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← Board of Management of Forth Valley College of Further and Higher Education

2025-07-31-accounts

FORTH VALLEY COLLEGE OF FURTHER AND HIGHER EDUCATION

REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED

31 July 2025

Scottish Charity No. SCO21191

Financial Statements for the Year Ended 31 July 2025

Forth Valley College

Scottish Charity No. SCO21191 The financial statements were approved and authorised for issue on 4 December 2025.

Contents

PROFESSIONAL ADVISERS..................................................................................................................................2 PERFORMANCE REPORT ....................................................................................................................................3 OVERVIEW .............................................................................................................................................................3 Principal and Chief Executive’s Statement.........................................................................................................3 Performance Summary......................................................................................................................................5 Estates Strategy...............................................................................................................................................11 Principal Risks and Uncertainties.....................................................................................................................12 Going Concern .................................................................................................................................................12 PERFORMANCE ANALYSIS....................................................................................................................................13 Performance Indicators ...................................................................................................................................13 Current & Future Developments......................................................................................................................14 Financial Performance.....................................................................................................................................14 Creditor Payment Performance.......................................................................................................................16 Sustainability Report .......................................................................................................................................16 CORPORATE GOVERNANCE REPORT....................................................................................................................19 Board of Management ....................................................................................................................................19 Statement of The Board of Management’s Responsibilities............................................................................21 Governance Statement....................................................................................................................................23 Assessment of corporate governance .............................................................................................................25 Internal Control ...............................................................................................................................................26 Going Concern .................................................................................................................................................27 REMUNERATION AND STAFF REPORT..................................................................................................................28 Remuneration Report......................................................................................................................................28 Staff Report .....................................................................................................................................................32 PARLIAMENTARY ACCOUNTABILITY REPORT.......................................................................................................35 INDEPENDENT AUDITOR’S REPORT TO THE BOARD OF MANAGEMENT OF FORTH VALLEY COLLEGE, THE AUDITOR GENERAL FOR SCOTLAND AND THE SCOTTISH PARLIAMENT...................................................................................................................36 REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS ....................................................................................................36 FINANCIAL STATEMENTS .................................................................................................................................40 STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 JULY 2025....................................................................40 STATEMENT OF CHANGES IN RESERVES FOR THE YEAR ENDED 31 JULY 2025 ........................................................................41 BALANCE SHEET AS AT 31 JULY 2025...........................................................................................................................42 CASH FLOW STATEMENT FOR THE YEAR ENDED 31 JULY 2025...........................................................................................43 NOTES TO THE FINANCIAL STATEMENTS ........................................................................................................................44 APPENDIX 1 ACCOUNTS DIRECTION FROM SCOTTISH FUNDING COUNCIL .............................................................................62

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

PROFESSIONAL ADVISERS

External Auditor: Forvis Mazars LLP
Capital Square
58 Morrison Street
Edinburgh
EH3 8BP
Internal Auditors: WBG Services LLP
168 Bath Street
Glasgow
G2 4TP
Tax Advisers: Henderson Loggie LLP
20 Greenmarket
Dundee
DD1 4QB
Bankers: Barclays Bank
120 Bothwell Street
Glasgow
G2 7JT
Royal Bank of Scotland
36 St Andrew Square
Edinburgh
EH2 2YB
Solicitors: Morton Fraser MacRoberts LLP
60 York Street
Glasgow
G2 8JX
CMS Cameron McKenna Nabarro Olswang LLP
20 Castle Terrace
Edinburgh
EH1 2EN
Clyde & Co (Scotland) LLP
1 George Square
Glasgow
G2 1DY

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PERFORMANCE REPORT

OVERVIEW

The purpose of this overview is to provide sufficient information to understand Forth Valley College, its purpose, its objectives, the College’s performance during 2024-25, and the impact and management of key risks.

Principal and Chief Executive’s Statement

College background

Forth Valley College (FVC) was established in 2005 as a merged regional College serving the needs of the three communities in Clackmannanshire, Falkirk and Stirling. In geographic and industrial terms, the Forth Valley region is very diverse, from the nationally significant oil, gas and chemical sectors in Grangemouth, to the hospitality, tourism and heritage sectors in Stirling and the rural communities. The College delivers 750 programmes over our three main campuses at Falkirk, Stirling and Alloa to 2,600 full time students and a total of 12,500 students per annum. The College offers programmes at Scottish Credit and Qualifications Framework (SCQF) Levels 2-10 with a 60/40 split on FE and HE delivery. The College works with several awarding bodies, having devolved authority to deliver Scottish Qualifications Authority (SQA) qualifications, which comprise the majority of its curriculum offer.

The College works in close partnership with the three local authorities and delivers to over 1,200 school pupils across Forth Valley’s 18 secondary schools. The College has one of the largest Modern Apprentice contracts with Skills Development Scotland, and delivers to over 1,100 apprentices. The College also delivers partnership degrees with the University of Stirling, Heriot Watt University and Strathclyde University, and has extensive university articulation agreements with many Scottish Universities. The College’s ambitions are set out in the 2025-30 Strategic Plan which summarises the fundamental purpose “to deliver excellence in education and skills that are transformational for our students and partners.” The purpose is underpinned by four strategic aims relating to delivering an excellent student experience, delivering a sustainable future, promoting equality and wellbeing, and achieving growth through innovation. Each of these aims is supported by a range of high-level metrics to measure success.

Financial & Academic Year 2024-25

For academic session 2024-25 all programmes started in August 2024 with the majority delivered in face-to-face format, but with some courses delivered through a hybrid learning delivery model where this is beneficial to a specific programme. The College continues to deliver for our students following on from our successful outcomes in session 2023-24, where the most recent available Scottish Funding Council performance data shows the College continuing to perform above the Scottish average in all full-time and part-time FE and HE categories in the national table. The College is performing above the sector average in relation to: all enrolments over 160 hours; SIMD 10 & 20 groups and disability. Our student data also shows that a total of 97% of the College’s full-time students moved on to a positive destination - employment, further training or higher education.

Session 2024-25 continued to be another positive year for Forth Valley College with the College on plan to deliver its credit allocation within the set 2% tolerance. The 2025-30 Strategic Plan launched in January 2025 has been designed with staff, student and stakeholders’ input to ensure it places people at the centre of the College’s vision. In conjunction with the new strategic plan the College has also launched its new Student Experience strategy to enhance student attainment at Forth Valley College.

Further recognition of success occurred when QAA visited the College in March and May of 2025 as part of the new SFC’s Outcomes Framework & Assurance Model (OF & AM) which is replacing the Outcome Agreement (OA) model and How Good Is Our College (HGIOC) quality assurance process. Forth Valley College is the first college in Scotland to go through this new quality assurance process and has achieved the highest outcome by being judged as effective in managing academic standards, enhancing the quality of the learning experience and enabling student success. This is an excellent outcome for the College and demonstrates the capacity to continue to grow and improve as an organisation.

Sustainability is a top priority for the College, and we are committed to minimising the financial and environmental impact from our activities. The top risk facing the College is financial due to future flat cash assumptions on public

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sector funding. The College has been continually engaging with the Scottish Funding Council to make our financial position known, as well as working to offset flat-cash settlements. In academic session 2024-25 the College made further savings of over £1 million resulting in a total cost reduction of approximately £6 million since academic session 2021-22. Approximately 85% of the College’s income is from publicly funded sources which the College does not control, and 89% of our costs are split between staff (80%) and the estate (9%). All salaries within the sector are set centrally through national bargaining. In order to better understand our cost base, the College participated in a Financial Benchmarking activity with four other Scottish Colleges where an independent consultant reviewed and compared the cost profile of each college. FVC has been identified as the most efficient of the colleges in this process in terms of our income to cost ratio, confirming that FVC is making efficient decisions related to spend and costs reduction in conjunction with income opportunities.

We also recognise our corporate responsibility to act in a responsible manner to protect our environment whilst also promoting sustainability issues. The College is in the midst of our Net Zero Plan for 2023–2027 and has backed the sector wide ‘Scottish Colleges’ Statement of Commitment on the Climate Emergency’. The College’s Net Zero Plan has been developed to embed Scotland’s colleges’ aims across all of our operational and strategic planning and activities, to ensure we play a key role in achieving absolute emissions reduction by 2040.

The College has now had its Full Business Case approved for the £4 million skills transition centre project through the Falkirk and Grangemouth Growth Deal (F&GGD) to deliver the skills needed to support local businesses in their transition to net zero, and the funding commenced in January 2025.. The skills transition centre project is the first F&GGD project to be up and running and it is a key project within the Innovation theme and will directly contribute “to create a dynamic and distinctive area at the heart of central Scotland”. The STC brings together a broad spectrum of partners to create a focus for skills delivery within the context of significant transformational change as businesses, communities and individuals in our area transition to net zero. Collaborating with F&GGD partners across the Innovation and Place themes, the STC will deliver skills that are integral to the success of Falkirk and Grangemouth’s Just Transition. It will support the current and future workforce to become resilient, agile, climate literate and fully equipped to take advantage of opportunities in our rapidly changing economy. The College is also working with Stirling Council on the Forthside Film Studio’s skills production centre and is seen as a key partner in developing the business case as part of the Stirling and Clackmannanshire City Deal.

As always our partnerships are a reflection of how Forth Valley College is a key player in education on a local, national, regional and international level - and an organisation which stakeholders are proud to be associated with. The College is the key skills hub related to Project Willow and the Just Transition of the Grangemouth Cluster as well as being a lead College in the delivery of the skills needed to make the Forth Green Free Port a success. The College continues to expand its delivery model with ECITB where we have brought in additional income and we have secured a regional investment grant from ECITB to create a training programme that addresses critical skills shortages in the region. The College continues to strengthen its regional partnerships, and we have increased our MA provision by 17% for 2025-26 with a contract value of £2.3million. Using our networks to support our local communities , the College is supporting Petro-Ineos staff affected by the closure of the Grangemouth Refinery, with training needs analysis and a programme of re-training.

The College is launching a global strategy to maximise commercial opportunity to support the College’s financial operating environment and is active in Africa, the Middle East and Asia.

The College continues to be a key partner in the Forth Valley University College NHS Partnership which is set to pave the way for improved patient care and treatment for communities across the region for years to come. To aid the success of the partnership, the Alloa Campus has been identified as a centre of excellence for health and social care with our new clinical skills facility supporting an increase in delivery in the three priority areas.

Kenny MacInnes Principal and Chief Executive 4 December 2025

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Vision, purpose and activities

Legal Status

Forth Valley College came into being on 1 August 2005 as a result of the merger of Clackmannan and Falkirk Colleges. The Office for National Statistics (ONS) reclassified all incorporated Further Education (FE) Colleges as central Government entities, to be referred to as Arm’s Length Public Bodies from 1 April 2014. The College is a registered charity (Scottish Charity number SCO21191) for the purposes of the Law Reform (Miscellaneous Provisions) (Scotland) Act 2005.

The Financial Statements cover all activities of the College.

College Vision

We aim to empower every learner, drive positive change, and build strong connections with our communities and industries that strengthens Scotland’s economy.

Purpose and Strategic Aims

The Forth Valley College of Further and Higher Education Strategic Plan, for the period 2025-30 has the core purpose of delivering excellence in education and skills that are transformational for our students and partners. It has 4 strategic aims. These are:

Performance Summary

We will deliver an excellent student experience for all learners

A Thriving College Community

At Forth Valley College, we take pride in delivering an outstanding experience for all our learners. Our three state-of-the-art campuses Alloa (opened in 2011), Stirling (2012), and Falkirk (2020), have transformed the quality and breadth of education we offer across our local communities. These modern, digitally enabled spaces provide flexible learning environments that support full-time, part-time, evening learners, apprentices, and wider community users for now and into the future.

We understand that a thriving learning community goes beyond the physical building. That’s why we continually work closely with colleagues and students to shape the culture and ethos of the College, fostering a welcoming, inclusive, and supportive environment for everyone on their learning journey.

Our digital-first approach is now embedded across all aspects of college life. Technology is being used as a key enabler of learning, driving flexibility and innovation throughout our curriculum. Digital empowerment sits at the heart of our Vision for 2030. Through practitioner-led communities of practice, focusing on areas such as digital skills development, we are helping to deliver for the Forth Valley region.

Our award-winning campuses are also making a significant contribution to environmental sustainability. With cutting-edge green technologies integrated into the fabric of our estate, we’ve achieved substantial reductions in our carbon footprint. These campuses offer adaptable learning spaces, with enhanced digital infrastructure to support our learners.

