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← Fife College

2025-07-31-accounts

‘Fi ~~f~~ e Colle ~~g~~ e

ANNUAL ACCOUNTS For the year ended 31 July 2025

Annual Accounts For the year ended 31 July 2025

Scottish Charity Number: SC021203

Pittsburgh Road, Dunfermline, Fife, Scotland, KY11 8DY t: 0344 248 0115 e: info@fife.ac.uk f: 0344 248 0116 w: www.fife.ac.uk

Principal and Chief Executive: Mr Jim Metcalfe

Contents

Performance Report

Performance Overview

Performance Overview
Principal and Chief Executive’s Statement on Performance 1
Finance 2
New Campus 2
Legal Status 3
Vision and Values 3
Our Key Priority Aims 3
Key Risks and Issues Affecting Fife College 4
Performance Summary and Overview 5
Performance Analysis
Financial Review Summary 7
Treasury Management 9
Supplier Payment 9
Sustainability Report 10
Equality and Diversity 11
Going Concern 11
Accountability Report 12
Corporate Governance Report
Director's Report 12
Statement of Board of Governor’s Responsibilities 16
Governance Statement 18
Remuneration and Staff Report
Remuneration Report 23
Staff Report 26
Staff Numbers & Costs 26
Sickness Absence Data 27
Promotion of Equality of Delivery of Service to Different Groups 27
Fair Work Practices 28
Health and Safety 30
Trade Unions 30
Parliamentary Accountability Report
Fees and Charges 31
Independent Auditor’s Report
Independent Auditor’s Report 32
Annual Accounts
Financial Statements 36
Appendix 1 – Direction from Scottish Ministers 59

The Accountable Officer authorised these financial statements for issue on:

Performance Report

Performance Overview

The performance report provides an overview of Fife College’s performance within the academic year 2024-25, covering performance analysis, financial review for the year, and key risks affecting the College.

Fife College is a Further and Higher Education College with an experienced team dedicated to transforming the lives of the College’s students through community-centred education and skills training. The College offers a wide range of inspirational learning experiences from access education to graduate degree and higher apprenticeship programmes. The main campuses are located in Dunfermline, Rosyth, Glenrothes, Levenmouth and Kirkcaldy.

The College is committed to offering a dynamic and relevant portfolio of courses which supports close collaboration and seamless pathways between schools, colleges, universities and employers. The College’s aim is to develop stronger relationships with the Colleges wide range of partners in the regional economy and community.

Principal and Chief Executive’s Statement on Performance

Having been in post as Principal of one of the largest colleges in Scotland for two years, we are beginning to implement our new Action Plan. The College is at the forefront of college provision across the sector, with the ambition, talent and assets to help shape the future delivery of education and skills in Fife and beyond.

Our experienced team of nearly 800 staff is committed to providing our 6,000 full-time and 18,000 parttime students with the best possible College experience. The College does this through a range of impactful learning experiences. Our College continued to deliver a tremendous – and ever-improving - service to students and staff which is reflected in sustained positive student and staff satisfaction feedback.

Against the current climate of inflationary pressures and the cost-of-living crisis, the College continues to strengthen our relationships with existing partners and stakeholders, while creating new partnerships with organisations such as NHS Fife, the region’s manufacturing and construction industries, and many regional college and university partners.

During 2024-25 the College had to adapt to the realities of a challenging economic environment. However, throughout this we have continued to support our students through a range of measures such as free breakfasts and lunches with over 34,000 free meals being provided to students in the last financial year.

We have worked diligently to provide additional support activities, such as financial literacy, wellness, and wellbeing advice, and personalised learning support.

We face an increasingly challenging financial landscape and have delivered to our resulting, planned deficit in 2024-25. Our Board has approved a deficit budget for 2025-26 designed to return the College to a stable financial position through the realisation of cost saving measures including a revised Voluntary Severance programme.

Fife College remains steadfast in its commitment to being student-centred in all that we do. Our aim is to transform the lives of our students, enabling them to change other people’s worlds, develop their full potential, and give them the knowledge, experience and resilience to shape their future success.

We will achieve this by:

1

Performance Report (Continued)

Having a particular focus on the health and wellbeing of our students and staff, providing flexible and adaptable approaches to learning and working, and a strong sense of togetherness and belonging. we are actively exploring opportunities for staff development, training, and progression, reinforcing our commitment to their growth and well-being.

I am looking forward to playing my part in taking the College forward to deliver our Action Plan for improvement in full, empowering our students, our communities and our staff.

Finance

Due to how the College has been directed to account for costs relating to the national Job Evaluation exercise the College has reported a deficit of (£2.914m) (2023-24 deficit of (£4.906m)).

The College’s attention is now turning to the financial outlook for 2025-26 and beyond. In preparing the College’s budgets for future years, it is considering a number of different scenarios, in what is a very uncertain financial environment. The main sources of pressure are likely to be from:

The College has based its financial forecast to 2027-28 in line with the assumptions provided by the Scottish Funding Council. The financial forecast returns highlight significant deficits and if the College were not to take sufficient actions it would cease to have sufficient trading cash by financial year 2027/28. Actions are being implemented that aim to mitigate the deficits over the planning period and ensure that the College can maintain and deliver its services to students and wider stakeholders.

New Campus

The Scottish Funding Council issued its grant offer letter formally to Fife College on 12th January 2023 confirming capital grant funding of £130.9 million for the project. Fife College executed the design and build contract with Balfour Beatty Construction Limited (BBCL) on 20th January 2023. Construction work on the new Dunfermline City Campus (DCC) is progressing well from a start on site in January 2023, with the College receiving the keys to the new campus on 30 September 2025. In addition, the funding received from the Scottish Government, the College has invested £4.5 million of its own capital allocation to ensure the new campus provides the best student experience possible.

The College established a New Build Project Board to provide dedicated and focused governance and oversight of the project. The Board formally meets monthly to review the build progress and to monitor the financial pressures as well as a briefing update once per week as the College progresses towards completion.

2

Performance Report (Continued)

The new campus offers enhanced provision for the College’s staff and students in every discipline including new sports facilities and a dedicated engineering block which provides the latest learning environment for the students. The DCC is on track to be delivered under budget and ahead of schedule.

Legal Status

The College is incorporated under the Further and Higher Education (Scotland) Act 1992 as amended by the Post-16 Education (Scotland) Act 2013, and is registered with the Office of the Scottish Charity Regulator. The College is a registered charity (Scottish Charity number SCO21203) for the purposes of the Charity and Trustee Investment (Scotland) Act 2005.

Vision and Values

Our Vision

To transform the lives of our students through inspirational learning and teaching.

Our Mission

The College will deliver excellent opportunities for our students and work with them to develop their full potential with life enhancing skills, knowledge, experience and resilience that will shape their future success.

Our Values

To realise our vision, the College recognises the importance of colleagues, customers, partners and communities. The College achieves this by working to and delivering the following values:

Our Key Priority Aims

Learning and teaching is at the heart of everything Fife College does. The College recognises that delivering a relevant curriculum and an outstanding student experience is critical to the College’s success as a College of Higher and Further Education.

In 2023-24 the College developed a new strategy to reflect the future needs of the people of Fife for 2024-29. The Strategy is focused on the following five Ambitions:

  1. We put our students first, every time

  2. We invest in the team – people make our College

  3. We create learning for work and opportunity

  4. We take responsibility for wealth building in our communities

  5. Achieve NET ZERO is our fight, together

The implementation of the Strategy is being developed to create a coherent approach to ensure it is underpinned by and aligned to key college operational plans, and the Colleges long-term financial forecasts. Priorities outlined in the Scottish Funding Council (SFC) Regional Outcome Agreement (ROA) contribute to the Colleges key priorities and objectives.

3

Performance Report (Continued)

Key Risks and Issues Affecting Fife College

The College maintains a strategic risk register which is reviewed regularly by the College Leadership Team, the Audit and Risk Committee and Board of Governors.

The table below sets out the College’s strategic risks as at 31 July 2025.

Table 1: Key Strategic Risks

Risk
Ref		 Risk Description Current
Risk
Score		 Risk
Appetite
BOG1 There is a risk of our staff and students not being aware of their roles
and responsibilities around the climate change emergency because
of lack of training and communication resulting in lack of knowledge
and supportindelivering against the climate change agenda.
12 Open
BOG2 There is a risk of being unable to clearly measure impact because
we have not adequately defined our success metrics, resulting in
reliance onanecdotalevidence.		 6 Cautious
BOG3 There is a risk of the College being unable to meet its commitments
because lack of funding and / or poor financial planning, resulting in
the College being unable to achieveits strategic objectives.		 20 Cautious
FCE1 There is a risk of college systems and processes being the victim of
a cyber-attack, including from artificial intelligence (AI) because of
targeted exploitation of vulnerabilities in our infrastructure, software
and policies not being fit for purpose, resulting in the loss of key data
or financial loss.
12 Cautious
FCE2 There is a risk of us not being the training provider of choice
because we have failed to offer a competitive product and have
underperformed, resulting in significant reputational damage and
loss of future business andincome.
12 Cautious
FCE3 There is a risk of becoming overly dependent on the local market
and suppliers because we are focused on supporting the Fife
economy, resulting in local suppliers being unable to meet our
requirements and potentiallyhighercosts.
9 Cautious
FCE4 There is a risk of the withdrawal of job evaluation funding because of
changes in Scottish Government direction and lack of support
resulting in the College having to fund and implement a job
evaluation scheme that it cannot sustainablyafford.
20 Cautious
PCC1 There is a risk that our staff don’t have the right skill set because we
have not invested time and resource into professional development
resulting in ineffective use of resources and inability to deliver a
high-qualityexperience.
12 Cautious
PCC2 There is a risk of reduced levels of staff satisfaction and engagement
because of a failure to provide an environment of opportunity, trust
and respect resultingin a high level of staff turnover and absence.		 12 Cautious
PCC3 There is a risk of industrial action because of failure to agree a
national bargaining award resulting in loss of teaching time, students
withdrawing and/or students not getting their results in an acceptable
timeframe.
8 Cautious
ASC1 There is a risk that we fail to put our students first in delivering a
high-quality learning experience because we have not considered
the diverse range of needs resulting in a poor student experience,
retention and attainment.
16 Open
ASC2 There is a risk of lack of achievement and progression for students
because of poor quality of learning and teaching and resources
within an engaging environment resulting in low attainment,
inconsistent student experiences andinability tomeet ourtargets.
16 Open

4

Risk
Ref		 Risk Description Current
Risk
Score		 Risk
Appetite
ASC3 There is a risk that our students are not competent within their area
of study because of the increased usage of artificial intelligence in
submission of assessments resulting in low attainment and
progression,and impactingour reputation.
12 Open

Risk Appetite Definitions

Almost Certain
Likely
Likelihood
Possible
Unlikely
Rare		 5 10 15 20 25
4 8 12 16 20
3 6 9 12 15
2 4 6 8 10
1 2 3 4 5
Insignificant
Minor
Significant
Major
Extreme

Impact

Classification Risk Score Colour ID
Minimal 1-6
Cautious 8-12
Open 15-25

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

Performance Summary and Overview

Fife College was allocated an activity target of 118,604 credits by the Scottish Funding Council (SFC) for the period August 2024 to July 2025.

Overall, the College has achieved 101.6% of the credit target.

The table below summarises the College key performance indicators (KPIs) in relation to student activity.

5

Performance Report (Continued)

Table 2: Student Activity KPIs

Table 2: Student Activity KPIs
2024-25 2023-24
Student Activity (Credits) 120,496 116,963
Performance Against Credits Activity Target 101.6% 98.6%
Credits per Staff FTE 151 146
Early Withdrawal* 3.4% 3.4%
Further Withdrawal 11.6% 12.6%

Early Withdrawal for 2024/25 is calculated in line with SFC guidance and requirements. Early withdrawal indicates that a student has withdrawn from the programme before five weeks of the course has elapsed (for courses 20 weeks or more in duration). For shorter courses, the threshold is after 25% of the course has elapsed. In addition, colleges are required to ensure that early withdrawal is excluded from the calculation for overall withdrawal figures.

In terms of funding, SFC provides activity funding for students who are actively engaged in their studies for at least five weeks and one day. Funding is not provided for students who withdraw before this date.

The College’s new 5-year strategy was launched in August 2024, with an update against KPI's provided to the Board in December 2024. The KPI’s were further refined and the below table was provided to Board in June 2025.

