Council / Government to provide clarification on funding in due course amid spending review
THE NEW UK Government says it will provide clarification on funding plans in due course as it looks to undertake a spending review.
The former Conservative government previously awarded nearly £27 million to Shetland Islands Council (SIC) for a replacement Fair Isle ferry and harbour upgrades, but no construction work has started.
A government spokesperson said it understands “local areas are seeking clarification on funding” after new chancellor Rachel Reeves said the previous Conservative government had left £22 billion public spending blackhole.
This has prompted the new Labour government to seek £5.5 billion of savings this year and £8.1 billion the following year.
The UK Government confirmed in 2023 that it would award the SIC nearly £27 million to go towards a new Fair Isle ferry and harbour upgrades through the Levelling Up fund.
The overall project cost estimates had increased to £40 million to £45 million in January this year, and it has risen since.
As a result of these increased costs, the project has moved from a ro-ro ferry to a primarily load on, load off vessel with occasional ro-ro sailings.
With the government previously pledging around £27 million, the SIC would have to cover the rest of the cost.
The funding award came with a deadline of spring 2026 but development director Neil Grant previously confirmed that the council had formally requested this be extended.
A UK Government spokesperson said the spending review would conclude in spring 2025, with the new budget on 30 October confirming plans for this and next year.
SIC leader Emma Macdonald said the council had written to the UK Government on the matter and had received a similar response, with the government adding that ongoing conversations with the council would be continuing.
Meanwhile the council has confirmed that a number of interested parties attended a pre-tender market engagement event regarding the replacement ferry at the end of July.
A spokesperson said these interested parties provided “useful feedback which will be incorporated into the procurement strategy for a replacement vessel for the Fair Isle service”.
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