National Islands Plan Annual Report 2025

Sustainable Economic Development

Strategic Objective 2 – Improve and promote sustainable economic development.

Commitment 2.1 Identify key actions to drive inclusive and sustainable economic growth on islands such as community-run businesses, e-commerce and digitally enabled island-based businesses.

In line with the ambitions set out in the National Islands Plan and the National Strategy for Economic Transformation (NSET), the Scottish Government continues to work with development agencies, local authorities and delivery partners to stimulate sustainable economic development among island communities. In particular, Highlands and Islands Enterprise (HIE) continues to offer support and advice to island-based businesses, driving employment and innovation.

Growing the digital economy and supporting data-driven business is one of HIE’s key priorities. The new Digital and Technology Adoption (DaTA) Programme 2025-30 commenced in June 2025 and has since supported two island-based businesses by providing digital specialist advice and awarding a capital grant for ambitious digital transformation projects.

In addition, HIE’s Artificial Intelligence (AI) Readiness Programme has supported five island-based organisations in implementing AI in their business models.

HIE is a partner of the National AI Adoption Programme, which is funded by the Scottish Government. Through this, HIE has supported five island-based businesses to access AI mentoring. Moreover, HIE is supporting nine island-based businesses to adopt AI in their organisation through an AI Voucher of up to £1,500. In addition, HIE delivered workshops through a Rural AI Roadshow in January 2026 which was attended by three island-based businesses.

Through its Innovation Programme, HIE organised a series of AI in Action: Driving Business Growth workshops in Stornoway, Kirkwall and Lerwick. These attracted a combined total of 40 participants, with eight island-based organisations receiving innovation funding totalling £152,000.

Commitment 2.2 Explore how best to ensure the needs of islands are met within emerging regional economic partnerships including the Convention of the Highlands and Islands (COHI).

Convention of the Highlands and Islands

The Convention of the Highlands and Islands (CoHI) continues to meet twice a year to strengthen alignment between the Scottish Government and member organisations to support the local economy and communities. The latest Convention was held on 3 November 2025 in Arran, bringing an island focus to some of the wider strategic issues and opportunities in the region.

The discussion focused on Community Wealth Building, integrated health and social care staffing, skills provision (Workforce North), the new National Islands Plan and digital connectivity. One of the key actions agreed at the CoHI meeting on Arran was the importance of increasing island communities’ involvement in future Conventions.

Transcripts of the Conventions are available on a dedicated Scottish Government webpage.

Regional Economic Partnerships

In November 2025, the First Minister announced the intention to introduce enabling legislation in the next Parliament to enable regional groupings to seek formal legal status as a “Regional Partnership”. This will allow them to unlock new powers, and design delivery models tailored to local priorities.

The proposed model will be flexible, with Partnerships able to operate at their selected level. Each level will have increasing powers and responsibilities. There will be nothing to compel areas to join or form these partnerships. We intend to develop these plans in consultation with COSLA, regional partners such as HIE and CoHI, as well as other interested stakeholders to seek views on the range and scope of powers that this designation should afford.

Workforce North – Supporting Island Communities

The Workforce North initiative is led by Skills Development Scotland (SDS) in partnership with HIE, local authorities, and industry partners and aims to support employers across the Highlands and islands by strengthening current and future workforce pipelines through the delivery of Foundation, Modern, and Graduate Apprenticeships. This long-term approach is designed to underpin major structural investment planned for the region over the next 15 years. In October 2025, the Deputy First Minister announced the creation of the £2 million Workforce North Co-Investment Fund, which is intended to leverage additional private-sector contributions to help grow and expand the regional workforce.

Workforce North was established in response to the significant opportunities arising from major renewable energy infrastructure investment across Scotland’s Highlands and islands. The initiative aims to create up to 16,000 new jobs and deliver long-term benefits for these communities. Island-focused engagement has been central to this work and has included hosting Workforce Summits to bring public and private partners together in order to identify priority actions and co-investment opportunities which will address labour and skills shortages. Additionally, Localised Skills Solutions have supported targeted outreach in schools and communities, raising awareness of opportunities in growth sectors and enhancing apprenticeship delivery in priority areas.

In the 2025–26 Programme for Government, the First Minister reaffirmed our commitment to establishing a new Scottish Government-led approach to national skills planning, alongside strengthened regional skills planning. The goal is to ensure post-school provision becomes more responsive to Scotland’s strategic skills needs and priorities. This new approach will enhance understanding of skills requirements, at both national and regional levels, and clarify how these can be met within the education and skills system.

