Members of The Highland Council Economy and Infrastructure Committee have welcomed a report highlighting significant growth and savings delivered by the council’s in house bus service since it was established in January 2023.
The report, presented on Thursday 12 February, outlines how the service has expanded from an initial fleet of 10 vehicles to 25 vehicles now operating a mix of school transport contracts, public bus routes and low cost education hires.
The committee was told that key contracts previously tendered at a combined value of £4.19 million per year are now being delivered internally at an annual running cost of £2.4 million.
That difference represents substantial annual cost avoidance while maintaining continuity of school and community services.
Passenger numbers on public bus services operated throughout the Inverness area have also risen steadily.
Figures show 73,727 passengers in 2023, 85,465 passengers in 2024 and 135,839 passengers in 2025.
Chair of the committee, Councillor Ken Gowans, said:
“The in-house bus service is delivering reliable transport for our communities while protecting the Council from escalating contract prices.
“The savings achieved so far are significant, and the continued growth demonstrates how important this service has become.
“A steady increase in passenger numbers tell a clear story.
“People are using and valuing the services we are providing.
“The in-house team is helping residents access work, healthcare and education, and ensuring connectivity for communities who would otherwise be underserved.”
The report also notes that a 2024 Internal Audit recommended development of a long term financial and business strategy for the service.
Work is now underway to design a future operating structure, including examination of a potential Arm’s Length External Organisation model.
Benchmarking is being carried out with comparable organisations such as Lothian Buses.
A cross service Officer Group has been established and a further report on the proposed operating model and wider public transport opportunities will be brought to the May 2026 committee meeting.
Councillor Gowans added:
“This is an important moment for transport in the Highlands.
“The in-house service has proven its value, delivered savings and supported communities during a challenging time for the transport sector.
“The work now underway will help shape a sustainable model for the long term, ensuring we continue to deliver the best possible service for the Highlands.”
