Council Services Outsourced But Not Immune - Why High Life Highland Is Still Vulnerable to Budget Cuts

29th January 2026

When Highland Council transferred responsibility for leisure, culture and community learning services to High Life Highland (HLH), the move was often presented as a way to protect valued local services from the worst of council budget cuts.

By placing libraries, leisure centres, swimming pools and cultural provision into a charitable trust, the council could take advantage of tax reliefs, external funding opportunities and more flexible operating arrangements.

However, while the governance model changed, the financial reality did not. High Life Highland may be arms-length, but it is not insulated from Highland Council's ongoing budget pressures. In practice, it remains one of the most exposed parts of the local public service landscape.

A Trust That Still Depends on the Council

High Life Highland exists primarily to deliver services on behalf of Highland Council under a formal service delivery contract. Council funding remains a central pillar of its income. Although HLH also generates revenue through memberships, fees and grants, this income fluctuates and is sensitive to wider economic conditions.

Recent funding agreements show that direct council support to HLH has already reduced compared with previous years, with future funding levels dependent on annual budget decisions and contract reviews. This means that even without a headline announcement of "cuts", HLH faces a tightening financial environment year on year.

Crucially, HLH does not have deep financial reserves. The pandemic, rising wage costs and energy prices significantly weakened its financial buffer. As a result, even relatively modest reductions in council funding — or increases in costs that are not fully funded — can quickly translate into difficult operational decisions.

Why HLH Remains Highly Exposed

From the council’s perspective, services delivered by High Life Highland fall largely into the category of non-statutory provision. Unlike education or adult social care, there is no legal requirement to maintain specific levels of leisure, cultural or library services. That makes them structurally more vulnerable when budgets tighten.

For Highland Council, this vulnerability is magnified by geography. Running swimming pools, libraries and leisure centres across the largest local authority area in the UK is expensive. Many facilities serve small populations and generate limited income, but are essential to community life. When the council looks for savings, the contract with HLH inevitably comes under scrutiny because changes there do not immediately breach statutory duties.

What “Cuts” Look Like in Practice

Any future reduction in funding to High Life Highland is unlikely to arrive as a single dramatic announcement. Instead, pressure typically appears in subtler forms:

Reduced contract funding in real terms, failing to keep pace with inflation

Expectations to redesign services, delivering the same outcomes with less money

Greater reliance on income generation, even where communities have limited ability to pay

Shorter opening hours, seasonal closures, or fewer programmes rather than full shutdowns

Over time, these incremental changes can hollow out services just as effectively as explicit cuts, particularly in rural and island communities where alternatives do not exist.

A Political Shield, Not a Financial One

The trust model does provide political advantages. It creates a degree of separation between elected members and frontline service reductions, and it allows the council to argue that it is supporting an independent charity rather than directly cutting services. But this separation is largely administrative and reputational, not financial.

As Highland Council continues to manage large budget gaps driven by debt servicing costs, inflation and rising demand for statutory services, pressure will continue to flow downhill. High Life Highland sits near the bottom of that slope.

High Life Highland was never designed to be immune from austerity — only to manage it differently. While the trust structure offers flexibility and opportunities, it does not remove the fundamental dependency on council funding.

As long as Highland Council faces sustained financial strain, HLH will remain at risk of real-terms cuts, service reductions and difficult trade-offs, even if those cuts are framed as efficiencies or redesigns.

For communities across the Highlands, the implication is clear. The future of libraries, pools and leisure centres will depend not just on the performance of High Life Highland, but on the unresolved structural funding crisis facing local government as a whole.