2025 31 July 2024
£000 £000
a) Bank loans
Within one year 140 317
Between one and two years - 139
Between two and five years
140 456
Bank borrowings are secured over specific areas of heritable land and buildings spread a 12-year terms at fixed rates of 7.90%. This
loan will be fully repaid November 2025.
b) Bank loans
Within one year - -
Between one and two years - -
- -
18 Funded Pension Asset
Reserve at start of year - 133
Current service cost in year (2,337) (2,146)
Past service cost (181) -
Employer contributions 864 1,734
Contributions re unfunded benefits 704 661
Net interest (370) (352)
Transfer to Income and Expenditure (1,320) (103)
Pension scheme actuarial gain Asset ceiling adjustment 14,848 15
(13,529) (45)
Balance at 31 July 2025 - -
19. Unfunded Pension Provision
Pension provision at start of year (6,935) (7,307)
Pension scheme actuarial gain/loss 632 372
Balance at end 31 July 2025 (6,304) (6,935)
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The movement in the funded and unfunded pension schemes is further analysed in Note 24

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20. Analysis Of Net Cash / (Debt)

20. Analysis Of Net Cash / (Debt)
At
31 Jul 2024
£000
Cash Flows
£000		 Other Non-
Cash Changes
£000		 At
31 Jul 2025
£000
Cash 13,801
(2,701)		 - 11,100
13,801 (2,701) -
11,100
Debt due within one year (317) 317
(140)		 (140)
Debt due after oneyear (140) -
140
-
13,344
(2,384)		 -
10,960

21. Financial Commitments

At 31 July 2025 the College had annual commitments under non-cancellable operating leases for Land and Buildings as follows:

Year ended
31 July 2025
£000		 Year ended
31 July 2024
£000
Future minimum leasepayments due:
Expiringwithin 1 year 122 113
Expiring between two and five years 419 439
Expiringafter 5 years 102
Total leasepayments due 541 654

22. Capital Commitments

The College has no capital commitments at the year end.

23. Related Party Transactions

The Board of Management of West College Scotland is a body incorporated under the Further and Higher Education (Scotland) Act 1992. It receives funding from the Scottish Funding Council (SFC).

During the year the College had various material transactions with other entities for which SFC is regarded as the sponsor department, via Students Awards Agency for Scotland, Scottish Enterprise and several other colleges and higher education institutions.

In addition, the College has had a small number of material transactions with other Government Departments and other central and local government bodies. Most of these transactions have been with the Employment Service and Local Authorities.

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Due to the nature of the College’s operations and the composition of its Board of Management (being drawn from local public and private sector organisations), it is inevitable that transactions will take place with organisations in which a member of the Board of Management may have an interest. All transactions involving organisations in which a member of the Board of Management may have a material interest are conducted at arm’s length and in accordance with the College’s and their employer’s normal project and procurement procedures.

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----- Start of picture text -----
Member Organisation Position Value of Value of
Purchase Sales
Invoices Invoices
(£000) (£000)
Anne Campbell Developing the Young Workforce Board Member 890 -
Terry Dillon Skills Development Scotland Board Member 3 17
Terry Dillon The Beacon Art Centre Board Member 27 6
Waiyin Hatton Wai Beyond Founder/ Director - 0.2
Gordon Hunt College Development Network Senior Manager 4 0
Ronald Leitch AGS Airports Ltd & Glasgow Airport Board Member - 0.1
John Scott NHS Golden Jubilee Board Member 20 0.1
Elizabeth Connolly Renfrewshire Chamber of Commerce Board Member 1 0.1
Board Member - Community Planning
Elizabeth Connolly West Dunbartonshire Council 17 123
Partnership Board
Elizabeth Connolly Developing the Young Workforce Board Member 890 -
Elizabeth Connolly Colleges Scotland Board Member 74 7
Brian Logan Capability Scotland Chief Executive - 0.8
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24. Pension Schemes

The College‘s employees belong to one of two principal pension schemes, the Scottish Teacher‘s Superannuation Scheme (STSS) and the Strathclyde Pension Fund Scheme (SPF), which are both defined benefit schemes.

==> picture [526 x 146] intentionally omitted <==

----- Start of picture text -----
31 July 2025 31 July 2024
£000 £000
The total pension cost for the College was:
Contributions paid 5,704 7,019
Employer service costs (net of employee contributions) 950 (249)
Total pension cost (Note 7) 6,654 6,770
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Scottish Teachers’ Superannuation Scheme (STSS)

The STSS is an unfunded multi-employer defined benefit scheme. It is accepted that the treatment can be as a defined contribution scheme as the STSS is unable to identify its share of the underlying assets and liabilities of the scheme. As the scheme is unfunded there can be no surplus or shortfall. Pension contribution rates will be set by the schemes actuaries at a level to meet the costs of the pensions as they accrue.