The success of Forth Valley College is driven by the success of our learners and the expertise of our staff. We value our people and are committed to investing in their development to maintain and grow their skills. As an agile, forward-thinking organisation, we respond to the evolving needs of learners, employers, partners, and

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stakeholders ensuring our staff are equipped to embrace future opportunities and continue delivering excellence.

The Forth Valley College Student Experience

The College has continued to enhance the student journey by streamlining application and enrolment processes, and improved digital systems that provide clearer communication and easier tracking for applicants. The development of the portal into a user-friendly, accessible, and mobile-responsive platform has created a single point of access for timetables and course information, improving efficiency and reducing barriers for learners. The integration of transition information into the student journey started in 2023-24, with schools supporting the submission of key support information for over 400 pupils. This process will continue to be developed to integrate the transition information directly into our Student Support System (Triple S) to support lecturers in preparing for their class profile pre-delivery. The usability of the Portal has been improved and online enrolments are now fully rolled out to full-time, school and evening students which enables them to access digital ID cards and timetables before commencing their studies at Forth Valley College.

Academic year 2023-24 was the final year of the College’s Creative Learning and Technologies Strategy and in January 2025, the Student Learning Experience Strategy (SLE) 2025–30 was launched. The SLE places the learner voice at the centre of educational planning and delivery, aligning with the sparqs Student Learning Experience model to ensure students are equal partners in shaping their journey. Developed through consultation with staff, the Forth Valley Student Association, and class representatives, the strategy prioritises excellence in teaching, inclusive practice, and the development of digital and meta-skills to prepare students for future destinations. It introduces ambitious objectives, including increasing student participation in satisfaction surveys, improving overall satisfaction levels, and embedding structured mechanisms such as Power BI dashboards to track feedback and actions. This evaluative, evidence-based approach reflects the College’s commitment to continuous improvement and to delivering a high-quality, inclusive, and future-focused student experience.

Inclusion and Student Services (ISS) plays a central role in ensuring a student-centred and responsive support model, underpinned by data-driven evaluation through the Continuous Curriculum Improvement (CCI) process. ISS has embedded a coordinated staffing framework that enables early intervention and tailored support through the Support and Guidance Advisors and Learning Support Advisors who are aligned to academic departments. In addition, the introduction of the Learning and Inclusion Facilitator (LIF) role in 2022 has created a crucial bridge between curriculum delivery and student support, ensuring that learners receive timely, department-level assistance tailored to their needs. Delivered by academic staff, the LIF role has been particularly effective when aligned with the work of Learner Development Workers, strengthening early intervention and retention strategies. Education Scotland and the Quality Assurance Agency have recognised the positive impact of this resource, with curriculum teams reporting improved student engagement, progression, and attainment as a direct result of the targeted support provided. By embedding pastoral and academic guidance within departments, the LIF role has enhanced consistency of support, reduced barriers to accessing services, and contributed to safeguarding outcomes for the most vulnerable student groups.

This network of collaborative support has proven effective despite the increasing numbers of students disclosing Additional Support Needs (ASN) and priority group status. In 2024-25, ASN disclosures in full-time students increased to 31%, up from 25% in the previous year.

The College has implemented a range of targeted measures to improve outcomes, recognising the challenges of transition, engagement, and attainment within priority groups. Initiatives such as the publication of a School Leaver Toolkit, the roll-out of Get Ready to Learn workshops, and enhanced engagement in local authority positive destination meetings have provided structured transition support and improved readiness for college. Vulnerable students are further supported through the allocation of Named Contacts, closer alignment of Support and Guidance Advisors with departments, and the integration of school transition information into the Triple S system to enable earlier interventions. In addition, the College has embedded trauma-informed practice within staff development, ensuring that teaching and support approaches are sensitive to the needs of learners most at risk. These combined actions have led to measurable improvements, including a rise in under-18 success rates from 63.9% in 2021-22 to 70% in 2023-24, demonstrating the positive impact of a proactive and inclusive approach.

Triple S has transformed the way Forth Valley College manages and delivers learner support by consolidating all student support information into a single, accessible platform. Recent improvements include the introduction of

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an attendance and engagement monitoring report which consolidates key information that triggers support measures and interventions by key staff. Targeted staff development and technical improvements have significantly increased usage of Tiple S, enhancing the quality of data and the effectiveness of support. The recent inclusion of transition information from schools has further strengthened its role, enabling earlier and more tailored interventions for new students. By streamlining processes and improving communication across departments, Triple S has enhanced both efficiency and the student experience, positioning itself as a critical tool in safeguarding outcomes and supporting the diverse needs of learners.

The past year has seen another increase in referrals for safeguarding, mental health, and counselling. The changing nature of students, financial pressures and complex needs has exacerbated the need for more immediate interventions. The ISS team has managed these challenges effectively, avoiding waiting lists whenever possible for mental health and counselling referrals.

The College has taken a more strategic and collaborative approach to working with schools by embedding a Schools Collaborative Curriculum Planning process, designed to align college provision with school priorities and reduce duplication of curriculum. This process has been supported through regular planning and reflection meetings with Depute Head Teachers from all 18 secondary schools, enabling joint discussion of curriculum design, progression pathways, and improvement actions. For the School-College Partnership (SCP), enhancements such as the development of Technical Qualification pathways and improvements to the schools portal with live attendance and PI prediction data have strengthened monitoring and created clearer routes into college. For school leavers transitioning into full-time study, the introduction of the standardised Transition Information form in 2024-25 has enabled earlier and more tailored interventions, alongside initiatives such as the Get Ready to Learn workshops and active participation in local authority positive destination meetings have supported preparedness, retention, and progression.

The Staff Development Conference held in August 2025 provided staff with a rich programme of professional learning opportunities, combining strategic updates with a wide range of practical workshops. The conference offered a Quality and Systems Update, setting the context for the year ahead, followed by keynote sessions on Moodle developments, ABC Learning Design, and ISS priorities, emphasising how these areas directly support learning, teaching, and student success. Staff were able to select from a variety of workshops tailored to current challenges and innovations in education. These included sessions on managing classroom behaviour, embedding sustainability in the curriculum, and the use of AI to streamline lesson planning. Alongside these, important sessions on poverty awareness, corporate parenting, and trauma-informed practice highlighted the College’s ongoing commitment to inclusion and equity. The conference also expanded the focus with sessions designed to strengthen community partnerships and staff wellbeing. Highlights included opportunities to engage with Strathcarron Hospice on student volunteering and placement pathways, a workshop on promoting positive behaviour, and training on preventing sexual harassment in line with new legislative requirements. Other sessions addressed unconscious bias, emotional intelligence, and anti-racist curriculum design, reflecting the College’s strategic priority of embedding equality and diversity into practice. Staff were also introduced to emerging tools such as AI agents and Microsoft 365 Copilot, with a focus on how digital innovation can reduce workload and enhance teaching. Importantly, forums such as Listening to Employees (L2E) reinforced the College’s culture of valuing staff voice in shaping improvement. Overall, the conference provided a balance of strategic alignment, skills development, and wellbeing, equipping staff with both the tools and inspiration to deliver an excellent student experience in the year ahead.

In May 2025, FVC was the first college in Scotland to undergo QAA’s new Tertiary Quality Enhancement Review (TQER), achieving an overall judgement of effective in managing academic standards, enhancing the learning experience and enabling student success. The review highlighted strengths in the design of high-quality, work-like learning environments, comprehensive induction and ongoing support for new staff, end-to-end transition support that benefits disadvantaged learners, a strong data culture informing decisions, and a positive, enhancement-led staff-and-student culture. The areas for improvement that were highlighted were all in line with the College’s own improvement priorities including increasing staff and student ownership of the Strategic Plan and SLEs, improving public visibility of complaints processes and outcomes, widening and evidencing the influence of the broader student voice, and establishing more systematic oversight of the CCI process.

The process reflected that FVC remains an improvement focused organisation where there is a strong culture of reflection, evaluation and action planning to drive enhancement in the student experience. The new Tertiary

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Quality Enhancement Framework quality assurance reporting will continue in 2025-26 with the first submission of the organisational Self-Evaluation and Action Plan and also the Institutional Led Quality Review.

During 2024-25, the Forth Valley University College Partnership has delivered the Career Ambassador Project. Delivered through funding from the UK Shared Prosperity Fund and supported by the Forth Valley University College NHS Partnership, the project has successfully provided transformative mentoring opportunities for 44 college students. The initiative matched students, many from diverse and disrupted educational or career backgrounds, with NHS Forth Valley Volunteer Ambassadors across departments such as Business, IT, Health Improvement and Catering, offering one-to-one sessions, workshops, site visits and skills development. The project hosted a celebration in March 2025, where students shared inspirational stories of increased confidence, skills and career opportunities, with several progressing to university offers. The success of the programme reflects the strength of collaboration between the College, NHS Forth Valley and local partners, providing real-life role models, building ambition, and laying the foundation for future partnership and expansion.

We are continuing to drive the inclusion of student voice in quality improvement activities and aim to diversify how we do this through the CCI process. The bi-annual student survey “Listening to Learners” is central to this, where over 2,000 students contributed their views and helped to shape learning within their programmes of study. Over 95% of students reported that they were happy with their college experience and over 96% recognising how their learning will help them to progress to further study or work. The Scottish Funding Council Student Satisfaction and Engagement Survey responses, is an area of priority for improvement. Response rates are consistently lower than they should be, however student satisfaction rates being reported are consistently high with 94% of Forth Valley College students being either Highly Satisfied or Satisfied with their college experience.

We will focus on people, promoting equality, integrity and wellbeing

The College continues its commitment to improving the staff experience and service levels through the introduction of a new HR and Payroll system with a dedicated self-service and management information area. This provides staff with easier access to work and personal data, and managers have greater access to up to-dateinformation on which to base operational decisions.

Career development continues to be a focus through Personal Review and Development meetings between staff and managers to discuss and plan career and personal objectives and priorities. In addition, the General Teaching Council for Scotland (GTCS) registration of lecturing staff continues to be a priority for teaching staff.

A continued focus has been within the area of health and wellbeing, with an aim to empower our staff and support them during life’s challenges, in turn enhancing engagement and loyalty. This is a key component of the College’s People Strategy. We promote a range of support options available to staff, providing easy access to the Employee Counselling service, Work Positive policy, Carers support, and Mental Health provision, including our mental health ambassadors. We have also offered the Access to Work mental health support service through Able Futures, providing advice and support on how employers can help staff to cope with issues that are concerning them. Health and wellbeing workshops ran throughout the year including; Menopausal awareness, Men’s Health and a programme of courses relating to financial health.

Recognition and providing staff opportunities to input is another key element of the People Strategy. Staff have been encouraged to enter into a range of external awards such as the CeeD, Heralds Award and CDN awards.

The College undertakes an independent Equal Pay Audit every two years and publishes the outcomes on its website. This audit includes gender, disability and ethnicity pay gaps. The 2024-25 audit shows the College as robust with variations within gender primarily relating to occupational segregation, length of service and time in post. The overall mean gender pay gap has continued to reduce from 9.34% in 2016 to 8.06% in 2024. The mean disability pay gap is 2.07% and mean ethnicity pay gap is -1.58%.

The College undertakes a full staff cultural survey every three years and in 2022 we ran the last cultural survey using an updated template. This same survey was repeated in 2025 and compared directly against the 2022 results. With categories including leadership, management, learning, warmth, edge, entrepreneurship and teamwork, results increased from an average of 6.12 in 2022 to 6.62 in 2025. Under the survey’s matrix, this places the College in the upper quartile in terms of organisational performance. The improvement in scoring comes

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at a time of uncertainty for staff and supports the College’s current actions on fostering a positive culture. It also supports its future goals through utilising findings with a view to strengthen or change practices, to support efforts to improve morale and commitment, and to ultimately impact positively on performance.

Fair Work Principles

The recognised principles of fair work include opportunity, fulfilment, effective voice, respect and security. These align to the college values of Respectful, Innovative, Trustful and Excellent.

In promoting opportunity, which is detailed in our new People Strategy 2025-30 under “we will empower our people to reach their full potential” the College supports and invests in staff development and training as well as conducts staff reviews and provides CPD and leadership programmes. Career progression opportunities are at the heart of our resourcing strategy with vacancies advertised internally and support given to allow staff secondments, and all staff have access to training opportunities through various mediums. In working towards fulfilment we have a strong wellbeing support structure, paid development days and team building events. Our flexible approach to resourcing with multiple working patterns, supportive of many needs including those of carers, families, and promoting work-life balance is accessible by staff from day one of their employment.

