Notes to the Financial Statements

**Tuition Fees and Education Contracts** (Consolidated and University)
1. Tuition Fees and Education Contracts (Consolidated and University)	2023/24 £000	2022/23 £000

Scotland home domicile fees	7,818	7,847
European Union domicile fees	2,501	2,135
Rest of UK domicile fees	1,919	1,706
Non-European Union domicile fees	5,591	5,255
Other non-credit bearing course fees and discounts	(952)	(1,134)
Education contracts	2,962	2,359
Total	19,839	18,168

**Scottish Funding Council Grants** (Consolidated and University)
2. Scottish Funding Council Grants (Consolidated and University)	2023/24 £000	2022/23 £000

Recurrent grants
General Fund - Teaching	18,369	17,367
General Fund - Research and Innovation	1,741	1,714

Specific grants
Capital maintenance grants	116	378
Ring-fenced grants funded by Scottish Government	1,258	2,097

Deferred capital grants released (Note 16)	649	649
Other grants	298	-
Total	22,429	22,204

**Research Grants & Contracts (Consolidated and University)**
3. Research Grants & Contracts	Consolidated		University
	2023/24 £000	2022/23 £000	2023/24 £000	2022/23 £000
Research councils	200	136	200	136
UK based charities	138	230	135	223
UK government and health authorities	1,073	967	1,073	964
UK Private Sector	13	24	13	24
European funding	193	531	193	531
Other grants & contracts	260	127	260	127
Total	1,877	2,015	1,873	2,006

**Other Operating Income (Consolidated and University)**
4. Other Operating Income	Consolidated		University
	2023/24 £000	2022/23 £000	2023/24 £000	2022/23 £000
Residences, catering and conferences	6,152	5,981	5,619	5,506
Other services rendered	279	347	218	241
Sports centre income	240	208	240	208
Other income	906	785	1,382	1,132
Total operating income	7,577	7,321	7,459	7,087

**Investment Income (Consolidated and University)**
5. Investment Income	Consolidated		University
	2023/24 £000	2022/23 £000	2023/24 £000	2022/23 £000
Other investment income	924	586	885	568
Interest On Pension Asset	1,208	412	1,208	412
Total investment income	2,132	998	2,093	980

**Donations and Endowments (Consolidated and University)**
6. Donations and Endowments (Consolidated and University)	2023/24 £000	2022/23 £000
Unrestricted donations	272	410
Total	272	410

**Staff Costs (Consolidated and University)**
7. Staff Costs	Consolidated		University
	2023/24 £000	2022/24 £000	2023/24 £000	2022/23 £000
Wages and salaries	24,312	22,517	24,277	22,411
Social security costs	2,522	2,349	2,522	2,349
Movement on USS provision	(1,934)	(13)	(1,934)	(13)
Other pension costs	4,733	5,066	4,733	5,066
Restructuring costs	533	-	533	-
Total staff costs	30,166	29,920	30,131	29,814

**Emoluments of the Principal and Vice-Chancellor**
Emoluments of the Principal and Vice-Chancellor	2023/24 £000	2022/23 £000
Sir Paul Grice
Salary *	218	210
Employers' pension contributions	-	-
In lieu of employers' pension contribution	36	35
Total	254	245

The head of the University's basic salary is 5.57 times the median pay of staff (2022/23: 5.68 times), where the median pay is calculated on a full-time equivalent basis for the salaries paid by the University to its staff.

Key management personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the University: this comprises the Senior Leadership Team. The total compensation for the year ended 31 July 2024 (including any employers’ pension contributions) was £1,080,862 (year ended 31 July 2023: £1,003,273).

University Court Members
The University Court members are the trustees for charitable law purposes and are also the directors of the company limited by guarantee for company law purposes. Other than the Chair, University Court members receive no remuneration in respect of their duties as members of the University Court. A number of members of the University Court, including the Principal and Vice-Chancellor, receive a salary in respect of their employment with the University. Detail of such remuneration is set out below.

