Submitted by Bill Fernie
6th September 2026
£2.1 billion is a difficult number for most people to comprehend.
It is so large that it can make almost any announcement sound impressive. New schools, improved roads, better community facilities, investment in local services and infrastructure across the Highlands. Put it all together and Highland Council has described a 20-year investment programme worth £2.1 billion.
But there is a question which perhaps deserves rather more attention than the size of the headline.
How quickly can Highland Council actually deliver it?
The answer may be considerably more complicated than the announcement suggests.
The Highland Investment Plan is a major programme. The council says it will invest around £2 billion over 20 years, with 2% of council tax revenue being set aside each year to support it. The programme includes the replacement or refurbishment of around 90 schools, investment in roads and local service points and community facilities, including Community PODs in Thurso and Dingwall.
The council's 2026-27 budget also included a 7% council tax increase, with 2% specifically linked to the investment plan. That is an important point because it means local taxpayers are not merely being asked to pay for today's services. They are also being asked to contribute towards tomorrow's capital investment.
The difficulty is that tomorrow's economy is rather harder to predict than tomorrow's council meeting.
A capital plan is not a cheque
It is easy for residents to hear "£2.1 billion investment programme" and imagine that the money is already available.
It isn't.
Large public-sector capital programmes normally depend on a mixture of council resources, borrowing, grants, contributions and the ability to maintain sufficient revenue income to support the borrowing and the services surrounding the new assets.
And that is where the wider financial environment becomes important.
Across Scottish local government, borrowing is already a major part of capital financing. The Scottish Government's latest figures show that councils expect in-year borrowing for capital investment to rise to £3.349 billion in 2026-27, while total external debt is budgeted to reach £28.793 billion.
Highland is therefore not operating in isolation.
If borrowing becomes more expensive, the cost of delivering a long-term capital programme changes.
A project which looked affordable when interest rates were lower may become more expensive to finance. A programme designed over 20 years can also face substantial changes in construction costs, wages, energy prices and the cost of materials.
The danger is not necessarily that the investment programme collapses.
It may simply take much longer to deliver.
And inflation doesn't stop when the announcement is made
This is perhaps one of the least understood aspects of long-term public investment.
A £20 million project today does not necessarily remain a £20 million project five or ten years from now.
Construction costs can rise. Energy prices can rise. Labour costs can rise. Planning requirements can change. Materials can become more expensive. Interest rates can move in either direction.
That means a council can announce a large programme today and discover several years later that the amount of work it can actually buy with the available money has fallen.
This is particularly important in the Highlands.
Building a school or repairing a road in a remote part of Scotland is not necessarily comparable with doing the same work in a densely populated urban area. Transport, logistics, labour availability and weather can all add costs.
So the £2.1 billion headline needs to be viewed as a long-term financial ambition rather than a fixed shopping list.
Then there is the taxpayer
Highland Council's 7% council tax increase for 2026-27 was already significant.
For some households, particularly those with relatively modest incomes, another increase in future years will be difficult to absorb.
That matters because the council's capital programme is not being discussed in a vacuum.
Households are already dealing with higher food prices, energy costs, mortgage or rent pressures and the general increase in the cost of living.
A council can quite reasonably argue that investment in schools, roads and infrastructure is necessary.
But residents can equally reasonably ask how much more they can afford.
There is a point at which the theoretical ability to increase council tax becomes very different from the political and economic ability to do so.
And that could become one of the biggest constraints on the Highland Investment Plan.
The council isn't the only government with a financial problem
There is another complication.
Highland Council ultimately operates within a much larger public-finance system.
The Scottish Government provides a substantial part of local government funding, while Westminster determines the overall funding available to Holyrood.
The Scottish Government's 2026-27 budget provides a real-terms increase in the local government settlement to almost £15.7 billion. That sounds reassuring, but councils are simultaneously facing growing demands on services such as education and social work.
Across Scotland, general fund net revenue expenditure is budgeted to rise to £17.254 billion in 2026-27. Education and social work alone account for around 81% of general fund net revenue expenditure.
That tells us something important.
The money available to councils is not simply a pot which can be divided between day-to-day services and capital investment.
