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Islands growth deal could trigger 1,300 new jobs for Orkney, Shetland and Outer Hebrides

Photomontage of Quanterness wind farm on Faray.
Green energy is key to the islands future. Image: Orkney Islands Council

Scotland’s outer islands are to cash in on a share of up to £393 million during the next 10 years as a slew of UK and Scottish government initiatives breathes life into 16 projects.

The Islands Growth Deal inked for Orkney, Shetland and the Outer Hebrides will release nearly £400 million, with claims up to 1,300 jobs could be created by the decade-long investment.

It comes hot on the heels of levelling up funds announced for English regions this week.

Brokered between Western Isles Council (WIC), Shetland Islands Council (SIC), Orkney Islands Council (OIC), London and Edinburgh, the finance is split into £50 million each from the Scottish and UK governments, with a further £293 million anticipated in match funding.

SaxaVord spaceport
New industries for Shetlands include SaxaVord Spaceport. Image: SaxaVord UK Spaceport/PA Wire

The Islands Growth Deal will invest in projects built around three themes of low carbon, supporting growth and future industries and thriving sustainable communities, subject to approval of full business cases.

It has been developed by the three island councils, together with public, academic, business, community and third sector partners.

The first 12 months of the 10-year programme is expected to see investment across the islands, including in University of Highlands and Islands‘ (UHI) 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.

Projects allocated funding include investment in areas to create jobs in offshore wind and decommissioning, as well as for sites of historic importance.

We recognise there are particular challenges when it comes to living on the geographical extremities of Scotland.”

Scotland Office Minister Lord Offord.

Scottish Business Minister Ivan McKee said: “This £50 million investment by the Scottish Government will help maximise the potential of industries like our islands’ food and drink, world heritage tourism, and creative and artistic talent to provide new sustainable green jobs for future generations – and build the skills to fill them locally.

“The £6.5 million investment in the Scapa Flow Future Fuels Hub will help lead the way to a low carbon future. Our £9 million investment in an ultra-deepwater quay in Shetland will enable decommissioning of oil and gas rigs, and support services for offshore wind.

“A further £8.9 million will provide new education and training, equipping our islands with the skills needed to realise these aspirations.”

Scottish Government Business Minister Ivan McKee
Scottish Business Minister Ivan McKee. Image: Sandy McCook /DC Thomson

Following the signing in OIC’s chamber, Scotland Office Minister Lord Offord of Garvel said: “There are particular challenges when it comes to living on the geographical extremities of Scotland.

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

‘Significant milestone’

OIC leader James Stockan said: “This is the first brick in the wall. The signing of this important document today in Orkney marks another significant milestone and future vision for our three island areas.

Orkney Council Leader James Stockan.
Orkney Islands Council leader James Stockan. Image: Orkney Islands Council

“If you don’t manage to get young people and families, that is not a viable position.

“Things like vertical farming, future fuels and the Centre for Net Zero – these are things of particular interest for young people.

“We have got such incredible renewable energy resource in Europe’s largest natural harbour (Scapa Flow) – it is ripe for development. It is an incredibly large space of flat water in troubled seas.”

The signing of the deal perhaps takes on extra significance in Orkney following the disappointment of last week, when the islands’ bid to become one of Scotland’s two green freeports failed in favour of those at Cromarty Firth and the Firth of Forth.

Missing out on green freeport sweetened by Scapa Flow cash

That bitter medicine has been sweetened by the award of £6.5 million in the Scapa Flow Future Fuels Hub.

Mr Stockan, said: “It is disappointing but not altogether surprising the UK and Scottish governments decided not to locate a green freeport in Orkney, given the way the bid process was structured, with scoring heavily weighted to the number of jobs that would be supported.

“However, our bid did present a unique and compelling vision of a green innovation zone for Orkney.”

Scapa Flow
Scapa Flow can be up to 200ft deep. Image: DC Thomson

WIC leader Paul Steele said: “The funding is really significant – there is potential for hundreds of jobs.

“We need job opportunities for people in the Western Isles to return or retain the population we have got and have high-skill, high-wage jobs. That applies particularly to young people.”

SIC leader Emma Macdonald noted the deal contained projects which are “island-specific” and focused on local opportunities.

Shetland Island Council leader Emma Macdonald
Shetland Islands Council leader Emma Macdonald. Image: Shetland Islands Council

Ms Macdonald added: “We need to make sure we are doing things differently and this is a real opportunity.

“We really need to look at what young people want to see in the future, whether it is working in space or new industries. We want them to have homes to fit that future – that is how you keep a sustainable island.”

Full list of projects given green investment light:

  • Islands Centre for Net Zero
  • Scapa Flow Future Fuels Hub
  • Outer Hebrides Energy Hub
  • Shetland Clean Energy Project
  • Dales Voe ultra-deepwater quay
  • Supporting Growth and Future Industries
  • Creative Islands Wellbeing
  • Outer Hebrides Destination Development
  • Orkney World Heritage Gateway
  • Orkney Vertical Farm
  • Shell-volution
  • Outer Hebrides Food and Drink Programme
  • Spaceport 1
  • Thriving Sustainable Communities

TalEntEd Islands programme

  • Orkney Research and Innovation Campus
  • Shetland Campus redevelopment
  • Outer Hebrides Campus redevelopment
  • Knab redevelopment