The report details achievements and challenges, including financial performance and ongoing efforts to strengthen leadership and accountability.
By Morag Henderson
••3 min read
AI
Generic image of a historic stone building facade with ornate architectural details, bathed in soft, cool northern light.
Historic Environment Scotland (HES) has published its Annual Report and Financial Statements for 2025-2026, detailing its performance, achievements, and ongoing efforts to address organisational challenges.
The report covers the first year of HES’s Corporate Plan 2025 - 2028, 'Heritage for All', outlining progress across five key priorities: Scotland’s heritage, skills and learning, people and places, climate action, and the organisation itself.
During the 2025-26 period, HES welcomed 4.8 million visitors to its staffed sites, generated £79.1 million in commercial income, and invested £41.3 million in the conservation and maintenance of its properties, collections, and archives. The organisation also contributed £1.052 billion to Scotland’s tourism Gross Domestic Product (GDP) and engaged 118,000 people through its learning programmes. Carbon emissions were reduced to 32% below the 2018-19 baseline.
The Annual Report acknowledges a challenging year for HES, including scrutiny of its leadership, governance, and organisational culture. It outlines the work underway in response to the Organisational and Cultural Review, published in June 2026, and efforts to enhance governance, accountability, and culture.
The Auditor General’s Section 22 report on the 2025-26 audit recognises that actions have been taken to address weaknesses in financial management and governance. However, it stresses that further work is required to fully implement improvements, emphasising the need for stable leadership and swift delivery of the organisation’s transformation programme. The auditor issued unqualified opinions on HES’s 2025-26 Annual Report and Financial Statements.
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"This report reflects a year of important achievements alongside significant organisational challenges. Those achievements reflect the expertise and commitment of our staff, but they do not diminish the concerns about governance and leadership. Our public responsibilities must be matched by the highest standards of accountability and conduct."
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"The Auditor General recognises that progress has been made, but some changes still need to be fully implemented and shown to be operating consistently. The Board has accepted all the recommendations of our independent organisational and cultural review and agreed a plan for their implementation. We are committed to delivering that plan at pace, with the resources required, clear management accountability and effective Board oversight. If we do that, HES will be well placed to fulfil its role as a leading organisation in Scotland’s culture and heritage sector."
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"Public confidence must be earned through improvements that stand up to scrutiny. The test is whether those changes become part of how HES operates every day, and whether our staff and the public can see the difference. Strengthening the organisation matters because the work we do to protect and promote Scotland’s heritage matters."
HES remained financially stable during 2025-26, with income increasing by 5% to £151.6 million, compared to £144.6 million in 2024-2025, driven by commercial growth. Spending stayed within Scottish Government budget limits. Of the 30 actions in its 2025-2026 Operating Plan, HES fully achieved 18, partially achieved nine, and did not achieve three.
The report also outlines future priorities, including organisational effectiveness, financial sustainability, long-term property management, workforce innovation, and digital transformation. Historic Environment Scotland is the lead body for Scotland’s historic environment, caring for over 300 properties of national importance.
