Island Resilience Fund 2026-27: Island Communities Impact Assessment

5. Island Communities Impact Assessment

The decision to introduce an Islands Resilience Fund is, in itself, a mitigation for the adverse and disproportionate impacts that ferry disruption is having on some islands and some sectors. The evidence gathered through previous funding rounds, independent evaluation and stakeholder engagement demonstrates that ferry disruption has had disproportionately greater impacts on many island communities than on mainland communities due to their reliance on ferry services for connectivity, trade, employment and access to services.

The Fund is therefore intended as a targeted intervention to mitigate some of these impacts and support the resilience of island businesses, organisations and communities.

Positive impacts

The Fund is expected to have a number of positive impacts for eligible island communities.

Firstly, it will provide direct financial support to businesses and organisations experiencing ongoing disruption arising from reduced ferry reliability and capacity constraints. This will help organisations manage increased operating costs, maintain trading activity and improve resilience during periods of continued uncertainty.

Secondly, the Fund is expected to support employment within island communities. Many island businesses operate within small and fragile labour markets where the loss of even a small number of jobs can have wider consequences for community sustainability. By helping organisations remain viable, the Fund is expected to contribute towards maintaining local employment opportunities and retaining economic activity within island communities.

Thirdly, stakeholder engagement highlighted the extent to which local businesses, community organisations and social enterprises contribute to wider community resilience. In many islands these organisations provide essential services, support community facilities and sustain local supply chains. As a result, support provided through the Fund is expected to generate benefits beyond the individual organisations receiving assistance.

The Fund also incorporates a number of changes intended to better reflect the realities of island economies. These include:

• clarification that fish catching and aquaculture businesses are eligible for support;
• extension of eligibility to include hauliers transporting goods and livestock;
• recognition of portfolio livelihoods by allowing eligible turnover from multiple activities to be aggregated; and
• reduced turnover thresholds for volunteer-led organisations.

These changes respond directly to issues identified through stakeholder engagement and are expected to improve access to support for organisations that may previously have been excluded despite experiencing significant impacts from ferry disruption.

Differential impacts between island communities

The evidence demonstrates that ferry disruption has not affected all island communities equally.

Some islands have experienced sustained levels of cancellation over a number of years, while others have experienced significant capacity constraints, timetable reductions or wider operational disruption. More recent evidence also identifies increasing disruption affecting Harris and Scalpay.

The Fund therefore adopts a targeted approach, focusing support on those communities where evidence suggests impacts have been most significant. This means that some island communities will be eligible for support while others will not.

Whilst this creates a differential impact between island communities, this approach is considered justified as it is based on available evidence, stakeholder feedback and the need to target limited resources where they are likely to have the greatest impact.

Potential negative impacts

The Scottish Government recognises that some businesses, organisations and communities affected by transport disruption will not be eligible for support through this Fund.

Stakeholder engagement identified a number of communities and sectors that believe they have been adversely affected by ferry disruption but may fall outside the scope of the Fund. This includes some mainland port communities and island areas not covered by the eligibility criteria.

There is therefore a risk that some organisations perceive the Fund as unfair or insufficiently broad in scope.

Similarly, whilst the Fund can provide short-term support, it cannot address the underlying causes of ferry disruption. Stakeholders consistently highlighted that reliable transport infrastructure remains fundamental to long-term island resilience.