To give staff an effective voice we support transparency in our surveys, have recognised trade unions with regular meetings and facility time, staff and trade union representatives on the Board of Management, regular news updates, employee groups on both general and specialist topics such as sustainability and equalities, and staff involvement in project development, as well as access to senior management through staff meetings. Respect is demonstrated not only in our approach to giving staff a voice and through our college values but to our actions on health & safety, wellbeing, our polices on flexible working, family friendly policies, hybrid working, as well as our open door management approach.

Zero hour contracts are restricted to where there are mutual benefits with the first consideration always set contracted hours. We also undertake an independent Equal Pay audit every two years that encompasses sex, ethnicity and disability and conduct Equality Impact Assessments on all major policies and decisions. Security is reflected in our transparency through union meetings, and staff briefings, as well as that we pay the real living wage as a minimum, have an excellent pension scheme, clear pay and progression practices. In these financially difficult times the College reviews its structures with a view to minimising risk and improving stability. Change in structure and establishment is undertaken only with full consultation with recognised unions and staff input, with justifications for change rightly scrutinised.

We will drive transformation to deliver a sustainable future

Over the last four years, to support the sustainability of the College for the medium term, the management team has delivered savings of over £6m, including the removal of circa 92 full-time equivalent staff. During 2024-25 FVC took part in a benchmarking exercise with four other Scottish colleges to assist with finding further areas for efficiencies, from which it was identified that FVC was the most operationally efficient of the participating colleges.

It is recognised by the management team that it is no longer possible to keep cutting around the edges and something fundamentally needs to change. To this end we are undertaking a review of the 3-campus estate and announced in September 2025, that we are considering the viability of our Alloa campus. A professional feasibility study is being prepared, and the Board of Management will consider this report early in 2026.

In response to the exceptional inflationary pressures exerted on the sector the Board of Management approved an application to the Forth Valley College Foundation for £1m to support the College with operational costs for 2025-26, which has been granted, leaving minimal funds within the Foundation for future projects.

A key component of driving a sustainable future is to lead as a business that is a champion for governance, financial control and balanced risk taking. The Board of Management approved the updated Code of Good Governance for Scotland’s Colleges on 8 December 2020 and continues to work within this framework. In September 2025 the Board of Management participated in a risk workshop where they reviewed their risk appetite and the key risks facing the college. The Board of Management also considered and adopted the updated Scottish Government Code of Conduct for Further Education Colleges in February 2022. The College follows an anti-bribery and corruption policy that demonstrates our commitment to ensuring the highest standards of financial probity,

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reliability and ethical behaviour. This policy was updated and approved by the Audit Committee in September 2024.

A full report on the College’s financial performance is included within the Performance Analysis section of this report. Overall, the College’s financial health, in line with the rest of the sector, is a cause for concern due to the challenges of static funding and inflationary cost pressures out with the control of the College. The Board of Management and the Senior Management Team is actively engaging with the Scottish Funding Council (SFC) to address these concerns and is seeking to submit a proposal under the SFC’s Transformation Framework in early 2026.

We will grown through innovation and entrepreneurship

Apprenticeships, Skills and Commercial Training

Our commitment to continuous improvement remains steadfast. We have further refined our operational processes, enhanced efficiency, and strengthened alignment with institutional goals. Recent system enhancements introduced in prior years have matured and continue to operate effectively, supporting our ambitions for innovation and growth.

Over the past year, we have launched several new course offerings and maintained our status as one of the highest-performing CompEx centres globally, an achievement that reflects our dedication to excellence in training and delivery. Forth Valley College holds one of the largest Skills Development Scotland (SDS) contracts for Modern Apprentices in the college sector and ranks as the second highest-achieving college in Scotland.

Programmes in Engineering, Construction, and Health & Social Care have experienced a strong resurgence, returning to pre-pandemic levels of engagement and achievement. These areas are projected to expand further in 2025–26, driven by sector demand and our continued focus on quality and relevance.

Apprenticeships

Our SDS contract for the provision of Modern Apprenticeships for the fiscal year 2024-25 was awarded a value of £1.9 million, with our team of Apprenticeship Officers securing our highest ever number of new starts at 419. We exceeded the SDS target, claiming income of £2 million.

We successfully secured bids from ECITB to continue delivering their apprenticeship programme and to introduce our largest cohort of 24 scholars for 2025-26. We were the first training provider in Scotland to offer two new ECITB programmes, the work ready Trainee Maintenance Operatives and the Wind Turbine Programme. We were also awarded a grant from the Regional Hub Investment Fund to the value of £259K. Our reputation for exceptional customer service and strong employer partnerships has brought tangible benefits to the College, securing prestigious opportunities, including significant apprenticeship programmes with over 10 new nationwide organisations. Looking ahead, we have set an ambitious contract value target of £2.3 million for fiscal year 202526 with a predicted target of 470 starts, which we are confident of achieving.

PetroIneos Intervention

Working with the UK and Scottish Governments, we have secured funding to deliver training and upskilling opportunities to individuals being made redundant from Petroineos. This programme has been delivered in two stages. Stage One involved supporting 384 personnel through an individual training needs analysis (TNA). Other personnel chose not to take part in the TNA activity but subsequently requested access to training. We are currently underway with stage two of the intervention and are actively working with individuals to approve and schedule appropriate training.

Commercial Activity

We have successfully embedded a range of strategic initiatives, resulting in significant progress in how we operate. Our reputation for exemplary customer service and flexibility continues to attract requests for bespoke training from national, regional & international employers. This includes the development and delivery of tailored programmes such as BP Senegal SVQ Assessment. Nationally we have been delivering on client’s premises CompEx Foundation, 18th Edition and NEBOSH courses, including as far afield as Dounreay.

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

We have successfully delivered all scheduled provision for the year. Our delivery model continues to evolve, with growth in both our publicly advertised commercial courses and our onsite training provision. These enhancements reflect our commitment to innovation, responsiveness, and continuous improvement.

In session 2024-25 we exceeded our stretch targets and are well positioned to build on this success as we move into 2025-26.

Skills Transition Centre

During the year we were successful in our bid for funding through the Falkirk Growth Deal, receiving £4m across 2025-2034 to create a centre of excellence for skills delivery within the context of transformational change as businesses, communities and individuals in the local community transition to Net Zero.

In alignment with the evolving needs of the local economy, we continue to expand our training portfolio. As part of the wider FVC Skills Transition Centre, we have launched a range of renewable energy courses. These short programmes equip learners with essential skills to support the transition to greener jobs, while continuing to meet the operational requirements of existing system installations.

Global Partnerships

Since commencement of the role in September 2024, significant progress has been made across the global partnership remit. Alongside vital fact-finding and stakeholder engagement activity (spanning visits and participation in trade missions and industry events in London, Germany, Namibia, Turkey, Kenya, Saudi Arabia, and China) tangible outcomes have been delivered. Notable achievements include securing £25,000 in British Council funding for a green skills collaboration with a South African TVET college; hosting multiple high-level visits from international dignitaries and stakeholders at FVC campuses; formal acceptance into the UK Skills Partnership and the UK Hydrogen Skills Alliance; and the signing of several institutional and industry Memoranda of Understanding, both domestic and international, to support a growing pipeline of opportunities.

Further milestones include establishing a partnership with CIEE to offer paid internships in the USA for students; selection to join the UK Government’s Skills Mission to Saudi Arabia; the delivery of guest lectures in mechatronics and electrical engineering at our Chinese university partner, with reciprocal staff and student visits planned; and the soft launch of international student recruitment via a dedicated agent, in preparation for the 2026–27 academic year.

Looking ahead to 2025–26, momentum will continue to build as we position Forth Valley College as a recognised destination for international learners and a trusted partner for global institutions and industries.

Estates Strategy

The College estate is based across 3 campuses at Falkirk, Stirling and Alloa. The largest of these which operates as the Head Office, is at Grangemouth Road, Falkirk, FK2 9AD. Our Estates Development Strategy is now complete with 3 modern campuses.

Going forward the significant capital investment in our estates will be supported with the implementation of an Estates Maintenance Strategy to ensure the estate is adequately maintained so that it remains fit for purpose and continues to provide a superb environment for learning. A new Estates Strategy to complement our 2025-30 Strategic Plan is currently being drafted; it will be heavily influenced by the SFC Infrastructure Strategy which has been billed as a “once in a generation opportunity to create a coordinated Infrastructure Investment Plan for the college estate in Scotland. It is an undertaking that will see the Scottish Funding Council (SFC) working in close partnership with the college sector to map out the investment needed over a five-to-ten-year period.” This SFC exercise originally scheduled for a November 2024 completion, delayed to ‘end of winter 2025’, will now be complete by end of Autumn 2026. The outcome of the FVC’s Board of Management review of the three-campus model will also significantly shape the new Estates Strategy which will also incorporate the College’s Net Zero Plan to 2028. Our College-wide Sustainability Committee provides governance and direction for our Net Zero Plan

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

Principal Risks and Uncertainties

The College recognises the need to take informed and calculated risks to allow for the growth of the College.

The College has comprehensive risk management systems in place to ensure that risks are fully analysed and receive the appropriate level of approval before activity commences. All risks identified within the College are monitored on an on-going basis and specialist registers are created for large individual projects.

The College has updated the strategic risk register to reflect the changes across the sector and changes specific to FVC. The register provides details of individual risks, their potential consequences and the mitigating actions put in place to manage these risks.

The College has robust risk management processes in place to ensure relevant risks are captured, assessed and (where possible) mitigated against. The College maintains a register of strategic risks which is reported on at each meeting of the Audit Committee as well as being reported annually to the Board of Management.

The College’s Internal Auditors conducted an exercise to explore and quantify the Board of Management’s risk appetite. This information was reported back to the Audit Committee in May 2022 which has made recommendations on how to have cognisance of the Board Risk Appetite when considering overall risk.

At this time, the top risks on the Strategic Risk Register are:

Risk Mitigation
Unable to maintainfinancial
sustainability due to insufficient
funding from Scottish Government
to support the core activities of the
College.		 The College continues to review its operating structures and activities
to deliver efficiencies and grow commercially. There is ongoing
dialogue with the Scottish funding Council regarding funding to ensure
the financial sustainability of the College.
Unable to maximise the long term
return on investment on the
College estate due to insufficient
capital maintenance funding, and
changes in working practices.		 Effective monitoring of lifecycle maintenance programmes and
discussions with Scottish Funding Council regarding funding. Review
of campus utilisation and the 3-campus estate.
The College is unable to sustain a
three-campus estate model
leading to the closure of a campus		 Engagement with staff, Union, stakeholders and external organisations
to find a solution to retaining three campuses.
External consultant appointed to conduct a feasibility study on the
options open to the College.
The College is unable to deliver a
majortransformation project in
support of financial sustainability		 Engagement with SFC to develop a proposal under the College
Transformation Framework.
Development of Digital Strategy

Going Concern

The Board of Management has assessed the financial position of the College for the year ended 31 July 2025 and its future financial position to support the going concern basis of preparation in the financial statements, and ensure completeness and accuracy of related disclosures. Further detail is provided in Note 1.

The conclusion from the assessment of financial position is that it is considered appropriate to adopt a going concern basis for the preparation of these annual financial statements.

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

PERFORMANCE ANALYSIS

Performance Indicators

The College delivered 77,785 Credits against a target of 79,107 which is 1,322 Credits (1.67%) below target for Academic Year 2024-25 (2023-24 : 1.99% below target of 79,107 credits).

To monitor performance the College uses a range of performance indicators which are reviewed regularly by members of the Leadership Management Team and the Senior Management Team, and Board members through the Learning and Student Experience Committee. Furthermore, performance down to curriculum area and course level is monitored through curriculum teams through the College’s quality processes and procedures. Through its Continuous Curriculum Improvement Process (CCI), the College sets a range of targets which are monitored through the year by the Vice Principal Learning and Student Experience. Under the new Tertiary Quality Enhancement Framework (TQEF), colleges are subject to a strengthened regime of external scrutiny, monitoring, and reporting designed to assure academic standards, enhance the student experience, and demonstrate public ‑ accountability. Each institution must conduct institution led quality activities, including ongoing annual monitoring ‑ ‑ and periodic Institution Led Quality Reviews. Annually, colleges submit a Self Evaluation and Action Plan (SEAP) to the Scottish Funding Council (SFC), replacing prior reporting mechanisms, which SFC uses, alongside performance indicator data, to assess institutional quality and the effective use of public funding. TQER is a key mechanism within this new framework.

Alongside colleges’ internal processes and external reviews, SFC oversees the effectiveness of the TQEF, drawing on SEAPs, peer-review outcomes and data, while QAA and partner agencies (like CDN and sparqs) support external review processes, student engagement, and thematic enhancement activities.