Table 3: College KPIs

6

Performance Report (Continued)

Performance Analysis

Fife College, in conjunction with key stakeholders, now operates within the Scottish Funding Council’s Outcome and Framework Agreement Model (OFAM). This framework replaces the previous Outcome Agreement process and sets out expectations for planning, performance, and accountability across the college sector. As part of OFAM, the College produces an annual Self-Evaluation and Action Plan (SEAP), which outlines performance against agreed priorities and identifies actions for improvement. Regular quarterly engagement meetings with SFC provide opportunities to review progress, discuss performance, and agree any necessary interventions or support. The College’s activity — including the volume and subject areas of credit delivery — is discussed with SFC and aligned to national and regional priorities established by the Scottish Government. In addition, the College develops an annual financial plan, covering both SFC-funded and commercial activity, which aligns with the Annual Plan, overarching College Strategy, and other key strategic and operational plans, ensuring strong collaboration with external stakeholders.

Overall activity is managed by the College Leadership Team where student activity targets are monitored along with performance against budget and achievement of planned activities for the year.

Financial performance is also monitored quarterly at both the Finance, Commercial and Estates Committee and the Board of Governors. The Board of Governors are informed of the progress made towards key targets and performance, through Business Reporting and the Principals report.

Fife College has recorded a deficit before other gains and losses of (£1.280m) (2023-24 deficit £5.643m). Factoring in (as outlined in Note 28) the Adjusted operating surplus for the year is £0.836 million (202324 £0.920 million). This factors in:

A further year extension for 2024-25 had been exercised by the Scottish Prison Service to continue the delivery of the Colleges training programme until summer 2025. This contract will not continue past summer 2025.

Financial Review Summary

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

The full financial picture is detailed later in this document. The following table gives a summary of key financial and other operating ratios.

7

Performance Report (Continued)

Table 4: Key Financial and Other Operating Ratios

Table 4: Key Financial and Other Operating Ratios
2024-25 2023-24
Adjusted Surplus/deficit as % of Total income 1.49% 1.73%
Non SFC Income as % of Total Income 24.31% 24.84%
Current Assets: Current Liabilities 1.33 1.25
Staff Costs as a % of total turnover 75.76% 77.55%
Ratio of days cash to total expenditure 172.36 123.42
Staff Turnover 12.10% 10.23%

Fife College’s cash budget for priorities has been set at £2.152 million by SFC. The College continues to reconcile spend against the set value ensuring items allocated are in line with the set spend priorities.

Spend allocated against the College’s cash budget for priorities within the financial year is detailed below.

Table 5: Cash Budget for Priorities

Table 5: Cash Budget for Priorities Table 5: Cash Budget for Priorities Table 5: Cash Budget for Priorities
Table of cash budget forpriorities spend
Revenue priorities 2024-25
£'000		 2023-24
£'000
2015-16payaward 400 400
Voluntaryseverance 577 665
Digital equipment 612 513
Total impact on operating position 1,589 1,578
Capitalpriorities
Loan repayments 341 341
Unfundedpensionpayments 222 233
Total capital 563 574
Total cash budget forpriorities spend 2,152 2,152

The College is reporting an adjusted operating surplus of £0.836 million.

Table 6: Adjusted Operating Position

Table 6: Adjusted Operating Position
ADJUSTED OPERATING POSITION 2023-24
£'000		 2024-25
£'000		 2025-26
Budget
£'000
Surplus/(deficit) before other gains and losses (5,643) (1,262) (2,984)
Add Back:
- Depreciation (net of deferred capital grant release)
- Non-cash pension adjustments - Net service cost
- Non-cash pension adjustments - Net interest cost
- Costs of middle management job evaluation exercise not matched
by revenue
Deduct:
- Cash budget for priorities allocated to loan repayments and other
capital items		 3,043
(585)
(1,450)
6,129
(574)		 3,145
(194)
(1,615)
1,325
(563)		 3,128
0
0
967
(557)
Adjusted Operating Surplus/(Deficit) 920 836 554

8

Performance Report (Continued)

This position will support the College going into the next financial year 2025-26. However, while this is a positive position, the College recognises the significant financial pressures on Fife College, and the college sector as a whole, in future years.

The Statement of Comprehensive Income (SOCI) presents the financial performance during the accounting period in accordance with the FE/HE SORP. The adjusted operating position is intended to reflect the financial performance of the college after allowing for non-cash adjustments and other material one-off or distorting items required by the SORP. The adjusted operating position is therefore designed to smooth any volatility in reported results arising from FRS 102 and also to recognise that some of the reported costs do not have an immediate cash impact on the College.

The Statement of Comprehensive Income table above outlines adjusting items made to arrive at the adjusted operating position. The adjust for depreciation reflects that this is a non-cash item. Depreciation is therefore excluded when calculating the adjusted cash operating position. The adjustments to the pensions charge represent the non-cash element of service cost (i.e. including the present value of projected benefits resulting from employee service in the current year) less cash contributions paid.

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. These are non-cash adjustments.

The costs of job evaluation have been excluded when calculating the adjusted cash operating position, as required within the SFC’s Accounts Direction for 2025. The final adjustment is for loan payments and unfunded pension payments. These are not reflected in the SOCI and therefore these are removed to give the adjusted operating position.

Treasury Management

Treasury management is the management of the College’s cash flows. Treasury management includes banking, managing the existing borrowing facilities; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.

The College’s treasury management arrangements are governed by the College’s financial regulations. Following reclassification on 1 April 2014 the College is unable to enter into new loan arrangements without prior approval from the Scottish Funding Council.

At 31 July 2025, there was a cash balance of £25.1 million (2023-24, £19.8 million). The trading cash is impacted by the need to provide for known liabilities, including spend on the Dunfermline City Campus.

The underlying year end cash balance as at 31 July 2025 was £6.5 million (2023-24, (£4.9 million). This is equivalent to circa 45 days of working cash.

Supplier Payment

Fife College complies with the CBI Prompt Payment Code and has a policy of paying its suppliers within 30 days of invoice unless the invoice is contested. Supplier payment runs are completed fortnightly future paying all invoices due and those falling due in the next two weeks to ensure all payments are made within 30 days.

In 2024-25, the level of creditors in terms of the proportion of year-end creditors to the aggregate invoiced amounts during the year was 20 days (2023-24: 36 days). The increased days in 2023-24 was as a result of outstanding new campus Balfour Beatty construction invoices totalling £5.7m at year end due to timing. Excluding this figure from the calculation brings the normal creditor days to 27 days for 2023-24.

The College did not make any late interest payments during the year.

9

Performance Report (Continued)

Sustainability Report

Fife College confirms compliance with Scottish Government sustainability reporting in line with requirements of the Climate Change (Scotland) Act 2009 which sets out the required content for the report to Scottish Government. Latest published data is from academic year 23-24 and can be found here – Public Bodies Climate Change Duties Compliance Reporting

Over the 2023-24 period, with the addition of spend for the new campus, in total during the period, Fife College emitted 17,620 tonnes of CO2e. This figure can be broken down into three scopes as per the College's Public Bodies Climate Change Duties annual reporting linked above. When the total figure is broken down into these three scopes the figures are as follows:

The total CO2e figure is a 23.8% increase compared to the previous year. This is primarily due to the spending on the new Dunfermline Campus. Additionally, the inclusion of staff & student commuting emissions for the first time has also contributed to this increase, with commuting totalling 579 tonnes of CO2e (3.2% of total emissions).

Overall, the emissions on scope 1 and 2 have reduced 52% in the last 10 years since the baseline year of 2014. Commuting and grey fleet (staff using their own car and claiming expenses) are both significant contributors to Fife College’s overall emissions. The College is therefore developing sustainable travel plans for all its campuses to help reduce these figures, in line with its ambition on net zero and sustainability.

The College reports and contributes to national targets and plans, details can be found in our Public Bodies Climate Change Duties annual reporting linked above. This included adapting and being resilient to the effects of climate change as an anchor, public institution as we must identify climate hazards and plan for a 2 degree and 4 degree average warmed planet and the climate change risks associated such as flooding and overheating. Fife College was identified as one of 8 education institutes that were deemed comprehensive in our adaptation action and reporting by the Sustainable Scotland Network annual roundup report. This contributes to the Scottish Governments National Adaptation Plan.

Fife College reports on its carbon footprint and relevant climate change data annually to Scottish Government. This is through its annual Public Bodies Climate Change Duties (PBCCD) report. In addition, Fife College has put in place peer review and validation reporting arrangements. These also take place annually to help validate the College’s reporting and to enable the ability to develop and enhance climate change actions.

Fife College demonstrated Governance and Leadership as the College has sustainability as an ambition under the corporate strategy. The Board receives quarterly updates on progress made along with the College Leadership Team, including an update on relevant KPIs. Climate change risk is included in the Board risk register extract, it is part of the Colleges overall Strategic Risk Register which is monitored and reported on quarterly to both the Colleges Audit and Risk Committee and Board of Governors. Fife College has assigned Board and Leadership positions for sustainability.

Fife College’s climate related strategies and targets can be found in the annual PBCCD report. These annual reports can be accessed through the following link: Sustainability Key Documents

The College also recognises its role in the broader community of Fife, Scotland and the UK. To this effect, the Sustainability Team are active members of the Environmental Association of Universities and Colleges (EAUC). The team sit on multiple working groups including Biodiversity Community of Practice, EAUC Scotland Smaller Institutions, Advanced Procurement for Universities and Colleges (APUC) and Waste. The College is also one of few colleges represented on the Adaptation Benchmarking Working Group. This Group is the body that works with all public bodies across Scotland on climate change adaptation administered by Vertur for Scottish Government.

10

Performance Report (Continued)

Fife College is an active partner in local environmental organisations such as Fife Environmental Partnership, Fife Biodiversity Partnership and Fife Communities Climate Action Network, which are all involved in environmental initiatives across Fife. Fife College is also a partner in Climate Action Fife, an organisation whose remit is to improve the climate response across the whole of Fife with a variety of climate action initiatives. The College is a finalist two Green Gown awards with EAUC and Edie Net Zero building award with the Colleges new Dunfermline Campus which is built as a pathfinder for the Scottish Governments Net Zero Public Sector Building Standard, to be low carbon impact in construction and operation.

Equality and Diversity

Fife College works proactively to embed sustainability, environmental management and equality considerations in College Contracts and partner with the Colleges contractors to actively support the commitment of Fife College to sustainable working. All college policies and procedures ensure fair and equal treatment in the delivery as Equality Impact Assessments (EIA) are completed to ensure that policies, practices and decisions are rights based, fair, meet the needs of staff and students and that they do not inadvertently discriminate against any protected group. The EIAs from across the College are reviewed for quality, consistency and fairness at the Strategic Equality and Diversity Group.

Fife College consistently delivers and supports educational projects that emphasise the importance of equality, diversity, and human rights. The College has established a varied and diverse range of projectbased learning that directly and indirectly addresses the 9 protected characteristics in areas of: race, religion, belief, gender, sexual orientation and disability. Fife College has developed over 80 bespoke projects to tailor for learner interest, style of learning and preference. The biggest impact is through positive engagement of reluctant learners whose first step to engagement with Fife College is through their interest in a project or thematic course of learning. Many continue to more formal learning and the achievement of SQA qualifications. Examples of recent projects delivered successfully are:

Going Concern

As detailed within the Financial Statements pages 37-38 the Board of Governors considers that the College has sufficient resources to continue in operational existence for the foreseeable future. A detailed long term financial plan has been developed that outlines the pressures impacting the sector as a whole and The College has begun activity to implement a long-term sustainable model of delivery.

Signed Accountable Officer…………………………… Date…………………. Jim Metcalfe (Dec 12, 2025 12:53:25 GMT)

11

Accountability Report

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

Corporate Governance Report

Director's Report

The director’s report sets out the membership of the Board of Governors and the Executive Officers of Fife College over the course of the financial year.

