24th September 2026
Rising energy prices are a problem for households and businesses, but there is another very large energy bill that receives much less attention.
Highland Council operates one of the largest public-sector property estates in Scotland, while NHS Highland runs hospitals, health centres, clinics and other facilities across an enormous geographical area. Both organisations are major users of electricity, heating and fuel, and the cost of keeping those buildings operating will increasingly compete with spending on frontline services.
Highland Council's latest property figures give us an idea of the scale.
Its 2024/25 energy benchmarking covered more than 1,000 buildings. The Council's estate used about 57 million kWh of electricity, while recorded heat consumption was about 88.5 million kWh. The electricity bill alone was approximately £25.4 million.
The Council has a much larger property portfolio than this energy dataset suggests, with 1,145 buildings/assets identified in its latest Strategic Asset Management Plan.
What makes the figures particularly interesting is that the Council is already trying to reduce energy consumption. Its property strategy talks openly about reducing the size of the estate, changing how buildings are used and improving energy efficiency. It also has an area review programme looking at opportunities for retaining, combining or disposing of properties.
In other words, Highland Council is not simply facing a problem of using too much energy. It is facing the much harder problem of having a very large estate to heat, light and maintain while the cost of doing so remains under pressure.
A useful illustration shows the potential scale.
If the Council's roughly £25.4 million electricity expenditure increased by 10%, without any change in consumption, that alone would add about £2.5 million a year. A 20% increase would add about £5.1 million.
These are not forecasts. They simply demonstrate why relatively small percentage changes can become significant sums when applied to a large public-sector bill.
It comes at a difficult time for Highland Council
The Council is already under considerable financial pressure.
Its 2025/26 budget shows net expenditure of about £818 million, with the Council Tax requirement accounting for approximately £164 million. Government grants and other income provide much of the remainder.
Energy is therefore only one part of a much bigger financial equation. Pay, social care, transport, maintenance, borrowing costs and demand for services all compete for the same limited resources.
That means a rise in energy costs does not automatically translate into a higher Council Tax bill.
Instead, it becomes another pressure that has to be accommodated through a mixture of funding, efficiency savings, service changes, income generation, estate rationalisation and potentially Council Tax increases.
This makes the Council's property strategy increasingly important.
If a building is expensive to heat, maintain and operate but is being used less than it once was, the financial argument for sharing it with another service, moving services elsewhere or disposing of it becomes stronger.
That does not mean every building should or will close. Schools, care facilities, libraries, depots and community buildings have purposes that cannot be measured simply by their running costs.
But the energy bill becomes part of the calculation.
NHS Highland has a hidden energy cost
The position at NHS Highland is harder to quantify because its annual accounts do not publish a single figure for total energy expenditure.
That does not mean the energy requirement is small.
The Scottish Government's latest NHS sustainability report shows that NHS Highland's buildings produced about 19,000 tonnes of carbon dioxide equivalent from fossil-fuel use in 2024/25, together with around 6,000 tonnes associated with electricity.
NHS Highland is also operating across a particularly challenging geography, with hospitals and other healthcare facilities spread across the Highlands and Islands.
Unlike a household, a hospital cannot simply turn down the heating when energy prices rise. Buildings operate around the clock and contain medical equipment, laboratories, refrigeration, ventilation systems and other facilities that require continuous power.
The Scottish NHS as a whole has made substantial progress in reducing energy use, saving an estimated £181 million in energy costs since 2015/16. But the Scottish Government points out that electricity prices are considerably higher per unit than gas, while fossil-fuel heating remains widespread.
The move towards electrification could therefore create an interesting contradiction.
Switching heating and vehicles away from fossil fuels can reduce emissions and dependence on oil and gas, but it can also increase demand for electricity. NHS Scotland itself expects electricity use to rise as heating and transport are electrified.
Another pressure on already stretched budgets
This matters because NHS Highland is already under substantial financial pressure.
Audit Scotland's 2024/25 report highlighted the Board's difficult financial position and the scale of savings that it needs to achieve over the coming years. Energy is only one component of that challenge, but it is a cost that cannot simply be eliminated.
The same basic problem applies to Highland Council.
If electricity, heating oil and other energy costs rise, the organisations have three broad choices: find additional money, reduce consumption or find savings elsewhere.
In practice, it will probably be a mixture of all three.
For the Council, that could mean accelerating work to reduce the size of its property estate and making greater use of shared buildings.
For NHS Highland, it could mean investment in insulation, heating systems, renewable energy, energy management and eventually changes to the estate itself.
There is also a wider public-sector issue here.
Highland Council's Strategic Asset Management Plan explicitly says the Council needs to reduce the size and cost of its estate, while also changing behaviours around energy consumption and meeting its net-zero targets.
So rising energy prices may not appear as a separate item on next year's Council Tax bill or NHS budget.
Instead, their effect may be seen indirectly in the decisions that have to be made about buildings, services and savings.
What does this mean for Caithness?
This is particularly relevant in Caithness because public services are spread across a relatively small population and a large geographical area.
A building may look expensive on a simple cost-per-user calculation but still be essential because closing it could mean people travelling much further for a service.
That is one of the difficulties facing both the Council and NHS Highland.
Centralising services can sometimes reduce building and staffing costs, but it can increase travel costs and make services less accessible in rural communities.
Highland Council's property review programme is due to consider Caithness as part of its wider area review process. The Council has indicated that this will be linked to the developing Thurso Highland Investment Plan and wider questions about its future property estate.
That makes the energy question more than an accounting exercise.
The next few budgets will have to balance the cost of keeping buildings open against the cost, financial and social, of changing the way services are delivered.
For households, an extra few pounds on an electricity bill is immediately visible.
For a council or health board with hundreds of buildings and vehicles, the same price increase can run into millions of pounds.
And when budgets are already under pressure, every million pounds spent keeping buildings warm is a million pounds that has to be found somewhere in the overall financial equation.