Transport / Government announces new capital funding for inter-island connectivity
THE DRAFT Scottish budget includes new capital funds for Shetland Islands Council to use on inter-island connectivity resilience – whether that be “ferries, flight or fixed links”.
The news was announced by finance secretary Shona Robison as she unveiled the Scottish Government’s draft 2025/26 budget.
Orkney Islands Council will also receive the same funding for the same purpose.
The document appears to suggest funding of £20 million is to be split between the two local authorities.
The budget document said: “This budget provides one off capital funding of £20 million for Orkney Islands Council and Shetland Islands Council to enable them to sustain and improve inter‑island connectivity in the way that best meets local needs, whether ferries, flight or fixed links such as tunnels and bridges.”
Shetland Islands Council leader Emma Macdonald said the local authority had asked the government for capital money to increase resilience.
“We have worked with the government to explain and explore what that need is, but we obviously don’t have the details yet about the capital payment,” she said.
“But it’s very much welcomed that it has been mentioned in this budget statement.
“The details will come over the next few days but I’m glad that my engagement with the government has allowed them to see the need for this and to demonstrate that they are keen to find shared solutions to our connectivity challenges.”
She added that councillors will consider how the money will be used once more details are provided.
“It’s obviously not something I can suggest how it will be spent at this time but I’m sure it will be welcomed by members,” Macdonald said.
“We know that funding the entirety of our transport connectivity is not affordable or realistic by the Scottish Government, but this is a really positive start that they recognise they have a role to play in supporting our island communities.”
SIC chief executive Maggie Sandison recently said she believed the local authority needed one new ferry “at least” to improve resilience.
It comes as consultants continue to examine Shetland’s inter-island transport network on behalf of the council, which will take into account tunnels as possible ferry replacements.
Robison also confirmed that island councils would continue to receive funds for the operation of their ferry services.
Macdonald said this revenue funding the SIC has received from the government over recent years has been “absolutely transformational” and said the new additional capital element will “allow us to consider some resilience options”.
“The revenue costs are significant, and the ability to influence change in the [Scottish Government’s Shetland] ferry replacement taskforce has been worthwhile,” she added.
Liberal Democrat leader Alex Cole-Hamilton said he welcomed the funding for “ferries and tunnels”.
But he said regarding the overall budget, the “devil will be in the detail”.
Commenting, Highlands and Islands SNP MSP Emma Roddick said: “This crucial funding will support ferries, flights, and tunnels, ensuring that island communities can thrive. From discussions with folk in the isles, I know this investment will bring significant benefits.
“Throughout this budget, it is clear that the Scottish Government has listened to the voices of island communities and taken action.”
The budget is only in its draft form, with MSPs set to vote on it in February.
However, the SNP has a minority government and needs the support of other MSPs to pass the budget.
The budget document also said it “continues the enhanced £4 million of funding for the differential cost of operating services on islands, in lieu of a formal review of the special islands needs allowance, for the six councils which benefitted from that funding in 2024/25”.
Previously announced funding for a new Brae High School also got a mention.
Robison further confirmed a U-turn on cuts to the government’s affordable housing budget – something which had caused great concern at recent council meetings.
She said it would mean spending would return a higher level than it was two years ago.
The government would provide £768 million for affordable homes, “enabling over 8,000 new properties for social rent, mid-market rent and low-cost home ownership to be built this coming year”.
Robison also confirmed a “record” funding settlement for councils in Scotland of more than £15 billion.
And there there is a record £21 billion earmarked for health and social care in Scotland.
Figures appear to show an increase in the NHS Shetland budget from £62.4 million to £74.8 million.
The budget also mentions an investment of more than £6 million in the government’s National Islands Plan.
It also includes a fund specifically “targeting rural and island communities where there is a shortage of viable” electric vehicle charging points.
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