Table 7: Fife College Board of Governors Membership and relevant Register of Interests

Member’s
Name		 Date
Appointed		 Term of
Office Ends		 Date
Resigned		 Status of
Appointment		 Interests
(Employer)		 Interests
(Related Undertaking / Non-
financial interests)		 Committees Served
T Bennett 01.05.24
01.08.25		 31.07.26 Co-opted
Member		 FCE Group and
Self-Employed		 N/A Co-opted Member on People and
Culture Committee
M Boyle 01.08.22 31.07.26 Non Executive Ardelis LTD N/A Academic Standards Committee
Finance, Commercial and
Estates Committee
New Build Project Board
L Coakley 14.03.24 13.03.28 Teaching
Trade Unions
Staff		 Fife College EIS Finance, Commercial and
Estates Committee
P Dobson 01.08.21
01.08.25		 31.07.29 Non Executive University of St
Andrews		 N/A Academic Standards Committee
People and Culture Committee
Nominations and Remuneration
Committee
T Edwards 01.07.23 30.06.25 21.02.25 Student Fife College
Students’
Association		 National Union of Students
(NUS)		 Academic Standards Committee
Finance, Commercial and
Estates Committee
B Fisher 01.08.20
01.08.24		 31.07.28 Non Executive N/A Fife Housing Group Audit and Risk Committee
New Build Project Board
Nomination and Remuneration
Committee

12

Member’s
Name		 Date
Appointed		 Term of
Office Ends		 Date
Resigned		 Status of
Appointment		 Interests
(Employer)		 Interests
(Related Undertaking / Non-
financial interests)		 Committees Served
S Fleming 01.08.22 31.07.26 Non Executive Caledonian
Sleeper Ltd		 N/A Academic Standards Committee
K Gallacher 01.07.23 30.06.25 Student Fife College
Students’
Association		 National Union of Students
(NUS)		 People and Culture Committee
N Graham 01.08.24 31.08.28 Non Executive Edinburgh Napier
University		 N/A Academic Standards Committee
Audit andRiskCommittee
B Heenan 02.10.23 01.10.27 Non Teaching
Staff		 Fife College UNISON Academic Standards Committee
J Hepburn 01.08.24 31.08.28 Non Executive NHS 24 Cross Roads Fife
British Transport Police		 Audit and Risk Committee
People and Culture Committee
Nominations and Remuneration
Committee
S Hermiston 01.08.24 31.08.28 Non Executive University of
Edinburgh		 N/A Finance, Commercial and
Estates Committee
People and Culture Committee
E McPhail 23.03.20
01.08.23		 31.07.27 Non Executive NHS Healthcare
Improvement
Scotland		 N/A Academic Standards Committee
Audit and Risk Committee
Nominations and Remuneration
Committee
J Metcalfe 17.04.23 Duration of
contract of
employment		 Principal Fife College Energy Saving Trust Group
Energy Saving Trust
Foundation		 People and Culture Committee
Finance, Commercial and
Estates Committee
Academic Standards Committee
New Build Project Board
S Mitchell 01.11.18
01.08.22		 31.07.26 Non Executive Glasgow
Caledonian
University		 GCU Company Ltd
GCU Academy Ltd
GCU Nominee Company Ltd
James Hutton Institute
Historic Environment
Scotland		 Finance, Commercial and
Estates Committee
Nominations and Remuneration
Committee
New Build Project Board

13

Member’s
Name		 Date
Appointed		 Term of
Office Ends		 Date
Resigned		 Status of
Appointment		 Interests
(Employer)		 Interests
(Related Undertaking / Non-
financial interests)		 Committees Served
J Park 01.08.24 31.08.28 Non Executive Airbnb UK Ltd N/A Finance, Commercial and
Estates Committee
People and Culture Committee
C Skelly 14.03.24 13.03.28 11.09.24 Non Teaching
Trade Unions
Staff		 Fife College UNISON People and Culture Committee
P Thompson 15.02.22
01.08.25		 31.07.29 Non Executive Thornton Tomasetti
Defence Ltd		 Fife Economy Partnership
Fife Economy Partnership
(Innovation Group)
Bank of England Advisory
Panel
Institute of Physics		 Audit and Risk Committee
Co-opted Member on New Build
Project Board
D C Watt 03.03.19
03.03.23		 02.03.27 Non Executive
(Regional
Chair)		 BGR Training
Governance
Express
Organising Leisure
Merlin Consultancy
(Global) Ltd.
Scottish Handball
Association		 College Employers Scotland
Colleges Scotland
Goodison Group in Scotland		 Nominations and Remuneration
Committee
New Build Project Board
L Wilkinson 28.11.22 27.11.26 Teaching Staff Fife College N/A People and Culture Committee

The Board of Governors formally meets 4 times a year. During 2024/25 there was also a Board Strategy Session. The Board also has a number of committees which are formally constituted with terms of reference.

14

Table 8: Attendance of Board and Committees

Member’s Name Board of
Governors		 Academic
Standards		 Audit and
Risk		 Finance,
Commercial
and Estates		 People and
Culture
Committee		 New Build
Project Board		 Nominations
Committee
(previously
Chairs
Committee)		 Remuneration
Committee
T Bennett (Co-opted
Member on People
and Culture
Committee)		 - - - - 3/3 - - -
M Boyle 4/5 3/3 - 4/4 - 8/10 - -
L Coakley 4/5 - - 3/4 - - - -
P Dobson 5/5 1/3 - - 1/3 - 3/4 -/-*
T Edwards 2/2 2/2 - 2/2 - - - -
B Fisher 4/5 - 4/4 - - 10/10 4/4 1/1
S Fleming 3/5 1/3 - - - - - -
K Gallacher 4/5 - - - 3/3 - - -
N Graham 5/5 3/3 4/4 - - - - -
B Heenan 5/5 3/3 - - - - - -
J Hepburn 4/5 - 2/4 - 3/3 - 3/4 1/1
S Hermiston 4/5 - - 2/4 3/3 - - -
E McPhail 4/5 3/3 4/4 - - - 4/4 1/1
J Metcalfe 4/5 3/3 - 3/4 3/3 10/10 - -
S Mitchell 2/5 - - 3/4 - 7/10 2/4 1/1
J Park 5/5 - - 2/4 3/3 - - -
C Skelly* -/- - - - -/- - - -
P Thompson (Co-
opted Member on New
BuildProjectBoard)		 3/5 - 3/4 - - 8/10 - -
D C Watt 5/5 - - - - 8/10 4/4 1/1
L Wilkinson 4/5 - - - 3/3 - - -

15

Statement of Board of Governor’s Responsibilities

In accordance with the Further and Higher Education (Scotland) Act 1992, the Board of Governors 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 year.

The Board of Governors 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 Statement of Recommended Practice: Accounting for Further and Higher Education 2019 Edition and the 2023-24 Government Financial Reporting Manual (FReM) issued by HM Treasury and other relevant accounting standards. In addition, within the terms and conditions of a Financial Memorandum agreed between the Scottish Funding Council (SFC) and the College’s Board of Governors, the Board of Governors, through its designated Principal, is required to prepare financial statements for each financial year 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 year.

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

In causing the financial statements to be prepared, the Board of Governors has ensured that:

The Board of Governors has taken steps to:

The system of internal control is based on a framework of management information processes and procedures, including the segregation of duties, and relevant key college systems of delegation, automation and accountability. In particular, it includes:

16

Statement of Board of Governor’s Responsibilities (Continued)

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

Auditor

The Auditor General for Scotland appointed Forvis Mazars LLP to undertake the audit for the year ended 31 July 2025. This is the third year of a five-year appointment.

Disclosure of Information to Auditors

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

Non-Audit Fees

No payments were made to the External Auditor, Forvis Mazars LLP, other than in respect of the Statutory Audit fee (see note 10).

17

Governance Statement

Introduction

Fife College is committed to exhibiting good practice in all aspects of corporate governance. This summary describes the manner in which the College has applied the principles set out in the 2022 Code of Good Governance for Scotland’s Colleges. Its purpose is to help the reader of the financial statements to understand how the principles have been applied.

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 the College in the year to 31 July 2025 and reports the Board’s assessment of the effectiveness of these arrangements.

Statement of Compliance

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

Board of Governors

The College’s Board of Governors comprised a total of 19 members and there is one Co-opted member on People and Culture Committee. Eleven of these members were non-executive members who were drawn from the public and private sector and were selected due to their specific expertise, knowledge and skills that contributed to the effective governance of the College. The other members include the Chair, the Principal, two elected student members, two elected staff members and two trade union members. The Chair was appointed by Scottish Ministers. One of the non-executive members was elected by the Board as Depute Chair and another as Senior Independent Member.

Since 1 August 2013, new Board Members have been appointed in accordance with the Ministerial Guidance on College Sector Board Appointments.

The Board has established the undernoted Committees, all of which are formally constituted with Terms of Reference, as delegated by the Board of Governors. All the committees are chaired by a nonexecutive member of the Board and meet virtually via Microsoft Teams. The committees are:

A New Build Project Board has also been established to oversee the planned new campus for Dunfermline. The Project Board reports to the Finance, Commercial and Estates Committee and meets monthly.

18

Governance Statement (Continued)

The Board of Governors was responsible for setting the mission and strategic direction of the College and for protecting its reputation. The Board approved major developments and partnership projects and actively monitored and promoted financial stability. The Board had strategic responsibility for employment of staff, welfare of students and staff, and standards of teaching and learning. The Board promoted high standards of ethical conduct and integrity.

The Board of Governors met four times during the year and received minutes and reports from its committees. All meetings have been chaired by the Chair, and have been held in person with the option to dial in.

The Board held its annual strategy session in May 2025. Strategic sessions on financial resilience, Rosyth and Froth Green Freeport were held. Board members were also given an interactive presentation on the potential and risk of Artificial Intelligence.

The Board receives quarterly strategic dashboard reports which give updates on strategic ambitions for the college in relation to students, staff, finance and sustainability.

Evaluation of Board, Committee and Chair performance was carried out. Each Committee undertook a review of its effectiveness and the Chair has conducted individual annual development meetings with Board Members.

Academic Standards Committee

The purpose of the Academic Standards Committee is to assure the Board of Governors that Fife College’s learning and teaching strategy meets the needs of all stakeholders and to ensure consistency in the strategic development of learning, teaching, quality and related issues throughout the College. Board of Governors approved the name change of Academic Quality Committee to Academic Standards Committee on 27 March 2025.

Audit and Risk Committee

The purpose of the Audit and Risk Committee is to assure the Board of Governors that Fife College has in place a system of governance, internal control and risk management which is being maintained and developed to meet legislation and regulations applying to the sector. The Committee must support the Board and the Principal by reviewing the comprehensiveness, reliability and integrity of assurances: the College’s governance, risk management and internal control framework.

Internal and External Auditors attended relevant meetings of this Committee. Whilst senior members of College staff including the Principal attended meetings of the Audit and Risk Committee, they were not members of the Committee. Once a year, the Audit and Risk Committee met both the External Auditors and Internal Auditors for independent discussions.

The Audit and Risk Committee has a range of skills and experience with representation from financial and risk management backgrounds. The Committee includes a member who has over 30 years’ experience of the finance services sector including actuarial/financial modelling and business change management, and who is also a member of the Board of Governors.

Nominations and Remuneration Committee (previously Chair’s Committee)

The purpose of the Nominations and Remuneration Committees is to ensure that the governance structure of Fife College is fit for purpose and meets legislative obligations; acts as a Nominations Committee for recruitment and selection to the Board of Governors; and acts as Remuneration Committee to review and approve the salaries of the Principal, Deputy Principal, Vice Principal and the Governance Professional role.

On 27 March 2025 Board of Governors approved the change in committee structure to create a separate Nominations Committee and Remuneration Committee.

19

Governance Statement (Continued)

Finance, Commercial and Estates Committee

The purpose of the Finance, Commercial and Estates Committee is to assure the Board of Governors that Fife College has appropriate strategies, plans, budgets and controls in place which manage identified risks creating a sustainable and stable college. The Committee recommends to the Board of Governors the College’s annual budgets and monitors performance in relation to the approved budgets. It considers the Estates Strategy and ensures that the College’s buildings are fit for purpose and maintained to an appropriate standard. It receives quarterly reporting in relation to the Colleges Digital Strategy and performance thereof.

People and Culture Committee

The purpose of the People and Culture Committee is to assure the Board of Governors that Fife College has in place appropriate policies and procedures to promote and safeguard the health, safety and wellbeing of staff, students and all stakeholders and satisfies current legislation. With regard to organisational development and human resources, it is to assure the Board of Governors that Fife College meets its ethical and legal obligations to staff and has appropriate strategies, policies and procedures in place to promote a positive and inclusive culture.

Board and Committee Attendance Levels

Table 9: Attendance at the relevant meetings throughout the year

Board of Governors 82% (2023/24: 80%)
Academic Standards 83% (2023/24: 82%)
Audit and Risk 85% (2023/24: 94%)
Finance, Commercial and Estates 73% (2023/24: 92%)
People and Culture Committee 92% (2023/24: 67%)
New Build Project Board 85% (2023/24: 93%)
Nominations Committee (previously Chair’s
Committee) 83% (2023/24: 71%)
Remuneration Committee 100%

All meetings were quorate.

Risk Management

Fife College is accountable to a variety of stakeholders and the environment in which it operates is subject to wide range of risks, requiring effective risk management. Therefore, the approach of Fife College is that risk management is embedded within the operation of the College and part of its culture by actions such as:

The Board of Governors has overall responsibility for ensuring the effective identification, mitigation and monitoring of strategic risks within the College. The Audit and Risk Committee has delegated authority from the Board of Governors to implement the policy and strategy set by the Accounting Officer and endorsed by the Board, and to review strategic risks and action plans, including those identified through the operational risk management process on a periodic basis and report this to the Board of Governors.