**Directors' emoluments (including pension contributions)**
Directors' emoluments (including pension contributions)	2023/24 £000	2022/23 £000
Fees for services as members of the University Court	24	15
Emoluments (i.e. salaries as members of staff)	656	630
Contributions paid to pension schemes	113	86
Total	793	732

These figures relate to 8 members of staff, including the Principal (2022/23 : 9)

The number of members of staff, including the Principal, who received remuneration (including benefits and excluding pension contributions) in each of the following ranges was:-

**Senior post holders**
Senior post holders	2023/24 Number	2022/23 Number
£100,001 to £110,000	1	-
£110,001 to £120,000	-	1
£120,001 to £130,000	1	-
£130,001 to £140,000	-	1
£140,001 to £150,000	1	-
£150,001 to £160,000	1	-
£230,001 to £240,000	-	-
£240,001 to £250,000	-	1
£250,001 to £260,000	1	-

No compensation payments were made to senior post holders in respect loss of office (2022/23: Nil).

**Average full time equivalent (FTE) staff numbers by major category:** (Consolidated and University)
Average full time equivalent (FTE) staff numbers by major category: (Consolidated and University)	2023/24 FTE Number	2022/23 FTE Number
Academic schools	246	226
Academic services	57	63
Research grants & contracts	16	28
Residences, catering & conferences	13	20
Premises	26	25
Administration & central services	147	133
	505	495

**Interest payable and other finance costs (Consolidated and University)**
8. Interest payable and other finance costs	Consolidated		University
	2023/24 £000	2022/23 £000	2023/24 £000	2022/23 £000
Loan interest	689	746	689	746
Net charge on pension scheme	43	61	43	61
	732	807	732	807

**Analysis of total expenditure by activity (Consolidated and University)**
9. Analysis of total expenditure by activity	Consolidated		University
	2023/24 £000	2022/23 £000	2023/24 £000	2022/23 £000
Academic schools	20,275	18,622	20,275	18,622
Academic services	5,467	5,385	5,467	5,385
Research grants & contracts	1,521	1,853	1,529	1,835
Other services rendered	282	329	227	233
Residences, catering and conferences	3,272	3,491	3,179	3,369
Premises	9,446	9,161	9,446	9,161
Administration & central services	10,998	10,254	10,975	10,230
Other expenses	(259)	1,860	(259)	1,860
Total per income and expenditure account	51,002	50,955	50,841	50,694

Other expenses show as a credit due to the movement on the USS pension (£1.9m).

**Other operating expenses (Consolidated and University)**
10. Other operating expenses	Consolidated		University
	2023/24 £000	2022/23 £000	2023/24 £000	2022/23 £000
External auditors - audit fees	184	144	163	123
External auditors - non-audit fees	4	4	-	-
Internal audit	31	22	31	22
Grants to ��Ƶ Students' Union	326	294	326	294
Other expenses	13,753	14,360	13,653	14,228
Total other operating expenses	14,298	14,823	14,173	14,668

**Intangible Assets (Consolidated and University)**
11. Intangible Assets (Consolidated and University)	£000
Cost or valuation:
At August 2023	903
Additions at cost	77
At 31 July 2024	1,343
	2,323
Amortisation:
At 1 August 2023	(239)
Provided during the year	(191)
At 31 July 2024	(430)

Net book amount at 31 July 2024	1,893
Net book amount at 1 August 2023	664

**Tangible Assets (Consolidated and University)**
12. Tangible Assets (Consolidated and University)	Freehold land & Buildings	Fixtures, fittings & equipment	Total
Cost or valuation:	£000	£000	£000
At 1 August 2023	136,024	9,324	145,348

Additions at cost	-	418	418
Under construction	-	1,265	1,265

Revaluation of buildings	(3,249)	-	(3,249)

At 31 July 2024	132,775	11,007	143,781

Depreciation:
At 1 August 2023	-	(8,707)	(8,707)
Written back due to revaluation	5,337	-	5,337
Provided during the year	(5,337)	(277)	(5,614)

At 31 July 2024	-	(8,984)	(8,984)

Net book amount at 31 July 2024	132,775	2,023	134,797
Net book amount at 1 August 2023	136,024	617	136,641

Analysis of net book amount at 31 July 2024
Financed by capital grant	4,962	-	4,962
Other	127,813	2,023	129,836
Total tangible assets	132,775	2,023	134,797

The heritable properties comprising ��Ƶ’s property estate were valued as at 31 July 2024 by an external valuer, Gerald Eve LLP, a regulated firm of Chartered Surveyors. The valuation was prepared in accordance with the requirements of the RICS Valuation - Global
Standards 2022 and the national standards and guidance set out in the UK national supplement (November 2018), the International Valuation Standards, Financial Reporting Standard 102 and the 2019 Statement of Recommended Practice 'Accounting for Further and Higher Education'. The valuations of specialised properties were derived using the Depreciated Replacement Cost (DRC) method, whilst the student residences were valued as a trading entity using a Discounted Cash Flow (DCF). Barclays Bank PLC held a standard security dated 17 December 2014, over the student accommodation situated on the University campus. This was in place at the balance sheet date but removed following repayment of the loan.

