Islands Programme capital fund 2021/22 to 2024/25: grant awards - evaluation

4 Aug 2025 12:45 PM

Main findings of an independent evaluation of the process for awarding grants in the Scottish Government Islands Programme capital funding scheme from 2021-2022 to 2024-2025.

Introduction

In January 2025, the Scottish Government Islands Team commissioned an independent evaluation of the process for awarding grants from the Islands Programme capital funding scheme. The evaluation covered the first four years of this five-year programme (2021/22 to 2024/25). This report presents findings from the evaluation and discusses the implications of these for future development of the programme.

Background

The Islands (Scotland) Act 2018 introduced measures to support the unique needs of Scotland’s islands and help create an environment for sustainable growth and empowered communities. The Act requires Scottish Ministers to develop a National Islands Plan to ‘set out the main objectives and strategy of the Scottish Ministers in relation to improving outcomes for island communities that result from, or are contributed to by, the carrying out of functions of a public nature’.

Following extensive consultation with island communities, the first National Islands Plan was published in December 2019. The plan had 13 strategic objectives which were seen by islanders as critical to improving the quality of life in island communities. A National Islands Plan Infrastructure Investment Fund – later renamed the Islands Programme – was subsequently set up as a dedicated funding stream under the Scottish Government’s Infrastructure Investment Plan (published in February 2021). The Infrastructure Investment Plan stated that the Scottish Government would:

‘…invest £30 million in delivering the National Islands Plan, supporting a range of areas, including tourism, infrastructure, innovation, energy transition and skills – informed by our learning of how island communities have responded and adapted to COVID-19. This will include specific ring-fenced funding for capital projects on islands relating to net zero and green recovery objectives, creating high quality, skilled, green jobs in some of our most remote and vulnerable communities.’

The commitment to investment in island infrastructure was reiterated in the Capital Spending Review 2021/22 to 2025/26 and in the 2021 Programme for Government. However, updated capital spending allocations for 2023/24 to 2025/26, published in May 2022, showed that the £30m originally allocated to the Islands Programme had reduced to £25.8m. This change was attributed to a reduction in the capital settlement from the UK Government’s Autumn 2021 Spending Review.

As of Spring 2025, four Islands Programme annual funding rounds have taken place, and a total of £15.2m has been invested in islands infrastructure in Scotland’s six island local authorities of Argyll and Bute, Eilean Siar, Highland, North Ayrshire, Orkney Islands and Shetland Islands. The programme has supported 70 projects on 51 islands, with grant amounts ranging from £17k to £1.68m.

In its first year (2021/22), Islands Programme funding was delivered as a direct allocation to the island local authorities. This method of disbursement was intended to expedite payments to local authorities to help island communities recover from the impacts of the Covid pandemic and related lockdowns. Local authorities then distributed the allocated money to projects that met criteria set by the Scottish Government. Projects could be delivered by local authorities or community organisations – in some cases working in partnership with other local organisations – and could involve local authority-owned, community-owned or community-leased assets.

In the following three years (2022/23 to 2024/25), Islands Programme funding was disbursed through a competitive bid process, with local authorities acting as the lead applicants for projects in their area. A competitive bid process was adopted after considering a range of alternative funding mechanisms, as this approach was seen by the Scottish Government to enable maximum alignment between national policy objectives and local expenditure. This approach also mirrored that used to disburse a range of other Scottish Government and UK capital funds, including the Regeneration Capital Grant Fund (RCGF), which local authorities were already familiar with.

While there are a number of other funding streams which focus on investment in island communities and contribute to delivery of the National Islands Plan objectives, it is important to note that the Islands Programme is the only fund explicitly dedicated to supporting the delivery of the National Islands Plan.

Why is an evaluation of the Islands Programme grant awarding process required?

The Scottish Government is aware that there are a range of views on the best (most efficient and effective) way to disburse Islands Programme funding to ensure maximum impact. These views have been expressed in communication (written and oral) with the Scottish Parliament’s Rural Affairs and Islands Committee (see Annex 1 for details) as well as in the responses to a public consultation carried out in 2023 as part of a review of the National Islands Plan.[6] Following that review, the Scottish Government is now developing a new National Islands Plan and, as part of that process, wished to carry out an evaluation of the process used for delivering Islands Programme funding to island communities.

Evaluation aims

Given the range of views noted above, the Scottish Government commissioned an independent evaluation to examine (i) the effectiveness of the Islands Programme in providing support to island communities, (ii) the role of the fund in supporting implementation of the National Islands Plan and (iii) the approaches used to date to distribute Islands Programme funding. The purpose was to gather evidence to inform the process that could be used to distribute potential funding in the future. There were several specific questions that the Scottish Government wanted the evaluation to address. Each of these related to a broader set of questions which ultimately provided the focus for the evaluation:

Note that the focus of this evaluation was on the mechanism for allocating Islands Programme funding. The evaluation did not consider the outcomes for or impacts on island communities achieved by the fund. Therefore, in examining the effectiveness of different processes used to disburse funds under the Islands Programme, the main consideration was the extent to which these processes supported the fund’s role in addressing National Islands Plan objectives.

It was not part of the scope of this evaluation to examine in any detail how other infrastructure funding programmes are delivered. However, stakeholders taking part in this evaluation often shared their views on aspects of other funding programmes and approaches that they considered worked well. These views are reported in Chapter 6.

About the report

The remainder of this report presents:

The report also contains annexes providing further detail about aspects of the Islands Programme. References to the material in these annexes are made throughout the report.

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