The Performance Indicator Prediction and Tracking Tool remains crucial for monitoring and planning actions for courses and individual students. This proactive CCI process aims to protect performance indicators and enhance the student experience. Early retention within full time programmes for 2024-25 was up on 2023-24 figures: FE increased to 96% and HE to 99%. Retention within FE remained stable at 75% and HE increased to 83%.

In relation to risk, failure to meet our Outcome Agreement targets is listed within the College’s Risk Register as a risk, with mitigation of regular monitoring through the Senior Management Team and the Learning and Student Experience Committee. The College has adopted the core set of performance indicators which were developed by the Colleges' Finance Community of Practice. The table below details performance in 2024-25 and 2023-24.

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

Current & Future Developments

The College continues to rigorously review its curriculum portfolio via the CCI, considering local and national skills priorities, and maintains an excellent reputation with employers by delivering industry-relevant courses both on campus and through bespoke training at employers’ premises. For 2025-26, the CCI process will enhance focus on the impact of improvements and support curriculum areas to self-evaluate and action plan to ensure that improvements are meeting the needs of the changing nature of students. The CCI process will also drive the implementation of the Student Learning Experience Strategy and teams will plan improvements in line with operational and strategic priorities.

The Board of Management and Scottish Funding Council have been kept informed of the financial challenges that the College is facing. SFC announced the College Transformation Framework in May 2025, and the Board of Management confirmed its support for the Senior Management Team to develop a proposal under this framework for 2026-27 onwards, to support the College moving to a financially sustainable position. Engagement with SFC is ongoing with various proposals being developed for consideration by the Board of Management in early 2026.

Priorities for 2025-26 include diversifying the opportunities for students to contribute to the planning and evaluation of the student experience, FVSA will play a key role in supporting this work. With the changing profile of students and the increase in disclosures of ASN and the increasing requirements for complex support, FVC will be reviewing its curriculum delivery model and approaches to learning, teaching and assessment to ensure inclusivity is built into the fabric of curriculum development.

Close collaboration with our university partners is critical to maximise success and progression for our HE students. In 2024-25 we established articulation with the University of Aberdeen, presenting a unique opportunity to our Engineering and Science students to progress seamlessly to a prestigious institution where they will be supported with accommodation costs in years 3 and 4 of their studies. It is intended for 2025-26 that we increase the number of students accessing this provision.

Financial Performance

The finances of the College are regulated by the Financial Memorandum between the Board of Management and the Scottish Funding Council (SFC) under which the Principal is designated as Accounting Officer, responsible to the Chief Executive of the SFC for the stewardship of the College’s finances and assets.

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

The reclassification of the College as an arm’s length public body, effective from 1 April 2014, means the College is also regulated by the Financial Reporting Memorandum (FReM) and also by the Scottish Public Finance Manual. The financial statements have been prepared to comply with the Accounts Direction issued by SFC, the FReM, the Financial Reporting Standard FRS 102 and the 2019 Statement of Recommended Practice: Accounting for Further and Higher Education (SORP).

The College’s financial objectives are:

Underlying Operating Performance

The Statement of Comprehensive Income presents the financial performance during the accounting period in accordance with the SORP. The Adjusted Operating Position (AOP) is intended to reflect the underlying performance after allowing for material one-off or distorting items required by the SORP or other items outwith the control of the College. The AOP is therefore designed to smooth any volatility in reported results arising from Financial Reporting Standard (FRS) 102 and also to recognise that some of the reported costs do not have an immediate cash impact on the College.

The following table provides the adjusted operating position for Academic Year 2024-25:

The adjusted operating deficit of £317k has been agreed with the Scottish Funding Council. The College is operating sustainably within its funding allocation. Explanations for each of the adjusting items are provided below.

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

Explanation for adjusting items:

Note 1 : Depreciation does not have an immediate cash impact on the College and, in any case, capital expenditure will largely be funded by Government or grants from the Forth Valley College Foundation so the charge is removed. Note 2 : The swap rate adjustment is the movement on the valuation of the fair value of derivative financial instruments.

Note 3 : The adjustments to the pensions charge represent the net service cost (ie the present value of projected benefits resulting from employee service in the year less cash contributions paid).

Note 4 : The net interest cost is the interest accumulated on the pension liability and this is offset against the current year’s interest earned on pension assets.

Note 5 : The early retirement provision adjustment relates to the gain/loss arising from the actuarial valuation during the year. This excludes any adjustments to valuations as a result of adding or removing employees. Note 6 : The provision for the costs of the middle management and support staff job evaluation exercise are not matched by revenue to date. The impact for 2024-25 is a cost to the SOCI of £567k with related income reflected in the table above. Further details are provided below and in Note 17 of the financial statements.

Note 7: Capital grant income is not matched by SOCI expenditure as it has been used to fund capital assets which will be depreciated over the life of the asset.

Note 8 : The loan repayment is not reflected in the costs therefore this amount is adjusted.

Balance Sheet

As required by FRS102 and the FReM full professional valuations are periodically sought for all 3 campuses at Alloa, Falkirk and Stirling. The latest full valuation was undertaken as at 31 July 2023, and updated for potential impairments and likely growth in value of the estate as at 31 July 2025. This resulted in all the buildings being revalued upwards, along with the land at the Falkirk campus, totalling an increase in revaluation reserve of £5.4m.

Creditor Payment Performance

The College has a policy of paying suppliers within agreed terms unless the invoice is contested. Disputes and complaints are handled as quickly as possible. Every effort is made to take advantage of additional discount where this is offered for prompt payment. The College did not make any late interest payments during the year.

Standard creditor terms are set on our finance system to be 30 days and can be amended to adhere to supplier terms if authorised by Finance team management. Invoices are paid on a fortnightly basis by the due date and only if they are authorised for payment on the finance system. The average number of days taken to pay suppliers in the financial period being reported was 18 days (2023-24 : 20 days).

Sustainability Report

The College recognises its moral and legal responsibilities to sound sustainability management, encompassing environmental, social, economic and technological factors, in line with the College vision to ‘empower every learner, drive positive change, and build strong connections with our communities and industries that strengthens Scotland’s economy’. We recognise that the changing climate will have far reaching effects on Scotland’s

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

economy, people and environment, and consequently, a commitment to carbon reduction remains a key strategic objective for the College.

Our vision is to lead by example in all our activities and to ensure that both staff and learners are aware of the impact their actions will have on the environment. This vision is supported by the ‘College Sustainability Commitment Statement’ that is approved annually by our Board of Management and our College Principal. In addition, the College has adopted the sector wide ‘Scottish Colleges’ Statement of Commitment on the Climate Emergency’, which outlines 10 key actions colleges will deliver on to help achieve Scotland’s net zero target. We have also become a signatory to the ‘Race to Zero’; a global initiative for a zero carbon world representing Universities & Colleges.

The College has an established Sustainability Committee which performs a strategic function in identifying, encouraging, quantifying and leading the embedding of sustainable practices throughout the College. The Committee is currently led by the Principal and Chief Executive and encompasses representatives from across the College including the student body.

The College continues in partnership with sector peers, Borders College and Queen Margaret University (QMU) and the EAUC (Environmental Association for Universities and Colleges) to collaborate and deliver on the UK Further Education Climate Action road map as a commitment to delivering net zero by 2040. QMU replaced Borders College in this partnership in 2025 due to funding limitations. Whilst ever present at CDN’s climate emergency group, the College/University partnership developed and appointed the shared resource role of ‘Sustainability Project Manager’ to work with the partners to help develop and embed net zero planning across our organisations, to identify and aid applications to appropriate funding routes and develop a cradle to grave approach to sustainability.

With Scotland’s Colleges committing to be net zero by 2040 the Estates department is seeking solutions to decarbonise the College buildings with the sustainable and efficient use of capital grant money, lifecycle replacements and by accessing Scottish Government grant funding for decarbonising public sector buildings.

Decarbonisation opportunities with a capital value of £20 million (2023) have been identified, and from this we have identified a hierarchy of capital investment opportunities, and whenever funding becomes available bid applications will be submitted.

In accordance with the Climate Change (Scotland) Act 2009, and with the support of the EAUC, Forth Valley College reports annually to the Sustainable Scotland Network on our carbon footprint, compliance with Climate Change Duties and future sustainability ambitions and plans. We also adhere to reporting requirements in areas such as procurement, business travel and building management, and recognise the importance of consistent environmental reporting across public sector bodies.

In the last reportable academic year 2023-24 our annual return to the Sustainable Scotland Network showed a 43% reduction in our Carbon Footprint from 12,157 tCO2e to 6,945tCO2e. This is due mainly to changes in the emission factors used for calculation of Carbon emissions; and refined data gathering and reporting guidance for various Scope 3 supply chain emissions sources. Utilities and waste streams account for 1,240tCO2e or 18% of FVC’s Carbon footprint with the remainder mostly being contributed by our supply chain 2,789tCO2e 40% and travel (staff and students commuting to and from work and business travel) 2,861tCO2e 41%.

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

Scope 1 emissions are the College’s direct emissions from sources it owns or controls (e.g. gas boilers, fleet vehicles).

Scope 2 emissions are indirect emissions from purchased energy (mainly electricity and heat).

Scope 3 emissions are all other indirect emissions in the value chain (e.g. business travel, waste, supply chain) 'baseline emissions' refer to those emission sources required for reporting in year 2014-2015 (PBCCD pilot year). On an almost annual basis since 2021 the Scottish Government has increased the number and complexity of reportable emissions sources, including emissions from supply chain, emissions related to staff working from home and staff and student travel to and from campuses which has greatly increased all public organisations reportable carbon emissions. Although the College has captured and reported these additional emission sources annually, when reporting annual progress against baseline we have referred only to those emissions relevant to the original baseline reporting year of 2014-2015.

Kenny MacInnes Principal and Chief Executive 4 December 2025

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

ACCOUNTABILITY REPORT

CORPORATE GOVERNANCE REPORT

Forth Valley College of Further and Higher Education is committed to demonstrating best practice in Corporate Governance and the following statements are designed to provide an overview of governance arrangements in place.

The Corporate Governance Report consists of the following sections:

Board of Management

Membership of the Board of Management

The Post-16 Education (Scotland) Act 2013 requires that the board of a regional College should consist of no fewer than 17, nor more than 20 members. The Board of Management members who held office during the year and up to the date of signing these financial statements were as follows:

Dr A Agarwal Regional Chair
Mr K MacInnes Principal
Mr C Arthur Non-Executive member
Mr C Brodie Non-Executive member Appointed 01-12-24
Mr P Devoy Non-Executive member Resigned 22-03-25
Ms L Dougall Vice Chair
Ms R Geisler Non-Executive member
Mr A Gray Non-Executive member Appointed 01-09-25
Ms A Harley Trade Union member
Ms Y Harley Non-Executive member Appointed 01-09-25
Mr P Harris Non-Executive member
Ms G Hepburn Corporate Services Staff member Appointed 15-09-24
Ms J Hogarth Teaching Staff member
Ms K Kennedy Student member Tenure ended 30-06-25
Mr G Leebody Trade Union member Resigned 16-04-25
Appointed 01-09-25
Mr L McCabe Non-Executive member and
Senior Independent member
Ms E MacGregor Non-Executive member Appointed 01-09-25
Mr A McKean Corporate Services Staff member Tenure ended 14-09-24
Ms M McLuskey Non-Executive member Appointed 01-09-25
Ms E Meridith Non-Executive member Tenure ended 22-03-25
Mr M Podhorsky Student member Appointed 03-11-25
Ms S Reynolds Non-Executive member Appointed 01-12-24
Ms M Smith Student member Appointed 01-07-25
Ms E Strachan Student member Tenure ended 30-06-25
Mr C Ure Non-Executive member Tenure ended 30-08-25

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

Membership of the Senior Management Team

The Senior Management Team is responsible for the day to day management of the College’s activities and operations and consists of:

Mr K MacInnes Principal Mrs A Stewart Depute Principal and Chief Operating Officer Mrs S Higgins-Rollo Vice Principal Learning and Student Experience Mr C McMurray Vice Principal Business and Innovation

Mr David Allison, who was Vice Principal of Information Systems and Communications, retired on 31st July 2025.

Conflicts of Interest procedures

The College has comprehensive procedures for dealing with potential conflicts of interest. These include holding, and updating at least annually, a Register of Board Members Interests. The register is available to any member of the public who wishes to examine it and is available on the college website, http://www.forthvalley.ac.uk. Interests that must be registered, in terms of the name and nature of the organisation in which the interest is held, include: remuneration, related undertakings, contracts, houses, land and buildings, shares and securities, and nonfinancial interests. Declarations by Board members of any conflicts of interest are recorded in the minutes of the appropriate Board meetings.