The University has a modest collection of works of art and other items of historical interest. No value is included within fixed assets in respect of this collection as it is not considered to be material.

13. Investments

**Investments**
Name of undertaking	Country of incorporation and registration	Description of shares held	Proportion of nominal value of shares held %	Cost at 31 July 2024	Cost at 1 August 2023
��Ƶ Enterprises Ltd	Scotland	Ordinary £1 shares	100	100	100
Edinburgh Innovation Park Joint Venture Company Ltd	Scotland	Ordinary £1 shares	50	N/A	1
				100	101

��Ƶ Enterprises Limited, a wholly owned subsidiary company, undertakes activities which, for legal or commercial reasons, are more appropriately channelled through a separate limited company. These activities include vacation letting, conferences and rendering of services (other
than research) for a variety of commercial and other organisations. The results of ��Ƶ Enterprises Limited have been consolidated into the group financial statements.

The University holds a 50% share in Edinburgh Innovation Park Joint Venture Ltd, with East Lothian Council holding the remaining 50% share. As detailed in the Statement of Accounting Principles, section (B), the University has recognised its share of the net assets. As at 31 July 2024, the consolidated position of Edinburgh Innovation Park Joint Venture Ltd reported total assets of £10.4m, including work in progress of £6.6m and cash of £3.1m, and liabilities of £10.5m, of which £10.4m related to income received in advance. The net result of these is a negative net asset position of (£68,655), of which the University has recognised (£34,327) as a non-current liability.

**Trade and other receivables (Consolidated and University)**
14. Trade and other receivables	Consolidated		University
Amounts falling due within one year:	2024 £000	2023 £000	2024 £000	2023 £000
Trade debtors	1,476	883	1,371	777
Prepayments and accrued income	1,395	1,820	1,395	1,805
Amounts due from subsidiary company	-	-	857	582
Amounts due from joint venture	-	-	-	-
	2,870	2,703	3,622	3,163

**Creditors: Amounts falling due within one year (Consolidated and University)**
15. Creditors: Amounts falling due within one year	Consolidated		University
	2024 £000	2023 £000	2024 £000	2023 £000
Secured loans (see note 16)	15,809	1,343	15,809	1,343
Trade creditors	1,664	793	1,664	791
Social security and other taxation payable	687	762	673	680
Accruals and deferred income	6,057	6,390	5,471	6,090
Unsecured loans	686	171	686	171
Deferred capital grants (see note 16)	649	649	649	649
Amounts Due to Joint Venture	90	89	90	89
Total creditor amounts falling within one year	25,642	10,195	25,041	9,812

**Creditors: Amounts falling due in more than one year (Consolidated and University)**
16. Creditors: Amounts falling due in more than one year	Consolidated and University
	2024 £000	2023 £000
Secured loans (see note 15)	-	15,809
Unsecured loans	2,217	2,368
Deferred capital grants	4,313	4,962
	6,530	23,139
Analysis of secured loans:-
Due between one and two years	-	15,809
Due between two and five years	-	-
Due in five years or more	-	-
	-
Total due after more than one year	-	15,809
Due within one year (note 15)	15,809	1,343
Total secured loans	15,809	17,151

Analysis of unsecured loans:-
Due between one and two years	164	171
Due between two and five years	449	455
Due in five years or more	1,603	1,743

Total due after more than one year	2,217	2,368
Due within one year (note 15)	686	171
Total unsecured loans	2,903	2,539

Analysis of Deferred capital grants:-
Due between one and two years	649	649
Due between two and five years	1,947	1,947
Due in five years or more	1,717	2,366

Total due after more than one year	4,313	4,962
Due within one year (note 15)	649	649
Total Deferred capital grants	4,962	5,611

The secured loan from Barclays is repayable in full on 17 December 2024.The loan is therefore shown as being fully repayable within 1 year.

