Islands Growth deal signed for Orkney, Shetland and the Outer Hebrides will release total investment of £393 million

An agreement to invest £100 million in the future economic prosperity of Orkney, Shetland and the Outer Hebrides was signed today (20 January) in Orkney by UK and Scottish Government Ministers and the Council Leaders of the three island groups.

Up to 1,300 jobs and £393 million of investment is anticipated to result from the signing of the transformative Islands Growth Deal between UK Government, Scottish Government, Comhairle nan Eilean Siar, Shetland Islands Council, and Orkney Islands Council.

Over a ten-year period, the Islands Growth Deal will invest in 16 projects and programmes that capitalise on the Islands’ unique assets. These are built around three strategic themes of low carbon, supporting growth and future industries, and thriving sustainable communities, subject to approval of Full Business Cases.

Jointly funded by up to £100 million - £50 million from each of the Scottish and UK Governments - the Islands Growth Deal will attract further investment of up to £293 million in match funding.

The Deal has been developed by the three island Councils, together with public, academic, business, community and third sector partners.

The first year of the ten-year programme is anticipated to see investment across the islands, including in UHI’s 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.

Welcoming the news, Vicki Nairn, Interim Principal and Vice-Chancellor at UHI, said: “This is a significant milestone for the Islands Growth Deal Programme and a huge achievement for all involved. UHI is committed to having a transformational impact on the prospects of our region and to supporting our communities, public services and businesses. Initiatives like this make an important contribution to the future of our communities.

“We are excited to be working with colleagues in Comhairle nan Eilean Siar, Shetland Islands Council and Orkney Islands Council, with our key stakeholders and with UHI Outer Hebrides, Orkney College UHI and UHI Shetland to support the deal and drive forward transformational projects. This includes campus development and curriculum, research and knowledge exchange projects which will help us to deliver high-quality education and research as well attract inward investment and support employment.”

Hannah Ritchie-Muir, Principal of UHI Outer Hebrides, applauded the achievement of this significant milestone for the Islands Growth Deal, saying: "UHI Outer Hebrides has been a strong partner in the development of the vision and the project ideas that have emerged to form the Islands Growth Deal. It is thanks to the immense effort and hard work by all partners through this development phase that we have achieved this formal agreement and sign-off. We are equally committed to the delivery phase and to seeing these projects come to fruition for the benefit for our young people and our communities. Through the wider UHI partnership and our planned merger with UHI North Highland and UHI West Highland, we can offer unrivalled opportunities and excellence in learning, training and support for all students, businesses and rural communities."

Welcoming the Islands Growth deal, Lydia Rohmer, Principal Designate of UHI North, West and Hebrides, added: “This deal represents important strategic funding for the Outer Hebrides and supports our ambitions as a merged college to have a transformational impact on our rural and island communities, through our commitment to tertiary education, addressing the skills shortage, growing research and innovation, and proactively focussing on culture, tradition, and the Gaelic language. Our merged college will play a pivotal role in joining up key strategic economic developments in our merged college region, unlocking future-facing job opportunities, and supporting a new industrial revolution in our region. We look forward to working with all our Islands Deal partners to maximise all opportunities for our island communities.”  

Jane Lewis, Principal of UHI Shetland, said: “UHI Shetland looks forward to building on the Island Growth Deal for the future of Shetland and the islands, through continued collaboration with the Scottish and UK Governments, local industries, the wider UHI partnership, and other stakeholders. Today’s formal agreement and sign-off signals an exciting time for all partners, and our communities who will benefit from the developments underway. The links we have forged with renewables, green skills and the space sector highlight that Shetland has a dynamic future ahead. For UHI Shetland we are excited about the investment in the tertiary sector, particularly our campus redevelopment plans, which highlight Shetland as a vibrant destination of choice to study and live.”

Following the signing within Orkney Islands Council’s chamber, UK Government Minister for Scotland Malcolm Offord said: "This will not just boost local economies and create jobs, but also empower communities to get the most out of the many assets and attributes that make the islands such unique and special places to live.  

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

"The UK Government’s £50m support for the Islands deal, in addition to other levelling up investments, shows our continued commitment to the Scottish Islands."

Scottish Government Business Minister Ivan McKee said: “This Growth Deal will be a game-changing initiative for our islands – enabling sustainable economic growth and delivering new and internationally significant port infrastructure that will play an important role in achieving net zero targets.

“This £50 million Scottish Government investment will support the transition to renewable energy sources – including equipping the workforce with new skills – and trial emissions reduction initiatives on islands. It will drive innovation in key space, food and drink and creative industries sectors; help develop significant tourism and cultural attractions and expand education provision.

“We are determined that our islands should be attractive places to live and work and are able to maximise their contribution to Scotland’s sustainable economic transformation.”  

Councillor James Stockan, Leader of Orkney Islands Council, said: “The signing of this important document today in Orkney marks another significant milestone in our collaborative journey and future vision for our three island areas.

“We have worked together to successfully achieve an impactful growth deal from our governments in both London and Edinburgh that will help secure a better future for us all. Not only does the agreement recognise all our unique challenges faced as island areas, but also the strength of our assets and opportunities that we offer.”

Councillor Paul Steele, Leader of Comhairle nan Eilean Siar, said: “The signing of the Islands Growth Deal is both the culmination of a vision set out by the Islands Councils and the UK and Scottish Governments and the beginning of the implementation of that vision.

It is a milestone towards achieving our aims of securing 1300 jobs and £393m of investment over 10 years through the Islands Deal, using the resources of our Islands and capitalising on our natural assets and most importantly, our people.”

Councillor Emma Macdonald, Leader of Shetland Islands Council, said: “The Deal contains projects which are island-specific and focus on local opportunities and priorities, as well as those which, working in partnership, will help us unlock more economic success for all our islands.  These vital projects supporting our islands’ sustainability could not have progressed without the UK Government and Scottish Government’s support and investment

“Our partnership has developed as we have developed the Deal, and I look forward to seeing how it develops over the coming decade.”

The multi-million-pound investment will be shared across the following projects.

Leading the way to a low carbon future

  • Islands Centre for Net Zero
  • Scapa Flow Future Fuels Hub
  • Outer Hebrides Energy Hub
  • Shetland Clean Energy Project
  • Dales Voe Ultra-Deep Water 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
  • Orkney Research and Innovation Campus
  • Shetland Campus Redevelopment
  • Outer Hebrides Campus Redevelopment
  • Knab Redevelopment