Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner. Facebook Messenger An icon of the facebook messenger app logo. Facebook An icon of a facebook f logo. Facebook Messenger An icon of the Twitter app logo. LinkedIn An icon of the LinkedIn logo. WhatsApp Messenger An icon of the Whatsapp messenger app logo. Email An icon of an mail envelope. Copy link A decentered black square over a white square.

Roads and schools hang in the balance as Highland Council sets out full risk to capital programme

Highland Council's capital programme may be scaled back as roads and other investments ranked high risk. Image: Caithness Roads Recovery
Highland Council's capital programme may be scaled back as roads and other investments ranked high risk. Image: Caithness Roads Recovery

A report into Highland Council’s capital programme shows the full extent of its investment worries.

It reveals that many projects may need to be cancelled, scaled back or delayed.

And if the current financial climate doesn’t improve, council finance bosses say there will be “significant reductions” to the capital plan.

Highland Council has assessed all its capital projects in terms of the risk to costs, timing and scope. Every item is rated ‘red’ for costs.

Worryingly, all capital spend on roads, active travel, lighting and technology are rated red for all three measures.

This means they may not be deliverable.

At the same time, eight new Highland school builds are listed as ‘to be confirmed’ while the council awaits a funding decision from the Scottish Government.

Short of money, but also unable to spend it

There’s a paradox at the heart of the Highland Council’s investment problems.

The council has already admitted that its current capital plan is unaffordable. Senior councillors and officials have been working behind the scenes to see what can be saved.

But at the same time, both the main capital budget and the separate housing revenue account is actually underspent.

By the end of this financial year, the general fund is forecast to have spent just under £119 million. That’s a £38.5 million underspend.

Highland Council is struggling to progress with housing investment due to a shortage of labour and escalating costs. Image: Gordon Lennox.

The housing revenue account looks set to come in £5.6 million under budget too.

Highland Council says the significant underspends are down to the limited availability of contractors, consultants and building materials.

It’s now taking as long as two years for new fleet to be delivered, and tenders for housing jobs are often not returning any bids at all. The bids that are coming in, are sky high.

The council says these are global supply chain issues, but they’ve caused big delays with many capital investments.

Schools ‘to be confirmed’

Highland Council has provided a RAG (red amber green) risk assessment alongside its capital monitoring report.

Costs are in the red across the board. However, roads structural capital works, road surface dressing, bridges, wells and culverts, active travel investment and lighting are all rated at risk for costs, timescales and scope. The council’s Information and Communication Technology (ICT) transformation is also rated red on all fronts.

Several of these may need to be scaled back or cut completely from the capital plan.

New school projects also look uncertain. Highland Council was counting on funding from the Scottish Government’s Learning Estate Investment Plan (LEIP) but hasn’t had any news. The council had expected to have funding confirmed by the end of last year. Without clarity over LEIP funding, the council says it’s impossible to set its capital programme.

It has already had to cancel its February 1 budget meeting and now says members will get an update in March.

historic culloden academy
Culloden Academy is one of several schools marked ‘to be confirmed’ in the latest Highland Council capital programme update. Image: Sandy McCook/DC Thomson

However, all the LEIP funded schools now look shaky. Nairn Academy, Culloden Academy and Charleston Academy alongside Beauly, Broadford, Dunvegan and Park primary schools and St Clement’s school are all marked red for costs and ‘to be confirmed’ in every other risk category.

Six decades of loan repayments

Like all councils, Highland needs to borrow money to invest. In addition to much-needed new schools, it has the longest road network in the country and a commitment to deliver 490 new council houses in the next year.

But borrowing is now sitting at over £1.1 billion, with loans accounting for 69% of its capital funds. Council finance boss Ed Foster has highlighted that the council will have to pay back that sum for more than 60 years. And with interest rates on the rise, it’s a significant risk to financial sustainability.

When they meet next month, Highland councillors will have to try to find the balance between investing in growth, and keeping costs manageable.

In the meantime, members of the corporate resources committee meet on February 22 to consider this latest financial update.

Are you interested in more exclusive and breaking Highland and Islands news from the P&J? If so, why not join our dedicated Facebook page HERE

Conversation