The unsecured loans have been provided by the Scottish Funding Council. £2.647 million has been provided under the Financial Transactions scheme. This loan is unsecured, and is repayable in equal quarterly instalments over the period to 31 March 2040. An unsecured loan of £521k has been included within the accounts to reflect overdrawn bank accounts as at 31 July 2024. These have subsequently been repaid from cash reserves.

Deferred capital grants due to be released within one year are included within Creditors: amounts falling due within one year.

**Pension Assets & Provisions (Consolidated and University)**
17. Pension Assets & Provisions (consolidated and university)	Obligation to fund deficit on USS Pension £'000	Pension enhancements £'000	Defined benefit assets & obligations LGPS £'000	Total provisions £'000
At 1 August 2023	(1,891)	(2,272)	24,147	19,984
Utilised in year	(43)	164	1,406	1,527
Transfer (to) / from income & expenditure account	1,934	(104)	(857)	973
At 31 July 2024	-	(2,212)	24,696	22,484

The University has a liability to fund the past deficit on the Universities Superannuation Scheme (USS). This obligation arises from the contractual obligation with the pension scheme for total payments relating to benefits arising from past performance. The University has assessed future
staff levels within the USS scheme and salary inflation over the period of the contractual obligation in assessing the value of this provision. Further information is provided in note 21(C).

The University also has a liability for pension enhancements payable to former members of staff who have taken early retirement in prior years. An actuarial valuation of the amount of this liability was carried out by Hymans Robertson, Actuaries, at 31 July 2024, on the basis of valuation prescribed by FRS 102, and using the same set of assumptions as are set out in note 21 in relation
to the valuation of the Local Government Pension Scheme.

Detail of the movement in the Local Government Pension Scheme (LGPS) provision is set out in note 21(A).

**Endowment Reserves (Consolidated and University)**
18. Endowment Reserves	Consolidated and University
	Restricted Expendable £000	Restricted Permanent £000	Restricted Total £000
Balance at 1 August 2023	1,104	47	1,152

Income for year	272	-	272
Expenditure for year	(293)	-	(293)
At 31 July 2024	1,084	47	1,131

Represented by:
Capital value	-	36	36
Accumulated income	1,084	12	1,096
Total Endowment Reserves	1,084	47	1,131

**Revaluation Reserve (Consolidated and University)**
19. Revaluation Reserve	Consolidated and University
	2024 £000	2023 £000
At 1 August	88,898	80,889
Revaluation (losses) / gains	2,087	8,009
Release to general reserve	-	-
At 31 July	90,985	88,898

**Consolidated Reconciliation of Net Debt (Consolidated and University)**
20. Consolidated Reconciliation of Net Debt (Consolidated and University)	£000
Net debt at 1 August 2023	2,241
Increase in cash and bank balances	(1,163)
Secured loans repaid	(1,343)
Unsecured loans taken out	521
Unsecured loans repaid	(158)
Net debt at 31 July 2024	98

**Consolidated Reconciliation of Net Debt (Continued) - Consolidated and University**
20. Consolidated Reconciliation of Net Debt (Continued)	Consolidated and University
Analysis of net debt	2024 £000	2023 £000
Cash at bank and in hand	(18,613)	(17,450)

Borrowings: amounts falling due within one year
Secured loans	15,809	1,343
Unsecured loans	686	171
Total net debt due within one year	16,494	1,514

Borrowings: amounts falling due after more than one year
Secured loans	-	15,809
Unsecured loans	2,217	2,368
	2,217	18,177
Net debt as at 31 July 2023	98	2,241

21. Pensions and similar assets / obligations

The University’s employees belong to three principal pension schemes, the Scottish Teachers Pension Scheme (STPS), the Local Government Pension Scheme (LGPS) and the Universities Superannuation Scheme (USS).

**Pension Charges (Consolidated and University)**
-	Consolidated and University
The total pension charge is analysed as follows:-	Year ended 31 July 2024 £000	Year ended 31 July 2023 £000
Lothian Pension Fund (LGPS)	1,496	2,284
Scottish Teachers' Pension Scheme	2,916	2,333
Universities Superannuation Scheme	1,934	393
Total Pension Charges	6,346	5,010

Employers’ pension contributions for the year to 31 July 2024 are £6,346,000. Actual employers’ pension contributions in the year to 31 July 2023 were £5,010,000.

