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as the year progresses, highlighting any difficulties and pressures in managing within this envelope. Scottish Government has approved the carry forward of reserves up to £3m from budget allocations from 2025/26 onwards to support future delivery. Based on final out-turn, we are able to carry forward £2.1m RDEL and £0.9m CDEL.

The Capital IFRS16 allocation of £5m was intended to be ring-fenced based on the timing of expected costs. However, the majority of the expenditure was incurred in 2025/26 and there is agreement with Scottish Government that this budget can be transferred to core cash budget for 2026/27 to fund projects deferred to enable the expenditure in 2025/26.

There will also be an opportunity later in the year to secure budget to cover costs that are charged to the Annually Managed Expenditure (AME) budget heading.

As at 31 March 2026, Scottish Enterprise's net assets decreased by £45.9m to £469.6m (2025: £515.5m) as reported in Scottish Enterprise's Group Statement of Financial Position. This reduction was primarily driven by a £81.3m decrease in financial assets, largely reflecting a fall in the fair value of other investments to £390.6m (2025: £471.2m).

Non-current assets decreased overall to £567.3m (2025: £622.6m), mainly due to the reduction in financial assets noted above. This was partially offset by increases in property, plant and equipment and right of use assets, the latter reflecting remeasured lease arrangements during the year and a significant improvement in the pension position, with the retirement benefit scheme moving from a net deficit position in the prior year to a net asset position of £11.3m (2025: deficit £8.3m). This £19.6m improvement can be attributed to higher corporate bond yields over the period and 44 active members leaving through the Voluntary Exit Scheme, leading to a decrease in liabilities. This has been partially offset by higher levels of inflation, an increase in future life expectancies and lower than expected asset returns.

Current assets reduced by £6.8m to £192.6m (2025: £199.4m). This was driven by lower levels of short-term investments and assets held for sale, partially offset by an increase in cash and cash equivalents to £175.6m (2025: £170.2m). Trade and other receivables remained broadly stable year on year.

Current liabilities decreased significantly by £22.1m to £64.4m (2025: £86.5m), primarily due to reductions in trade and other payables and provisions. This reflects the timing of expenditure and settlement of liabilities during the year.

Scottish Enterprise accesses Financial Transactions funding from the Scottish Government to support investment in companies and the provision of loans. These funds are repayable over terms of up to 15 years, based on estimated returns from the underlying investments.