Councils have to keep schools operating today while also trying to build the schools of tomorrow.
They have to maintain roads today while trying to improve them for the future.
They have to provide social care today while investing in buildings and infrastructure that may not produce a financial return for decades.
And Holyrood has its own pressures
This is where the Highland Council plan could encounter an uncomfortable reality.
The Scottish Government is itself having to find savings and reconsider the way public services are organised.
The Programme for Government announced in September includes major plans to restructure health boards, reduce the number of public bodies and examine changes to local government. The wider fiscal challenge has been described as potentially involving a multi-billion-pound gap later in the decade.
It would be unrealistic to assume that the Scottish Government will always be able to provide councils with whatever additional capital funding they might want.
And Westminster has its own budgetary pressures.
That creates a chain running all the way down from the UK Treasury to Holyrood and then to Highland Council.
If the money becomes tighter at the top, the effects can eventually reach the bottom.
Could the £2.1 billion plan therefore become a much slower programme?
That may be the more realistic question.
There is no reason to assume that Highland Council's investment programme will fail.
Quite the opposite. Some projects will be delivered, and some may be accelerated where funding is available and the need is particularly pressing.
But a 20-year programme is long enough for several economic cycles, several governments, several council administrations and potentially several changes in interest rates and taxation.
That makes the timetable inherently uncertain.
The council may have to prioritise.
Some projects could move forward quickly because external funding becomes available.
Others could be delayed.
Some could become more expensive.
Some may be redesigned.
And some may eventually be judged less important than they appeared when the original programme was announced.
That is not necessarily failure.
It is what happens when long-term plans collide with economic reality.
The danger is the politics of announcements
There is, however, a broader problem which applies to governments at every level.
It is very easy to announce an ambitious programme.
It is much harder to deliver it.
A new school sounds wonderful. A new road sounds wonderful. Better community facilities sound wonderful.
Nobody is likely to object to investment in their own community.
But eventually someone has to pay for it.
And that means taxpayers, council tenants, Scottish taxpayers, UK taxpayers or future generations through borrowing.
The important question is therefore not simply whether Highland Council has a £2.1 billion investment plan.
It is whether the council can maintain the revenue, borrowing capacity and external funding necessary to turn that plan into physical projects on the ground.
There is another possibility
Perhaps the most interesting outcome would not be cancellation but delay.
Instead of the Highlands seeing a spectacular wave of capital investment over the next few years, the programme could gradually become more cautious.
Projects might be spread over longer periods.
Borrowing could be staged.
Councillors might become increasingly reluctant to increase council tax simply to support investment when household budgets are already under pressure.
And if construction costs continue to rise, the £2.1 billion headline could buy less than originally anticipated.
That could leave Highland with an investment programme which remains officially worth billions but takes considerably longer to complete.
For residents, that distinction matters.
A school promised for five years from now but delivered in ten years is not quite the same thing as a school promised for five years from now.
A road improvement delayed because borrowing costs have risen is still an improvement eventually, but businesses and residents have to live with the consequences in the meantime.
The real test will be what happens when the headlines disappear
Highland Council deserves credit for thinking beyond the next annual budget.
A council that never invests simply because money is tight will eventually find itself with ageing schools, deteriorating roads and infrastructure that becomes more expensive to replace.
Investment is necessary.
But so is financial realism.
The £2.1 billion Highland Investment Plan is an ambition rather than a guarantee that £2.1 billion of work will appear on Highland roads and in Highland communities exactly when people expect it.
The next few years could provide a serious test.
Interest rates, energy costs, construction inflation, household finances, Scottish Government funding and Westminster's own budgetary pressures could all pull in the same direction.
And if they do, the issue may not be whether Highland Council's plans are good enough.
It may simply be whether the money can keep up with the ambition.
That is something worth watching closely.
Because when politicians announce billions of pounds of investment, the most important question is often not what is being promised?
It is:
Who is going to pay for it, how much will it eventually cost, and when will the promised investment actually arrive?
Perhaps voters in the Wick and East Caithness bi-lection can ask candidates for their views on this important topic that they will have to make decisions on in future.