Personal data related incidents

Section 417 of the Companies Act 2006 requires that organisations report on personal data related incidents. In 2024-25, the College had no reported personal data incidents. (2023-24: no incidents).

Kenny MacInnes

Principal and Chief Executive 4 December 2025

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

Statement of The Board of Management’s Responsibilities

The Board of Management are required to present audited financial statements for each financial period.

In accordance with the Further and Higher Education (Scotland) Act 1992 and 2005, the Board of Management is responsible for the administration and management of the College’s affairs, including ensuring an effective system of internal control, and is required to present audited financial statements for each financial period.

The Board of Management is responsible for keeping proper accounting records which disclose, with reasonable accuracy at any time, the financial position of the College and enable it to ensure that the financial statements are prepared in accordance with the Further and Higher Education (Scotland) Act 1992, the 2019 Statement of Recommended Practice - Accounting for Further and Higher Education Institutions and other relevant accounting standards. In addition, within the terms and conditions of a 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 which give a true and fair view of the College’s state of affairs and of the surplus or deficit and cash flows for that period. These financial statements comply with the Accounts Direction issued by the Scottish Funding Council.

In preparing the financial statements, the Board of Management has ensured that:

The Board of Management has taken reasonable steps to:

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

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

Any system of internal financial control can, however, only provide reasonable, but not absolute, assurance against material misstatement or loss.

In October 2010, the UK Office for National Statistics (ONS) decided to reclassify incorporated further education colleges throughout the UK so that they would be treated as part of central Government for financial budgeting and reporting purposes. The UK ONS's reclassification decision is the consequence of the current level of Ministerial control and does not relate to the plans for improved governance that feature in the Post-16 Education (Scotland) Act 2013.

The implications of this are material and impact upon the ability of the College to generate and retain income, to generate and retain surpluses (reserves), to protect and use existing reserves, and to access capital funding and commercial borrowing. The use of Arm’s Length Foundations on a sector wide basis to shelter on-going College reserves was approved by Scottish Government Ministers. Forth Valley College Foundation was incorporated in December 2013 and has been awarded charitable status from the Office of the Scottish Charity Regulator (OSCR).

Auditor

The Auditor General for Scotland has appointed Forvis Mazars LLP to undertake the audit for the year ended 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.

Approved by order of the members of the Board on 4 December 2025 and signed on its behalf by:

Dr Abhishek Agarwal Chair

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

Governance Statement

Introduction

The College is committed to exhibiting best practice in all areas of corporate governance. This summary describes the manner in which the College has applied the principles in the 2022 Code of Good Governance for Scotland’s Colleges.

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 that have been operating in Forth Valley College in the year to 31 July 2025 and reports the Board’s assessment of the effectiveness of these arrangements.

Governance Structure

The College has a robust and effective Board and Committee structure in place. Board Committees review their remits on an annual basis and the Board as a whole keeps the structure of its Committees under regular review. The Committee structures were reviewed and amended by the Board of Management in June 2023 to reflect the changing needs of the Board.

Board of Management Committees

Audit Committee

The committee met on three occasions. Its role is to contribute to good governance by providing assistance to the Board of Management on issues of compliance, risk, financial probity and the overall effectiveness of internal College control systems. The internal and external auditors normally attend meetings.

Finance, Resource & Infrastructure Committee

The committee met on four occasions during the period. Its role is to contribute to good governance by providing independent advice to the Board of Management on the financial management of the College, providing a strategic overview of the College's financial direction while ensuring a position of financial security and that all relevant audit and legislative requirements are met. The Committee advises the Board of Management on HR strategy (including industrial relation matters), oversees the Board’s health & safety responsibilities, and monitors the Board’s equal opportunities aspirations.

Nomination Committee

The committee met twice during the period. Its role is to contribute to good governance in relation to the appointment of non-executive members and the appointment of the College Principal.

Remuneration Committee

The committee met twice during this period. Its role is to provide good governance advice and assistance to the Board of Management on the remuneration of senior College staff, considering sectoral guidance and maintaining comparability with relevant external bodies.

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

Learning and Student Experience Committee

The committee met on three occasions. Its role is to contribute to good governance by providing assistance to the Board of Management on the educational performance of the College, to act as the primary linkage between the Board of Management and the Student Association Executive, and to consider matters relating to the interests of learners in the College.

Board of Management Members

As at 31 July 2025, the Board gender split was 53% female, and 47% male.

Membership now consists of 19 members as follows:

Dr Abhishek Agarwal was appointed as Chair from 28 June 2024.

There is a clear differentiation in the roles of the Chair of the Board and that of the Principal. Matters reserved to the Board of Management are set out in the Standing Orders and Operating Guidelines, the Scheme of Delegation, and under the Financial Memorandum with the Scottish Funding Council. The Board of Management is responsible for the on-going strategic direction of the College, approval of major developments and the approval of annual budgets.

Members of the Board have a collective responsibility for the proper conduct of the College’s affairs. Members have full and timely access to information they consider to be relevant to enable them to perform their roles effectively. Members’ roles and responsibilities are described in the Code of Good Governance for Scotland’s Colleges and the Guide for Board Members in the College Sector.

Board Effectiveness

The Board of Management has adopted the Code of Good Governance for Scotland’s Colleges. The code outlines the activity to be undertaken by a Board. The Board of Management has an effective mix of skills in place, supplemented by a comprehensive induction process which is further enhanced by Board training activities such as the provision of equalities training.

There are self-evaluation processes, led by the Chair and an evaluation process for the activity of the Chair led by the Senior Independent Member. These offer a mechanism for members to feedback on their perceptions of the Board, their contribution and any future training needs. The performance of the Chair is also evaluated by the Scottish Government, as regional college chairs are appointed by Scottish Ministers and are personally accountable to them.

Attendance

The Board of Management normally meets formally five times per year and has a number of committees which are formally constituted with terms of reference.

Overall there were five Board of Management meetings in 2024-25.

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

Status Date of Appointment/Re-
Appointment		 Date of Retiral/Resignation
(If Applicable)		 Board of Management Audit Committee Finance, Resource &
Infrastructure Committee		 Learning & Student Experience
Committee		 Nomination Committee Remuneration Committee
Number of
Meetings		 5 3 4 3 2 2
A Agarwal Chair 28/06/24 5 2 2
K MacInnes Principal 01/05/23 5
C Arthur Non-Exec 01/09/25 5 3
C Brodie Non-Exec 01/12/24 2 of 4 2 of 2
P Devoy Non-Exec 23/03/21 22/03/25 1 1
L Dougall Non-Exec /
Vice Chair		 23/03/23 4 3 3 2 2
R Geisler Non-Exec 01/09/25 4 1 2 2
A Harley Trade Union 05/02/24 3 1
P Harris Non-Exec 01/04/23 3 4
G Hepburn Staff 15/09/24 3 1
J Hogarth Staff 27/06/23 3 1
K Kennedy Student 01/07/23 30/06/25 4 2 1
G Leebody Trade Union 07/03/24 16/04/25 2 of 3 1 of 2
L McCabe Non-Exec/
Senior
Independent
Member		 23/03/23 4 3 4 0 2
A McKean Staff 15/09/20 14/09/24 1 of 1
E Meredith Non-Exec 23/03/21 22/03/25 2 of 3 1 of 1
S Reynolds Non-Exec 01/12/24 4 of 4 2 of 2
M Smith Student 01/07/25
E Strachan Student 01/07/24 30/06/25 2 0
C Ure Non-Exec 30/08/23 30/8/25 4 1 of 1 1 of 2

Assessment of corporate governance

The College complies with all the principles of the 2022 Code of Good Governance for Scottish Colleges, with the exception of the role of Secretary to the Board. The Code of Good Governance states; “The board secretary may be a member of the senior management team in their board secretary capacity, but they cannot hold any other senior management team position at the same time”.

The Board of Management recognises the importance of the Board Secretary being able to report directly to the Chair independently of the Principal in order to prevent any conflicts of interests, however we believe that this can be achieved without the requirement to appoint a Board Secretary without other Senior Management Team responsibilities. The Board of Management appointed the Vice Principal Finance & Corporate Affairs as Secretary to the Board along with the Corporate Governance & Planning Officer as Deputy Secretary to the Board, both of whom report directly to the Chair in relation to the Board Secretary duties. The Board of Management believes any risk of non-disclosure or non-compliance not being reported to the Board of Management due to a conflict of interest is mitigated by the appointment of two individuals with direct reporting to the Chair. The Board of Management considered that governance is strengthened rather than weakened by the Vice Principal Finance &

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

Corporate Affairs having a dual role within the Senior Management Team. For 2025-26 this arrangement is planned to change with the Vice Principal Finance & Corporate Affairs stepping down from the role and an independent Secretary to the Board to be appointed.

Risk Management

The Board of Management has overall responsibility for ensuring the effective identification, mitigation and monitoring of strategic risks within the College. The Audit Committee has delegated authority from the Board of Management to approve the Risk Management Policy and to review regular reports from the College Senior Management Team regarding risk.

All Board Committees are able to request risks be added to the strategic risk register.

The College operates a Strategic Risk Register which identifies the most significant risks to the College. This register is taken to every meeting of the Audit Committee for comment and challenge. It is also provided annually to the Board of Management. There are currently 14 risks on the Strategic Risk Register covering areas such as ongoing financial sustainability, maximising the return on investment of the College estate and ensuring the College continues to meet student expectations.

The Principal is responsible for the maintenance of the College Strategic Risk Register and for ensuring appropriate risk mitigation actions are implemented to address significant risks to College operations and strategic objectives. Senior Management Team members are responsible for establishing controls to mitigate identified risks wherever possible. This information is included on the Strategic Risk Register in summary form.

Risk Management is embedded in the operations of the College. The identification and mitigation of risk is a component in all decision making and is a standing item at all Senior Management Team, Board Committee and Board of Management meetings. The College also operates a risk management system whereby areas of significant risk to the College have their own specific risk register.

Delegation of responsibility for managing the key risks in the risk registers is essential if risk management is to be effective. The risk registers, therefore identify “owners” for each risk.

Internal Audit

The College has an internal audit service, the work of which concentrates on areas of key activities determined by an analysis of the areas of greatest risk, input from Senior Management Team and areas of significant change to operational systems/practices and in accordance with the annual internal audit plan approved by the Audit Committee. The internal auditor reports to the Principal and to the Audit Committee on a regular basis and has direct access to the Chair of the Audit Committee. The internal audit plan, while an annual document, does take into account medium and longer term planning to ensure key areas are audited on a rolling basis.

The internal auditor has issued an annual report which gives an opinion on the adequacy, reliability and effectiveness of the College’s internal control systems. On the basis of the work undertaken during the period the auditor has expressed an opinion that the College did have adequate and effective risk management, control and governance processes to manage its achievement of the College’s objectives at the time of their audit work and that the College has proper arrangements to promote and secure value for money.

Internal Control

The Board of Management is aware of the need for effective internal control and acknowledges its responsibility for such a control system to be in place. The system can provide only reasonable and not absolute assurance that assets are safeguarded, transactions authorised and properly recorded, and that material errors or irregularities are either prevented or would be detected within a timely period.

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The system of internal control is based on a framework of regular management information, financial regulations and administrative procedures.

In particular it includes:

Assessment of the effectiveness of internal controls

The Board of Management is of the view that there is an on-going process for identifying, evaluating and managing the College’s significant risks. This process is reviewed by the Board of Management through the Audit Committee. A formal Business Continuity Plan is maintained within the College.

For the period to 31 July 2025, the Internal Auditor reported the outcomes of all reviews which took place during the year. Internal Audit was of the opinion “Forth Valley College did have adequate and effective risk management, control and governance processes to manage its achievement of the College’s objectives at the time of our audit work. In our opinion, the College has proper arrangements to promote and secure value for money“.

The external auditor has given an unqualified audit opinion on the financial statements for the period to 31 July 2025. No further significant issues have been identified as part of their audit process.

On the basis of the assurances provided from the credible sources outlined above, we can confirm that sound systems of governance, risk management and internal control, consistent with the requirements of the Scottish Public Finance Manual, have operated for the period ended 31 July 2025 and up to the date of approval of the annual report and financial statements.

Going Concern

After making appropriate enquiries, the Board of Management considers that the College has adequate resources to continue operations for 2025-26. In addition, the Audit Scotland guidance ‘Going Concern in the Public Sector’ states that “the use of the going concern basis of accounting will always be appropriate for public bodies”. The Board of Management has no reason to believe that future support from Scottish Funding Council will not be forthcoming. For these reasons, Forth Valley College continues to adopt the going concern basis in preparing the financial statements.