A) Local Government Pension Scheme (LGPS)

The Lothian Pension Fund is a funded multi-employer defined benefit scheme, with the assets held in a separate trustee-administered fund to meet long-term pension liabilities to past and present employees. The trustees of the fund are required to act in the best interests of the fund’s beneficiaries. The appointment of trustees to the fund is determined by the scheme’s trust documentation. The trustees are responsible for setting the investment strategy for the scheme after consultation with professional advisors.

The following information is based upon a full actuarial valuation of the fund at 31 March 2023 updated to 31 July 2024 by a qualified independent actuary, Hymans Robertson LLP.

**Assumptions (Pension and Salary Increase Rates and Discount Rate)**
Assumptions at	31 July 2024	31 July 2023	31 July 2022
Pension increase rate	2.75%	3.00%	2.75%
Salary increase rate	3.45%	3.50%	3.25%
Discount rate	5.00%	5.05%	3.50%

The fund is valued every three years by professionally qualified independent actuaries using the projected unit credit method, the rates of contribution payable being determined by the trustees on the advice of the actuaries. In the intervening years, the scheme actuary reviews the progress of the scheme. The actuary has indicated that the resources of the scheme are likely, in the normal course of events, to be sufficient to meet the liabilities as they fall due at the level specified by the scheme regulations. The agreed employer’s contribution rate for the University was 20.4% for the 2020 valuation and 17.6% for the 2023 valuation, which came into effect from 1 April 2024.

The assumptions used by the actuary are the best estimates chosen from a range of possible
actuarial assumptions which, due to the timescales covered, may not necessarily be borne out in practice. The assumptions noted above relate to expectations across the duration of the scheme and therefore are based on longer-term estimations.

The mortality assumptions used to value the Obligations in the University’s Closing Position are different to those used to value the Obligations in the University’s Opening Position. A commutation allowance is included for future retirements to elect to take 70% of the maximum additional tax-free cash up to HMRC limits. All other demographic assumptions are consistent with those used for the latest formal funding valuation, and include sufficient allowance for future improvements in mortality rates. Life expectancy is based on the Fund's VitaCurves with improvements in line with the CMI 2023 model, with a 15% weighting of 2023 (and 2022) data, a 0% weighting of 2021 (and 2020) data, standard smoothing (Sk7), initial adjustment of 0.25% and a long-term rate of improvement of 1.5% p.a. for both males and females. The assumed life expectations on retirement at age 65 are:-

**The assumed life expectations on retirement at age 65**
The assumed life expectations on retirement at age 65 are:-	31 July 2024 No. of years	31 July 2023 No. of years
Current pensioners
Males	20.2	19.8
Females	23.9	22.7
Future pensioners (assumed aged 45 at last formal revaluation date)
Males	21.4	21.0
Females	24.9	24.5

**Analysis of the amount shown in the balance sheet**
Analysis of the amount shown in the balance sheet	Value at 31 July 2024 £000	(Restated) Value at 31 July 2023 £000	Value at 31 July 2022 £000	Value at 31 July 2021 £000	Value at 31 July 2020 £000
Estimated employer assets (A)	82,443	75,944	74,429	69,844	60,469
Present value of scheme liabilities	(57,747)	(51,797)	(61,832)	(90,361)	(90,773)
Present value of unfunded liabilities	(365)	(377)	(470)	(573)	(680)
Total value of liabilities (B)	(58,112)	(52,174)	(62,302)	(90,934)	(91,453)
Net pension asset / (liability) (A) - (B)	24,331	23,770	12,127	(21,090)	(30,984)

* In accordance with the accounting policy adopted by the University, where the calculation above results in a net asset, recognition of the asset is limited to the extent to which the University is able to recover its share of the surplus, either through reduced contributions in the future or through refunds from the scheme. In 2023 the University has now recognised the net asset in full, to reflect that in line with FRS 102 accounting standards there is a theoretical right to refund and therefore the asset should be recognised as such based on the FRS 102 accounting estimates at the balance sheet.

The University's liability to unfunded pensions has been recognised separately within provisions.

