Watchdog warns council on cost of 'ambitious' plans

Highland Council has ambitious plans to transform its services over the next 20 years but needs to control its borrowing costs, a public finance watchdog has said.

The Accounts Commission said the local authority should be commended for having a "culture of transformation" after restructuring its management last year.

But in a new report it warned the council could find it challenging funding its capital programme, which includes plans to build new schools and improve roads,

It said Highland Council's borrowing costs were a "concern" and higher than the average for Scotland's 32 local authorities.

Council convener Bill Lobban said the report was "broadly positive".

Last year, councillors backed a plan to invest £2bn over the next 20 years to upgrade its potholed roads and build new schools.

The local authority said it would pay for the plan by borrowing money and using 2% of the money it collects through council tax.

Highland has the longest road network in the UK with more than 4,200 miles (6,759km) of roads, in excess of 1,000 miles (1,609km) of footpaths and more than 2,200 bridges and culverts.

Almost 70 of its more than 200 schools have been rated to be in a poor condition and 74 rated as being of poor suitability.

Highland Council serves a population of 236,330 people.

In the report, the commission said councillors and senior staff needed to be confident the local authority's plans were affordable.

The watchdog said the council had worked hard to close recent budget gaps.

The Accounts Commission said a reliance in recent years on drawing money from its reserves was not sustainable, though added that this was something the council had recognised in its latest budget.

Accounts Commission chairwoman Jo Armstrong said: "Highland Council is benefitting from a culture of transformation, and we're pleased to see progress since we last reported in 2020.

"Now challenges to making savings lie ahead – it's vital that the council's workforce, digital and IT strategies are developed, embedded and monitored."

Convener Mr Lobban said the report recognised improvements made by the council.

He said: "We also note the positive comments in the report about the ways in which Highland Council is taking steps to transform its delivery of services."

"In particular, Highland Council has set a budget for 2025-2026 which uses zero reserves to fill its revenue gap."