20

Governance Statement (Continued)

The College operates a Strategic Risk Register which identifies the most significant risks to the College. The Principal is responsible for the maintenance of the College Strategic Risk Register and for ensuring that appropriate risk mitigation actions are implemented to address significant risks to College operations and strategic objectives. The College Leadership Team are responsible for ensuring that management plans are in place and reviewed to mitigate the key risks identified during the business planning risk assessment process. This information is included on the Strategic Risk Register in summary form.

The Audit and Risk Committee receives quarterly reports from the College Leadership Team. The College Leadership Team reviews operational risk and proposes updates to the Strategic Risk Register. Any proposed changes to the Strategic Risk Register are highlighted and discussed at each Board SubCommittee, prior to being presented to the Audit and Risk Committee and Board of Governors.

Throughout the year, the Audit and Risk Committee received updates on the Strategic Risk Register and monitored and considered the updates and actions provided. Table 1 (page 4) sets out the strategic risks for the College following the development and implementation of a new risk management framework. The table sets out the College’s strategic risks as at 31 July 2025.

Internal Audit

Internal audit is a key independent source of assurance.

The strategic and annual planning of the internal audit programme is risk based, meaning internal audit work is targeted to the areas identified as greatest risk and strategic importance.

The Audit and Risk Committee agrees an internal audit schedule annually based on an audit needs assessment. The Committee receives:

In 2024-25 the Audit and Risk Committee commissioned the internal auditors to review the following key areas:

Table 10: Internal Audit Reviews

Table 10: Internal Audit Reviews
Targeted reviews Mandatory reviews
Human Resources – Succession Planning Credits
Net Zero Student Support Funds
Risk Management EMA
Student Withdrawals
Curriculum Planning
Overall Financial Controls

Of the above reviews carried out in 2024-25, none identified any high priority recommendations.

At the end of 2024-25, five audit recommendations were pending completion. All five were in a stage of partial completeness. Implementation of internal audit recommendations is closely monitored by the College Leadership Team and progress is reported to each meeting of the Audit and Risk Committee. Through the reporting on progress made with audit recommendations, the Audit and Risk Committee receives assurance from the College that it is committed to implementing the recommendations received and maintaining systems of control.

21

Governance Statement (Continued)

The Internal Audit Annual Report set out the audit opinion for 2024/25. The opinion of the auditors is as follows:

“Fife 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.”

Significant Control Issues/Weaknesses

In completing this governance statement there have been no exceptions or issues raised for inclusion by internal or external auditors in respect of significant control issues/weaknesses.

Personal Data Security

The Principal is the Senior Information Risk Owner (SIRO). Day-to-day management of information risks is the responsibility of all Assistant Principals across the College supported by the Data Protection Officer. There have been no reportable breaches of personal data security during 2024-25 (2023-24 nil).

Going Concern

After making appropriate enquiries, the Board of Management considers that the College has adequate resources to continue operations for 2025-26. Fife College continues to adopt the going concern basis in preparing the financial statements, due to its ability to continue to operate at 12 months after the signing of the annual report and accounts. 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”.

Conclusion

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

The Audit and Risk Committee agenda included a regular item for consideration of risk and control and received reports thereon from the College Leadership Team and the Internal Auditors. The emphasis was on obtaining the relevant degree of assurance and not merely reporting by exception.

The Board of Governors was of the view that there was an on-going process for identifying, evaluating and managing the College’s significant risks, that it had been in place for the year ended 31 July 2025 and up to the date of approval of the annual report and accounts, that it was regularly reviewed by the Board of Governors and that it accords with the 2022 Code of Good Governance for Scotland’s Colleges.

22

Remuneration and Staff Report

Remuneration Report

Introduction

The College is required to prepare and publish within its financial statements an annual Remuneration Report under the 2024-25 Government Financial Reporting Model (FreM) issued by HM Treasury which came into force for the period ending 31 July 2024.

The report sets out the remuneration and accrued pension benefits of the Executive Officers and remunerated board members.

The following report has been prepared in accordance with the aforementioned regulations.

Audit of Remuneration Report

All information disclosed in the tables in this report will be audited by the College’s external auditor and all other sections of the Remuneration Report will be reviewed to ensure they are consistent with the financial statements.

Remuneration Policy

The remuneration of the Principal, Deputy Principal, and Vice Principal level posts are considered by Nominations and Renumeration Committee which is made up of the Chair and Depute Chair of the Board of Governors and the chairs of the College committees. The remit of the Nominations and Remuneration Committee in terms of remuneration is as follows:

Remuneration Including Salary and Pension Entitlements.

Salary Entitlements

The following table provides detail of the remuneration and pension interests of the Principal, Deputy Principal, Vice Principals and board members that are remunerated. The remuneration of the Chair of Board of Governors is set by the Scottish Government and is a non-pensionable post.

No information has been disclosed for board members that are not remunerated.

Table 11: Remuneration

Table 11: Remuneration
Year ended 31 July 2025
Name Job Title Salary
£'000		 Pension
Benefit
£'000		 Total
£'000
David C Watt Chair of Board of Governors 20-25 - 20-25
Jim Metcalfe Principal & Chief Executive 140-145 25-30 165-175
James Thomson DeputyPrincipal 120-125 20-25 140-150
Sarah Jane Linton Vice Principal 120-125 30-35 150-160

23

Remuneration and Staff Report (Continued)

The Regulations require information to be published on the total number of College employees (including Executive Officers) whose total actual remuneration was £60,000 or more. This information is to be disclosed in salary bandings of £10,000 above £60,000 and is shown in note 7 to the financial statements.

Median Remuneration

Based on the 12-month equivalent figures, the remuneration of the highest paid official in the organisation in the financial year 2024-25 was £143,373. This was 3.8 times (2023-24 3.7 times) the median remuneration of the workforce which was £37,706 (2023-24 £37,650).

The following table details the median, 25[th ] and 75[th ] percentiles and the ratios between the highest paid official and the total pay and benefits for each percentile and the variances from the previous year.

Table 12: Median Salary

Table 12: Median Salary
2024-25
£

2023-24
£

Change
%
Range of workforce remuneration
Highest paid official remuneration
Median (total pay and benefits)
Median (salary only)		 143,373
37,706
37,706


140,913
37,650
37,650


1.7%
0.1%
0.1%
Ratio 3.8:1
3.7:1
25th percentile (total pay and benefits)
25th percentile (salary only)		 30,453
30,453

30,777
30,777

-1.1%
-1.1%
Ratio 4.7:1
4.6:1
75th percentile (total pay and benefits)
75th percentile (salary only)		 45,694
45,694

42,882
42,882

6.6%
6.6%
Ratio 3.1:1
3.3:1

There are no significant variances between 2024-25 and 2023-24.

Accrued Pension Benefits

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

Contribution rates are set annually for all employees and can be found in note 25.

There is no automatic entitlement to a lump sum. Members may opt to give up (commute) pension for lump sum up to the limit set by the Finance Act 2004. The accrual rate guarantees a pension based on final pensionable salary and years of pensionable service.

24

Remuneration and Staff Report (Continued)

Table 13: Pension Benefits

Name Job Title Accrued
pension
at
pension
age at
31 July
2025
£'000		 Accrued
lump
sum at
pension
age at
31 July
2025
£'000		 Real
increase
in pension
1 August
2024 to
31 July
2025
£'000		 Real
increase
in lump
sum 1
August
2024 to
31 July
2025
£'000		 CETV
at 31
July
2025
£'000		 CETV
at 31
July
2024
£'000		 Real
increase
in CETV
£'000
Jim Metcalfe Principal &
Chief
Executive		 5-10 - 0-5 - 85 47 24
James
Thomson		 Deputy
Principal		 20-25 - 15-20 - 292 38 242
Sarah Jane
Linton		 Vice Principal 0-5 - 0-5 - 38 5 32

Cash Equivalent Transfer Value (CETV)

A Cash Equivalent Transfer Value (CETV) is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member at a particular 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 a pension on retirement without reduction on account of its payment at that age; without exercising any option to commute pension entitlement into a lump sum; and without any adjustment for the effects of future inflation. The pension figures shown relate to the benefits that the person has accrued as a consequence of their total Local Government service and not just their current appointment.

In considering the accrued pension benefits figures the following contextual information should be considered:

Real Increase in CETV

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

Compensation for Loss of Office

During 2024-25, 20 employees left the College under an approved Voluntary Severance (VS) scheme. The total cost of these staff leaving through VS was £775,000. This figure includes pension strain costs. The table below summarises the exit packages by cost band.

25

Remuneration and Staff Report (Continued)

Table 14: Exit Packages by Cost Band

Exit Package Cost Band
<£10,000
£10,000 - £25,000
£25,000 - £50,000
£50,000 - £100,000
Total number of exitpackages
Total cost(£000)		 Total Number of
Exit Packages by
Cost Band
-
6
13
1
20
£775

Staff Report

Introduction

The staff report contains information in relation to staff costs and numbers.

Staff Numbers & Costs

Total Staff Numbers & Costs

The following table provides an analysis of the staff numbers and costs split between permanent and temporary staff:

Salaries and Related Costs

Table 15: Staff Numbers and Staff Costs

2025
Directly
employed
staff
£'000		 2025
Temporary,
Seconded
and agency
staff
£'000		 2025 Total
£'000		 2024 Total
£'000		 Movement
£'000
Wages and salaries 30,229 1,214 31,513 31,359 154
Social security costs 3,610 135 3,745 3,061 684
Other pension costs 7,335 292 73627 6,458 1,169
Total 40,368 1,641 42,009 40,878 2,007
Average number of FTE 755 45 800 801 (1)

There is a decrease in staffing of 1 FTE from 2023-24 to 2024-25 as a result of restructuring.

The College employed 535 females and 376 males as at 31 July 2024, the following table details the breakdown:

26

Remuneration and Staff Report (Continued)

Table 16: Employees by Gender

Category 2025
Female		 2025
Male		 2024
Female		 2024
Male		 Movement
Female		 Movement
Male
Senior Leadership 5 5 8 10 (3) (5)
All Other Employees 533 348 527 366 6 (18)
TOTAL 538 353 535 376 3 (23)

Sickness Absence Data

The average number of days lost per full time equivalent (FTE) to sickness absence during the year 2024-25 was 13.9 days, this compares to 15.9 days for the same period during 2023-24.

The following table shows the sickness absence days for the year 2024-25 comparing to the same period during 2023-24 and 2022-23. There has been a decrease in absence from the previous year with still a higher percentage being within the long-term category.

Table 17: Staff Sickness

Table 17: Staff Sickness
Sickness Absence 2024-25 2023-24
Short Term %(Under 20 days) 2.04% 2.28%
Long-Term %(Over 20 days) 3.21% 3.23%
Overall % 5.25% 5.95%

Promotion of Equality of Delivery of Service to Different Groups

The Equality and Diversity policy is implemented through a number of policies and procedures that concern the experience of staff and students and gives due regard to public sector equality duty under the Equality Act 2010.

For staff, these cover the employment cycle from recruitment, through time as an employee, and then to exit. A summary of the promotion of equality throughout each stage of the recruitment cycle is shown below:

27

Remuneration and Staff Report (Continued)

For students, this covers the learner journey:

Contractors and suppliers, including those who provide work placements to students, are bound by the terms and conditions under which they operate including the need to act in ways that are consistent with this policy. The procurement process to appoint contractors and suppliers will include a commitment to equality and diversity which is in line with this policy.

Visitors are required to behave in ways that are consistent with this policy and to seek advice and guidance from a member of the College staff if they are unclear as to what is expected of them.

The college utilises Equality Impact Assessments (EIAs). This is important as they help us to identify and mitigate potential discrimination and inequality in our policies, practices, and decisions. By systematically evaluating the impact on different groups, EIAs ensure that all individuals, regardless of their background, have fair and equal access to opportunities and resources, and are not disadvantaged in any way as result of the change.

Fair Work Practices

Fife College confirms its commitment to fair work practices in support of the Scottish Government’s ‘Fair Work First’ policy, which is the Scottish Government's flagship policy for driving high quality and fair work. Through this approach the Scottish Government is supporting employers who adopt fair working practices, specifically:

The College is accredited as a Living Wage Employer and promotes payment of the Real Living Wage which is distinct from the statutory National Living Wage and National Minimum Wage which are set by the UK Government. The College voluntarily pay staff no less per hour than the rate set by the Living Wage Foundation. The rate is calculated by the Resolution Foundation and overseen by the independent Living Wage Commission; it is reviewed annually to reflect the cost of living, and the rate is announced each November and implemented 1 May the following year. The College however pay the increase from 1 November. We have an agreed pay structure and pay our directly employed workforce an hourly rate higher than the Real Living Wage.

