Stagecoach will withdraw the X99 between Caithness and Inverness after 18 October, ending a direct link used by passengers travelling to Raigmore Hospital. The decision comes as Highland Council is already expanding its own bus operation to replace withdrawn commercial services, while temporary Scottish Government fuel support for operators runs out this month. The deeper issue is built into Scotland’s bus system: commercial operators can leave routes that no longer pay, but councils retain a statutory responsibility to consider transport needs the market will not meet.
For people living in Caithness, the X99 is a long-distance bus through Thurso, Wick and the east coast of the Highlands to Inverness. It also serves Raigmore Hospital.
Stagecoach currently advertises it as the quickest public-transport connection between Thurso and Inverness, with direct journeys continuing beyond the city bus station to Raigmore, the University of the Highlands and Islands campus and Inverness Shopping Park.
That service will cease after Sunday 18 October.
Stagecoach says the withdrawal follows a sustained period of extremely low passenger numbers and expects the effect on the wider community to be limited. The company is simultaneously leaving its Wick and Thurso operation, although most of that business will continue under D&E Coaches from 19 October.
D&E is no longer an independent private operator. Highland Council acquired it in 2025 and is now using the company as part of an expanding publicly owned transport operation.
The X99 is not included in that transfer.
Its disappearance therefore exposes a boundary that runs through Scotland’s deregulated bus system: a service can have an obvious social function without generating enough passengers or revenue for a commercial operator to continue running it.
The X99 Connects Caithness Directly to Raigmore
The current timetable shows three southbound weekday journeys from Inverness Shopping Park through Raigmore Hospital and the city centre towards the north, with northbound journeys linking Caithness and Sutherland back into Inverness.
The route serves communities including Thurso, Wick, Dunbeath, Helmsdale, Brora, Golspie and Dornoch before continuing through Easter Ross towards Inverness.
Its connection with Raigmore gives the service a role beyond ordinary inter-urban travel. The hospital is NHS Highland’s main acute hospital and receives patients from a geographical area extending across the Highlands and islands.
The value of a direct hospital link does not necessarily translate into high daily passenger numbers.
A bus carrying comparatively few passengers over a long rural route can be socially useful while remaining commercially weak. Fuel, drivers, maintenance and vehicles still have to be paid for regardless of whether every seat is occupied.
That tension sits at the centre of the X99 withdrawal.
Commercial Operators Decide Whether Commercial Routes Continue
Scotland’s local bus network is still built substantially around the deregulated model introduced by the Transport Act 1985.
On commercial routes, the operator decides whether to run the service, where it goes and how frequently it operates, subject to the registration and regulatory requirements applying to local bus services.
Highland Council describes the arrangement plainly. Commercial services are run independently by bus companies; the council does not fund or manage them.
Where a commercial service does not exist, the council can instead procure a tendered service. In those cases, the authority specifies the service and pays an operator to provide it.
Across the Highlands, both systems already coexist.
Most long-distance services and many routes around Inverness and Easter Ross operate commercially. By contrast, Highland Council says most services in Wester Ross, Sutherland and Caithness are tendered, along with most routes in Skye and all ordinary local services in Badenoch and Strathspey and Lochaber apart from Citylink.
Some services are now operated directly by the council itself.
The Law Leaves the Council With the Unmet Need
Commercial withdrawal does not automatically require a council to recreate an identical route.
It does, however, activate a different part of the transport system.
Section 63 of the Transport Act 1985 places a duty on councils to secure public passenger transport services they consider appropriate where transport needs would otherwise not be met.
Transport Scotland’s current guidance specifically gives evening and weekend buses serving hospitals and major employment sites as examples of services that might require support where the commercial market will not provide them.
A council can meet that duty by subsidising an operator through a tendered contract.
Since powers under the Transport (Scotland) Act 2019 came into force, Scottish councils also have another option: they can run local bus services themselves.
The legislation reversed a restriction inherited from the deregulation settlement of the 1980s, under which most mainland councils had been prevented from directly operating ordinary local bus services.
That change is now becoming increasingly visible in the Highlands.
Highland Council Has Already Been Replacing Stagecoach Routes
The X99 is not an isolated example of Stagecoach reducing its Highland network.
At the beginning of 2025, Stagecoach withdrew its route between Inverness city centre and Ness Castle. Highland Council Buses introduced a replacement service within days.
Further Stagecoach changes followed in Inverness during 2025, including the withdrawal of city routes and reductions in parts of the network.
Highland Council subsequently introduced additional in-house services for areas left without direct connections.
In January 2026, after Stagecoach announced another group of withdrawals, the council again expanded its own network to cover affected routes from February.
A council report on the Inverness network records a continuing pattern: commercial reductions followed by intervention from the publicly operated service.
That is one reason Highland Council’s new Public Transport Strategy openly identifies a “shrinking commercial bus network” as one of the main challenges facing transport in the region.
The Council Then Bought D&E Coaches
Highland Council’s response has gone beyond creating individual replacement routes.
In January 2025 it announced plans to acquire D&E Coaches, a long-established Highland operator.
