Budget 2026 to 2027

Highland Council Budget Challenge 2026/27

Overview

The public sector continues to face significant financial challenges - local council budgets are decreasing, costs are increasing, and there's greater demand on services.

The Highland Council is being proactive in how we approach these challenges.  Budgets are being squeezed, but we have a strategy which includes growing the number of houses - helping address the housing challenge and providing more income in council tax - changing the way we work to create more jobs across the region, being more entrepreneurial, and ensuring we see community benefit from energy infrastructure investment.

But we still have difficult decisions to make when it comes to our services.  The Council had a £805 million revenue budget in 2025/26 to deliver a range of services including education, adult social care, housing, welfare, and waste and recycling services, as well as sustaining roads, footpaths, bridges, and harbours.  Government funding is based on population.  With more schools per head of population than any other mainland council and over 4,000 miles of road to sustain we need to budget carefully to manage our geographical differences.

We need your help to decide how we spend our budget for 2026/27, which will be confirmed by The Scottish Government in January 2026.  Feedback from our communities will help councillors understand what matters most to people across Highland and help inform decisions they taken when setting the budget in March 2026.

Our approach

The Highland Council is working hard to deliver savings - we've delivered £217 million in savings over the past 12 years.

We've also taken a more proactive approach to address the pressures we face, supporting more entrepreneurial activity and a culture of innovation to drive incomes and growth through 'Our Future Highland' vision.  This includes projects like:

• Our Highland Investment Plan.  We are setting aside 2% of council tax revenue each year to fund a £2 billion investment plan over the next 20 years.  This money will support capital investment in local service points, roads, and schools.  This includes the replacement or refurbishment of around 90 schools, and investment in Community PODs (Points of Delivery) in Thurso and Dingwall.
• The Highland Social Value Charter.  We are working with developers to encourage them to commit to our Social Value Charter.  This ensures community benefit and a legacy from renewable investment over the next 20 years.  Scottish and Southern Electricity Networks (SSEN) Transmission is the first company to sign this Charter, committing to £1.8 billion of contracts for local businesses, more than £200 million spending on roads and bridges, and support the development of 500 permanent homes, if they get the go ahead through planned infrastructure works to support the energy sector.
• Entrepreneurial activity.  We've cut costs by running our own bus service and made public transport improvements for local communities.  Meanwhile, the Council-run Storr visitor attraction in Skye is supporting local jobs and local suppliers.  It generated around £450,000 in profit in its first year, which has supported reinvestment in the path network and public toilets.

At the same time, the Council is developing is own future operating model to support sustainable communities.  Our focus is on job roles across our region, flexible workspaces, better use of technology, seamless access to services through local points of delivery, and greater collaboration with partners.

Our proactive approach to financial sustainability and cultural transformation has been commended by Audit Scotland.

The budget challenge we face

We are forecasting a budget gap of £16.3 million in 2026/27, £16.2 million in 2027/28, and £14.2 million in 2028/29.

As part of addressing this gap, we want to work with our communities to find out what services are important to you, get your views on where we can save money, how we can generate more income, and how we could do things differently.

This will build on extensive engagement on our budget in 2023, when communities told us we needed to redesign our services, change how we manage our buildings, generate more income, and be more efficient in how we do things.  We've already started to do these things, and we'll continue to work hard on this.

This is your opportunity to have your say.

Have your say

• Complete our budget survey online - it only takes 5-10 minutes to complete and is an opportunity for you to share your thoughts on what services we prioritise.  Our survey is also available in paper form in libraries and service points.
• Post your ideas on our discussion board - this board in anonymous and allows you to quickly share ideas on how we make savings, do things differently or generate income.  We're particularly interested in your views on these questions:
  • Should we increase Council Tax on second homes and long-term empty properties?
  • How can we generate more income?  This could include things like car parking, garden waste bins, school meals, or service fees?
  • How can we encourage people to make better use of public transport?
  • What services do you want to access locally?
  • Which services or activities could the Council bring in-house or outsource to achieve cost savings?

What happens next?

Councillors will consider your views and use your feedback to help shape the budget proposal for 2026/27, which will be presented to a meeting of The Highland Council at the beginning of March 2026 for discussion.