A full actuarial valuation was carried out as at 31 March 2016. The valuation had set the rate payable for the scheme for the period 1 September 2019 to 31 March 2023 at the rate of 23%. The latest valuation, discussed with the Scheme advisory Board (SAB), confirmed that an increase in the employer contribution rate from 23% to 26% took effective from 1 April 2024. Confirmation from STSS of final member contribution structure from the 1 April 2024 ranged from 7.4% to 12%.

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FRS 102

Under the definitions set out in Financial Reporting Standard 102 (FRS 102) Section 28 Employee Benefits, the STSS is a multi-employer pension scheme. The College is unable to identify its share of the underlying assets and liabilities of the scheme. Accordingly, the College is required by FRS 102 to account for its contributions to the scheme as if it were a defined-contribution scheme. The College has set out above the information on the scheme and the implications for the College in terms of the anticipated contribution rates.

Strathclyde Pension Fund (SPF)

The SPF is a funded defined benefit scheme, with the assets held in separate trustee-administered funds. The total contribution rates are set by the scheme actuaries. This year the employer contributions dropped to 6.5% from 19.3%. They will remain at 6.5% for 24/25 and will increase to 17.1% from 1st April 2026. Employee contributions are set by the LGPS Regulations and ranged from 5.5% to 12%.

24. PENSION SCHEMES (Continued)

The pension cost is assessed every three years in accordance with the advice of a qualified independent actuary. The assumptions which have the most significant effect on the scheme are:

31 July 2025 31 July 2024
£000 £000
Principal Actuarial Assumptions
Rate of increase in salaries
3.45%		 3.45%
Rate of increase for pensions in payment / inflation
2.75%		 2.75%
Discount rate for liabilities
5.80%		 5.00%

The current mortality assumptions include sufficient allowance for future improvements in mortality rates. For 2024 life expectancy was calculated based on the Fund›s VitaCurves as in the previous year. The assumed life expectations on retirement age 65 are:

31 July 2025 31 July 2024
£000 £000
Currentpensioners
Males
20.4		 20.1
Females
22.7		 22.6
Future pensioners
Males
20.5		 20.4
Females
24.4		 24.4

Commutation

An allowance is included for 50% of future retirements to elect additional tax-free cash up to HMRC limits for pre-April 2009 service and 75% of the maximum tax-free cash for post-April 2009 service.

The table below compares the present value of the scheme liabilities, based on the actuary’s assumptions, with the estimated employer assets:

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----- Start of picture text -----
Year ended Year ended
31 July 2025 31 July 2024
£000 £000
Funded Pension Scheme
Fair value of employer assets 138,482 130,081
Present value of liabilities (79,608) (86,895)
58,874 43,187
Pension asset ceiling adjustment (58,874) (43,187)
Net funded pension asset/(liability) - -
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The pension asset ceiling has been derived from using the ‹perpetuity› calculation which forecasts over 66.7 years.

This year the accounting estimate changed from the future working lifetime ‹FWL› method to the perpetuity method when calculating the pension asset ceiling adjustment. The change in accounting treatment will be treated prospectively.

Year ended
31 July 2025
£000		 Year ended
31 July 2024
£000
Unfunded Pension Scheme
Present value of liabilities (6,304) (6,936)
Net unfundedpension liability (6,304) (6,936)