Further detail on going concern is expanded on in Note 1 of the financial statements.

Conclusion

The Board of Management’s opinion is that the College has an appropriate framework of internal controls, and these provide reasonable assurance regarding the effective and efficient deployment of resources to achieve the College aims.

Approved by order of the members of the Board on 4 December 2025 and signed on its behalf by:

Dr Abhishek Agarwal

Chair

Kenny MacInnes

Principal and Chief Executive

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REMUNERATION AND STAFF REPORT

Remuneration Report

This report outlines the remuneration policy of the College for the Board of Management and the Senior Management Team (SMT), and provides details of members remuneration for the year ended 31 July 2025.

The tables in the Remuneration report have been subject to audit by the College’s external auditor. The other sections of the Remuneration Report are reviewed by the external auditor to ensure they are consistent with the financial statements.

Board of Management

The College Board Members, with the exception of the Principal and Chief Executive Officer, are appointed for a fixed period, normally, four years. With the exception of the Principal and Chief Executive Officer and elected staff (including trade union) representatives, these members do not have contracts of service with the College.

The level of remuneration for the Chair is set by Scottish Government who informs the College on an annual basis of any increase to be awarded.

Senior Management Team

The Senior Management Team (SMT) is responsible for the day to day management of the College’s activities and operations. The Principal and Chief Executive Officer, Kenny MacInnes, is a member of both the Board and the SMT.

The Principal and Chief Executive Officer and other SMT members are on standard Forth Valley College contracts of employment. Their contracts provide for a notice period of 3 months. For 2024-25 there was no bonus scheme in operation in the College.

If an SMT member’s employment with the College is terminated on the grounds of redundancy or in the interests of the efficiency of the organisation, severance payments will apply based on age and on length of service and are subject to approval by the SFC. This basis is identical to that applied for all other employees.

Remuneration Committee

The Remuneration Committee determines the policy for the remuneration of the members of the SMT, including the Principal and Chief Executive and other such members of the management team as it is designated by the College to consider. This policy is set within the context of the applicable Government guidelines. With input from the Chair, Principal and Chief Executive it determines the total individual remuneration packages of members of the SMT.

The membership of the Remuneration Committee is made up of the Chair of the Board of Management plus the Chairs of each of the Board Sub-Committees. All members have completed the mandatory online College Development Network Remuneration Committee training. Minutes of Board and Committee meetings can be found on the College website.

Senior Management Team Remuneration

As part of the College’s performance management system, each SMT member agrees with the Principal their personal performance objectives.

The College aims to ensure that the remuneration packages offered to SMT:

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Basic salaries are reviewed annually from 1 September. Salary levels are established after taking into account external market levels and internal comparisons as well as individual responsibilities and performance. All senior posts are evaluated as part of our job evaluation process to ensure they reflect the responsibility and accountability of the role and are graded appropriately. An equal pay audit, that takes into account our Colleges Job Evaluation system is externally audited every two years. Salary payments are made monthly.

SMT members are members of either the Scottish Teachers’ Superannuation Scheme (STSS) or the Local Government Pension Scheme (LGPS). As ordinary members, they contribute a rate of pensionable salary dependant on salary. In the financial period being reported the rates were between 8.8% to 12.14%. The College contributed 26% of the employees’ pensionable salary to the STSS. Contributions for the LGPS were 19.4%. These schemes are defined benefit schemes. The LGPS scheme provides benefits at a normal retirement age of 65 for all LGPS benefits paid prior to 1 April 2015. For all LGPS benefits paid after 1 April 2015 and for STSS, benefits are provided at the state pension age. The pension benefits consist of an annual pension, based on a final pensionable salary calculation up to 31 March 2015 and a career average pensionable salary with effect from 1 April 2015. For members who joined before 1 April 2007 for STSS and 1 April 2009 for LGPS a tax free lump sum will be paid automatically.

Remuneration of the Principal and other Senior Management Team who served during the year to 31 July 2025, including salary, pension benefits and other allowances was:

For the year 2024-25 the Principal did not receive any benefits in kind (2023-24:nil). For 2024-25 and 2023-24 no bonus schemes were in operation. David Allison, Vice Principal of Infrastructure & Communications, retired on 31st July 2025. There are now 4 members in the Senior Management Team.

Salary

Salary information includes gross salary, overtime and allowances to the extent that they are subject to UK taxation. This report is based on accrued payments made by the College and thus recorded in these financial statements.

Chair Remuneration

For the year to July 2025 the Chair was entitled to claim remuneration of £211 per day up to a maximum total fee of £21,944. The Chair is not entitled to a pension in respect of their office. For the year to 31 July 2025 the Chair was paid remuneration of £21,944 (2023-24: £9,372 was split between Ms Trudi Craggs (£7,543), interim Chair until 27[th] June 2024 and Dr Abhishek Agarwal (£1,829) appointed from 28[th] June 2024).

Fair Pay - Pay Multiples

Institutions are required to disclose the relationship between the remuneration of the highest paid member and the remuneration of the workforce. Remuneration includes salary, non consolidated performance-related pay and benefits in kind. It does not include severance payments, employers pension contributions and the cash

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equivalent transfer value of pensions. Remuneration for Forth Valley College staff only includes salary, as the College does not provide performance bonuses or benefits in kind.

The table below shows the median, 25th and 75th percentile remuneration and ratios against the highest paid member. The information in this table has been subject to audit

The annualised remuneration of the highest paid member in the financial year 2024-25 was £140,465 (2023-24: £133,965). This was 3.30 times (2023-24: 3.26 times) the median remuneration of the College workforce which was £42,589 (2023-24: £41,089). The remuneration of the highest paid member increased by 4.9%, while the average remuneration for the College increased by 3.7%. The resultant ratio is impacted by the Principal, who is the highest paid member, moving up a scale point within his role grading.

Management believes the median pay ratio for 2024-25 is consistent with the pay, reward and progression policies for the College employees taken as a whole, taken within the context of management having limited scope for controlling pay policy arrangements under National Bargaining for the sector.

The minimum full-time equivalent salary on the College’s pay and grading framework for the year to 31 July 2025 was £24,640 (2024: £23,140).

Pension Benefits

The College operates two pension schemes, the Scottish Teachers’ Superannuation Scheme (STSS) and the Local Government Pension Scheme (LGPS). More details are provided in Note 20. Pension benefits are provided to the Senior Management Team on the same basis as all other staff and an explanation of how benefits accrue is detailed below.

The accrued retirement benefits of the Senior Management Team for the year to 31 July 2025 are set out below, and this information has been subject to audit.

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The cash equivalent transfer value is the actuarially assessed capitalised value of the retirement scheme benefits accrued by a member at a point in time. The value of the accrued pension benefits has been calculated on the basis of the age at which the person will first become entitled to receive pension on retirement without reduction on account of its payment at that age; without exercising any option to commute pension entitlements 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 as a consequence of their total Local Government service and not just their current appointment.

In considering the accrued pension benefits figure the following contextual information should be taken into account:

Real Increases in Cash Equivalent Transfer Value

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.

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Staff Report

As at 31 July 2025 there were 560 staff in post, which equated to 482 FTE. The split across gender and business area is detailed in the table below.

The following table shows the salary and related costs for all staff for the year ended 31 July 2025, identifying temporary, inward seconded and agency staff separately. This table has been subject to audit.

In the year ended 31 July 2025 staff turnover was 7.5%.

During the year no employees left under voluntary exit terms. The table below summarises the prior year exit packages by cost band, and this information has been subject to audit:

Attendance Management

The College recognises that employees need to be properly supported during absences, matched with our priority, to meet our operational objectives. As a result, we take distinct steps to balance the needs of the individual with the needs of the organisation to effectively manage sickness absence. To achieve this balance, working with our Occupational Health advisors, we take a positive and pro-active approach to attendance management. We also offer a range of services that staff can access to help them with their own wellbeing.

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Financial Statements for the Year Ended 31 July 2025

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These include:

In 2024-25, an average of 9.24 days (including leavers) was lost per staff member compared to 7.26 days from 2023-24. The 2024-25 average equates to 3.58% overall absence rate for the year (2023-24: 2.95%). The increase for 2024-25 followed a higher than usual level of absences from winter flu. The College does not have a specific target however our rates of absence are comparable to the sector.

Trade Union Facility Time – 1[st] April 2024 to 31[st] March 2025

The College recognises 2 trade unions for the purpose of collective bargaining, Educational Institute of Scotland and Unison. We recognise the benefits of a positive and open relationship with our recognised trade unions. As part of our commitment to working in partnership, and in accordance with the Trade Union (Facility Time Publication Requirements) Regulations 2017, we offer paid facility time to our work place representatives to enable them to carry out union activities and duties.

During 2024–25, 13 staff members held a total of 17 roles as trade union officials. The combined full-time equivalent (FTE) for these roles was 1.59.

Percentage of time spent on facility time

Percentage of time Number of representatives 1%-50% 13

The total cost of facility time amounted £93,356, 0.3% of the total pay bill of £28,435,464, including the gross amount spent on wages, pension contributions, and national insurance contributions. 3.3% of the total paid facility time hours was spent on trade union activities. This table has not been subject to audit.

Equality, Diversity and Inclusion

The College continues its commitment to ensuring that all staff and students can work and study in an environment that is inclusive and that everyone can develop the skills and have the opportunities to progress with equity.

We are guided by the Equality Act 2010 which sets out our responsibilities to:

These responsibilities apply to both staff and students who share protected characteristics. The College also applies these principles to those who fall under the Scottish Funding Council’s Priority Access Groups which includes those who have care experienced and those from areas of multiple deprivation.

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Forth Valley College’s Equality Outcomes Report 2021–2025, published in June 2025, outlines the College’s commitment to fulfilling its statutory duties under the Equality Act 2010 by mainstreaming equality, diversity, and inclusion (EDI) across all operations. The report details progress against a set of evidence-based Equality Outcomes designed to eliminate discrimination, advance equality of opportunity, and positive relations among individuals with protected characteristics—including age, disability, race, sex, religion or belief, gender reassignment, pregnancy and maternity, marriage and civil partnership, and sexual orientation. Key achievements include the deployment of Power BI analytics to track performance across equality-related metrics, data-informed interventions (e.g., enhanced support for students under 16), the roll-out of anti-racism training and policies, and embedding equalities assessments into policy development and continuous curriculum improvement.

Complementing the Outcomes report, the Mainstreaming Activity Report and the Evidence of Mainstreaming Report illustrate how equality has become an integral element in strategy, governance, and operational processes. Equality considerations are embedded in leadership structures, staff and student services, and Board-level decision-making. Examples include offering LinkedIn Learning modules on EDI, accessible content training, mental health and menopause awareness support, alongside workshops for managers and the expansion of mental health first aid provision. Though the College has made significant strides in embedding EDI, the report acknowledges ongoing structural inequalities and commits to further action—from data-driven self-evaluation to targeted initiatives—to strengthen progress in its next Equality Outcomes cycle.

During 2024-25, the Equality and Inclusion Advisory group continued to support and establish EDI activity throughout the College for both staff and students. The group has reviewed relevant training and processes including the Hate Incident Reporting process, Trans-Awareness training and EQIA training.

We comply with the Equality Act by demonstrating our activities through a range of reports and information: Equality Mainstreaming Report; Equality Outcomes Progress Report; Equalities Policy, publication of our Equality Impact Assessments and Gender Pay Gap and Equal Pay Reporting. We are committed to achieving our Equality Outcomes and embed actions for equality mainstreaming in our strategic and operational planning processes.

Kenny MacInnes

Principal and Chief Executive 4 December 2025

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PARLIAMENTARY ACCOUNTABILITY REPORT

The Financial Reporting Manual 2024-25 (FReM) requires the inclusion of a Parliamentary Accountability report and the Scottish Public Finance Manual sets out the specific disclosures required.

The College has no items to disclose for either the current year to 31 July 2025 or the prior financial year to 31 July 2024.

Kenny MacInnes

Principal and Chief Executive 4 December 2025

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AUDIT REPORT

Independent auditor’s report to the Board of Management of Forth Valley College, the Auditor General for Scotland and the Scottish Parliament

Report on the audit of the financial statements

Opinion on financial statements

We have audited the financial statements in the annual report and accounts of Forth Valley College (“the College”) for the year ended 31 July 2025 under the Further and Higher Education (Scotland) Act 1992 and section 44(1)I of the Charities and Trustee Investment (Scotland) Act 2005. The financial statements comprise the Statement of Comprehensive Income, Statement of Changes in Reserves, Balance Sheet, and Statement of Cash Flows 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 of 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 18 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 .

.

