Cairngorm funicular railway

The Committee acknowledges there are overly complex governance arrangements in place. Cairngorm Mountain (Scotland) Ltd (CMSL) took over responsibility for the funicular in 2018, and the Committee notes that for most of this time the funicular has not been operational. We consider the governance arrangements should be simplified and be made more transparent.

The Committee therefore recommends Highlands and Islands Enterprise (HIE) should continue to monitor the ongoing effectiveness of CMSL’s governance arrangements and review these within two years. It is also vital that the Scottish Government has oversight of the governance arrangements, as well as assuring itself that HIE’s financial management controls are appropriate to safeguard public funds and conform to the requirements both of propriety and of good financial management in accordance with the Framework Agreement between the Scottish Government and HIE.

The Committee notes that one of the areas that was raised in the 2020 section 23 audit report was the opportunity for Highlands and Islands Enterprise (HIE) to learn and consider the best way to provide transparency and openness into how future decisions are made in light of the choices available.

Whilst we acknowledge that HIE has made progress in relation to its engagement with local stakeholders, we also note there is a sense of frustration amongst some stakeholders around the level of information available to take a judgement on HIE’s decision-making for the future of the funicular. The Committee therefore considers there is significant room for improvement, particularly in view of the highly redacted board minutes. HIE should ensure it is sharing information about the funicular proactively and in a timely manner on its website, so the public has less need to rely on Freedom of Information requests. This would lead to greater accountability on the use of public money.

The Auditor General’s section 23 report recommended Highlands and Islands Enterprise (HIE) should “fully consider the options available before deciding on a new operating model for Cairngorm Mountain and draw on lessons learned from the problems encountered by the two previous external operators”. We note that independent consultants were used at that time to appraise the business case, including the options for the funicular railway.

The Infrastructure Delivery Pipeline (IDP) sets out the infrastructure projects and programmes the Scottish Government will fund over the next four financial years. The Committee notes that the Cairngorm funicular railway does not feature in the 2026 IDP. The Committee therefore asks for information from the Scottish Government on its plans for the funicular, given the project does not appear to be included in the Scottish Government's infrastructure funding priorities for the next four years.

We also note that the Scottish Government is working on improving the transparency of infrastructure projects. The Committee seeks improved transparency on major capital projects taken forward by Scottish Government funded public bodies, such as Highlands and Islands Enterprise (HIE) in relation to the Cairngorm Funicular Railway. The Committee therefore asks that such projects are included in future Major Capital Updates provided by the Scottish Government and in its future IDPs.

As the owner and custodian of the Cairngorm Mountain Estate, HIE has responsibility for the costs of removal of equipment and reinstatement of the funicular railway and associated buildings to a natural condition. According to HIE’s most recent 2024/25 annual report and accounts, the liability for the funicular railway would arise where a permanent discontinuance of operation occurs, and alternative operation is not secured within three years.

The Committee raises these points as it will be of importance to our successor Committee when the funicular comes to the end of its lifespan, whether this is in 30-years (2050) as projected in the 2020 business case or earlier, so any liability or investment at that time can be monitored in relation to the decision-making that has been taken. The Committee will include a reference to this point in its Legacy Paper.

Given the reliance on public sector funding and the funicular’s history of structural issues, the Committee has some concerns that the costs of regular monitoring and maintenance may become disproportionate to its benefit over the projected 30-year lifespan of the funicular railway.

The Committee recommends the Scottish Government closely monitors HIE and Cairngorm Mountain (Scotland) Ltd to ensure the effective use of public funds. Therefore, the Committee asks the Scottish Government to set out a detailed plan including review dates where updated cost estimates for the project can be considered to ensure continuing value for money.

From the evidence we gathered there appears to be a clear vision for the year-round diversification of the mountain to future-proof it. As this is a national asset, it will be crucial to take the local community wider conservation and nature organisations’ views into account. The Committee recommends that Cairngorm Mountain (Scotland) Ltd continues to engage with the local community and expert groups and does so in a transparent way, particularly when it is reviewing its masterplan.

The Committee believes that there would be merit in the Auditor General and Audit Scotland undertaking further audit work in relation to the funicular. We therefore ask the Auditor General for Scotland to give consideration to this suggestion as part of his future work programme.

The Committee also intends to draw this report to the attention of its successor Committee through its legacy paper.