28

Remuneration and Staff Report (Continued)

We also work the Advanced Procurement for Universities and Colleges to secure contracted services to deliver on-campus services who pay the Real Living Wage as a minimum.

We engage appropriate channels for effective voice by:

Workforce development and career growth are priorities that are outlined in our College Strategy, College Operating Plan and People Strategy. We champion this by:

We provide contracts which accurately reflect the hours and/or guarantee a minimum number of hours.

• Action to tackle the Gender Pay Gap and create a more Diverse and Inclusive Workplace

We continue to address gender equality, diversity and inclusion as an institution and are making positive moves in tackling these by:

29

Remuneration and Staff Report (Continued)

The College offers a progressive suite of family-friendly policies and practices designed to consider, promote and support flexibility.

We do not engage in fire and rehire practices.

Health and Safety

The Board of Governors of Fife College not only accepts its legal duties of care as set out in the Health and Safety at Work etc. Act 1974 and subsequent legislation. It also has moral and ethical obligations to staff and to all other persons who may be affected by operational practices and procedures.

It is the policy of Fife College; Board of Governors to conduct its activities so that:

The Principal and Chief Executive of the College has ultimate responsibility for health and safety of the staff, students and of any members of the general public having access to college premises, and in particular assumes responsibility for:

Trade Unions

The College recognises three Trade Unions, EIS, UNISON and UNITE. The relationships with each are governed by the appropriate Recognition and Procedure Agreements augmented with regular informal discussions with senior staff and the Culture and Resources area. This brings open and construction dialogue in both formal and informal settings. The recognised Trade Unions and Management also have the opportunity to discuss how the effective relationships are working with the People and Culture Board Meeting and are now part of this committee. There will also be representation from the recognised trade unions on the Board.

We are an active member of the Employer’s Association to support National Bargaining dialogue, discussion and agreement. All of this highlights our commitment to partnership working and a no surprises relationship based on openness and transparency from management and the recognised Trade Unions.

Facility Time

In accordance with the Trade Union (Facility Time Publication Requirements) Regulations 2017, the College provided support through paid facility time for union officials working at the College during the year ended 31 July 2025. Details on the facility time are set out in the following four tables.

30

Remuneration and Staff Report (Continued)

Table 18: Facility Time

Relevant union officials

Number of employees who were relevant union Full time equivalent officials during the relevant period: employee number: 11 11

Percentage of time spent on facility time

Percentage of time spent on facility time
Percentage: Number of employees:
0% -
1%-50% 11
51%-99% -
100% -

Percentage of pay bill spent on facility time

Percentage ofpay bill spent on facility time
Total cost of facilitytime: £44,569
Totalpaybill: £41,724,823
Percentage of the total pay bill spent on facility
time:		 0.11%

Paid trade union activities

Time spent on trade union activities as a
percentage of totalpaid facilitytime hours:		 3.22%

Parliamentary Accountability Report

Fees and Charges

Throughout the financial year Fife College had a contract with the Scottish Prison Service to deliver education services within 13 prisons across Scotland. This contract ended on 31[st ] July 2025.

The direct cost of running this contract was £4.2 million (£4.1 million in 2023-24) and income generated was £5.5 million (£5.1 million in 2023-24).

Conclusion

The Corporate Governance Statement on pages 18-22 was approved by the Board of Governors on 11 December 2025 and signed on its behalf by:

Jim Metcalfe (Dec 12, 2025 12:53:25 GMT)

Jim Metcalfe Principal

David C Watt (Dec 12, 2025 16:58:20 GMT)

David C. Watt Chair, Board of Governors

31

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

Report on the audit of the financial statements

Opinion on the financial statements

We have audited the financial statements in the annual report and accounts of Fife College (“the College”) for the year ended 31 July 2025 under the Further and Higher Education (Scotland) Act 1992 and section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005. The financial statements comprise the Statement of Comprehensive Income, 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 for opinion

We conducted our audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Auditor General for Scotland. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We were appointed by the Auditor General on 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 .

32

Risks of material misstatement

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

Responsibilities of the Board of Management for the financial statements

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

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

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.

33

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

Reporting on regularity of expenditure and income

Opinion on regularity

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

Responsibilities for regularity

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

Reporting on other requirements

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

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

Other information

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

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

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

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

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

34

with the Further and Higher Education (Scotland) Act 1992 and directions made thereunder by the Scottish Funding Council.

Matters on which we are required to report by exception

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

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, Audit Director For and on behalf of Forvis Mazars LLP

Forvis Mazars

5th Floor,

3 Wellington Place,

Leeds

LS1 4AP

Michael Speight

Michael Speight (Dec 15, 2025 08:38:12 GMT)

Date 15/12/2025

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

35

Fife College

College Statement of Comprehensive Income and Expenditure

Notes
Income
SFC Grants
2
Tuition fees and education contracts
3
Other income
4
Investment income
5
Donations and endowments
6
Revenue Grant from Arms Length Foundation
4
Total income
Expenditure
Staff costs
7
Restructuring costs
7
Interest and other finance costs
9
Other operating expenses
10
Depreciation
11
Charitable donations
Total expenditure
(Deficit)/surplus before other gains losses
(Deficit)/surplus before other comprehensive income
(Deficit)/surplus for the year
Other comprehensive income
Actuarial gain/(losses) in respect of pension schemes
19
Unrealised gain on revaluation of fixed assets
Total comprehensive income for the year		 Year Ended 31
July 2025
Year Ended
31 July 2024
£'000
£'000
39,635
37,837
11,376
10,869
2,704
2,329
2,068
1,847
156
261
0
1
55,939
53,144
42,381
40,577
577
640
119
128
10,067
13,436
3,966
3,818
91
188
57,201
58,787
(1,262)
(5,643)
(1,262)
(5,643)
(1,262)
(5,643)
(2,119)
(1,751)
452
2,488
(2,929)
(4,906)

Total comprehensive income for the year is wholly represented by unrestricted income and is fully attributable to College.

All items of income and expenditure relate to continuing activities

The Statement of Comprehensive Income is prepared under the FE/HE SORP. Colleges are also subject to Central Government accounting rules but the FE/HE SORP does not permit colleges to include Government non-cash allocations for depreciation in the Statement of Comprehensive Income. Note 28 provides details of the adjusted operating position on a Central Government accounting basis and presents the underlying surplus for the year.

36

Fife College

College Balance Sheet

Notes
Non-current assets
Tangible assets
11
Investments
12
Investment in joint venture
12
Current assets
Stock
13
Trade and other receivables
14
Cash and cash equivalents
16
Less: Creditors - amounts falling due within one year
17
Net current assets
Total assets less current liabilities
Creditors: amounts falling due after more than one year
18
Provisions
Pension provisions
20
Other provisions
20
Total net assets
Unrestricted Reserves
Income and expenditure reserve - unrestricted
21
Revaluation reserve
22
Total Reserves		 217,611
163,556
41
41
404
404
218,056
164,001
93
107
1,843
5,676
25,139
19,878
27,075
25,661
(23,612)
(19,753)
3,463
5,908
221,519
169,909
(158,960)
(105,267)
(1,821)
(1,733)
(10,158)
(8,746)
Year Ended 31
July 2025
Restated Year*
Ended 31 July
2024
£'000
£'000**		 Year Ended 31
July 2025
Restated Year*
Ended 31 July
2024
£'000
£'000**
50,580
54,163
5,235
6,869
45,345
47,294
50,580
54,163

The financial statements on pages 1 to 59 were approved by the Board of Management on 11 December 2025 and were signed on its behalf on that date by:

Jim Metcalfe (Dec 12, 2025 12:53:25 GMT)

Jim Metcalfe Principal

David C Watt (Dec 12, 2025 16:58:20 GMT)

David C. Watt Chair, Board of Governors

37

Fife College

Statement of Cash Flow

Note
Cash flow from operating activities
Surplus/(deficit) for the year
Adjustment for non-cash items
Depreciation
11
Deferred government grants released to income
2
Deferred non-government grants released to income
4
Decrease/(increase) in stock
13
Decrease/(increase) in debtors
14
Increase/(decrease) in creditors
17
Pension costs
25
Increase/(decrease) in other provisions
20
(Decrease)/increase in student funds
24
Adjustment for investing or financing activities
Investment income
5
Interest payable
9/20
Net return on pension scheme
5
Net cash inflow/(outflow) from operating activities
Cash flows from investing activities
Investment income
5
Payments made to acquire fixed assets
11
Net cash outflow from investment activities
Cash flows from financing activities
Interest paid
9
New Grants
Repayments of amounts borrowed
17/18
Net cash inflow from financing activities
Increase/(Decrease) in cash and cash equivalents in the period
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period
Increase/(Decrease) in cash		 31 July
31 July
2025
2024
£'000
£'000
3,966
3,818
(651)
(605)
(170)
(170)
14
(10)
3,833
728
2,981
(7,213)
(504)
(301)
1,190
6,699
(2,371)
1,359
(453)
(397)
172
179
(1,615)
(1,450)
(1,262)
(5,643)
5,130
(3,007)
453
397
(58,257)
(52,172)
(57,804)
(51,775)
(119)
(128)
58,395
51,720
(341)
(341)
57,935
51,251
5,261
(3,531)
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period
Increase/(Decrease) in cash		 19,878
23,409
25,139
19,878
5,261
(3,531)

0

38

Fife College

College Statement of Changes in Reserves

Year ended 31 July 2025

Balance at 1 August 2023
Deficit from the income and expenditure statement
Other comprehensive income
Transfers between revaluation and income and expenditure reserve
Balance at 1 August 2024
Deficit from the income and expenditure statement
Other comprehensive income
Transfers between revaluation and income and expenditure reserve
Total comprehensive income for the year		 Total
£'000
£'000
£'000
11,942
47,151
59,093
(5,643)
0
(5,643)
(1,742)
2,455
713
2,312
(2,312)
0
(5,073)
143
(4,930)
6,869
47,294
54,163
(1,262)
0
(1,262)
(2,773)
452
(2,321)
2,401
(2,401)
0
(1,634)
(1,949)
(3,583)
Income and
expenditure
account
Revaluation
reserve
Unrestricted
Balance at 31 July 2025 5,235
45,345
50,580

39

Fife College

Analysis of Debt Statement

Year ended 31 July 2025

Balance at
1		 Other non-cash Other non-cash Balance at 31
August 2024 Cash flows
changes		 July 2025
£'000 £'000 £'000 £'000
Cash and cash equivalents
Cash 19,878 5,261 0 25,139
Borrowings
Loans falling due within one year (341) 341 (341) (341)
Loans falling due after more than one year,less than 5 years (1,364) 0 0 (1,364)
Loans falling due after more than five years (1,193) 0 341 (852)
Total 16,980 5,602 0 22,582

40

FIFE COLLEGE

Financial Statements for the Year Ended 2025

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

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

After making appropriate enquiries, the Board of Management considers that the College has adequate resources to continue operations for 2025-26. Fife College continues to adopt the going concern basis in preparing the financial statements, due to its ability to continue to operate at 12 months after the signing of the annual report and accounts. 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 College recorded a deficit of (£1.262 million) before other gains and losses during the financial year and total comprehensive expenditure of £2.929 million. The College reported an adjusted operating surplus of £0.836 million after accounting for technical pension adjustments of £1.809 million, net depreciation adjustments of £3.145 million and cash budget for priorities of £0.563 million. Cash increased by £5.261 million during the year to £25.139 million at 31 July 2025. At 31 July 2025, the College held borrowings of £2.557 million in unsecured loans which have no financial covenants. The College is reporting a net asset position in these financial statements of £50.580 million (2023-24: £54.163 million net asset position). This includes a pension liability of £1.821 million for the College’s share of the Fife Council Local Government Pension Scheme (LGPS) at 31 July 2025 (2023-24: £1.733 million).

The activities of Fife College are over 70% funded by the Scottish Government through the Scottish Funding Council (SFC). The Board of Governors and the College Leadership Team are responsible for ensuring that these funds are used to meet this purpose and the operations within the College to achieve this support ensuring financial sustainability for the College.

The College has in place a five-year strategic plan outlining its key strategic aims. One of the key strategic aims is to maintain long term financial sustainability and become more commercially focused. This aim is in turn supported by a Finance Strategy and a financial forecast out to 2027-28.

The Board of Fife College have 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. The assessment period considered is at 12 months from the date of signing the accounts and concluded on 11 December 2025.

