Submitted by Bill Fernie
12th October 2026
The Chancellor John Healey will anounce the UK budget on 28 October 2026. Bill has dived into some places to see what would help Caithness and other rural areas.
The UK Budget Must Not Forget Rural Scotland - A Five-Point Plan for Caithness
Five points are just the tip of a huge set of probelms facing he chancellor but here we go.....
From better transport to local jobs and cheaper energy, the Chancellor could do far more to help rural communities build a sustainable future.
When the Chancellor prepares the next UK Budget, there is a strong case for looking beyond the big cities and the areas with the lowest average incomes.
For people living in Caithness and other remote parts of the Highlands, the cost of living is not just about wages, food prices and household bills. It is also about distance, limited transport choices, the availability of work and the difficulty of attracting businesses and skilled workers.
A community can have relatively respectable average incomes and still face serious disadvantages. A household without a car, for example, may find it difficult to reach work, hospital appointments or further education. A local business may face higher delivery and recruitment costs than a competitor in a large city.
The UK Government has already committed substantial sums to rural Scotland through existing investment programmes. But there is a case for a more coordinated approach, with clear objectives and funding designed around the particular challenges of remote communities.
Here are five practical measures that could make a difference.
1. Create a Rural Scotland Growth Fund
The UK Government should establish a dedicated fund for remote rural communities, including Caithness, Sutherland and other parts of the Highlands.
Rather than allocating money mainly according to average household income, the fund should also recognise remoteness, population decline, poor transport connections, recruitment difficulties and the cost of delivering services.
Funding should support projects that create sustainable employment, help small businesses expand, bring vacant commercial buildings back into use and develop new economic opportunities.
Local communities should have a meaningful role in deciding priorities, but funding should be awarded against published criteria, with transparent reporting on spending and results.
The aim should not be to subsidise businesses indefinitely. It should be to overcome the barriers that prevent viable businesses from investing and growing.
2. Treat rural transport as economic infrastructure
The proposed withdrawal of the X99 bus service between Caithness and Inverness illustrates the vulnerability of long-distance transport links. Andy Burnham PM seems to like buses so prhaps he can look at some discussion with Scottish government to help out.
For some residents, losing a service means losing more than a convenient journey. It can affect access to healthcare, employment, education and family life.
The UK Government should work with the Scottish Government and local transport authorities to establish a Rural Transport Guarantee Fund. It could support viable alternatives where commercial operators cannot sustain essential routes, including integrated bus and rail connections, demand-responsive transport and better connections between remote communities and regional centres.
The fund should require evidence of need and value for money, rather than promise that every existing route will be maintained regardless of cost.
A transport system that enables people to work, study and access essential services is an investment in the rural economy, not simply a transport expense.
3. Make the most of Scotland's energy investment
Caithness is surrounded by major energy developments, from nuclear decommissioning at Dounreay to renewable electricity and the infrastructure needed to transport power south.
These projects can generate significant construction activity, but the long-term economic benefits depend on how much work goes to local firms, how many skilled workers remain in the area and whether new businesses are attracted to the region.
The UK Government should use its influence over major infrastructure and publicly supported projects to improve local supply-chain opportunities, apprenticeships and technical training.
It should also help develop a long-term economic plan for areas where nuclear decommissioning or other major industrial activities are expected to decline.
The objective should be to turn temporary construction spending into lasting employment and a more diverse local economy.
4. Help rural businesses with energy and investment costs
Small businesses in remote areas can face a combination of high operating costs, expensive premises, limited access to finance and difficulty recruiting staff.
A targeted package could include support for energy-efficiency improvements, investment in modern equipment, digital technology and apprenticeships.
The UK Government should also examine whether existing business investment allowances and support schemes adequately serve small rural firms, rather than assuming that a scheme available nationally will necessarily be equally accessible everywhere.
Any additional support should be targeted at genuine investment and measurable improvements in productivity, not simply distributed as an unconditional subsidy.
5. Bring reliable digital connections to every community
Reliable broadband and mobile coverage are now essential for businesses, education, healthcare and everyday life.
Remote businesses should be able to sell nationally and internationally without being held back by poor connectivity. Residents should have the option of accessing more services online where that is practical, while retaining face-to-face alternatives when needed.
The UK Government should work with the Scottish Government and network providers to identify remaining gaps in rural coverage, publish clear delivery targets and ensure that the most remote communities are not continually left until last.
Better digital connections cannot replace every local service, but they can reduce some of the disadvantages imposed by distance.
How much would it cost?
A sensible starting point would be to commission a five-year Rural Scotland Growth Programme, with an illustrative budget of £250 million across remote rural Scotland.
That would amount to £50 million a year. It is a proposed figure for discussion, not an existing government commitment or a costed estimate of all the measures above.
The money could be allocated competitively to transport connections, local business investment, skills, digital infrastructure and projects that help communities develop new sources of employment. Existing programmes should be taken into account to avoid double funding.
Before committing the money, the Government should publish an assessment of need, identify which departments would contribute and set out measurable outcomes for jobs, business investment and access to services.
A fairer way to measure regional prosperity
The UK Government has argued that its existing funding decisions take account of regional differences in household income. That is a legitimate consideration, particularly where poverty is widespread.
But income alone cannot tell the whole story about rural disadvantage.
A more complete assessment would also examine the cost of reaching services, the availability of public transport, the number of local jobs, the age profile of the population and the difficulty of attracting investment.
The Highlands and Islands should not be expected to compete with major urban areas on precisely the same terms when the underlying costs and circumstances are so different.
Nor should rural communities be promised money without a convincing plan for using it effectively.
The test should be whether public spending helps people build secure lives, enables businesses to grow and gives communities a realistic economic future.
Caithness does not need a permanent subsidy for decline. It needs investment that makes decline less likely.
And then will fwllow the Scottish Governments budget - and that looks to be very tight with expectationsof soms cuts.
Swiftly after will come he Highland council budget where once again the utlook is grim due to the already announced deficits.
Not much hope here from his answe to parliamentary question
29 January 2026
The UK Government is providing targeted funding to the places in Scotland that need it most, while simultaneously delivering the largest Block Grant settlement for the Scottish Government in the whole history of devolution, which they can use to improve general funding settlements for local government services and priorities.
The Local Growth Fund is targeting five regions that contain the local authorities with the lowest Real Disposable Household Income per capita (RDHI) in Scotland, which is an established metric for measuring spatial disparities in living standards across the country. The local authorities in the Highlands and Islands had higher living standards and so did not meet the threshold for funding from this programme.
The Local Growth Fund is just one UK Government investment programme and the Highlands and Islands region is benefiting from more than £300m in other UK Government investments, including Community Regeneration Partnerships for Argyll & Bute, and the Western Isles; Local Regeneration Fund projects including the Fair Isle Ferry and Elgin Town Centre masterplan; the Inverness and Cromarty Firth Green Freeport; Pride in Place Programme funding for Elgin, Sutherland, Orkney, and Lewis; and the completion of the four regional Growth Deals.
The Scottish Government 26/27
https://www.gov.scot/publications/scottish-budget-2026-2027/