Islands business resilience fund: island communities impact assessment

5. Island Communities Impact Assessment

The decision to introduce a new Islands Business 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 shows that some routes have experienced exceptionally high levels of cancellations, with significant economic consequences for businesses in certain sectors on those islands.

Whilst the Scottish Government acknowledges that many islands experience some level of disruption, current financial constraints mean it is not possible – or appropriate - to provide blanket funding to all island communities.

However, the evidence clearly shows the severity of the disruption on some islands, and so the Scottish Government has established the IBRF to mitigate the impact on the worst-affected islands’ businesses.

Delivery by HIE has been identified as the most effective and immediate method, due to their existing relationships with island businesses, their on-island presence, and their experience of delivering similar grant support in similar contexts.

The IBRF has been designed to support businesses within the sectors that have been put most at risk (namely the visitor economy and perishable goods sector), on the islands that have faced the most disruption (>15% of ferry disruption, based on three-year performance data).

Positive outcomes are expected for eligible islands and sectors, but it is acknowledged that many islands will not benefit directly from the IBRF, even though they may be experiencing some (albeit lower) levels of ferry disruption.

No alternative delivery mechanisms are currently proposed, as the HIE model offers both speed and local sensitivity. However, ongoing monitoring and engagement will help us to identify whether any further interventions or adjustments are needed.

In summary, the IBRF aims to mitigate the worst impacts of ferry disruption in a fair, transparent and targeted way, while acknowledging that not all affected communities can be supported through this intervention.