Basis of Accounting

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

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

41

FIFE COLLEGE

Financial Statements for the Year Ended 2025

Notes to the Financial Statements

Recognition of Income

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

Fee income is stated gross of any expenditure which is not a discount and credited to the Statement of Comprehensive Income and Expenditure over the period in which students are studying. Where the amount of the tuition fee is reduced, by a discount for prompt payment, income receivable is shown net of the discount.

All income from short-term deposits and Investment income is credited to the Statement of Comprehensive Income and Expenditure on a receivable basis.

Grant Funding

Government revenue grants including the recurrent grants from the Scottish Funding Council (SFC) 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.

On 14 August 2025 the Scottish Funding Council issued amended accounts direction to the college sector. This updated guidance was in line with prior years’ accounts direction. This includes the requirements for how colleges should report on the national job evaluation exercise. The direction requires colleges to recognise the costs of the job evaluation exercise as a liability and provide for the total costs of the exercise to date. Previously colleges had recognised the funding for these costs in their financial statements. The accounts direction requires colleges to no longer recognise this asset. Colleges have also been required to make prior period adjustments.

The change in the accounts direction resulted in a significant change in the College’s financial statements for prior year. Prior to this change the College was reporting a modest surplus of £0.082m in 2023-24. After applying the requirements of the accounts direction the College is reported a deficit of (£4.906m).

The amended SFC accounts direction states the following:

“ It is important to note that this remains to be a technical accounting change only. The Scottish Government remains clear that responsibility for Job Evaluation funding commitments now rests with [the Government] until the process is complete. ”

Donations and Endowments

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

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

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

42

FIFE COLLEGE

Financial Statements for the Year Ended 2025

Notes to the Financial Statements

Capital Grants

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

Tangible Fixed Assets

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

Land and Buildings

Land and buildings are measured using the revaluation model. Under the revaluation model, 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 5 years such that the fair value is not materially different to the current value. In line with the FReM an annual indexation exercise will be completed. Depreciation and impairment losses are subsequently charged on the revalued amount.

Finance costs which are directly attributable to the construction of land and building, 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. The College will also review the useful life of fixed assets to reflect known circumstances, for example the sale of the Halbeath campus.

Assets under construction are accounted for at cost, based on the value of architects’ certificates and other direct costs, incurred to 31 July 2025. They 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 10 to 50 years as determined by professional opinion and valuation.

Equipment

Equipment is carried at depreciated historical cost, which is used as a proxy for fair value. Depreciated historical cost is deemed to be more appropriate than revaluing for equipment as it is common for such assets to reduce in value, rather than increase, as they are utilised by the College.

Capitalised equipment is depreciated over its useful economic life as follows:

To ensure capital spend meets the Scottish Funding Council capital grant requirements, the College has removed the de minimis limit and relevant related spend is capitalised at cost.

43

FIFE COLLEGE

Financial Statements for the Year Ended 2025

Notes to the Financial Statements

Where equipment is brought into use mid-way through a year the depreciation charge in the first year will be prorated to reflect the number of months that the asset was in use.

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

Leased Assets

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 income and expenditure account in proportion to the reducing capital element outstanding.

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.

Service Concession Arrangements

Fixed assets held under service concession arrangements will be recognised on the Balance Sheet at the present value of the minimum lease payments when the assets are bought into use with a corresponding financial liability.

Payments under the service concession arrangement are allocated between service costs, finance charges and financial liability repayments to reduce the financial liability to nil over the life of the arrangement.

Investments

Fixed asset investments that are not listed on a recognised stock exchange are carried at historical cost less any provision for impairment in their value, or at a fair estimate of value placed on such assets by an independent valuer for insurance purposes. Artwork investments are subject to an independent valuation every five years.

Investments in jointly controlled entities are carried at cost less impairment in the Colleges accounts

as a measurement for fair value.

Current asset investments are held at fair value with movements recognised in the Surplus or Deficit.

Stocks

Stocks held are valued at cost.

44

FIFE COLLEGE

Financial Statements for the Year Ended 2025

Notes to the Financial Statements

Cash

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

Taxation

The College is an exempt charity and is therefore not liable for corporation tax under section 506 (1) of the Income and Corporation Taxes Act (ICTA) 1988.

The College does not receive exemption in respect of Value Added Tax (VAT).

The College's conferencing facility is subject to corporation tax and VAT in the same way as any commercial organisation.

Provisions

Provisions are recognised when the College has a present legal or constructive obligation as a result of a past event, it is probable that a transfer of economic benefit will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

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 Income and Expenditure Account, 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 Income and Expenditure Account.

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.

Retirement Benefits

Fife Council Pension Fund

The Fife Council Pension Fund is a pension scheme providing benefits based on final pensionable pay. The assets and liabilities of the scheme are held separately from those of the College. Pension scheme assets are measured using market values. Pension scheme liabilities are measured using a projected unit method and discounted at the current rate of return on a high-quality corporate bond of equivalent term and currency to the liability.

Contributions to the Scheme are 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 Age Attained Method. Variations from regular cost are spread over the expected average remaining working lifetime of members of the schemes, after making allowances for future withdrawals. The amount charged to the income and expenditure account represents the service cost expected to arise from employee service in the current year.

Scottish Teachers' Superannuation Scheme

The College participates in the Scottish Teachers' Superannuation Scheme 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, accounts for the scheme as if it

45

FIFE COLLEGE

Financial Statements for the Year Ended 2025

Notes to the Financial Statements

were a defined contribution scheme. As a result, the amount charged to the income and expenditure account represents the contributions payable to the scheme in respect of the year.

Reserves

Reserves are classified as restricted or unrestricted. Restricted endowment reserves include balances which, through endowment to the college, are held as a permanently restricted fund which the college must hold in perpetuity.

Other restricted reserves include balances where the donor has designated a specific purpose and therefore the college is restricted in the use of these funds.

Accounting Estimates and Judgements

The financial statements contain estimated figures that are based on assumptions made by the College 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 the College 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 as at 31 July 2025 for which there is a significant risk of material adjustment in the forthcoming financial year are as follows:

• Pensions Liability/Surplus

Estimation of the net liability to pay pensions depends on a number of complex judgements relating to the discount rate used, the rate at which salaries are projected to increase, changes in retirement ages, mortality rates and expected returns, on pension fund assets.

A firm of consulting actuaries is engaged to provide the College with expert advice about the assumptions to be applied by the College in estimating these values at the balance sheet date.

The actuarial inputs into the pension liability valuation are subject to annual review, and have a significant impact on the potential valuation. Historically it is common for small changes in the discount rate, salary assumption rate and pension rate to have material impacts on the year end valuations on a year-to-year basis. We have outlined the potential impact of future changes below. The pension liability at 31 July 2025 following the updated actuarial valuation was £1.821 million, an increase of £0.088 million to the deficit reported 31 July 2024.

Where the calculation results in a net asset, recognition of the asset is limited to the extent to which the College is able to recover the surplus either through reduced contributions in the future or through refunds through the scheme. As the College cannot access the surplus, the net asset has not been recognised .

Given the history of significant changes to liability valuations in the past, the ongoing sensitivity to future changes, and the requirement to update assumptions annually, the College expects future liabilities to continue to change significantly going forward.

More information on the key assumptions used in the actuarial valuation of the estimates is available in note 25 to the accounts, including information on the key assumptions, risks and sensitivities.

• Valuation of Property

The valuation of the College’s estate which is subject to revaluation are subject to significant estimation due to a number of factors, including ongoing changes to estimates around the costs of replacing existing assets, the market value fluctuation of comparable assets used for valuation, the current condition and future maintenance costs of assets, changes to regulatory standards and the remaining useful economic lives of the assets. Given the material nature of the College’s

46

FIFE COLLEGE

Financial Statements for the Year Ended 2025

Notes to the Financial Statements

assets, there is a high likelihood that changes in these estimates will result in material changes in the valuation of assets on the balance sheet. The total value of the College’s assets at 31 July 2025 is outlined and broken down by asset category at note 11.

Land and Buildings were independently valued for the purpose of the financial statements by F G Burnett, Property Consultants. The basis of valuation was depreciated replacement cost. The latest desktop valuation was undertaken at 31 July 2025.

The changes in valuation in assets in 2024-25, compared to 2023-24, represent updated information around the assets since the most recent full valuation, in particular the cost of replacing assets based on RICS indices.

• Job Evaluation

The National Job Evaluation Scheme is an ongoing exercise whereby both roles and salary costs are being reviewed for support staff across the College sector.

On 13 November 2024 the Scottish Funding Council issued amended accounts direction to the college sector. These amended directions set out new requirements for how colleges should report on the national job evaluation exercise. The direction required colleges to recognise the costs of the job evaluation exercise as a liability and provide for the total costs of the exercise to date. Prior to this date colleges had recognised the funding for these costs in their financial statements. The accounts direction requires colleges to no longer recognise this asset.

The change in the accounts direction results in a significant change in the College’s financial statements for 2023-24, 2024-25 and subsequent years.

The requirements for Job Evaluation in the 2024-25 accounts direction remains unchanged from the amended direction introduced last year. The SFC accounts direction states the following:

“ It is important to note that this remains to be a technical accounting change only. The Scottish Government remains clear that responsibility for job evaluation funding commitments now rests with [the Government] until the process is complete. ”

The full harmonisation costs of National Bargaining support staff and middle management will not be confirmed until the national Job Evaluation exercise is concluded. The outcome of which would be implemented as effective from 1 September 2018. Up until 2022-23, colleges accrued support staff and middle management costs (and associated grant funding) based on College’s Scotland’s February 2019 costings.

SFC had held grant funding provided by the Scottish Government relating to Job Evaluation in reserves, but these funds were returned to Scottish Government in 2023. Colleges are now required to recognise a liability relating to the costs of implementing the Job Evaluation exercise.

It is important to note that at this time this remains to be a technical accounting point. The Scottish Government remains clear that responsibility for funding Job Evaluation commitments rests with the Government until the process is complete.

The College however continues to prudently accrue for the inflationary impacts of the 2019 calculation of Job Evaluation.

47

Financial Statements for the Year Ended 2025

FIFE COLLEGE

Notes to the Financial Statements (Continued)

Notes
2
SFC Grants
3
Tuition fees and education contracts
4
Other income
Release of deferred capital grants
Other grants
Other income-generating activities
Other income
Revenue grant from Arms Length Foundation
5
Investment income
6
Donations and endowments
Unrestricted donations
FE recurrent grant
Childcare funds
24
Release of deferred capital grants
Non recurring SFC Grants
Other SFC grants
FE fees - UK
HE fees
SDS contracts
Education contracts
Other contracts
Other interest receivable
Total net of pension scheme
Net return on pension scheme		 Year Ended 31
July 2025
Year Ended 31
July 2024
College
College
£'000
£'000
37,920
33,163
201
319
651
605
634
871
229
2,879
39,635
37,837
150
132
2,246
2,349
1,487
1,321
7,490
7,067
3
0
11,376
10,869
170
170
350
332
1,245
1,084
939
743
2,704
2,329
0
1
2,704
2,330
453
397
453
397
1,615
1,450
2,068
1,847
156
261
156
261

48

E COLLEGE E COLLEGE Financial Statements for the Year Ended 2025 Financial Statements for the Year Ended 2025 Financial Statements for the Year Ended 2025
es to the Financial Statements (Continued)
Year Ended 31 Year Ended 31
July 2025 July 2024
College College
£'000 £'000
7 Staff costs
Staff costs :
Salaries 31,513 31,359
Social security costs 3,745 3,061
Other pension costs 7,627 6,458
Pension adjustment (504) (301)
Restructuring costs 577 640
Total 42,958 41,217
Academic/teaching departments 18,560 18,891
Academic/teaching services 13,700 12,618
Other support services 2,808 2,497
Administration and central services 3,762 2,684
Premises 1,791 1,961
Full cost activities 2,005 1,982
Other expenditure 259 245
Pension charge less contributions paid (504) (301)
Sub-total 42,381 40,577
Restructuring costs 577 640
42,958 41,217
Employment costs for staff on permanent contracts 41,768 39,761
Employment costs for staff on temporary contracts 1,117 1,117
Pension charge less contribution paid (504) (301)
Restructuring costs 577 640
42,958 41,217
The average number of full-time equivalent employees, including higher paid employees, during the year was:
2025 2024
Academic/teaching departments 386 400
Academic/teaching services 217 207
Other support services 54 49
Administration and central services 41 44
Premises 40 44
Full cost activities 52 49
Other staff 10 8
800 801

FIFE COLLEGE Notes to the Financial Statements (Continued)

The number of staff, including senior post-holders and the Principal, who received emoluments in the following ranges were: (A split is shown below for 2025 between staff whose emoluments include a voluntary severance payment and those that do not include VS payments). The prior year (2024) included emoluments that were subject to voluntary severance arrangements, resulting in payments falling within the highest remuneration band.