The council said the acquisition was intended partly to reduce the cost of home-to-school transport, a statutory service that had been creating significant budget pressure, and partly to reduce exposure to future contract-cost increases.
D&E subsequently moved into local-authority ownership.
That purchase created a second publicly owned operating platform alongside Highland Council Buses.
It is now being used to absorb most of Stagecoach’s Caithness operation.
From 19 October, D&E will take over Stagecoach’s Wick and Thurso business, including 26 employees, the existing fleet and depot facilities.
The transfer covers public bus work, school transport, private hire contracts and Dounreay services. Twenty drivers and six maintenance employees will transfer under TUPE arrangements without redundancy.
Highland Council describes the acquisition as part of a strategy to build a larger publicly owned network and reduce long-term transport costs.
Public Ownership Has Not Automatically Saved the X99
The transfer creates an important contrast.
Stagecoach can leave Wick and Thurso while most of its existing operation continues under a council-owned company.
The X99 will still disappear.
That indicates that ownership alone does not resolve the economics of every route.
D&E is receiving staff, vehicles, depot capacity and existing contracts from Stagecoach, but Highland Council has confirmed that it will not take on the X99 as part of the transaction.
The direct Inverness–Scrabster route therefore sits outside the bundle of services judged capable of continuing through the acquisition.
The council could still decide that a replacement is necessary under its wider transport responsibilities, but no like-for-like council-operated X99 has been announced.
The Scottish Government’s Temporary Fuel Support Ends in October
The timing adds another layer.
Bus operators across Scotland have spent much of 2026 receiving exceptional government support because of increased fuel costs.
In April, the Scottish Government provided up to £3.5 million of additional assistance, targeted particularly at smaller operators and community transport organisations.
In August it added another £2.7 million to continue the temporary support until October.
The total package was therefore worth up to £6.2 million.
When the second tranche was announced, Transport Secretary Stephen Flynn said higher fuel costs posed a risk of service reductions, fare increases and “potential network collapse”, particularly on quieter rural and semi-rural routes and among operators working on thin margins.
The exceptional fuel support ends this month unless another intervention is announced.
That does not mean all Scottish Government bus support is ending. The underlying Network Support Grant continues separately.
The distinction is important. What disappears in October is an emergency layer added because ordinary funding was judged insufficient to absorb the sudden rise in fuel costs.
The Ordinary Support System Remains
The Scottish Government continues to support bus services through the Network Support Grant, concessionary travel reimbursement and other programmes.
Network Support Grant payments are scheduled through the remainder of the 2026–27 financial year.
Concessionary schemes also reimburse operators for carrying eligible older, disabled and younger passengers.
Those mechanisms are designed to support bus operation generally rather than guarantee that every individual commercial route remains viable.
A route with low passenger numbers can therefore receive the same wider industry support environment as other services and still fail the operator’s commercial test.
When that happens, the unresolved need moves towards the council.
Highland Council Is Already Facing Rising Contract Costs
That transfer of responsibility occurs at a difficult financial point for local government.
Highland Council’s Public Transport Strategy for 2026–36 identifies rising contract costs alongside the shrinking commercial network as one of the main pressures on transport provision.
The authority is simultaneously forecasting a general budget gap of £16.3 million in 2026–27, followed by gaps of £16.2 million in 2027–28 and £14.2 million in 2028–29.
Bus contracts therefore compete for money within an authority already trying to close significant gaps across its wider services.
The statutory framework does not provide an automatic national payment every time a private operator concludes that a socially useful route is no longer profitable.
The local authority first has to determine what unmet transport need remains and how, if at all, it should be secured.
That may involve a subsidy contract, a council-run bus, community transport, demand-responsive transport, changes to another route or a decision that an identical replacement is not justified.
The Highlands Make Commercial Bus Economics Particularly Difficult
Geography intensifies the problem.
Highland Council covers more than 25,000 square kilometres, with communities separated by long distances and low population densities.
The cost of running a bus over those distances is not proportionate to the number of people available to fill it.
A route between Caithness and Inverness also involves a journey of several hours. Driver time, fuel consumption and vehicle utilisation are materially different from those of a short urban service capable of carrying several loads of passengers during the same period.
That economic structure helps explain why Highland Council already supports large parts of the rural network through contracts.
Its own published description says most ordinary bus services in Sutherland and Caithness are already tendered rather than commercial.
The X99 was one of the long-distance services remaining on the commercial side of that divide.
Healthcare Travel Exposes the Limits of a Pure Passenger-Count Test
The route’s Raigmore connection also illustrates a problem with judging public transport solely by average daily usage.
A passenger travelling for a specialist hospital appointment may use the service infrequently. The value of the trip is not represented simply by how often that passenger boards a bus.
Low-frequency medical travel can be particularly important in remote areas because alternatives may involve private-car journeys of several hours, reliance on relatives, community transport or overnight stays.
Transport Scotland’s own section 63 guidance recognises hospital access as a type of need that may justify council-supported transport where commercial services do not provide it.
That does not establish that the X99 must be replaced in its present form. It does place hospital access within the type of need local authorities are expected to assess.
