News / Island councils secure £100 million government investment deal

Photo of Buchan Alpha arriving at Dales Voe: Shetland News

AN ECONOMIC stimulus package for Shetland, Orkney and the Western Isles worth £100 million described as having the “potential to transform our island communities” has finally been confirmed.

The long-awaited and much-heralded islands growth deal was announced on Wednesday evening by the UK and Scottish governments, who both have committed £50 million to be invested in a number of key capital projects in all three island groups.

Islands council leaders, working together as part of the Our Islands, Our Future initiative, had initially hoped and campaigned for a significantly higher investment – a figure of £300 million for all three island groups had been floated early in the campaign.

However it turns out that the funding agreement for the islands represents an award of almost three-times the per capita figure based on other Scottish growth deals.

SIC leader Steven Coutts: Photo: Shetland News

Shetland Islands Council political leader Steven Coutts said he was delighted that both governments had acknowledged the specific needs of island communities.


“What we got for the islands deal is more significant than the other deals that have previously been announced, so do welcome the fact that both governments have acknowledged the additional needs in rural and island communities,” Coutts said on Wednesday.

“We presented the UK and Scottish governments with a serious and ambitious set of proposals which reflected both the scale of our economic opportunities as well as the support required to create a sustainable future for our islands.

“This deal has the potential to transform our islands.”

The specific projects and activities to be supported will be announced over coming months, the governments said.

It is known that Shetland Islands Council is keen to receive funding for projects such as the redevelopment of the Knab site, deep water decommissioning, as well as projects linked to the proposed energy hub, the plans for a space centre, as well as aquaculture developments.

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Coutts said expectations were that Shetland would get “a fair and equitable share” of the pot of money.

“There will be a process of negotiations between the local authorities and both governments to get to a ‘heads of terms’ stage at which point we will get an understanding of the specific projects that will be taken forward, and we are keen that this progresses very, very quickly,” he said.

“Obviously government also needs to be convinced of the projects we are putting forward.

“Capital project that can’t happen overnight but we are keen to have them happening sooner rather than later.”

Prime minister Boris Johnson is expected to visit Orkney on Thursday. Announcing the Islands Deal the prime minister said: “When I stood on the steps of Downing Street one year ago, I pledged to be a Prime Minister for every corner of the United Kingdom.”


“Whether you are from East Kilbride or Dumfries, Motherwell or Paisley, I promised to level up across Britain and close the opportunity gap.”

Shetland’s parliamentary representatives both welcomed Thursday’s announcement of the £100 million islands growth deal.

Orkney and Shetland MP Alistair Carmichael. Photo: Shetland News

Orkney and Shetland MP Alistair Carmichael said: “I am glad that this deal has finally been agreed at a level of funding that all sides are happy with.

“Many times in recent years I have discussed with the Scottish secretary and treasury ministers the importance of a package for the isles that was something more than a crude per head calculation.

“Having now secured a deal that it approximately three times the regular rate per head of population I am delighted that this message has got through.


“Particular congratulations should go to the councillors and officials who have worked long and hard on this. It is a testament to their efforts that we have such a robust deal today.”

Shetland MSP Beatrice Wishart added: “This islands deal has the potential to be transformational for our island communities. I look forward to speedy progress to make exciting opportunities a reality.

“The deal was needed long before Covid-19 struck to ensure sustainability of our island groups and so they can thrive well into the future.”

Announcing the Scottish Government’s commitment, cabinet secretary for transport, infrastructure and connectivity, Michael Matheson said: “The islands growth deal is the final regional growth deal to be announced and marks our commitment to invest across all of Scotland, which is something we have pushed for.

“This money will work to improve the quality of life for island communities, alongside the Scottish Government National Islands Plan we introduced to the Scottish Parliament at the end of 2019.


“It is important that all deals take account of the unprecedented economic challenges created by coronavirus and we are working with partners, to understand how best to move forward and respond to current circumstances.”

The Scottish Government has committed more than £1.8 billion has been towards city region and growth deals.

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