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----- Start of picture text -----
Year ended Year ended
31 July 2025 31 July 2024
£000 £000
Amount charged to Comprehensive Income and Expenditure:
Employer service cost (net of employee contributions) (note 7) 950 (249)
Interest (receivable) / payable on obligation (note 6 and 10) 370 352
Actuarial gain on scheme assets 15,481 5,636
Asset ceiling adjustment (13,529) 45
Total 3,272 (239)
Changes in the fair value of scheme assets:
Opening fair value of scheme assets 130,081 120,380
Net interest 6,462 6,075
Contributions by members 720 722
Contributions by the employer 864 1,734
Contributions in respect of unfunded benefits 704 661
Benefits paid (3,120) (3,143)
Unfunded benefits paid (704) (661)
Other experience - (458)
Expected (loss) / return on assets 3,475 4,771
Closing fair value of scheme assets 138,482 130,081
Changes in the present value of the defined benefit obligation:
Opening defined benefit obligation 93,830 86,486
Current service cost 2,337 2,146
Past service cost 181 -
Interest cost 4,674 4,353
Contributions by members 720 722
Estimated benefits paid (3,120) (3,143)
Estimated unfunded benefits paid (704) (661)
Actuarial (gain) / loss (12,005) 3,927
Closing defined benefit obligation 85,913 93,830
History of experience losses
Scheme assets 138,482 130,081
Defined benefit obligation (85,913) (93,830)
Surplus 52,569 36,251
Experience gains/(losses) on scheme assets 3,475 4,771
Experience gains/ (losses) on scheme liabilities 12,005 (3,927)
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Year ended Year ended
31 July 2025 31 July 2024
£000 £000
Net assets excluding pension liability
Pension asset 92,831 96,281
(6,304) (6,936)
Net assets including pension liability 86,527 89,345
The analysis of amounts charged to the Statement of Comprehensive
Income and Expenditure (SOCIE) is as follows:
Analysis of the amount charged to staff costs (Note 7):
Current service cost (2,337) (2,146)
Past service cost (181) -
Total charged to staff costs (2,518) (2,146)
Analysis of the amount (due) / charged to pension interest (Note 6 and 10):
Expected return on pension scheme assets 6,462 6,075
Interest on pension scheme liabilities (4,674) (4,353)
Interest cost on the effect of the asset ceiling (2,158) (2,074)
Net pension interest income / (charge) (370) (352)
Charge to other comprehensive income:
Return on assets excluding amounts included in Interest 3,475 4,771
Experience gains arising on the scheme liabilities 868 (8,713)
Changes in assumptions underlying the present value of the scheme
11,137 4,328
liabilities
Asset ceiling adjustment (13,529) (45)
Actuarial gain 1,951 341
Total (charge) / income to the SOCIE (937) (2,157)
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Analysis of the movement in deficit during the year

Deficit in scheme at beginning of the year:

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----- Start of picture text -----
Year ended Year ended
31 July 2025 31 July 2024
£000 £000
Movement in year:
Current service cost (6,936) (7,174)
Past service cost (2,337) (2,146)
Contributions (181) -
Contributions in respect of unfunded benefits 864 1,734
Past service cost 704 662
Total net interest - -
Actuarial gain (370) (352)
Asset ceiling adjustment 15,481 386
(13,529) (45)
Deficit in scheme at end of the year (6,304) (6,935)
- -
Fair value of funded pension scheme asset
Fair value of unfunded pension scheme liability (6,304) (6,935)
(6,304) (6,935)
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25. FE Bursary and Other Student Support Funds

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FE Bursary EMAs Other Total Total
£000 £000 £000 31 July 2025 31 July 2024
£000 £000
Balance b/fwd. 173 - - 173 1,175
Allocation/Receipts in year 11,057 390 208 11,655 10,815
Expenditure (10,544) (390) (202) (11,136) (10,765)
Repaid to SFC (173) - - (173) (835)
Recovered from SFC as owing - - - - -
College contribution to funds - - - - -
Balance c/fwd. 513 - 6 519 390
Represented by:
Repayable to SFC 513 - 6 519 390
Repayable to College by SFC - - - - -
Totals 513 - 6 519 390
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The above grants are available solely for students, the College acting only as paying agent. The grants and related disbursements are therefore excluded from the Income and Expenditure Account.

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26. Childcare Funds

26. Childcare Funds
Total
31 July 2025
£000		 Total
31 July 2024
£000
Balance b/fwd. - -
Allocation received in period 575 728
Expenditure (575) (728)
Balance c/fwd. - -

Childcare fund transactions are included within the College SOCIE in accordance with Accounts Direction issued by the Scottish Funding Council.

27. Contingent Liabilities and Contingent Assets

There are no contingent liabilities or contingent assets.

28. Post Balance Sheet Events

There have been no significant post balance sheet events.

29. Impact Of Depreciation Budget on Statement of Comprehensive Income

Following reclassification, colleges received a non-cash budget to cover depreciation, but this additional budget is not recognised under the FE/HE SORP accounting rules. As a result, colleges may show a deficit equivalent to net depreciation as a result of having to meet Government accounting rules and the requirement to spend the entire cash allocation.

Year ended
31 July 2025
£000		 Year ended
31 July 2024
£000
Deficit before othergains and losses (FE/HE SORP basis) (7,358) (9,537)
Add: Depreciation budget for government funded assets (net of deferred
capitalgrant)		 4,802 4,326
OperatingSurplus / (Deficit) on Central Government accountingbasis (2,556) (5,211)

Under the FE/HE SORP, the College recorded an operating deficit of £7.4m for the year ended 31 July 2025. After adjusting for the non-cash allocation provided under the government rules, the College shows an “adjusted” deficit of £2.6m on a Central Government accounting basis.