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Risks of material misstatement

We report in our 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.

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.

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Report 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.

Report on other requirements

Opinion prescribed by the Auditor General for Scotland on audited part 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.

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 Performance Report and Governance Statement

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

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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:

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.

Michael Speight (Dec 12, 2025 15:01:12 GMT) ~~Michael Speight~~

Michael Speight, Audit Director For and on behalf of Forvis Mazars LLP

Capital Square 58 Morrison Street Edinburgh EH3 8BP United Kingdom

12 December 2025

Michael Speight is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006.

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Financial Statements for the Year Ended 31 July 2025

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FINANCIAL STATEMENTS

Statement of Comprehensive Income for the year ended 31 July 2025[1]

1 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 allocations for depreciation in the Statement of Comprehensive Income. Note 30 provides details of the adjusted operating position on a Central Government accounting basis.

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Financial Statements for the Year Ended 31 July 2025

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Statement of Changes in Reserves for the year ended 31 July 2025

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

Balance Sheet as at 31 July 2025

The financial statements on pages 40 to 62 were approved by the Board of Management on 4 December 2025 and were signed on its behalf on that date by:

Dr Abhishek Agarwal Chair

Kenny MacInnes Principal and Chief Executive

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Financial Statements for the Year Ended 31 July 2025

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Cash Flow Statement for the year ended 31 July 2025

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Financial Statements for the Year Ended 31 July 2025

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Notes to the Financial Statements

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.

Basis of preparation

These financial statements have been prepared in accordance with the Statement of Recommended Accounting Practice (SORP) 2019: ‘Accounting for Further and Higher Education’; the Financial Reporting Standards FRS 102 and the 2024-25 Government Financial Reporting Manual (FReM) issued by the Scottish Government and in accordance with applicable Accounting Standards. They conform to the Accounts Direction and other guidance issued by the Scottish Funding Council. Forth Valley College is a public benefit entity as defined by FRS102.

Basis of accounting

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

The financial statements do not include the income and expenditure of either the Forth Valley Students' Association or the Forth Valley College Foundation, as the College does not exert control or dominant influence over policy decisions within these organisations.

Going Concern

We have concluded that the use of the going concern basis of accounting in the preparation of the financial statements is appropriate. As a public body, the College is presumed to be a going concern unless there is a stated intention to withdraw the statutory services it provides under legislation. We have not been informed by the Scottish Government of any such intention. 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 approved by the Board of Management.

The College recorded a deficit of £4.87 million before other gains and losses during the financial year and total comprehensive income of £0.52 million. The College reported an adjusted operating deficit of £317k after accounting for technical pension adjustments of £37k and net depreciation adjustments of £4.2 million. Cash decreased by £1.85 million during the year and at 31 July 2025 the College held cash balance of £2.6 million.

At 31 July 2025, the College held borrowings of £2.55 million in unsecured loans which have no financial covenants. The College is reporting a net current liabilities position in these financial statements of £3.0 million and net total assets of £79.2 million.

The net current liability position reported in these financial statements is due to deferred Government capital grants being disclosed as creditors in accordance with FRS 102. They do not represent future cash outflows for the College. Liabilities also include a Pension Provision of £4.3m for the College’s share of the Falkirk Council Local Government Pension Scheme (LGPS), as well as £3.9m relating to the Job Evaluation exercise for support staff and middle management. To the extent that any pension deficit is not met from the College’s other sources of income, it may only be met by future grants or Grant In Aid from the Scottish Funding Council. This is because, under the normal conventions applying to parliamentary control over income and expenditure, such grants may not be paid in advance of need. Further details of the provision for job evaluation is included in note 17.

Cashflow projections have been prepared for 12 months from the date of approval of these financial statements, up to 31 December 2026, based on the financial forecasts prepared for the Scottish Funding Council. This position would result in cash at the end of the going concern period of £1.9m, and no lower than £1.7m through the lowest point of the going concern period.

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Recognition of income

Income from grants, contracts and other services rendered is included in proportion to the extent of completion of the contract or service concerned. All income from short-term deposits is credited to the income and expenditure account in the period in which it is earned.

Recurrent grants from the Scottish Funding Council (SFC) are recognised in the period in which they are receivable.

Grant Funding

Government revenue grants including SFC block grants 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 creditors due within one year and due after more than one year as appropriate.

Grants from non-government 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.

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.

Tangible Fixed Assets

In line with FReM all tangible assets are carried at fair value.

Land and Buildings

Land and buildings are measured using the revaluation model and accordingly, assets are revalued to fair value. Where appropriate Depreciated Replacement Cost has been used as a measure of fair value for land and buildings otherwise Market Value will be used. The College has a policy of ensuring a full revaluation takes place at least every 3 years such that the fair value is not materially different to the current value. In line with the FReM this will be supplemented by an indexation exercise or an interim professional valuation in the intervening years. 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 not 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. If a building is brought into use mid-way through a year the depreciation charge in the first year will be pro-rated to reflect the number of months that the asset was in use.

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 and are not depreciated until they are brought into use.

Freehold 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. The expected useful life of buildings can vary from 20 to 50 years as determined by professional opinion and valuation.

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Financial Statements for the Year Ended 31 July 2025

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Equipment

Equipment costing less than £10k per individual item or grouped items is written off to the Statement of Comprehensive Income in the year of acquisition. All other equipment and vehicles are capitalised and depreciated in accordance with the depreciation policy.

Intangible fixed assets

When expenditure meets the recognition criteria for capitalisation as set out in FRS 102, the asset will be depreciated on a straight line basis over its useful economic life.

Depreciation

Depreciation is provided to write off the cost or valuation of tangible fixed assets on a straight-line basis over the expected useful lives of the assets. New build campuses at Alloa and Stirling are depreciated using a component accounting approach.

i) Buildings 20 - 50 years
ii) Plant & Equipment 5 years
iii) Building improvements 10 years
iv) IT Equipment 4 years
v) Motor vehicles 7 years
vi) Equipment acquired for other projects project life
vii) Specialist Equipment acquired for Oil and Gas teaching 10 years

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

Leased Assets

Finance Leases

Leases in which the College assumes substantially all the risks and rewards of ownership of the leased asset are classified as finance leases. Leased assets acquired by way of finance lease and the corresponding lease liabilities are initially recognised at an amount equal to the lower of their fair value and the present value of the minimum lease payments at inception of the lease.

Leasing agreements which 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 assets are included in fixed assets and the capital element of the leasing commitments is shown as obligations under finance leases. Assets held under finance leases are depreciated over their useful life.

Where a lease covers both land and buildings, the land and buildings elements are considered separately for classification.

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

Operating Leases

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

Arrangements that do not have the legal status of a lease but convey a right to use an asset in return for payment are accounted for under this policy where fulfilment of the arrangement is dependent on the use of specific assets.

Revaluation Reserve

Surpluses arising on the revaluation of the College’s properties are transferred to the revaluation reserve. Additional depreciation charged on the revalued amount of these assets is transferred from the revaluation reserve to the Income and Expenditure Account annually, together with any surplus or deficit on disposal.

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

Stocks

Stock is held at the lower of cost and net realisable value. Where necessary, provision is made for obsolete, slowmoving and defective stocks.

Cash and Cash Equivalents

Cash and cash equivalents include sums on short-term deposits with recognised banks, building societies and government securities.

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 & Customs as a charity for the purposes of section 505, Income and Corporation Taxes Act 1988 and is exempt from corporation tax on its charitable activities. The College receives no similar exemption in respect of Value Added Tax.

Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised when the College has a present or constructive obligation as a result of a past event, it is probable that a transfer of economic benefits will be required to settle the obligation and a reliable estimate can be made of the obligation. The amount recognised as a provision is determined by discounting the expected future cash flows at a pre-tax rate that reflects risks specific to the liability.

A contingent liability arises from a past event that gives the College a possible obligation whose existence will only be confirmed by the occurrence or otherwise of uncertain future events not wholly within the control of the College. Contingent liabilities also arise in circumstances where a provision would otherwise be made but either it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured reliably.

A contingent asset arises where an event has taken place that gives the College a possible asset whose existence will only be confirmed by the occurrence or otherwise of uncertain future events not wholly within the control of the College.

Contingent assets and liabilities are not recognised in the Balance Sheet unless they are considered to be wholly certain but are disclosed in the notes.

Agency Arrangements

The College acts as an agent in the collection and payment of certain Student Support Funds. These funds are excluded from the College’s Statement of Comprehensive Income, 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, the income and expenditure relating to those funds are shown in the College’s Statement of Comprehensive Income.

Foreign Currency Translation

Transactions denominated in foreign currencies are recorded at the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the year-end rates. The resulting exchange differences are dealt with in the determination of income and expenditure.

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.

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

Retirement Benefits

The two principal pension schemes for the College are the Local Government Pension Scheme (LGPS) and the Scottish Teachers' Superannuation Scheme (STSS).

Local Government Pension Scheme (LGPS)

The LGPS is a pension scheme providing benefits based on final pensionable pay, prior to 1 April 2015 and a career average scheme from 1 April 2015. 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 calculated so as to spread the cost of pensions over employees’ working lives with the College. The contributions are determined by an actuary on the basis of triennial valuations using the Projected Unit 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 represents the service cost expected to arise from employee service in the current year.

In line with FRS102 the College recognises a plan surplus as an asset only to the extent that it is able to recover the surplus either through reduced contributions in the future or through refunds from the plan. The actuarial FRS102 results schedule at 31 July 2025 shows a net asset position. It is management’s view that a minimum funding requirement for future service exists within the LGPS, nor is there an unconditional right to a refund. Within these parameters, the actuary provided asset ceiling calculations for the College, and this ceiling was applied which adjusted the net pension position in the balance sheet to nil, as per note 20.

Scottish Teachers' Superannuation Scheme (STSS)

The College participates in the STSS pension scheme providing benefits 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 FRS 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 represents the contributions payable to the scheme in respect of the year.

Pension Provision

The College has made provision for the enhanced pensions, payable to former employees who have taken early retirement, for which it is liable. This provision is calculated based on the actuarial tables which take account of the enhancement payable, the age, gender and marital status of the former employee. The annual cost of the enhancement is funded from the provision. The provision is made in accordance with FRS 102 and any movements are adjusted through the Statement of Comprehensive Income.

Derivatives

Derivatives are held on the balance sheet at fair value with movements in fair value recorded in the Surplus or Deficit.

Derivative financial instruments are initially measured at fair value on the date on which a derivative contract is entered into and are subsequently measured at fair value through income or expenditure. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative. The fair value of interest rate swap contracts are determined by calculating the present value of the estimated future cash flows based on observable yield curves.

Reserves

Reserves are classified as restricted or unrestricted. Restricted reserves include balances where the donor has designated a specific purpose and therefore the College is restricted in the use of these funds.

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Forth Valley College

Financial Statements for the Year Ended 31 July 2025

Compensation for loss of office payable to a senior post-holder: No compensation payments were made in the year.

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

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

The number of staff, including senior post-holders and the Principal, having responsibility for planning, directing and controlling the activities of the College, and who received emoluments including benefits in kind where appropriate, excluding pension contributions, were as follows:

The emoluments for the Senior Management team are set out in the Remuneration report.

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

Total emoluments include amounts payable to David Allison who retired as the Vice Principal of Infrastructure & Communications on 31[st] July 2025. Further details are provided in the Remuneration Report.

Two of the senior post-holders were members of the Scottish Teachers’ Superannuation Scheme and the other three postholders were members of the Local Government Pension Scheme. All pension contributions were paid at the same rate as for other members of staff.

The Chair of the Board of Management claimed combined remuneration of £21,944 in the financial period (2023-24: £9,372 was split between Dr Agarwal and Ms Craggs). Other members of the Board of Management, other than the Principal and 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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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

11 Taxation

The Board does not consider that the College was liable for any corporation tax arising out of its activities during the period.

12 Tangible fixed assets

Land and buildings were revalued at 31 July 2025 by DM Hall, Chartered Surveyors, in the capacity of independent valuer and in accordance with the Royal Institution of Chartered Surveyors' Appraisal and Valuation Manual. As the majority of the College’s buildings are specialised buildings, open market value is not an appropriate basis of valuation. Accordingly, land and buildings are valued on the basis of depreciated replacement cost. Land is not depreciated and buildings are depreciated over their estimated life as identified by the valuer.

Land and buildings with a net book value of £162m have been funded from Scottish Funding Council capital grants. These assets may not be disposed of without the prior approval of the Scottish Funding Council and the College may have to return all or part of the sale proceeds to the Scottish Funding Council.

Other debtors include a £63K (2024: £96k) debtor from an interest rate SWAP, which is considered to fall due after one year.