**Analysis of movements in the present value of the scheme liabilities**
Analysis of movements in the present value of the scheme liabilities	31 July 2024 £000	(Reinstated) 31 July 2023 £000
Opening defined benefit obligation	52,174	62,302
Current service cost	1,496	2,274
Interest cost on defined benefit obligation	2,646	2,199
Contributions by members	554	510
Actuarial losses / (gains)	3,077	(13,450)
Unfunded benefits paid	(37)	(34)
Benefits paid	(1,798)	(1,627)
Closing defined benefit obligation	58,112	52,174

**Analysis of movement in the market value of the scheme assets**
Analysis of movement in the market value of the scheme assets	31 July 2024 £000	(Reinstated) 31 July 2023 £000
Opening fair value of employer assets	75,944	74,429
Expected return on assets	2,449	(1,552)
Other experience	(217)	-
Contributions by members	554	510
Contributions by employer	1,657	1,573
Contributions in respect of unfunded benefits	37	34
Interest income on plan assets	3,854	2,611
Unfunded benefits paid	(37)	(34)
Benefits paid	(1,798)	(1,627)
Closing fair value of employer assets	82,443	75,944

Guaranteed minimum pension (GMP) was accrued by members of the Local Government Pension Scheme (LGPS) between 6 April 1978 and 5 April 1997. The value of GMP is inherently unequal between males and females for a number of reasons, including a higher retirement age for men and GMP accruing at a faster rate for women. However overall equality of benefits was achieved for public service schemes through the interaction between scheme pensions and the Second State Pension. The introduction of the new Single State Pension in April 2016 disrupted this arrangement and brought uncertainty over the ongoing indexation of GMPs, which could lead to inequalities between men and women’s benefits. As an interim solution to avoid this problem, GMP rules were changed so that the responsibility for ensuring GMPs kept pace with inflation passed in full to pension schemes themselves for members reaching state pension age between 6 April 2016 and 5 April 2021. This new responsibility led to increased costs for schemes (including the LGPS) and hence for scheme employers. An allowance for full GMP indexation was included within the 31 March 2020 funding valuation position and therefore the allowance is automatically included within the balance sheet figure at 31 July 2024. It is anticipated that a further ruling relating to historical transfers is unlikely to be significant in terms of impact on the University’s pension obligations. As a result, no allowance has been made for this within the calculation of the level of provision at 31 July 2024.

In April 2015, wholesale changes were made to the Local Government Pension Scheme in
Scotland to reform the scheme’s benefits structure. These changes were implemented as part of wider reforms to public sector pensions introduced by the UK Government’s Public Service
Pensions Act 2013. In the LGPS, these changes included moving benefit accrual from a final salary to a career average basis, and linking members’ normal retirement age to their state pension age. Transitional provisions were introduced for members who were within 10 years of normal retirement age in 2012. These transitional protection arrangements applied across public service pension schemes where older members were permitted to remain in their pre-2015 schemes. In the LGPS all members were moved onto the new arrangements from 1 April 2015. However, those within 10 years of their normal pension age on 1 April 2012 were protected through a statutory ‘underpin’. This underpin protection provides that additional checks are undertaken for qualifying members to ensure that the career average pension payable under the reformed LGPS is at least at high as the member would have been entitled to receive under the final salary scheme. Where it is not as high, scheme regulations provide that an addition must be applied to the member’s career average pension to make up the shortfall. In the ‘McCloud’ and ‘Sargeant’ court cases (which related to the judicial and firefighters’ pension schemes respectively), the Court of Appeal found that the transitional protection arrangements directly discriminated against younger members in those schemes. In July 2019, the UK government confirmed its view that these rulings had implications for all the main public service pension schemes, including the LGPS, and that the discrimination would require to be addressed in all the relevant schemes, regardless of whether members had lodged a legal claim. An allowance for the estimated impact of the McCloud judgement was included within the 31 March 2020 funding valuation position. The impact was
calculated based on the eligibility criteria of being included within the proposed solution for the McCloud judgement (i.e. any active member who was a participant in the Fund as at 1 April 2012 will be given the greater of the final salary pension or CARE pension upon retirement). The McCloud allowance will therefore automatically be included within the 31 July 2024 balance sheet provision.

In June 2023, the UK High Court (Virgin Media Limited v NTL Pension Trustees II Limited) ruled that certain historical amendments for contracted-out defined benefit schemes were invalid if they were not accompanied by the correct actuarial confirmation. Part of the High Court decision was appealed, and the Court of Appeal was asked to consider whether the actuary's written confirmation was only required if an alteration to the rules of the scheme affected pension benefits attributable to past service at the date of the alteration, OR whether the actuary's confirmation was also required if the alteration affected the pension benefits that a member would earn by future services. In a decision handed down on 25 July 2024, the court dismissed the appeal and confirmed in relation to alterations made between 6 April 1997 and 5 April 2013, section 9(2B) rights included both past service rights and future service rights.

