Addressing Depopulation And Economic Challenges In Sutherland

19th January 2026

Sutherland is one of Scotland's most sparsely populated counties, with communities experiencing population decline, an aging demographic, and outmigration of young people.

The rise of tourism, particularly the North Coast 500 (NC500), has boosted visitor numbers but also intensified housing affordability problems, as older investors purchase properties for Airbnb and holiday lets. Employment levels have risen overall, but growth is concentrated in seasonal, low-paid sectors, leaving structural weaknesses in the local economy.

Scottish Government Strategies
Addressing Depopulation Fund (2024/25): £60,000 awarded to Highland Council to support local-led research, initiatives, and community projects in North West Sutherland.

National Population Strategy: Recognises depopulation as a national challenge, with projections showing Scotland’s population will begin to fall from 2033. Sutherland is identified as a priority area.

Short-term Let Licensing Scheme (2024): Introduced to regulate Airbnb and holiday lets, aiming to balance tourism benefits with housing needs.

Housing Policy: Support for community-led housing projects, including developments ring-fenced for local residents in villages such as Scourie.

Economic Diversification: Investment in renewable energy and digital infrastructure to create sustainable, year-round jobs.

Highland Council Initiatives
NW2045 Vision: A long-term community-led strategy to strengthen resilience, attract families, and sustain services in North West Sutherland.

Community Empowerment: Funding directed to grassroots projects designed by local residents to address depopulation.

Housing Developments: Council-backed projects to ensure affordable homes for locals, countering the impact of second homes and holiday lets.

Employment Support: Collaboration with local businesses to expand apprenticeships and training opportunities, particularly in care and renewable energy sectors.

Risks and Trade-offs
Tourism vs Housing: While NC500 tourism boosts the economy, it inflates property prices and reduces housing availability for locals.

Funding Scale: The £60,000 allocation is modest compared to the scale of depopulation challenges.

Job Quality: Employment growth is concentrated in low-wage, seasonal sectors, limiting long-term retention of young people.

Infrastructure Gaps: Transport, healthcare, and broadband remain underdeveloped, discouraging settlement.

Recommendations for Improvement
Expand Affordable Housing: Increase investment in locals-only housing projects and strengthen restrictions on second homes.

Diversify Employment: Promote renewable energy, digital industries, and sustainable agriculture to create stable, skilled jobs.

Invest in Infrastructure: Improve transport links, broadband, and healthcare facilities to make rural living viable.

Youth Retention Policies: Develop apprenticeships, remote work hubs, and incentives for graduates to return to Sutherland.

Tourism Reinvestment: Ensure NC500 revenues are reinvested into housing, services, and infrastructure to balance visitor impact with community needs.

Sutherland’s challenges reflect wider rural issues in Scotland: depopulation, housing affordability, and uneven employment growth. Current government strategies — the Depopulation Fund, NW2045 vision, and short-term let licensing scheme — provide important foundations, but require scaling up and integration into a comprehensive long-term plan. By prioritising housing, diversifying the economy, and investing in infrastructure, Sutherland can move towards a sustainable future where young people see the county as a place to build their lives rather than leave.