Highland Council to seek views on how to balance £39.2m budget gap

The Council needs to find £39.2 million of additional savings over the next three years to deliver a balanced financial plan, driven largely by the impact of rising costs and the ongoing impact of wider economic events.

This is in addition to £32.8 million of savings and other budget measures already agreed in 2027/28 and 2028/29 through the Council’s three-year financial planning approach.

To address the funding gap, the Council’s strategy will continue to focus on:

• Exploring financial flexibilities, including tax and other fiscal options.
• Delivering strategic council-wide cross cutting savings.
• Identifying savings within cluster and service areas.
• Continuing to transform how we deliver services and improve efficiencies.

At a meeting of The Highland Council today, members agreed a blended approach to its budget engagement, providing people with a range of different ways to have their say on the Council’s financial plan, either through the Council’s engagement platform ‘Engage Highland’ or at key locations across the region for people to respond in-person.

Chair of the Council’s Budget Review Group, Cllr Bill Lobban said:

“The Council has a clear vision, a strong financial planning framework and a proven track record of transformation, which has been recognised by Audit Scotland. However, the financial challenges facing all councils remain significant.

Ongoing global economic uncertainty, inflation and higher interest rates, continue to increase costs and place significant pressure on local government budgets. Early indications also suggest the Council’s funding settlement from the Scottish Government could be lower than previously anticipated and below a flat-cash position.

That makes it more important than ever that communities are involved in shaping the Council’s budget decisions. We want to hear what matters most to people and ensure everyone has an opportunity to have their say.”

The budget engagement programme will launch in November and includes:

• A budget simulator, allowing people to explore how they would set the Council’s budget and the implications of increasing and reducing spend in different areas.
• Budget surveys for the public, community groups and young people.
• An online ‘ideas board’ where people can submit suggestions.

From late November into early December focus groups will also take place with community councils, tenant and business forum, third sector organisations and parent councils.

Chair of the Corporate Resources Committee, Cllr Paul Oldham, added:

“The Council has made significant progress in addressing its budget gap over recent years, which stood at £113 million in 2024. We have already identified £32.8 million savings over the next three years. However, rising costs and economic pressures mean further action is required to close the £39.2 million gap we face.

Public engagement and feedback will provide a vital source of information which members will use to form the budget decision made by the Council in March 2027. I encourage everyone to take part when the engagement programme goes live in the coming months.”

The phased engagement programme will run throughout November and December, with a second phase of consultation in January and February 2027 before Council considers the budget on 4 March 2027.

Information on how to participate will be published on the Council’s website and through the Engage Highland platform shortly.