The Local Government Pension Scheme is a contracted out defined benefit scheme, and amendments have been made during the period 1996 to 2016 which could impact member benefits. Work is being performed by the Government Actuary’s Department as the Local Government Pension Scheme actuary to assess whether section 37 certificates are in place for all amendments and some of these have been confirmed however, at the date of these financial statements, the full assessment is not complete. Until this analysis is complete, we are unable to conclude whether there is any impact on the assessed actuarial present value of promised retirement benefits under FRS 102, or if it can be reliably estimated. As a result, Lothian Pension Fund does not consider it necessary to make any allowance for the potential impact of the Virgin Media case in the disclosure of the actuarial present value of promised retirement benefits in its financial statements.

B) Scottish Teachers’ Pension Scheme (STPS)

The Scottish Teachers’ Pension Scheme is an unfunded statutory public service pension scheme with benefits underwritten by the UK Government. The scheme is financed by payments from employers and from those current employees who are members of the scheme and who pay contributions at progressively higher marginal rates based on pensionable pay, as specified in the regulations. The rate of employer contributions is set with reference to a funding valuation undertaken by the scheme actuary. The last four-yearly valuation was undertaken as at 31 March 2016. This valuation used the Projected Unit Methodology, and was carried out in accordance with the Public Service Pensions (Valuations and Employer Cost Cap) Directions 2014 (as amended). The valuation informed an increase in the employer contribution rate from 17.2% to 23.0% of pensionable pay from September 2019 and an anticipated yield of 9.4% of pensionable pay from employee contributions. The notional fund at 31 March 2016 amounted to £21.5 billion, and total scheme liabilities for service amounted to £22.8 billion, giving a notional past service deficit of £1.3 billion, which is being repaid by a supplementary rate of 4.3% of employers’ pension contributions over a 15-year period from 1 April 2019. This contribution is included in the 23.0% employers’ contribution rate. The University has no liability for other employers’ obligations to the multi-employer scheme. As the scheme is unfunded there can be no deficit or surplus to distribute on the wind-up of the scheme or withdrawal from the scheme.

The scheme is an unfunded multi-employer defined benefit scheme. The University is unable to identify its share of the underlying assets and liabilities of the scheme. Accordingly, the University has accounted for its contributions as if it were a defined contribution scheme.

While a valuation was carried out as at 31 March 2016, it is not possible to say what deficit or surplus may affect future contributions. Work on the most recent valuation was suspended by the UK Government pending the decision from the Court of Appeal (McCloud (Judiciary scheme)/Sargeant (Firefighters’ Scheme) cases, that held that the transitional protections provided as part of the 2015 reforms unlawfully discriminated on the grounds of age. Following consultation and an announcement in February 2021 on proposals to remedy the discrimination, the UK Government confirmed that the cost control element of the 2016 valuations could be completed.

The UK Government has also asked the Government Actuary to review whether, and to what extent, the cost control mechanism is meeting its original objectives. The 2020 actuarial valuations will take the report’s findings into account. The interim report is complete (restricted) and is currently being finalised with a consultation. The agreed employer contribution rate from 1 April 2024 was 26%.

C) Universities Superannuation Scheme (USS)

The University participates in the Universities Superannuation Scheme, which is a hybrid pension scheme, providing defined benefits (for all members), as well as defined contribution benefits. The assets of the scheme are held in a separate trustee-administered fund. Because of the mutual nature of the scheme, the scheme’s assets are not attributed to individual institutions and a scheme-wide contribution rate is set. The University is therefore exposed to actuarial risks associated with other institutions’ employees and is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis. As required by Section 28 of FRS 102 “Employee benefits”, the University therefore accounts for the scheme as if it were a defined contribution scheme. As a result, the amount charged to the consolidated Statement of Comprehensive Income and Expenditure represents the contributions payable to the scheme in respect of the accounting period.

A deficit recovery plan was put in place as part of the 2020 valuation, which required payment of 6.2% of salaries over the period 1 April 2022 until 31 March 2024, at which point the rate would increase to 6.3%. No deficit recovery plan was required under the 2023 valuation because the scheme was in surplus on a technical provisions basis. The institution was no longer required to make deficit recovery contributions from 1 January 2024 and accordingly released the outstanding provision to the profit and loss account.