£60,001 to £70,000 per annum
£70,001 to £80,000 per annum
£80,001 to £90,000 per annum
£90,001 to £100,000 per annum
£100,001 to £110,000 per annum
£110,001 to £120,000 per annum
£120,001 to £130,000 per annum
£130,001 to £140,000 per annum
£140,001 to £150,000 per annum
£170,001 to £180,000 per annum		 2025
2025
2025
2024
VS included
No VS
Total
Total
No
No
3
8
11
5
0
7
7
10
3
1
4
0
2
1
3
1
0
0
0
1
0
0
0
4
0
2
2
0
0
0
0
2
0
1
1
1
0
0
0
1
8
20
28
25

49

Financial Statements for the Year Ended 2025

FIFE COLLEGE Notes to the Financial Statements (Continued)

8 Senior post-holders' emoluments

The Principal and Chief Executive's emoluments can be found in page 25 of the Remuneration Report.

9
Interest and other finance costs
10
Other operating expenses by activity
Other operating expenses include:
Auditors' remuneration
- external auditors' remuneration
- internal auditors' remuneration
- other non external audit services
On bank loans, overdrafts and other loans:
Repayable within five years, not by instalments
Repayable wholly or partly in more than five years
Total net of pension charge
Net charge on pension scheme
Academic/teaching departments
Academic/teaching services
Other support services
Administration and central services
Student funds overspend
General education
Premises costs
Planned maintenance
Interest on early retirement provision
Other expenses
Other income generating activities		 Year Ended 31
July 2025
Year Ended 31
July 2024
College
College
£'000
£'000		 Year Ended 31
July 2025
Year Ended 31
July 2024
College
College
£'000
£'000
11
9
108
119
119
128
0
0
119
128
Year Ended 31
July 2025
Year Ended 31
July 2024
College
College
£'000
£'000
1,643
1,836
249
360
158
199
1,749
2,114
1
0
1,293
1,311
4,135
6,650
305
305
53
51
263
419
218
191
10,067
13,436
Year Ended 31
July 2025
Year Ended 31
July 2024
College
College
£'000
£'000
55
51
31
31
3
3
55
51
31
31
3
3

50

Financial Statements for the Year Ended 2025

FIFE COLLEGE Notes to the Financial Statements (Continued)

11 Fixed Assets

Fixed Assets
At 31 July 2025
Cost or valuation
At 1 August 2024 (Restated)
Additions
Revaluation
Disposals
At 31 July 2025
Depreciation
At 1 August 2024
Charge for the year
Revaluation
Disposals
At 31 July 2025
Net book value*
At 1 August 2024		 Land and
Buildings
Equipment
Total Assets
Assets in the
Course of
Construction
Total
£'000
£'000
£'000
£'000
£'000
81,651
3,014
84,665
83,781
168,446
443
169
612
57,611
58,223
(3,908)
0
(3,908)
0
(3,908)
0
(574)
(574)
0
(574)
78,186
2,609
80,795
141,392
222,187
2,216
2,674
4,890
0
4,890
3,766
200
3,966
0
3,966
(3,706)
(3,706)
0
(3,706)
0
(574)
(574)
0
(574)
2,276
2,300
4,576
0
4,576
79,435
340
79,775
83,781
163,556
75,910
309
76,219
141,391
217,611

All assets are deemed to be exchequer funded. The proceeds from the disposal of any asset, potentially could result in a repayment of funds to the exchequer.

The College has a policy of ensuring a full revaluation takes place at least every five years. A full revaluation was undertaken in July 2023. Land and buildings were independently valued on a desk top basis for the purposes of the financial statements by F G Burnett, Property Consultants. The basis of valuation used was depreciated replacement cost at 31 July 2025 .

Freehold land at Dunfermline, Glenrothes and Kirkcaldy campuses which was inherited on incorporation at a nominal value of £1, was revalued on 31 July 2025 at £4.25m (£4.25m 2024).

Other tangible fixed assets inherited from the local authority at incorporation were revalued on 31 July 2025 on a depreciated replacement cost basis with the assistance of independent advice. If inherited land and buildings had not been valued they would be included at nil cost and nil net book value.

The title to land, buildings and equipment with an original net book value of £5.335m originally funded from local authority sources was formally transferred to the College during 1997/98. The disposal of these assets and retention of any proceeds is subject to the approval of the Scottish Funding Council in accordance with the procedures set out in its circular letter FE/48/00

51

FIFE COLLEGE Notes to the Financial Statements (Continued)

Financial Statements for the Year Ended 2025

Year Ended 31 Year Ended 31
July 2025 July 2024
College College
£'000 £'000
12 Investments
Investments in joint venture companies 404 404
Artworks 41 41
445 445
Year Ended 31 Year Ended 31
July 2025 July 2024
College College
£'000 £'000
13 Stocks
Consumables 93 107
93 107
Year Ended 31 Year Ended 31
July 2025 July 2024
College College
£'000 £'000
14 Trade and other receivables
Trade debtors - net of provision for doubtful debts 949 1,105
Prepayments and accrued income 871 4,541
VAT 22 29
1,842 5,675
15 Contingent Asset
In line with the directive issued by the Scottish Funding Council for 23/24 financial statements for the Job Evaluation project, where the previous accounting treatment
was regarded as no longer appropriate. A contingent asset continues to be disclosed rather than a provision. Grants accrued in prior years were derecognised in 23/24,
and the related costs continue to be recognised as a provision. This revised accounting treatment was adopted in 23/24 following consultation with the Scottish
Government and Audit Scotland colleagues.
Year Ended 31 Year Ended 31
July 2025 July 2024
College College
£'000 £'000
16 Cash and cash equivalents
Cash at bank 25,128 19,865
Cash in hand 11 13
25,139 19,878

At the reporting date, the cash at bank balance comprised £13m (53%) attributable to College trading activities, with the remaining £12m (47%) ring-fenced for the Dunfermline City Campus project to support the completion of the new campus.

The College receives certain Scottish Funding Council grants on an agency basis. The funds are available solely for students and the College acts only as paying agent. The funds held in trust are reflected on the balance sheet, as both cash at bank and as a current liability. The following agency funds are included in cash at bank and in hand at the year end:

Bursary funds
FE Hardship
HE Discretionary
Childcare
17
Creditors - amounts falling due within one year
Bank loans and overdrafts
Trade creditors
Pension
Amounts owed to SFC
Other taxation and social security
Other creditors
Accruals and deferred income
Bursaries and Access funds for future disbursement
Government grants		 Year Ended 31
July 2025
Year Ended 31
July 2024
College
College
£'000
£'000
51
1,571
197
485
3
5
0
564
251
2,625
Year Ended 31
July 2025
Year Ended 31
July 2024
College
College
£'000
£'000
341
341
3,744
6,875
775
783
336
333
835
818
21
26
13,288
7,183
248
2,619
4,024
775
23,612
19,753

52

Financial Statements for the Year Ended 2025

FIFE COLLEGE Notes to the Financial Statements (Continued)

18
Creditors: amounts falling due after more than one year
Bank loans due < 5 years
Bank loans due > 5 years
Amounts owed to SFC
* Government grants		 Year Ended 31
July 2025
Restated Year
Ended 31 July
2024
College
College
£'000
£'000
1,364
1,364
852
1,193
2,225
2,225
154,519
100,485
158,960
105,267

Bank loans refer to a term loan from Santander, with a fixed rate of 2.155%, due to mature in November 2032.

The increase in Government grants relates to the funding of the Dunfermline City Campus and Estates capital funding.

*It was identified that the construction costs of the Dunfermline City Campus needed to be more clearly presented in the annual accounts. This change results in the inclusion of construction-related retentions being shown within the tangible fixed assets and creditors. Therefore, construction related retentions of £1,362k are shown in the financial statements for 2024/25 and retentions of £1,866k are shown as a restatement to the 2023/24 financial statements. The overall impact of this change is a £nil net effect on the College’s financial statements in respect of result for the year and net assets.

Year Ended 31
July 2025
College
£'000
Year Ended 31
July 2024
College
£'000
19
Pension Provision
Year Ended 31
July 2025
Year Ended 31
July 2024
College
College
£'000
£'000
20
Other Provisions
Unfunded Pension Provision
The unfunded pension provision is in respect of future pension liabilities arising from early retirals.
A valuation of the existing pension provision was carried out by Hymans Robertson LLP, an independent firm of actuaries, at 31 July 2025.
Year Ended 31
July 2025
Year Ended 31
July 2024
College
College
£'000
£'000
21
Income & Expenditure Reserve Unrestricted
Year Ended 31
July 2025
Year Ended 31
July 2024
College
College
£'000
£'000
22
Revaluation Reserve
At 1 August 2024
Revaluation
Write back of depreciation on revaluation
Transfer to Income & expenditure account in respect of:
Depreciation on revalued assets
At 31 July 2025
47,294
47,151
(3,253)
(1,174)
3,705
3,629
(2,401)
(2,312)
45,345
47,294
As at 1 August 2024
Current service cost
Employer contributions
Interest charged/(earned)
Transfer to/(from) income & expenditure
Actuarial (gains)/losses
As at 31 July 2025
0
0
3,143
3,757
(3,647)
(4,058)
(1,615)
(1,450)
(2,119)
(1,751)
2,119
1,751
0
0
At 1 August 2023
Expenditure in the period
Revaluation adjustment
Interest charged
At 31 July 2025
Provision for Job Evaluation
Provision for leased buildings in respect of dilapidations
At 31 July 2025
1,733
2,250
(222)
(233)
257
(335)
53
51
1,821
1,733
8,139
6,814
2,019
1,932
11,979
10,479
At 1 August 2024
Suplus/(deficit) for the year
Revaluation of asset
Transfer from revaluation reserve
Actuarial gain/(loss) in pension scheme
At 31 July 2025
6,869
11,942
(1,262)
(5,643)
(654)
9
2,401
2,312
(2,119)
(1,751)
5,235
6,869		 Year Ended 31
July 2025
College
£'000
Year Ended 31
July 2024
College
£'000
0
0
3,143
3,757
(3,647)
(4,058)
(1,615)
(1,450)
(2,119)
(1,751)
2,119
1,751
0
0
Year Ended 31
July 2025
Year Ended 31
July 2024
College
College
£'000
£'000
1,733
2,250
(222)
(233)
257
(335)
53
51
1,821
1,733
8,139
6,814
2,019
1,932
11,979
10,479
6,869
11,942
(1,262)
(5,643)
(654)
9
2,401
2,312
(2,119)
(1,751)
5,235
6,869
Year Ended 31
July 2025
Year Ended 31
July 2024
College
College
£'000
£'000
47,294
47,151
(3,253)
(1,174)
3,705
3,629
22
Revaluation Reserve
At 1 August 2024
Revaluation
Write back of depreciation on revaluation
Transfer to Income & expenditure account in respect of:
Depreciation on revalued assets
At 31 July 2025
(2,401)
(2,312)
45,345
47,294

53

Financial Statements for the Year Ended 2025

FIFE COLLEGE Notes to the Financial Statements (Continued)

23 Lease obligations

There are no minimum lease payments receivable under non-cancellable finance leases.

24 FE Bursary and other Student Support Funds

FE Bursary and other Student Support Funds
Balance brought forward
Allocation received in year
Expenditure
Repaid to Scottish Funding Council as Clawback
Balance carried forward		 Year ended
31 July
Year ended
31 July
2025
2024
FE
FE
Bursary
Hardship
EMA's
Other
Total
Total
£'000
£'000
£'000
£'000
£'000
£'000
1,571
485
9
5
2,070
840
7,040
961
439
126
8,566
9,750
Balance brought forward
Allocation received in year
Expenditure
Repaid to Scottish Funding Council as Clawback
Balance carried forward
8,611
1,446
448
131
10,636
10,590
(6,989)
(960)
(435)
(123)
(8,507)
(7,882)
(1,571)
(289)
0
(5)
(1,865)
(638)
51
197
13
3
264
2,070

All 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.