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

The term loan is a 29 year loan from Barclays, taken out 30 September 2010. The first drawdown against the facility was in 2011-12. The College has an interest rates swap at 31 July 2025 of £2.6m (2024: £2.8m) at a fixed rate of 4.3% which terminates on 30 July 2029. In the 12 month period to 31 July 2025, the College repaid £222k (2024: £212k) of the loan principal. There are no covenants attached to the term loan.

The early retirement provision above is in respect of future pension liabilities arising from early retirals. The value of the provision is based on a valuation at 31 July 2025 performed by Hymans Robertson, an independent firm of actuaries. The LGPS pension provision relates to the liability under the College’s membership of the Local Government Pension Scheme. Further details are provided at note 20.

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

Until 31 March 2022, SFC held grant funding provided by the Scottish Government that related to the middle management and support staff job evaluation exercise. These funds were returned to Scottish Government in 2023 with Scottish Government agreeing that responsibility for job evaluation funding commitments now wholly rests with them. To be compliant with the SORP and relevant accounting standards, this change in funding circumstances means the College is required to make a provision for the estimated costs of implementing the job evaluation exercise without being able to recognise the matching funding stream, as the change in the funding arrangements do not provide sufficient audit evidence for it to be recognised in the financial statements. The net result of this is to reduce reserves and net assets at 31 July 2025 by £3,924k.

It must be noted that the settlement of this provision is contingent upon funding being made available by Scottish Government to Forth Valley College, and a contingent asset is recorded as per Note 28.

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

20 Pensions and similar obligations

The College's employees belong to two principal pension schemes, the Scottish Teachers' Superannuation Scheme (STSS) and the Local Government Pension Scheme (LGPS).

The Scottish Teachers' Superannuation Scheme

Forth Valley College participates in the Scottish Teachers’ Superannuation Scheme. The scheme is an unfunded statutory public service pension scheme with benefits underwritten by the UK Government. The scheme is financed by payments from employers and from those current employees who are members of the scheme and paying contributions at progressively higher marginal rates based on pensionable pay, as specified in the regulations. The rate of employer contributions is set with reference to a funding valuation undertaken by the scheme actuary. The last four-yearly valuation was undertaken as at 31 March 2020 and this set contribution rates from 1 April 2024 at 26%, and this rate continues until the results of the next valuation.

Forth Valley College has no liability for other employer’s obligations to the multi-employer scheme. As the scheme is unfunded there can be no deficit or surplus to distribute on the wind-up of the scheme or withdrawal from the scheme. The scheme is an unfunded multi-employer defined benefit scheme. It is accepted that the scheme can be treated for accounting purposes as a defined contribution scheme in circumstances where Forth Valley College is unable to identify its share of the underlying assets and liabilities of the scheme.

The employer contribution rate since 1 April 2024 was 26% of pensionable pay. Employees paid variable rates ranging from 7.35% to 12.14%.

The total employer contributions received for the Scottish Teachers' scheme in the year to 31 March 2024 were £793.9m as per the Scottish Public Pensions Agency website. At the time of signing the contributions for the year to 31 March 2025 were not available. Forth Valley College's level of participation in the scheme is 0.30% based on the proportion of the employer contributions paid in 2023-24.

The Local Government Pension Scheme

The Falkirk Council Pension Fund for non-academic employees is a funded defined benefit scheme, with the assets held in separate trustee administered funds. The total contribution made for the period ended 31 July 2025 was £2,663k of which employer's contributions totalled £2,031k and employee’s contributions totalled £632k. The agreed contribution rates are 19.4% from 1 April 2024, with employees paying between 5.5% and 11.2%.

The following information is based upon a full actuarial valuation of the fund at 31 March 2023 by a qualified independent actuary, rolled forward to 31 July 2025 using approximation methods which allow for changes in financial assumptions, additional benefits, cash flows and actual pension increase orders. This valuation at 31 July 2025 includes the impact of the High Court decision on 26 October 2018, whereby pension schemes which have members with Guaranteed Minimum Pensions (GMPs) must take action to address inequalities in those GMPs if they were contracted-out of the State scheme between 1978 and 1997.

McCloud and Sargeant Cases

When the LGPS benefit structure was reformed in 2015, transitional protections were applied to certain older members close to normal retirement age. Following legal proceedings argued in the McCloud and Sargeant cases, the Court of Appeal found that the transitional provisions introduced in the judges and firefighters’ pension schemes in 2015 gave rise to unlawful age discrimination. The UK Government requested leave to appeal this finding but this was refused by the Supreme Court on 27 June 2019. The UK Government has formally accepted the Court’s decision and, recognising the implications for all public sector pension schemes, is engaging with relevant representatives to agree how the discrimination will be remedied. An allowance

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

for the estimated impact of the McCloud judgement was included within the formal 31 March 2023 triennial funding valuation position, and is therefore automatically included within the Balance Sheet at 31 July 2025, and is through the SOCI as one part of the remeasurement item.

Goodwin Case

In 2017, the Supreme Court ruled in Walker that the surviving spouse of a same sex marriage was entitled to a survivor’s pension based on all of a deceased’s members service. As confirmed by the employment tribunal ruling in Goodwin, this placed a same sex survivor in a more favourable position than an opposite sex survivor and was therefore direct discrimination on grounds of sexual orientation. The rulings relate to members whose entitlement arose with effect from 5 December 2005 and therefore retrospective calculations will be required to eliminate past discrimination. Whilst there is still uncertainty surrounding the potential remedy to the Goodwin judgement, Hyman Robertson has carried out some approximate analysis to understand the potential impact of implementing a solution to correct the past underpayment of spouses’ benefits on Local Government schemes. The approximate impact of this is very small for a typical Fund (c0.1% of obligations), and therefore is not considered to be material for the financial statements.

Walker and O’Brien Cases

There are 2 further court cases, Walker and O’Brien, which could impact LGPS benefits in the future, however Hymans Robertson understand these are unlikely to be significant judgements in terms of impact on the pension obligations of a typical employer, and as such no allowance is made for these potential remedies.

Virgin Media Case

In June 2023 the High Court ruled in the case of Virgin Media Limited v NTL Pension Trustees. The ruling was that certain pension scheme rule amendments were invalid if they were not accompanied by the correct actuarial confirmation. This High Court ruling was appealed, but the Court of Appeal unanimously upheld the decision of the High Court. At the date of approval of these financial statements, it is unknown whether there would be any potential remedy required to public service schemes (including the LGPS) and if there was the impact in monetary terms is not known and it is reasonable to form the view that it is not able to be estimated. Accordingly, no adjustments to reflect the impact of the ruling have been made in these financial statements. The UK Government indicated in June 2025 that it will introduce legislation to deal with issues arising from the June 2023 legal judgement. The Board of Management will continue to monitor the developments and consider the impact on the LGPS liabilities recognised by the College.

Principal Actuarial assumptions

The yearend liability is calculated to include an estimated uprating of current and deferred pension benefits in relation to the 2025 pension increase order for the scheme, which was 1.7%. The assumptions used by the actuary are the best estimates chosen from a range of possible actuarial assumptions which, due to the timescales covered, may not necessarily be borne out in practice. The assumptions noted relate to expectations across the duration of the scheme and therefore are based on longerterm estimations.

As indicated in the accounting policy in note 1, the actuarial FRS102 results schedule at 31 July 2025 shows a net asset position. It is management’s view that a minimum funding requirement for future service exists, nor that is there an unconditional right to any refund from the scheme. As such, an asset ceiling adjustment of £23.5m was applied to the balance sheet position. The asset ceiling is restricted to funding obligations and unfunded obligations are still recognised on the balance sheet.

Life expectancy is based on the Vita Curves mortality tables with some adjustments. Based on these assumptions, the average future life expectancies at age 65 are summarised below:

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

The following is an analysis of the amounts charged to the Statement of Comprehensive Income:

As explained above, and in note 1, an actuarial asset ceiling of £23,549k (2024;£14,733k) was applied to the balance sheet values, and hence the charge to the SOCI is correspondingly reduced.

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

21 Related Party Transactions

The College's board members are the trustees for charitable law purposes. 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 normal project and procurement procedures.

During the period under review, transactions with bodies in which a member of the Board of Management has an interest and which, in aggregate, are considered to be material with respect to both parties, are noted below:

The College had transactions during the year, or worked in partnership with, the following bodies in which members of the Board of Management hold, or held, official positions.

Chris Brodie was on assignment to Scottish Government as a Senior Adviser on the Skills Planning Reform from 10[th] March until 31[st] October 2025.

The members of the Senior Management Team who are not Board members have also been considered in relation to these disclosures, and are noted below.

22 Financial Instruments

Financial assets and liabilities are carried in the balance sheet at amortised cost. Their fair value can be assessed by calculating the present value of the cash flows that will take place over the remaining period of the instrument, using the assumption that the fair value of trade and other receivables (note 13) and trade creditors (note 14) is taken to be the invoiced or billed amount.

Liquidity risk – The College uses an interest rate swap to adjust interest rate exposure in order to guarantee fixed interest payments for a bank loan (note where payments are variable and hence exposed to interest rate movements). The swap has a fixed rate of 4.3% and the fair value as at 31 July 2025 was an asset of £63k (2024: asset of £96k). The swap is due to terminate on 30 July 2029. The term loan is a 29 year loan from Barclays, taken out 30 September 2010. The first drawdown against the facility was in 2011-12. In the year to 31 July 2025 the college repaid £222k of the loan principal.

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

FE Bursary and Student Support Fund 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.

Childcare Fund transactions are included within the College Income & Expenditure account in accordance with the Accounts Direction issued by the Scottish Funding Council.

26 Restricted Reserves

The college has no restricted reserves as at 31 July 2025 (2024: nil).

27 Capital Commitments

The College has no capital commitments at 31 July 2025.

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

28 Contingent Assets and Liabilities

The College has a contingent asset of £3,924k at 31 July 2025 (2024: £3,357k). This relates to the Scottish Government funding for the middle management and support staff job evaluation exercise as explained in Note 17. This is recorded as an off balance sheet contingent asset as Scottish Government, whilst acknowledging responsibility for the outcome of this exercise, has not provided written confirmation of the amount of funding available.

The College has no contingent liabilities at 31 July 2025 (2024: nil).

29 Post Balance Sheet Events

There are no post balance sheet events to note.

30 Table of Non-cash allocation

Following reclassification, incorporated Colleges received a non-cash budget to cover depreciation but this additional budget is not recognised under the FE/HE SORP accounting rules. 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.

Under the FE/HE SORP, the college recorded an operating deficit of £4,869k for the year ended 31 July 2025. After adjusting for the non-cash allocation provided under Government rules, the College shows an “adjusted” deficit of £736k on a Central Government accounting basis. The deficit is attributable to other factors reflected in the adjusted operating table on page 15 and also the impact of factors such as inflationary pressure and geopolitical issues explained in the Performance Report on pages 3 to 39.

31 Accounting estimates and judgements

The financial statements contain estimated figures that are based on assumptions by management about the future, or that are otherwise uncertain. Estimates are made taking into consideration historical experience, current trends and other relevant factors based on the information available to management at the time of preparing the financial statements. However, because balances cannot be determined with certainty, actual results could be materially different from the assumptions and estimates.

The items in the College’s Balance Sheet at 31 July 2025 for which there is a risk of material adjustment in the forthcoming financial year are as follows:

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

swap fair value was an asset at 31 July 2025 but if the SONIA interest rates and other market factors change going forward there is the potential for the fair value of the swap to be assessed as a liability for the College rather than an asset, or for the asset to increase.

The following are other areas where there is significant estimates or judgements which affect the financial statements:

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Financial Statements for the Year Ended 31 July 2025

Forth Valley College

Appendix 1 Accounts Direction from Scottish Funding Council

It is the Scottish Funding Council’s direction that institutions comply with the 2019 Statement of Recommended Practice: Accounting for Further and Higher Education (SORP) in preparing their annual report and accounts.

Institutions must comply with the accounts direction in the preparation of their annual report and accounts in accordance with the Financial Memorandum with the Scottish Funding Council (SFC).

Incorporated colleges are also required to comply with the Government Financial Reporting Manual 2024-25 (FReM) where applicable. In cases where there is a conflict between the FReM and the SORP, the latter will take precedence.

Incorporated colleges must send two copies of their annual report and accounts to the Auditor General for Scotland by 31 December 2025.

The annual report and accounts should be signed by the Chief Executive Officer / Executive Director and by the Chair, or one other member of the governing body.

Incorporated colleges should reproduce this Direction as an appendix to the annual report and accounts.

Scottish Funding Council 14 August 2025

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