The latest available complete actuarial valuation of the Retirement Income Builder is as at 31 March 2023 (the valuation date), which was carried out using the projected unit method. Since the institution cannot identify its share of USS Retirement Income Builder (defined benefit) assets and liabilities, the following disclosures reflect those relevant for those assets and liabilities as a whole.

The 2023 valuation was the seventh valuation for the scheme under the scheme-specific funding regime introduced by the Pensions Act 2004, which requires schemes to have sufficient and appropriate assets to cover their technical provisions (the statutory funding objective). At the valuation date, the value of the assets of the scheme was £73.1 billion and the value of the scheme’s technical provisions was £65.7 billion indicating a surplus of £7.4 billion and a funding ratio of 111%.

The key financial assumptions used in the 2023 valuation are described below. More detail is set out in the .

**Key Financial Assumptions - 2023 Valuation**
Area	%
Price inflation – Consumer Prices Index	3.0% p.a. (based on a long-term average expected level of CPI, broadly consistent with long-term market expectations)
RPI / CPI Gap	1.0% p.a. to 2030, reducing to 0.1% p.a. from 2030
Pension increases (subject to a floor of 0%)	Benefits with no cap: CPI assumption plus 3bps Benefits subject to a “soft cap” of 5% (providing inflationary increases up to 5%, and half of any excess inflation over 5% up to a maximum of 10%): CPI assumption minus 3bps
Discount rate (forward rates)	Fixed interest gilt yield curve plus: Pre-retirement: 2.5% p.a. Post retirement: 0.9% p.a.

The main demographic assumption used relates to the mortality assumptions. The assumptions are based on analysis of the scheme’s experience carried out as part of the 2023 actuarial valuation. The mortality assumptions used in these figures are as follows:-

**Mortality Assumptions**
	2023 valuation
Mortality base table	101% of S2PMA "light" for males and 95% of S3PFA for females
Future improvements to mortality	CMI 2021 with a smoothing parameter of 7.5, an initial addition of 0.4% p.a., 10% w2020 and w2021 parameters, and a long-term improvement rate of 1.8% p.a. for males and 1.6% p.a. for females

**Current Life Expectancies - on retirement at age 65**
The current life expectancies on retirement at age 65 are:	2024	2023
Males currently aged 65 (years)	23.7	24.0
Females currently aged 65 (years)	25.6	25.6
Males currently aged 45 (years)	25.4	26.0
Females currently aged 45 (years)	27.2	27.4

D) Other pension liabilities

The University has a liability for pension enhancements payable to former members of staff who have taken early retirement in prior years. An actuarial valuation of the amount of this liability was carried out by Hymans Robertson, Actuaries at 31 July 2024 on the basis of valuation prescribed by FRS 102. The total provision in respect of this liability is £1.847 million (2023: £1.895 million).

22. Financial Instruments

The University applies the provisions of Sections 11 and 12 of FRS 102 in full. The University’s financial assets and liabilities all meet the criteria for basic financial instruments prescribed within FRS 102 – Section 11.8.

23. Related Party Transactions

Due to the nature of the University’s operations and the composition of the University Court (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 University Court may have an interest. All transactions involving organisations in which a member of the University Court may have an interest are conducted at arm’s length, and in accordance with the University’s financial regulations and normal procurement procedures.

24. Hardship and Childcare Funds

**Hardship and Childcare Funds**
Funds	2023/24 £000	2022/23 £000
Hardship Fund (Undergraduate and Postgraduate)
Balance at 1 August 2023	-	0
Amounts received from Student Awards Agency for Scotland	167	198
Interest received	2	4
Amount vired (to) / from Childcare Fund	(3)	52
	166	253
Disbursed to students	(156)	(253)
Other costs	(11)	-
Refunded to Student Awards Agency for Scotland	-	-
Balance unspent at 31 July 2024	-	-

Childcare Fund
Balance at 1 August	-	-
Amounts received from Student Awards Agency for Scotland	122	145
Interest Received	1	2
	122	147
Disbursed to students	(125)	(111)
Amount vired (to) / from Hardship Fund	3	(36)
Refunded to Student Awards Agency for Scotland	-	-
Balance unspent at 31 July 2024	-	-

Amounts received from the Student Awards Agency for Scotland are available solely for students; the University acts only as paying agent. The grants and related disbursements are therefore excluded from the Statement of Comprehensive Income and Expenditure.