Expenditure Account.
Represented by:
Repayable to Scottish Funding Council as clawback
FE Childcare Funds
Balance brought forward
Allocation received in year
Expenditure
Repaid to Scottish Funding Council as clawback
Balance carried forward		 Year Ended 31
July 2025
Year Ended 31
July 2024
College
College
£'000
£'000
264
2,070
264
2,070
564
466
202
883
766
1,349
(202)
(319)
(564)
(466)
Expenditure
Repaid to Scottish Funding Council as clawback
Balance carried forward
0
564

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

54

Financial Statements for the Year Ended 2025

FIFE COLLEGE Notes to the Financial Statements (Continued)

25 Pensions and similar obligations

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

The total pension costs for the institution was :
Contribution to STSS
Contribution to LGPS
Total pension cost (Note 7)
Contribution rates
STSS
LGPS		 Year ended
Year ended
31 July 2025
31 July 2024
£000
£000
3,795
2,827
3,492
3,752		 Year ended
Year ended
31 July 2025
31 July 2024
£000
£000
3,795
2,827
3,492
3,752
7,287
6,579
26.0%
23.0%
20.4%
23.4%
Contribution rates
STSS
LGPS
26.0%
23.0%
20.4%
23.4%

The employers contribution rates for the Scottish Teachers Superannuation Scheme increased to 26.0% with effect from 1st April 2024. The employers contribution rates for the Local Government Pension Scheme decreased to 20.4% with effect from 1st April 2024.

Scottish Teachers Superannuation Scheme (STSS)

The STSS is an unfunded defined benefit scheme. Contributions on a pay as you go basis are credited to the Exchequer under arrangements governed by the Superannuation Act 1972. A notional asset value is ascribed to the scheme for the purpose of determining contribution rate.

Fife Council Pension Scheme (LGPS)

The Fife Council Pension Scheme is a notional fund and is a defined benefit multi-employer scheme. The latest actuarial valuation for the scheme was carried out as at 31 July 2025.

The following notes are derived from the actuarial report supplied by Hymans Robertson's LLP dated August 2025 to comply with the reporting requirements of FRS102, as amended.

The Fife Council Pension Scheme is a defined benefit statutory scheme, administered in accordance with the Local Government Pension Scheme (Scotland) Regulations 1998, as amended. It is contracted out of the State Second Pension.

The above movements in plan assets and liabilities result in a net asset of £51.5 million at 31 July 2025 (2021-22: net asset of £15.4 million, 2022-23: net asset of £15.1 million, 2023-24: net assets £3.3m). In 2025, as outlined in the accounting policies, where the calculation results in a net asset, recognition of the asset is limited to the extent to which the College is able to recover the surplus either through reduced contributions in the future or through refunds from the scheme. The College assessed the recoverability of the asset on this basis and determined that it was appropriate that the plan surplus was not recognised in line with the requirements of FRS 102.

Reconciliation of defined benefit obligation

Year ended
Opening position
Current service cost
Interest cost on defined benefit obligation
Plan participants contributions
Total remeasurements recognised in other comprehensive income
Past service costs
Estimated unfunded benefits paid
Benefits paid
Closing position
Balance sheet
Year ended
Fair value of plan assets
Present value of funded liabilities
Present value of unfunded liabilities
Net asset per actuarial valuation
Less share of assets not recognised under FRS 102
Net asset held in balance sheet		 31 July 2025
31 July 2024
£000
£000
90,278
81,829
3,044
3,127
4,550
4,174
984
986
(12,988)
2,955
187
113
(212)
(220)
(2,407)
(2,686)
83,436
90,278
31 July 2025
31 July 2024
£000
£000
133,122
122,392
(81,615)
(88,545)
(1,821)
(1,733)
49,686
32,114
(51,507)
(33,847)
(1,821)
(1,733)

The present value of unfunded obligations is £1,821K (£1,733k in 2023-24) in relation to early retirements agreed in previous years. There are no partly funded obligations.

The assumptions noted above relate to expectations across the duration of the scheme and therefore are based on longer-term estimations.

55

Financial Statements for the Year Ended 2025

FIFE COLLEGE

Notes to the Financial Statements (Continued)

Reconciliation of fair value of employer assets

Year ended 31 July 2025 31 July 2025 31 July 2025 31 July 2024
£000 £000
Opening position 122,392 110,086
Interest income on plan assets 6,165 5,624
Other experience 0 (123)
Return on assets excluding amounts Included in net interest 2,553 4,667
Plan participants contributions 984 986
Employer contributions 3,435 3,838
Contributions in respect of unfunded benefits 212 220
Unfunded benefits paid (212) (220)
Benefits paid (2,407) (2,686)
Closing position 133,122 122,392
Fair value of employer assets
Year ended 31 July 2025 31 July 2024
£000 £000
Equities 90,523 83,227
Bonds 29,287 28,150
Property 6,656 7,344
Cash 6,656 3,672
Total 133,122 122,392
Analysis of amounts included in interest receivable (Note 5 & 9)
31 July 2025 31 July 2024
£000 £000
Net return/(cost) on pension asset/liability 1,615 1,450
Interest income on plan assets 6,165 5,624
Interest cost on defined benefit obligation (4,550) (4,174)
Net interest 1,615 1,450
Analysis of amounts charged to staff costs (Note 7 )
31 July 2025 31 July 2024
£000 £000
Pension charge less contributions paid (504) (301)
Current service costs 2,956 3,644
Past service costs 187 113
Total operating charge 3,143 3,757
Less contributions paid (3,647) (4,058)
Pension costs less contributions payable (504) (301)
Actuarial assumptions
The actuaries recommended assumptions are summarised below:
Year ended 31 July 2025 31 July 2024
% p.a. % p.a.
Salary increase rate 3.25% 3.25%
Pension increase rate (CPI) 2.75% 2.75%
Discount rate 5.80% 5.00%
Mortality rates
The average life expectancy after retiring is assumed to be as follows:
Males Females
Current pensioners 19.8 23.1
Future pensioners 20.8 24.7
Amounts for the current and previous accounting periods
Year to 31 July 2025 2025 2024 2023 2022 2021
£000 £000 £000 £000 £000
Fair value of employer assets 133,122 122,392 110,086 110,047 110,372
Present value of defined benefit obligation (83,436) (90,278) (81,829) (97,305) (141,215)
Adjustment to de-recognise funded pension asset (51,507) (33,847) (30,507) (15,386) 0
Gain/(Deficit) (1,821) (1,733) (2,250) (2,644) (30,843)

56

Financial Statements for the Year Ended 2025

FIFE COLLEGE Notes to the Financial Statements (Continued)

26 Summary pension note

The analysis of amounts charged to the Statement of Comprehensive Income (SOCI) is as follows:

Charged to staff costs:
Current service cost
Past service cost
Total charged to staff costs
Credit/charge for net return on pension scheme:
Interest income on plan assets
Interest cost on defined benefit obligation
Net interest charges
Credit/charge to other comprehensive income:
Return on assets excluding amounts Included in net interest
Other experience
Gains and losses arising on changes in financial assumptions
Adjustment for assets not recognised under FRS 102
Actuarial gain
Total charge to the SOCI
Analysis of the movement in deficit during the year:
Asset/(Deficit) in scheme at start of the year
Service cost
Employer contributions
Net interest costs
Actuarial gain
Asset in scheme at end of year		 Year Ended 31
July 2025
Year Ended 31
July 2024
£000
£000
(3,044)
(3,127)
(187)
(113)
(3,231)
(3,240)
6,165
5,624
(4,550)
(4,174)
1,615
1,450
2,553
4,667
(571)
7,957
13,559
(10,912)
(17,660)
(3,340)
(2,119)
(1,628)
(3,735)
(3,418)
Analysis of the movement in deficit during the year:
Asset/(Deficit) in scheme at start of the year
Service cost
Employer contributions
Net interest costs
Actuarial gain
Asset in scheme at end of year
32,114
28,257
(3,231)
(3,240)
3,647
4,058
1,615
1,450
15,541
1,589
49,686
32,114

Recognition of the asset is limited to the extent to which the College is able to recover the surplus either through reduced contributions in the future or through refunds through the scheme. As the College cannot access the surplus, the net asset has not been recognised in the balance sheet.

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. In a judgment delivered on 25 July 2024, the Court of Appeal unanimously upheld the decision of the High Court.

At the date of approval of these financial statements, while it is known there is potential for additional pension liabilities to be recognised as a result of this ruling, the impact in monetary terms is not known and it is reasonable to form the view that it is not reasonably estimable. Accordingly, no adjustments to reflect the impact of the ruling have been made in these financial statements.

The College will continue to monitor the developments and consider the impact on the LGPS liabilities recognised by the College.

27 Related party transaction

Due to the nature of the College's operations and the composition of its Board of Governors (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 Governors may have an interest. All transactions involving organisations in which a member of the Board of Governors may have a material interest are conducted at arm's length and in accordance with the College's financial regulations and normal procurement procedures.

The College had transactions during the year, or worked in partnership with, the following publicly funded or representative bodies in which members of the Board of Governors hold, or held, official positions as noted below:

Company Sales Purchases As at 31st As at 31st Name Position in
July July College
Due from Due to
University of St Andrews £5,090 £0 £495 £0 P Dobson Board member
Edinburgh Napier University £216,057 £0 £0 £0 N Graham Vice Principal
Historic Environment Scotland £0 £600 £0 £0 S Mitchell Audit Committee
Thornton Tomasetti £1,815 £0 £0 £0 P Thompson Director
Colleges Scotland £8,303 £64,858 £0 £0 DC Watt Board member
Fife Housing Group £4,352 £0 £0 £0 B Fisher Vice Chair
Totals £235,617 £65,458 £495 £0

28 Non-cash allocation

The following note provides details of the adjusted operating position on a Central Government Accounting basis.

Deficit before other gains and losses (FE/HE SORP basis)
Add back: non-cash allocation for depreciation (net of deferred capital grant)
Operating surplus/(deficit) on Central Government Accounting basis		 Year Ended 31
July 2025
Year Ended 31
July 2024
College
College
£'000
£'000
(1,262)
(5,643)
3,145
3,043
Deficit before other gains and losses (FE/HE SORP basis)
Add back: non-cash allocation for depreciation (net of deferred capital grant)
Operating surplus/(deficit) on Central Government Accounting basis
1,883
(2,600)

Following reclassification, colleges received additional non-cash budget to cover depreciation but this additional budget is not recognised under the FE/HE SORP accounting rules. As a result, colleges show a deficit equivalent to net depreciation (where funds are spent on revenue items) in order to meet Government accounting rules and the requirement to spend the entire cash allocation.

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Under the FE/HE SORP, the College recorded an operating deficit of £1,262,000 for the year ended 31 July 2025. After taking account of the Government non-cash budget, the college shows an “adjusted” surplus of £1,883,000 on a Central Government Accounting basis. Further removing the impact of the non-cash pension adjustments and the impact of revenue funding allocated to capital items the below demonstrates that the college is operating sustainably within its funding allocation to 31st of July 2025.

Operating (deficit)/surplus on Central Government Accounting
basis 1,883 (2,600)
Non-cash pension adjustments (1,809) (2,035)
Revenue funding allocated to loan repayments and other capital items (563) (574)
Costs of middle management job evaluation exercise not matched by
revenue 1,325 6,129
Adjusted operating surplus 836 920

29

Prior Year Adjustment

*It was identified that the construction costs of the Dunfermline City Campus needed to be more clearly presented in the annual accounts. This change results in the inclusion of construction-related retentions being shown within the tangible fixed assets and creditors. Therefore, construction related retentions of £1,362k are shown in the financial statements for 2024/25 and retentions of £1,866k are shown as a restatement to the 2023/24 financial statements. The overall impact of this change is a £nil net effect on the College’s financial statements in respect of result for the year and net assets.

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Appendix 1

Accounts direction for Scotland’s Colleges 2024-25

  1. It is the Scottish Funding Council’s direction that institutions[1] comply with the 2019 Statement of Recommended Practice: Accounting for Further and Higher Education (SORP) in preparing their annual report and accounts.

  2. 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) or the Regional Strategic Body (RBS) (for assigned colleges).

  3. Incorporated colleges and Glasgow Colleges’ Regional Board[2] are also required to comply with the Government Financial Reporting Manual 2024-25 (FReM) where applicable. In cases where there is a conflict between FReM and the SORP, the latter will take precedence.

  4. Incorporated colleges and Glasgow Colleges’ Regional Board must send two copies of their annual report and accounts to the Auditor General for Scotland by 31 December 2025.

  5. 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.

  6. Incorporated colleges and Glasgow Colleges’ Regional Board should reproduce this Direction as an appendix to the annual report and accounts.

Scottish Funding Council 14 August 2025

1 The term “institutions” includes colleges and Glasgow Colleges’ Regional Board.

2 Glasgow Colleges’ Regional Board was dissolved on 30 July 2025. The Scottish Funding Council will be responsible for preparing the 2024-25 accounts. This applies to all references made to Glasgow College’s Regional Board throughout this document.

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