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UK Government signs Islands Growth Deal worth £393m

Minister Malcolm Offord signed the full deal, which includes £50m investment by UK Government, at a joint event in Orkney.

An agreement to invest £100 million in the future economic prosperity of Orkney, Shetland and the Outer Hebrides was signed today (20th January) in Orkney by UK and Scottish Government Ministers and the Council Leaders of the three island groups.

Up to 1,300 jobs and £393 million of investment is anticipated to result from the signing of the transformative Islands Growth Deal between UK Government, Scottish Government, Comhairle nan Eilean Siar, Shetland Islands Council, and Orkney Islands Council.

Over a ten-year period, the Islands Growth Deal will invest in 16 projects and programmes that capitalise on the Islands’ unique assets. These are built around three strategic themes of low carbon, supporting growth and future industries, and thriving sustainable communities, subject to approval of Full Business Cases.

Jointly funded by up to £100 million - £50 million from each of the Scottish and UK Governments - the Islands Growth Deal will attract further investment of up to £293 million in match funding.

The Deal (full document) has been developed by the three island Councils, together with public, academic, business, community and third sector partners.

The first year of the ten-year programme is anticipated to see investment across the islands, including in UHI’s campuses in Shetland and the Outer Hebrides, and the pan-island Islands Centre for Net Zero, which will be based at the Orkney Research and Innovation Campus in Stromness.

Following the signing within Orkney Islands Council’s chamber, UK Government Minister for Scotland Malcolm Offord said: 

This will not just boost local economies and create jobs, but also empower communities to get the most out of the many assets and attributes that make the islands such unique and special places to live.

This deal is packed with a broad range of high-impact projects, whether it’s leading the transition to net zero or developing ‘must-visit’ destinations such as the St Kilda trail.

The UK Government’s £50m support for the Islands deal, in addition to other levelling up investments, shows our continued commitment to the Scottish Islands.

Scottish Government Business Minister Ivan McKee said:

This Growth Deal will be a game-changing initiative for our islands – enabling sustainable economic growth and delivering new and internationally significant port infrastructure that will play an important role in achieving net zero targets.

This £50 million Scottish Government investment will support the transition to renewable energy sources – including equipping the workforce with new skills – and trial emissions reduction initiatives on islands. It will drive innovation in key space, food and drink and creative industries sectors; help develop significant tourism and cultural attractions and expand education provision.

We are determined that our islands should be attractive places to live and work and are able to maximise their contribution to Scotland’s sustainable economic transformation.

Councillor James Stockan, Leader of Orkney Islands Council, said:

The signing of this important document today in Orkney marks another significant milestone in our collaborative journey and future vision for our three island areas.

We have worked together to successfully achieve an impactful growth deal from our governments in both London and Edinburgh that will help secure a better future for us all. Not only does the agreement recognise all our unique challenges faced as island areas, but also the strength of our assets and opportunities that we offer.

Councillor Paul Steele, Leader of Comhairle nan Eilean Siar, said:

The signing of the Islands Growth Deal is both the culmination of a vision set out by the Islands Councils and the UK and Scottish Governments and the beginning of the implementation of that vision.

It is a milestone towards achieving our aims of securing 1300 jobs and £393m of investment over 10 years through the Islands Deal, using the resources of our Islands and capitalising on our natural assets and most importantly, our people.

Councillor Emma Macdonald, Leader of Shetland Islands Council, said:

The Deal contains projects which are island-specific and focus on local opportunities and priorities, as well as those which, working in partnership, will help us unlock more economic success for all our islands.  These vital projects supporting our islands’ sustainability could not have progressed without the UK Government and Scottish Government’s support and investment

Our partnership has developed as we have developed the Deal, and I look forward to seeing how it develops over the coming decade.

The UK Government’s £50 million investment will be shared across the following projects:

  • £16m for Islands Centre for Net Zero
  • £11m for Outer Hebrides Energy Hub
  • £2.6m for Creative Islands Wellbeing
  • £4m for Outer Hebrides Destination Development
  • £1m for Orkney World Heritage Gateway
  • £1m for Orkney Vertical Farm
  • £4.4m for Shell-volution
  • £1.5m for TalEntEd Islands
  • £8m for Orkney Research and Innovation Campus
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