Most landlords looking to spend a six-figure sum sprucing up their pub would likely have to take out a loan or dip into their own cash.

However, locals on a debt-ridden Scots island have had their pub refurbished at taxpayers’ expense after being given a grant of almost a quarter of a million pounds.

The Gigha Hotel has been shut for two years because it was haemorrhaging money.

But now the public has footed the bill for a £248,000 upgrade to the bar in the hope that it might turn a profit.

The hand-out is among more than £1 million of government cash lavished on community-owned Gigha last year.

Other controversial buy-out schemes in the Highlands and islands also saw their subsidies increase sharply – even as council taxpayers elsewhere are being hit with record hikes to bills while services are being axed.

Shimeon Lee, policy analyst at the Taxpayers’ Alliance campaign group, said: ‘Taxpayers will be asking why they’re footing the bill to revamp a pub that was shut for being unprofitable.

‘While council tax soars and public services are cut to the bone, the SNP’s pet projects seem to be exempt from the belt-tightening that everyone else is facing.

The Gigha Hotel and pub on the island has been given £248,000 for an upgrade 

‘Scottish ministers need to put hard-working taxpayers first rather than costly ideological missions.’

Gigha lies off the Kintyre coast and has a population of around 150.

The Isle of Gigha Heritage Trust (IGHT) community group bought out its laird for £4 million in 2002 – with the Scottish Government and National Lottery bankrolling most of the deal.

Ever since, the island has been battling debt and been reliant on public sector grants to stay afloat.

In 2022/23, the Trust received £706,000 of public money, but last year it was handed £1.07 million.

That total included almost £819,000 from the Scottish Government’s Rural Housing Fund and around £114,000 from the quango Nature Scot for a landscape restoration project.

In addition, it was promised £248,000 for the pub upgrade from the UK Government’s Community Ownership Fund, which has since been axed.

The Trust’s annual report revealed: ‘During the year, the Gigha Hotel lessee returned the property to the IGHT.

The Isle of Gigha Heritage Trust bought out its laird for £4 million in 2002

‘The [refurbishment] is part of a wider plan to upgrade the property…to ensure a sustainable and viable future for the Hotel. This has meant that the Hotel has not operated during 2023-24.’

Locals got to see the new interior during the island’s recent annual Gigha Day celebrations and the Trust is advertising for a new tenant.

Councillors in Gigha’s local authority, Argyll & Bute, are raising council tax by 9.9 per cent next week while awarding themselves a 22 per cent pay rise.

Elsewhere, the island of Eigg received £109,000 of public money in 2023/24, more than twice the £42,000 it was handed the year before.

The remote community has been propped up by the taxpayer for nearly 30 years since its own buy-out.

Neighbouring Rum was given £44,000, up from £27,000.

And the Assynt Foundation – which owns the Glencanisp and Drumrunie estates near Lochinver, Sutherland, and has cost the taxpayer £5 million so far – was handed a further £66,000, up from £39,000.

Last year, it admitted a property it had been renting out wasn’t fit for habitation, and it also took a holiday on repaying a Covid Bounceback loan, underwritten by the Treasury.

It recently unveiled a deal to lease its hunting lodge – which was refurbished out of the public purse for £1.1 million but has lain empty for years – as a hotel.

Scottish Conservative shadow rural affairs and land reform secretary Tim Eagle said: ‘These schemes sound great in theory for communities to enable them to take decisions in their best interests, but the costs cannot spiral out of control.

‘As SNP ministers push forward with more aggressive land reform measures, they need to learn from what has happened previously, and ensure that taxpayers are not getting a raw deal.

‘Scots who are being hit with the highest taxes in the United Kingdom will want SNP ministers to start justifying these costs, if the benefits are not clear to see.’

Council tax bills are set to rocket this week as town halls grapple with budget shortfalls worth millions of pounds.

Many local authorities are preparing double-digit increases, including a 15.6 per cent rise in Falkirk.

A Scottish Government spokesman said: ‘Community ownership is an investment in tackling depopulation, providing crucial facilities, and giving people more power and a stake in the land where they live and work.

‘Our support – whether funding, advice, or greater legal powers – is helping meet the different needs of communities seeking to acquire land and assets that contribute benefit those who live there.’

The UK Government said it had axed the fund that granted Gigha the pub hand-out ‘due to the challenging inheritance left by the previous government’.

IGHT was approached for comment.

This week, the 20,000 South Sleat Estate on Skye was put up for sale after its owner, the Clan Donald Lands Trust, admitted it couldn’t make it run profitably.