Highland Council is poised to deliberate a proposed 7% increase in Council Tax for the 2025-26 fiscal year during its budget meeting on 6 March.
This proposed hike comprises a 5% core increase aimed at balancing the annual budget, supplemented by an additional 2% designated for capital investments under the Highland Investment Plan.
In May 2024, the Council approved a £2 billion Highland Investment Plan strategy, setting the stage for this approach.
The initial phase of the Plan envisions over £1 billion in capital investments over the next decade, focusing on enhancing schools and roads across Highland communities.
To kickstart the investment fund, £2.8 million in seed funding was sanctioned in May 2024, facilitating the creation of £50 million in capital, with the first investment phase greenlit in December 2024.
Allocating 2% of the Council Tax annually is projected to generate the necessary capital to sustain the funding plan long-term.
This funding mechanism requires annual approval by the Council as part of the budget-setting process, with 2025-26 marking the inaugural year for Councillors to endorse this approach via Council Tax.
This strategy empowers the Council to secure substantial capital for a long-term infrastructure investment programme tailored for the Highland region.
Council Convener Bill Lobban described the funding mechanism as a bold solution to the considerable challenges and expenses associated with maintaining and renewing infrastructure.
He emphasized that the Highland Investment Plan addresses public demand for enhanced investment in the school estate and tackles critical issues such as RAAC and high alumina cement concrete in schools.
Lobban also highlighted that the investment programme is poised to generate employment and economic prosperity throughout the region, transforming Highland communities over the next decade.
Council Leader Raymond Bremner noted that the Highland Investment Plan stands as one of Scotland’s most significant investment programmes and the largest ever for the Highland area.
The initial decade of the programme will focus on place-based projects, with Dingwall slated for a £40 million to £50 million investment to revamp education and community facilities, alongside housing, infrastructure, and depots.
Similar initiatives are planned for Thurso, Alness, Brora, Dornoch, Golspie, and Invergordon in the forthcoming years.
Bremner added that beyond upgrading the school estate and depots, the planned investments aim to address ongoing challenges in maintaining over 4,000 miles of Highland roads and supporting rural communities.
A long-term investment strategy for roads and transportation is expected to ensure a sustainable approach to investment, contractor procurement, and opportunities to attract matching funds from developer contributions or other external sources.
The delivery of the Investment Plan is anticipated to offer significant local contracting and business opportunities, along with broader community economic benefits.
The financial report scheduled for the 6 March Council meeting outlines recommendations for achieving a balanced budget.
It encompasses details on budget assumptions, risks, pressures, growth and investment, as well as savings, reserves, and Council Tax considerations.
All prior planning assumptions have been revised and updated within this report, reflecting the impacts of the UK Government Budget and the Scottish Government’s draft budget for 2025-26.
The budget report and associated proposals are accessible on the Council’s official website
