25th March 2026
At a time when public services are under increasing strain and councils are making difficult decisions about where to cut spending, one line in the budget can feel particularly frustrating to taxpayers: audit fees.
Hundreds of thousands of pounds each year are spent not on schools, roads, or care services—but on checking the books.
In places like Highland, where communities are already grappling with reduced services and rising costs of living, it's a fair question to ask: is this really justified?
To understand the issue, we need to start with what councils are actually paying. Highland Council’s external audit fee is now just over £550,000 per year, having risen steadily over recent years. On the surface, that sounds like a significant sum—and it is.
But in the context of a council that spends over a billion pounds annually, it represents only a tiny fraction of overall expenditure, roughly 0.05%. In other words, for every £2,000 the council spends, about £1 goes on audit.
That framing helps, but it doesn’t tell the whole story. A more revealing way to look at it is on a per-person basis. Highland has a population of around 237,000, which means the audit cost works out at approximately £2.34 per resident each year. Compare that to a city like Edinburgh, where the cost is closer to £1.38 per person, and a clear disparity emerges. Highland residents are effectively paying around 70% more per head for the same function.
This difference is not because Highland is inefficient or uniquely wasteful. In fact, it reflects deeper structural realities about how local government works in Scotland—particularly in rural areas. Highland is geographically vast, with services spread across remote and often hard-to-reach communities. That complexity feeds directly into the audit process. Auditors must examine a wider range of operations, travel further, and deal with more fragmented systems of service delivery.
There is also the issue of scale. Larger cities benefit from economies of scale: the cost of auditing a big organisation does not increase in perfect proportion to its size. So when that cost is spread over a larger population, the per-person figure drops. Highland, with its smaller population, simply cannot benefit from that same efficiency.
On top of this sits the structure of Scotland’s audit system itself. Unlike some other parts of the UK, where councils can appoint their own auditors through a competitive process, Scottish councils operate within a centralised framework. This ensures independence and consistency, but it also limits flexibility. Councils like Highland cannot shop around for better deals or tailor services to reduce costs. The fees are largely set nationally, leaving little room for local control.
All of this helps explain why audit fees are what they are—but it doesn’t automatically make them feel justified, especially in the current financial climate. When councils are cutting back on libraries, delaying infrastructure projects, or struggling to fund social care, half a million pounds on auditing can seem like a luxury.
Critics argue that audits often arrive too late to be truly useful, highlighting problems after they have already occurred rather than preventing them. Others question whether there is duplication between external auditors and internal audit teams, potentially inflating costs without adding proportional value.
And yet, removing or significantly reducing audit scrutiny would carry its own risks. Local authorities manage vast sums of public money, and failures in financial oversight can have serious consequences. Past examples of council financial crises have shown how quickly problems can escalate—and how expensive they can become to fix. In that light, audit functions can be seen less as a cost and more as a form of insurance.
So where does that leave us?
The honest answer is somewhere in the middle. Audit fees, including those paid by Highland Council, are not excessive when viewed in the context of overall budgets or compared with similar authorities. They are, in principle, a necessary part of maintaining transparency and accountability in public spending.
However, that does not mean the system is beyond criticism. The higher per-person cost in rural areas like Highland highlights a structural imbalance, and the steady rise in fees raises legitimate questions about efficiency and value for money. At a time when every pound counts, it is reasonable for the public to expect not just oversight but effective, timely, and proportionate oversight.
Ultimately, the debate is not about whether audits should exist. It is about whether the current system delivers the best possible balance between cost and benefit. For Highland—and for Scotland as a whole that is a question worth continuing to ask.