30. Adjusted Operating Position (AOP)

The SOCI presents the financial performance during the accounting period in accordance with the SORP. The AOP is intended to reflect the underlying operating performance after allowing for material one-off or distorting items required by the SORP or other items out with the control of the College. The AOP is therefore designed to smooth any volatility in reported results arising from FRS102 and to recognise that some of the reported costs do not have an immediate cash impact on the College. The College’s Underlying Operating Position can be illustrated as:

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2024-25 2023-24 2022-23
Note
£’m £’m £’m
Deficit before other gains and losses -7.35 -9.5 -2.6
Add back:
Depreciation net of deferred capital grant releases 1 4.8 4.3 3.2
Pension adjustment – Net service costs 2 0 0 0.6
Pension adjustment – Net interest costs 3 0.4 0.4 0
Cost of middle management job evaluation exercise not
4 0.94 5.5 0
matched by revenue
Deduct:
Pension adjustment – Net interest receivable 5 0 0 -0.5
Pension adjustment – Net service income 2 0.9 -0.2 0
Revenue funding allocated to loan repayments 6 -0.31 -0.4 -0.3
Adjusted operating surplus -0.62 0.1 0.4
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Commentary on adjusting items:

Note 1: Depreciation is a non-cash item and is therefore excluded when calculating the adjusted cash operating position.

Note 4: The accrued/provided costs of middle management/support staff job evaluation not matched by revenue to date.

Note 6: The loans payments and the unfunded pensions payments are not reflected in the SOCI therefore this amount is adjusted.

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69

60 60 600 0300 info@wcs.ac.uk www.westcollegescotland.ac.uk

Azets Audit Services Quay 2 139 Fountainbridge Edinburgh EH3 9QG

Dear Sirs,

West College Scotland Financial Statements for the year ended 31 July 2025

This representation letter is provided for the purpose of expressing an opinion as to whether West College Scotland’s (‘the College’) financial statements are presented fairly, in all material respects, in accordance with the Further and Higher Education (Scotland) Act 1992, the Accounts Direction issued by the Scottish Funding Council, UK Generally Accepted Accounting Practice including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice) and the Statement of recommended practice: Accounting for further and higher education, the Government Financial Reporting Manual (FReM) where applicable and the Financial Memorandum between the Scottish Funding Council and the College (further referred to as ‘the applicable accounting framework’).

We confirm that to the best of our knowledge and belief, having made such inquiries as we considered necessary for the purpose of appropriately informing ourselves:

Financial Statements

requirements of the applicable accounting framework. (A summary of the main disclosure changes is at Appendix 2).

xiii. The College has complied with all aspects of ring-fenced grants that could have a material effect on the College’s financial statements in the event of non-compliance.

Except as disclosed in the financial statements:

xv. Related party relationships and transactions have been appropriately accounted for and disclosed in accordance with the requirements of the applicable accounting framework.

xvi. All events subsequent to the date of the financial statements which require adjustment or disclosure have been adjusted or disclosed.

2

Information Provided

xxix. We acknowledge our legal responsibilities regarding disclosure of information to you as auditors and confirm that so far as we are aware, there is no relevant audit information needed by you in connection with preparing your audit report of which you are unaware. Each board

3

member has taken all the steps that they ought to have taken as a board member in order to make themselves aware of any relevant audit information and to establish that you are aware of that information.

Annual Report

xxx. The disclosures within the Annual Report fairly reflect our understanding of the College's financial and operating performance over the period covered by the financial statements.

Corporate Governance Statement

Approval

The approval of this letter of representation was minuted by the Board of Management at its meeting on 15 December 2025.

Yours faithfully

Signed on behalf of the board of management

Signature:

Name: Waiyin Hatton

Position: Chair of Board of Management

Date: 16 December 2025

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Appendix 1 – uncorrected misstatements

No Detail Statement of Balance Sheet Impact on
Comprehensive surplus
Income and
Expenditure
Dr / (Cr) Dr / (Cr) Dr / (Cr)
£’000 £’000 £’000
1. Reversal of potential cost to reinstate the Reversal of potential cost to reinstate the
Expenditure		 Expenditure
Accruals		 Accruals
(169)
leased office to the previous state. (169) (169)
169		 169
Net impact on(income)/expenditure (169)
Net impact on net assets 169

Appendix 2 – corrected disclosure and presentation changes

No Detail
1. Remuneration and staff report
College has calculated the remuneration figures based on full time equivalent (i.e multiplying the employees’
final month salary by 12). This was corrected to show the actual paid in the year and further footnotes were
added to explain full year equivalent for any members of the executive team who started/left the College
duringtheyear.
2. Remuneration and staff report
Remuneration figures for two members of the executive team were not included in the first version of the
accounts. The College had communicated that to us when submitting the accounts for audit and updated in
the final version of the accounts.
3. Performance report
Equality and diversity descriptions and narrative were updated to include the requirements of the Equality
Act 2010 as stated bythe SFC’s Accounts Direction.

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