No more cash for Islands Deal, UK and Scottish Governments say

The UK and Scottish governments say there is no extra funding available for the delivery of the £100m Islands Deal – after worries from the three island councils about the resources needed for project management.

The two governments instead encouraged exploring what support might be available from Islands Deal partners such as Highlands and Islands Enterprise or looking into any wider UK or Scottish government funds.

But the governments have confirmed they would be happy to discuss any ways the deal’s administration can be streamlined.

The Islands Growth Deal, formally signed in January, will see the UK and Scottish governments commit a total of £100m over ten years.

This money will be used to support a range of projects in Shetland, Orkney and the Western Isles designed to stimulate economic growth – with significant match funding expected to come on top from other parties.

Local projects include the redevelopment of the former Anderson High School site, investment in the UHI Shetland campus and an ultra-deep water port at the Dales Voe decommissioning site.

The three island councils are tasked with managing the delivery of the programme, but warnings have been made about the level of resources – both financially and in staffing – they have to do this.

The chief executive of the Western Isles Council Malcolm Burr wrote a letter to both governments about resourcing when it came to programme delivery.

He wrote: “Comhairle nan Eilean Siar, Orkney Islands Council and Shetland Islands Council are the three smallest local authorities in Scotland, and face significant financial pressures and budgetary constraints.

“We have worked very effectively thus far within these resource constraints to progress the Islands Deal.

“In addition to allocating specific funding towards a Programme Management Office, there has been significant allocation of staff time from within our respective executive, economic development, legal, finance and communications functions, which will continue through the implementation phase of the Islands Deal.

“Our Deal reflects our island communities and economies, which has inevitably resulted in a large number of ‘small’ projects involving multiple partners, compared to larger and arguably more straightforward capital projects in other Scottish Growth Deals.

“In working with you to deliver the Islands Deal, we would ask that these unique aspects of the Islands Deal be recognised and reflected in a pragmatic and proportionate approach that seeks to streamline the administration associated with programme delivery.

“In parallel with this, we would be interested in exploring any options for enhanced resources for the effective delivery of the Islands Growth Deal with representatives of the UK and Scottish Government.”

In response, representatives from the UK and Scottish governments wrote back to confirm there would be no extra funding outside the £100 million for the project delivery.

But they said the level of project management resource, and the workload, is a risk, and accepted that the island authorities have “unique challenges”.

They wrote: “Along with identifying the scope for enhanced support that might be available from Orkney and Shetland, we would encourage exploring what support might be available from your various Island Deal partners, such as Highlands and Islands Enterprise.

“With regards to wider match-funding for the Deal, we would also encourage you to look at wider Scottish or UK Government funds, and would be happy to support applications to them where appropriate.”

Regarding streamlining administration, they said they would be happy to discuss this “subject, of course, to adequate assurance being in place on the governance arrangements of each constituent part of the deal”.

The communication was noted at a meeting of the Islands Growth Deal joint committee this morning (Friday).