Financial performance

Our key risks and challenges

The management of risk is an integral part of Transport Scotland strategy, operations and decision making. A risk is anything that can impede or enhance our ability to meet our current or future objectives and the achievement of the Transport Scotland’s priorities, responsibilities, and outcomes.

The Transport Scotland Senior Management Team review risks monthly, supported by the Transport Scotland Risk Management Group, which includes representatives of each Directorate. The risk register is also reviewed by the Transport Scotland Audit and Risk Committee at each meeting. Our work and responses to identified risks are underpinned by a programme management approach which encourages cross directorate working to cut across traditional team boundaries and bring together a variety of skills, professions, and knowledge.

Risks are reported and escalated to Ministers, the Portfolio Accountable Officer, and Scottish Government Executive Team, as appropriate.

Key risks

Transport Scotland categorises risk in line with the Orange Book: Management of risk – Principles and Concepts.

The corporate risks below are grouped by category and reflect those considered for escalation to the Portfolio Accountable Officer.

Commercial

The current Clyde and Hebrides Ferry Service contract (CHFS2) is due to expire on 30 September 2024.

The risk of the next contract not being awarded by expiry of the current contract is being mitigated through the proposed extension of the current contract for twelve months. A due diligence process has been launched to establish the feasibility of a direct award using the ‘Teckal exemption’, in accordance with the Public Contracts Scotland Regulations 2015. It will look at the award from a financial, operational, and legal perspective.

Financial

Budgeting

There is a risk of allocated budgets being inadequate to meet ongoing operational requirements, legal commitments, ministerial priorities, and objectives.

We have mitigated this risk through regular review and updates to financial forecasts, continued dialogue with Ministers and Scottish Government colleagues and seeking to deliver value for money projects.

During 2023-24 we have provided further support and training to Directors and budget holders.

Operational

Trunk road maintenance

The trunk road network needs to be maintained to meet the level required for its safe operation and to ensure it can support Scotland’s economy. Transport Scotland has worked with Scottish Government finance and Ministers to prioritise assets with greatest potential for significant network disruption and maintain our 10-year Infrastructure Investment Plan to help inform capital investment decisions. This is supported by continuing to review our resilience arrangements across all transport modes as appropriate, maintenance interventions incorporated in Strategic Transport Projects Review 2 (STPR2) Strategic Transport Projects Review 2 | Transport Scotland, and developing maintenance programmes to meet statutory and Ministerial commitments.

Significant incidents

A prompt and effective response to significant incidents is essential to minimise disruption to the strategic transport network. Multi-agency contingency plans are in place across all modes for dealing with both anticipated and unanticipated disruptive events. Key freight flows and lifeline services are given priority in any contingency plans and forums and processes are in place to ensure that lessons learnt from incidents, including severe weather events, are included in future contingency plans and procedures.

Project and programme

Climate change

The transport emissions reductions required to meet our statutory climate change targets require ambitious new policies for inclusion in the next Climate Change Plan and delivering of existing Climate Change Plan Update transport sector commitments.

The Scottish Government recently announced its intention to bring forward a Climate Change Bill recognising the Climate Change Committee’s position that the interim 2030 target set by Parliament is out of reach. The government will now bring forward legislation that will seek to introduce a target approach based on five-yearly carbon budgets, supporting a credible pathway to net zero in 2045.

To achieve this, we have commissioned research to build the evidence base to inform and identify policy options to ensure a just transition to net zero. We monitor policy delivery and take forward engagement with internal and external stakeholders including public sector organisations, businesses, industry, and the public.

Transport Scotland continues to be represented on the Scottish Government Global Climate Emergency Board and manages its own response through the Transport Climate Change Board. Transport Scotland Directors are Senior Responsible Officers for oversight of their delivery objectives and risk mitigation, reporting and escalating to the Climate Change Board as required.

Reputational

Future transport

Changes to the usage of the transport network following recent societal and economic changes could lead to a medium to long-term reduction in farebox passenger revenue and impact on service provision that would disproportionally impact on vulnerable communities and groups. We published the Fair Fares Review in March 2024 setting out the recommendations and actions to advance our vision for the future of public transport – reliable, accessible, available, and affordable public transport services and a public transport system that is viable and sustainable in the long term.

Security

Cyber resilience

The threat of cyber-attacks requires proactive management of risk to ensure we secure and have access to our systems and data. Working closely with the Scottish Government, we have cyber resilience policies, systems, procedures, resources, and an incident response plan in place, which are supported by staff awareness and training to identify and avoid risk exposure.

People

Wellbeing

Our people are central to what we do and essential in achieving our organisational objectives. If we do not create the conditions to promote the wellbeing of our staff, then we will reduce our capability and capacity to deliver our business objectives. Our Senior Management Team review management information and discuss issues impacting our people regularly. Work to consider how the agency develops is underway to ensure we are the right size and shape for the challenges ahead.

To support effective management of our people resource we have revised our resource plan to better reflect the current operation of the organisation. In addition, we are currently working through a programme of transformation. The Transformation Programme is the term we are using to describe the overall work to improve Transport Scotland. It is made up of the following six workstreams which have been informed by staff feedback:

Organisation purpose
Prioritisation exercise
Wellbeing
Organisational design
Leadership and managing change
Learning and development

The programme is guiding us through a process to shape Transport Scotland to continue to deliver for Ministers and the people of Scotland, and looks at how we currently work and how we want to work to become an organisation where:

we are resilient – we have the tools we need to do our job, workload expectations are clear, balanced with capacity and we have collective and transparent controls in place
we are delivery and outcomes focussed
we understand our purpose and can effectively prioritise our work
we can efficiently use our available working time
we are empowered to work broadly and flexibly across teams
we work in a way that aligns with our values and we have capacity to do that.