About the Deal

What is the Islands Growth Deal? 

The Islands Growth Deal is the latest in a series of Region and City Deals that have been funded by UK and Scottish Government. The Islands Growth Deal is a 10 year package of investment that will seek to drive economic growth and the creation of sustainable jobs across Shetland, Orkney and the Outer Hebrides.   

Orkney Cliffs

What is the value of the Islands Growth Deal?

The total value of the Islands Growth Deal is £100 million. The UK and Scottish Governments will each invest £50m over 10 years, subject to approval of full business cases for each project. The Islands Growth Deal projects are supported by a wide range of partners from across the public, private and academic sectors who together will seek to invest up to a further £293 million to deliver these projects. There is £33.3m being invested within each island group. Growth Deal funding is subject to the development of Full Business Cases.  

Why does the Deal cover Orkney, Shetland and the Outer Hebrides? How will this work? 

Proposals for a 'Growth Deal for the Islands' emerged from joint work across the three Councils on 'Our Islands Our Future Campaign', and the investment proposals were developed in tandem with much of the work around this. The three island groups share significant opportunities and challenges, which have been approached through the Islands Growth Deal by working together to combine resources, share access to the best subject matter expertise and strengthen local collaborative capacity and capabilities.  

The Islands Growth Deal programme includes three joint-island innovation-focused proposals in the areas of low carbon technologies; creative industries and wellbeing, and skills and talent attraction.  These projects will undertake activity in all three island groups and deliver benefits across all communities. Each island group has responsibility for the coordination of one of these joint programmes, creating strong island-based partnerships between business, academia and research organisations, public agencies and local communities.

The Islands Growth Deal contains a number of projects that are island-specific and focus on local opportunities and community priorities.  While the project investment will be delivered locally, many of these single island projects will deliver outcomes and learning of benefit for all the islands and the partners will seek to maximise this shared value over the period of the deal.

Who are the partners in the Islands Growth Deal?

The Islands Growth Deal was developed by Comhairle nan Eilean Siar, Orkney Islands Council and Shetland Islands Council together with their partners in the public, academic, business and community sectors.   

Key delivery partners include Highlands and Islands Enterprise, University of the Highlands and Islands, Heriot Watt University, the European Marine Energy Centre (EMEC), Historic Environment Scotland and NHS Western Isles, Orkney & Shetland, among others. 

What does the Deal seek to achieve?

The Deal aims to harness the islands’ unique assets to create world class, innovative and globally focussed industries that will help address the islands’ severe demographic challenges and strengthen the distinct and important contribution the islands make to the economic vitality and international reputation of Scotland and the United Kingdom.   Specifically, we aim to: 

  • Create up to 1,300 sustainable jobs across the three Island groups.
  • Support the islands to be among the first places in the UK to achieve net zero. 
  • Create internationally significant new port infrastructure that will play an important role in supporting Scotland and the UK to achieve net zero targets.
  • Strengthen the Islands’ place as unique ‘living laboratories’ for global innovation in low carbon technologies, wellbeing research and sustainable food production in partnership with their leading universities and research institutes.
  • Showcase the Islands’ outstanding natural environment, heritage, culture and creativity to the world.
  • Create the foundation for an innovation-focused recovery from the COVID-19 pandemic and support inclusive growth across all the Island communities.

How will the Deal be managed?

The three island councils have put in place a governance structure to manage the Deal.  The model to be adopted has already been utilised in other multi-authority Growth Deals. This has included the creation of an Islands Growth Deal Joint Committee which has elected member representation from each of the three island councils and a Programme Management Board. Representatives at Chief Executive and Director level from the three local authorities, along with a Senior Management representative from HIE, sit on the Programme Management Board.  A Programme Management Office has been put in place to manage the delivery of the Programme.  

How have the partners decided which projects to fund? 

Following a process of development within and between the three local authorities, and with the involvement of key stakeholders through workshops and other dialogue, a suite of proposals was put together and submitted to UK and Scottish Governments in November 2019. These proposals were a starting point for our discussions with the UK and Scottish Governments, which led on to the announcement of the deal quantum in Summer 2020 and the identification of the projects included in the Heads of Terms. Heads of Terms for the Islands Growth Deal were signed on 17th March 2021. It is proposed the Full Deal agreement will be signed on the 20th January 2023. Between signing Heads of Terms, and signing of the Full Deal agreement, project leads have been developing Outline Business Cases for each of the investments within the Islands Deal. 

The projects agreed with both Governments will not only support our island economies, but also the Scottish and wider UK economies. As public funding is being invested from across the UK, it has been important that it aligns with wider UK and SG policy priorities and objectives. 

What are the next steps? 

Following the Full Deal agreement being signed off in January 2023 the next steps are to develop Full Business Cases. These will come forwards as each investment is at an appropriate stage of development over the duration of the 10 year Growth Deal period. It is only once a Full Business Case has been approved by the Islands Growth Deal Joint Committee that monies can begin to be released. All proposals are subject to the endorsement of full business cases from the relevant Governments.

Subject to full business cases we would hope that funding will begin to be released to projects during financial year 2023/24. 

What is the timescale for delivery and how will projects be prioritised?

Funds for each project will be released based on the sign-off of the individual business case,  the state of readiness to proceed, and availability of funding from the Islands Growth Deal in each financial year. Relationships between interdependent projects will influence the timing as we move forward, and each Council will determine the timelines for projects in their respective areas.  

For more information, contact Anne Murray