Highland Council Unveils £868 Million Budget with 7% Tax Increase

Highland Council has announced its budget for the 2026/27 fiscal year, totaling £868 million. This budget includes a planned 7% increase in Council Tax, which is set to be confirmed next Thursday. If approved, this will mark a rise of over 32% in Council Tax bills across the Highlands since the 2018/19 financial year.

The budget outlines significant investments required in local infrastructure, particularly in education and housing. Local authorities have faced challenges as government grant funding has not kept pace with the rising costs of delivering essential services. Over the past 14 years, Highland Council’s housing-related debts have surged by more than £290 million, averaging an increase of £20.7 million per year. This financial burden has resulted in an 8% increase in social housing rents, prompting discontent among tenants facing steep price hikes.

For households, the implications of the budget are stark. The lowest Council Tax Band will see annual bills rise to £907.77, compared to £685.46 just eight years ago. For properties in Band D, often used as a benchmark, the bill will increase by £106.90, bringing it to just under £1,634. The highest Band H properties will experience even steeper rises, with annual bills climbing from £3,022.86 to over £4,003.28 for the first time.

Budget Pressures and Community Impact

Residents are grappling with the dual pressures of rising taxes and escalating living costs, particularly in light of the ongoing cost-of-living crisis. While inflation rates have moderated, the overall expenses for households continue to rise. For instance, everyday items like cooking oil have seen price increases that reflect broader economic challenges.

In addition to Council Tax, other charges will also rise. School meal prices will increase by 3.8%, while fees for public services such as burials, cremations, and refuse collection will see a 5% hike. These changes disproportionately affect lower-income households, which are already strained by rising housing debts and mortgages.

Second homeowners will also feel the impact of the budget. For those owning properties in Band H, the annual Council Tax will reach £12,009.84, three times the basic rate.

Community engagement played a role in shaping the budget, with consultations held with community councils, business groups, and the public at the end of last year. Highland Council’s Convener, Bill Lobban, defended the tax increases, stating that they are essential to meet the growing demands for services amidst a challenging financial landscape. He noted that the council has shifted from a budget gap of £108 million three years ago to becoming one of Scotland’s most efficient local authorities in managing financial pressures.

Future Investments and Sustainability

Council leader Raymond Bremner echoed this sentiment, emphasizing that the budget aims to increase income while directing support to those most in need. He highlighted the Highland Investment Plan, which focuses on long-term capital improvements in schools and infrastructure to foster sustainable growth in the community.

Bremner described the budget as a balanced approach that includes both savings and revenue generation measures. These strategies are intended to enhance investments in key areas such as adult social care, housing, and workforce development, while also providing targeted support for young people and families facing poverty or educational barriers.

As Highland Council prepares for the final decision on this budget, the implications for households across the region remain significant. Residents will begin to feel the financial effects of these decisions when new bills arrive in April 2024, underscoring the ongoing challenges many face in managing household budgets amidst rising costs.