It turns out, that in automatically updating Xcode to 5.1 it uninstalls the iOS 7.0 simulator and replaces it with the iOS 7.1 simulator. It doesn't think to update the build settings on the Xcode server.
So to fix the problem, you have to manually open Xcode on your server, it then prompts you to install several items which you need to do. Then go to xcode preferences > Downloads and you can reinstall the iOS 7.0 simulator.
Really logical, thanks Apple...