The Council’s New Strategy Is Moving Away From One Delivery Model
Highland Council’s ten-year transport strategy, approved in May, appears designed for precisely this environment.
Rather than committing solely to private contracts or solely to council operation, it proposes a mixture of council-run services, externally contracted routes, community transport and demand-responsive services.
The authority says it wants contract renewals to become more phased and strategic, with greater attention to route design, passenger needs and stability.
It also wants closer working with NHS Highland to make better use of vehicles and resources.
The direction reflects a bus market that can no longer be divided neatly between profitable private services and council-funded rural routes.
Commercial operators remain central to the network, but the council is increasingly acquiring the capacity to operate services when the market withdraws.
Scotland Only Recently Restored the Right of Councils to Run Buses
The policy shift has historical roots.
The Transport Act 1985 deregulated local bus markets and largely separated councils from direct bus operation.
Municipal bus undertakings were transferred into companies and, across most of Scotland, later sold. Lothian Buses became the principal surviving example of a council-owned company from that earlier era.
The Transport (Scotland) Act 2019 created a new route back into direct local-authority operation.
Those powers commenced in 2022.
Transport Scotland described them as giving councils the ability to run bus services “in any way they see fit” within their wider statutory obligations, alongside their existing ability to subsidise private operators.
The Highlands are now becoming one of the clearest practical tests of those powers.
The Public Sector Is Becoming an Operator as Well as a Buyer
Traditionally, when Highland Council identified an unmet bus need, it could put a contract out to tender and pay an operator to provide it.
It can still do that.
But the council now owns D&E Coaches and operates Highland Council Buses itself.
That changes its position in the market.
It is no longer only commissioning services from private companies. It can compare the cost of contracting a route with the cost of providing the service through its own operation.
The council explicitly cited reducing exposure to future contract-price increases when it moved to buy D&E.
The effectiveness of that strategy will depend on operating costs, fleet investment, staffing, depot capacity and the ability to combine school, public and contract work efficiently.
It nevertheless gives Highland Council an option that Scottish mainland councils did not possess for most of the period since bus deregulation.
The X99 Is a Test of Where That New Model Stops
The withdrawal on 18 October therefore comes at an unusual point in Scotland’s bus policy.
Highland Council has acquired an operator. It has expanded its own routes. It is taking over most of Stagecoach’s Wick and Thurso operation. It has a statutory duty to consider transport needs that are not being met commercially.
Yet the X99 is still ending.
That makes the route a useful measure of what public ownership can and cannot presently absorb.
Stagecoach has made its commercial decision. D&E will preserve much of the Caithness operation. The emergency national fuel support that ministers introduced to protect vulnerable bus services reaches the end of its announced period in October. Highland Council, meanwhile, is attempting to manage a shrinking commercial network while closing a multimillion-pound general budget gap.
The next stage is now a local transport assessment rather than a commercial operating decision: what travel need remains after the X99 disappears, which passengers cannot reasonably make the same journeys another way, and whether that need justifies public funding or direct council operation.
Sources
Service X99 — Inverness to Scrabster
Stagecoach North Scotland, current October 2026
https://www.stagecoachbus.com/promos-and-offers/north-scotland/x99
Jobs secured and bus services strengthened through D&E Coaches acquisition
Highland Council, 1 October 2026
https://www.highland.gov.uk/news/article/17499/jobs-secured-and-bus-services-strengthened-through-dande-coaches-acquisition
How bus services are provided
Highland Council, updated 27 January 2026
https://www.highland.gov.uk/buses-community-transport/bus-services
Duties and powers of local transport authorities to support bus services
Transport Scotland, current 2026
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Information note: The local authority run services provision in the Transport (Scotland) Act 2019
Transport Scotland, current 2026
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Local authorities have power to run bus services
Transport Scotland, 24 June 2022
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Protecting bus services
Transport Scotland, 10 August 2026
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Network Support Grant — Payment Periods
Transport Scotland, 2026–27
https://www.transport.gov.scot/public-transport/buses/network-support-grant/network-support-grant-payment-periods/
Committee approves ambitious 10-year Public Transport Strategy
Highland Council, 28 May 2026
https://www.highland.gov.uk/news/article/17280/committee-approves-ambitious-10-year-public-transport-strategy
Council expands in-house bus network to protect key Inverness routes
Highland Council, 26 January 2026
https://www.highland.gov.uk/news/article/17018/council-expands-in-house-bus-network-to-protect-key-inverness-routes
Highland Council steps in to provide public bus service
Highland Council, 7 January 2025
https://www.highland.gov.uk/news/article/16425/highland_council_steps_in_to_provide_public_bus_service
Highland Council to acquire D&E Coaches Ltd
Highland Council, 22 January 2025
https://www.highland.gov.uk/news/article/16448/highland-council-to-acquire-dande-coaches-ltd
Budget 2026 to 2027
Highland Council, 2026
https://www.highland.gov.uk/budget
Bus Services in Inverness City — Committee Report
Highland Council, 2026
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Transport Act 1985
UK Parliament, 1985
https://www.legislation.gov.uk/ukpga/1985/67/contents
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Scottish Parliament, 2019
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