Inverness Town Hall was not quite its magnificent self last week, being swathed in scaffolding and net, as if wrapped up against the summer rain.

Undaunted, entrants, judges, teachers, councillors and well-wishers gathered on Tuesday for the Neil Gunn Writing Competition prize-giving ceremony. The beautiful chandeliered hall had been cut in half by hoardings, with a makeshift stage, and speakers competed at times to be heard above the drills and hammers of workmen repairing the stonework. Despite everything, however, the mood of the occasion was in no way dampened. How could it be, with the inimitable Neil Gunn himself looking down on us from banners, lounging in a suit on a pebbly beach, as if such debonair sloth was the way writers of his ilk generally passed their time.

The Neil Gunn Trust has run this bi-annual competition since 1988, and it has to be one of the most egalitarian and far-sighted writing prizes in the country. True to the spirit of the man it honours, its aim is to encourage writers of all ages, from primary and secondary school level to those grappling with their pension pots, and all stages in between.

As the lead judge, I was involved with the two adult categories, for poetry and short stories, aided by poets Chris Powici and Rhoda Dunbar. Fellow arbiters on the short story strand were Marilyn Ferguson, one of the Trust's long-standing members, and Ann Yule, its Convenor. It was Ann's husband Kerr who in 1983 came up with the idea of erecting a Neil Gunn Monument, which now sits on the Heights of Brae, above Dingwall. Out of this venture the Trust emerged, and a few years later, in partnership with what is now Highland Council, the writing competition was established.

There are countless literary prizes in Britain, but I don't know any that is founded on such humane and generous principles. And while the educational element is open only to schools in the Highland region, the adult sections invite submissions from across the world. Added to which, there is an award to the school which submits the best standard of work, thereby acknowledging the often overlooked fact that an inspirational teacher can make the difference between someone developing a love of books and writing, or switching off, perhaps forever.

Gunn would, one feels, have approved. As Ann Yule told the audience, despite his eminence as one of the finest novelists of his day, he went out of his way to support other writers. She recounted the story of Katharine Stewart, a crofter from Abriachan above Loch Ness who, needing to make more money than the land could provide, turned to writing with his help. The result was the hugely popular A Croft In The Hills, which went into six reprints.

I was re-reading a delightful essay recently, written by the poet Alastair Reid, in which he attended a Highland Gathering in Strathpeffer, and stayed for a couple of nights with Gunn, in Kessock on the Black Isle. By then in his seventies, Gunn had been to many gatherings, and preferred to spend the day tackling the moles in his garden. But in the evening, he and others sat around regaling Reid with tales and whisky. The next day, a fellow visitor from America remarked to Reid about the unusual quality of Highland conversation: "What kills me is the crazy way they have of reassuring you about everything. You'll ask them if some place is a long walk away, and they'll say, 'Oh, it's just a wee step', and it'll turn out to be ten miles. They somehow just want you to feel good - I guess it's really that they're telling themselves that everything's all right. And, come to think of it, it is."

That warmth of outlook is embodied in the Neil Gunn Writing Competition, and was reflected in the faces of the winners, and their families. Seeing the effect such a competition can have in boosting morale and confidence is a powerful reminder of how difficult the writing life can be, and how far a bit of encouragement can go in helping a writer find their voice.

The aim is that one day these writers will reach the position Gunn described to Reid: "The trouble with us in the north is that we get carried away by our own imaginations - carried away until we ourselves believe the things we're telling." He was talking about tall tales and fantastical anecdotes, but when you think of it, that is also the essence of writing: the act of turning the make-believe into the real. It isn't essential to live in the Highlands to learn this trick but, clearly, it helps.