Scotland's lucrative heritage at 'serious risk' of being 'squandered' as funding crashes

Heritage tourism alone generated £935 million in 2024-25. For every pound invested in the sector, more than £5 is generated back into the economy. For every pound spent on archaeology services by planning authorities, the local economy benefits by £15. Heritage funding preserves our past while safeguarding the skills needed to do that, bringing in tourism and employing 81,000 people across the country.

This is not a nice-to-have. It is one of the best-performing investments Scotland makes.

But we are at serious risk of squandering it.

To reiterate, heritage is one of the best-performing investments the Scottish Government makes, yet it has been systematically underfunded for thirty years.

The funding pot for heritage in Scotland has simply not kept pace with reality.

Historic Environment Scotland (HES), which receives funding directly from the Scottish Government, distributes around £12.4 million per year in grants to heritage organisations across Scotland. That means decisions about heritage funding are ultimately political decisions.

The funding of £12.4 million sounds substantial until you consider that in 1994, the figure was £11.3 million. Adjusted for inflation, that pot should today be worth £24.3 million. Despite costs rising, we are 50% down on where we need to be just to maintain what we have.

Last year, HES received £23 million in grant applications. They could only fund 52% of them. Viable, important work including conservation and research was turned away.

For many grants, applicants are expected to source match funding alongside any award. Apply for £50,000 and you may receive £20,000, but only if you can find the other £30,000 elsewhere.

In principle, spreading risk and broadening the funding base makes sense. In practice, the landscape for finding that match funding is desperately tight. Like all funders, the National Lottery Heritage Fund is inundated with applications from organisations scrambling to plug the same gap. In 2023-24, for example, it could only support 65% of all applications across the UK.

The Charities Aid Foundation(CAF) UK Giving Report in 2026 found that donations and donors are reducing and one in five people say they cannot afford to give to charity.

Then there is the investment picture. Many charities rely partly on investment returns to fund core work. According to Goldman Sachs Research, balanced investment portfolios have declined by around 5% since the start of the Iran conflict. For a charitable organisation like ours which relies on investment returns to fund core work, that is a significant hit, and the ongoing volatility makes meaningful financial planning challenging.

There is another hidden cost of deflationary funding that rarely makes the headlines. The headspace required to think strategically about what Scotland’s heritage needs for the next generation simply does not exist when you are running just to stand still.

This problem is made worse by how project funding works. Funders prefer to back the innovative project, the exciting new programme. What they rarely fund is the core of an organisation: its staff, infrastructure, and the institutional knowledge that makes the exciting new programme possible in the first place.

The consequences of underfunding are already visible. Multiple historic properties are closed or only partially accessible due to repair and maintenance backlogs.

The inevitable result of a sector asked to do more with less, year after year. Some organisations will not survive. This is fact, not scaremongering. When they go, they will take with them decades of accumulated specialist knowledge and community relationships. Once lost, it stays lost.

So, what needs to happen?

If Scotland is to continue to take pride in its heritage and benefit from the return on investment and effort that it has enjoyed to date, it must provide more financial support. HES, the organisation that is funded by the Scottish Government to look after our heritage, must receive additional funds, not only to improve and maintain the heritage estate, but crucially to increase and sustain the grants programme that underpins the sector which delivers on the ground throughout Scotland.

More specifically, the Scottish Government needs to increase the HES grants programme by at least £10 million per year and ring-fence that money so it reaches the sector. Then it must commit to increasing it annually in line with inflation going forward and funders need to reconsider the current match funding requirements. Additional targeted funding is necessary to support organisations to undertake the strategic long-term thinking that is required. Heritage skills and expertise in local authorities needs to be made secure and reintroduced where lost. This would allow a high-performing sector to deliver even greater returns for Scotland’seconomy and its people.

The heritage sector itself is working hard to be part of the solution. At the Society of Antiquaries of Scotland, we have responded by launching a campaign to secure a permanent home and Scotland’s first national heritage hub in Edinburgh.

This building will help us generate independent income, reduce our reliance on grant funding, and create a space where heritage organisations can collaborate, share resources and collectively do more. In an era of profound instability, the heritage hub will provide the anchor our sector needs to continue enriching communities nationwide.

Scotland’s past belongs to everyone. Keeping it alive matters to all of us.

By Dr Simon Gilmour, Director of Society of Antiquaries of Scotland