4th November 2026
Highland Council is making progress on a range of housing and property projects, but rising construction costs, shortages of contractors and uncertainty over future funding continue to threaten delivery.
A progress report covering the second quarter of 2026/27 is being considered by the Housing and Property Committee on 4 November. It examines five areas of the Council's three-year Delivery Plan, which runs from 2024 to 2027.
The projects range from affordable housing and community facilities to repairs, property maintenance and improving the energy efficiency of homes.
Getting local contractors involved
One of the more important developments is the proposed new Trades Framework, which is intended to improve the delivery of repairs and maintenance across Highland.
The first phase, covering the Inner Moray Firth area, has experienced some delays. Tenders closed on 28 September, with the framework now expected to be in place by January 2027.
The Council is also preparing the next phase, covering other geographical areas of Highland, with a target of Spring 2027.
However, officers recognise that rural areas present particular challenges. More engagement with local councillors and contractors is needed to encourage smaller businesses to tender and ensure that the arrangements reflect local conditions.
This is an important issue for Caithness and Sutherland. A maintenance contract covering a huge geographical area does not necessarily guarantee that local tradespeople will be available when repairs are required.
The Council wants to develop arrangements that allow tenants and users of non-domestic properties to receive a reliable local service.
Community hubs face rising costs
Plans for new Area Community Hubs are also experiencing some slippage.
The Dunvegan project on Skye has progressed through design development and is now at an advanced stage of tendering, with a final offer expected in early November.
However, construction costs remain high, with inflation and fuel costs contributing to the problem. The availability of accommodation on Skye for contractors is another consideration.
The report also identifies contractor capacity and supply-chain resilience as continuing challenges across the Highlands and Islands.
There are no immediate financial savings expected from the community hub programme, which is intended to deliver longer-term benefits.
Affordable housing: 32 homes on site
There is more encouraging news from the affordable housing programme.
The Council reports that work is progressing as planned, with 32 homes now on site in three fragile rural communities.
The Rural Key Worker Fund has also delivered six homes so far this year, with further purchases anticipated.
These are important developments because the shortage of housing in smaller communities can make it difficult for employers to recruit and retain essential workers.
However, the Council acknowledges that construction costs remain a major concern.
The increased cost of building has so far been offset by additional Scottish Government grant funding, but officers warn that this is not a sustainable long-term solution.
The Council is therefore looking at ways to reduce costs, including standard house designs, procurement frameworks and opportunities for smaller locally based contractors.
There are also continuing discussions with investors about developing additional housing. The original ambition was to attract investment with little or no public subsidy, but the Council now accepts that some public funding will be necessary to make projects financially attractive in the Highlands.
£28.38 million for warmer, more efficient homes
One of the strongest areas of progress is the Energy Efficient Homes programme.
The Council reports that £28.38 million in external funding has been secured since the Delivery Plan began. This has supported improvements to homes belonging to Council tenants as well as private homeowners and landlords.
An independent review of the Council's Energy Efficient Scotland Area Based Scheme, covering 2023 to 2025, concluded that Highland had developed an effective and innovative approach to improving energy efficiency and tackling fuel poverty.
The review also recognised the particular difficulties of delivering improvements across such a large rural area.
Older housing, properties without mains gas, shortages of skilled tradespeople and high levels of fuel poverty all add to the challenge.
The Council has secured an additional £1 million from the Scottish Government for 2026/27. A further £750,000 from SSE Renewables will be available over the next two years to help households experiencing extreme fuel poverty.
However, the report makes clear that the money secured so far represents only a proportion of what will eventually be needed to improve Highland's housing stock and meet future energy efficiency standards.
There are also delays in aligning some private-sector and social housing projects because of uncertainty over funding.
A difficult balancing act
The report illustrates the difficulties facing a council responsible for housing and property across such a large geographical area.
There are positive developments, particularly in affordable housing and energy efficiency, but the same problems appear repeatedly.
Building costs remain high, local contractor capacity is limited and the Council cannot rely indefinitely on increased government grants to make projects affordable.
For Caithness and Sutherland, the emphasis on smaller local contractors and housing in fragile rural communities is particularly relevant.
The success of these programmes will ultimately be judged not by the number of strategies, frameworks or funding announcements, but by whether homes are built, properties are improved and repairs are completed when people need them.
Highland Council has made progress, but delivering its ambitions over the next few years will require more than good planning. It will need sufficient funding, a stronger local construction workforce and a practical approach that recognises the realities of living and working in rural communities.