Commitment 2.3 Tailor business and community support for island communities to ensure products and services are fit for purpose, accessible and effective. This will include exploring new and innovative models and working with national providers to consider how programmes can better address needs of island communities and businesses.

Community Wealth Building

The Community Wealth Building (Scotland) Bill was passed by the Scottish Parliament in February 2026. Once it comes into force, the Bill will place duties on the Scottish Ministers, local authorities and relevant public bodies to embed CWB as a core element of economic development through the mandatory preparation of a Ministerial CWB Statement and local CWB action plans. Na h-Eileanan Siar and North Ayrshire – with a focus on Arran and Cumbrae – were among the local authority areas whose expertise contributed to the development of the Bill.

Commercial Property

HIE continues to invest in commercial property across the islands to drive economic growth and innovation. New delivery approaches have been developed, including direct capital-funded projects and grant-, or loan-assisted initiatives, ensuring a supply of suitable commercial premises in island locations. HIE has also maintained its own programme of developing small business units using capital funding, which has contributed to job creation and job retention within island communities. Over the course of 2025-26, HIE has continued to invest in and deliver property projects on Scottish islands, including:

• A £3.1 million investment in three terraces of small business units within Broadford Industrial Estate, Skye, with the first terrace of 8 units completed in 2025. Currently, two units are occupied, and five further units are in lease discussions with occupation planned for early 2026.
• A £2.1 million investment in developing a second phase of small business units at Eabhal Business Park, Benbecula. The second phase of seven units is due for completion at the end of February 2026, with six of the units pre-let.
• Continued investment in the Arnish Point Industrial Estate near Stornoway. This has included appointing a design team to support the next phase of proposed expansion to the Estate. A planning strategy for the delivery of the next phase of works is under development with the first planning application due to be submitted in the first quarter of 2026.
• Support for the design and consenting for a further phase of expansion of the Orkney Research and Innovation Campus (ORIC) in Stromness, with the latest planning application submitted for consideration during the first quarter of 2026.

Community Assets

HIE has awarded £147,062 to four island community bodies in 2025-26. Each of these projects was progressed under our Strategic Priority of “Place” with funding enabling community bodies to explore and develop ownership aspirations in an informed and supported manner. It also enables applicants to take ownership of assets, helping to deliver against local needs and creating more sustainable local communities.

Island	Organisation	Funding award	Description of project
Muckle Roe	Muckle Roe Public Hall	£3,382	Support to facilitate a visit by members of the Galson Estate Trust (Lewis) to share knowledge and experience to the Muckle Roe community explore the potential purchase of their island.
Skye	Broadford and Strath Community Company	£55,080	Purchase of Broadford North Wood and a development site at the edge of Broadford Industrial Estate (HIE-owned), for timber harvesting, amenity use and improved access to existing community-owned land.
Skye	Dunvegan Community Trust	£85,000	Purchase of Orbost farmhouse and amenity land (HIE-owned) for affordable housing, new woodland crofts and amenity space.
Skye	Elgol and Strathaird Development Trust	£3,600	Funding for mapping work to support a Community Right to Buy application to register an interest in land.

Scottish Land Fund

HIE has supported the delivery of the Scottish Land Fund with £790,922 being invested in the following asset acquisition projects:

Island	Organisation	Funding award	Description of project
Mainland Shetland	Sandness Community Development Group	£12,045	Purchase of pier for community use.
Rousay, Egilsay and Wyre	Rousay, Egilsay and Wyre Development Trust	£198,658	Land purchase for onshore marine facilities.
Egilsay	Egilsay Community Association	£56,858	Purchase of school and schoolhouse which they currently lease.
Skye	Solas Eige	£92,703	Purchase of church for community space.
Skye	Dunvegan Community Trust	£208,469	Purchase of Orbost farmhouse and amenity land for affordable housing, new woodland crofts and amenity space.
Skye	Broadford and Strath Community Company	£29,620	Purchase Broadford North Wood for amenity use and improved access to existing community-owned land.
Bute	Bute Community Land Company	£120,500	Purchase of Bute Winter Gardens to continue operation as a cinema and events space.
Islay	Islay Development Initiative	£72,069	Purchase retail building to relocate their post office, zero-waste refillery and community fridge and continue to provide tourism services.

Commitment 2.4 Work in partnership to support strategic projects which deliver sustainable economic growth in the islands, e.g. Outer Hebrides Destination Development and Stornoway port developments.

Stornoway Port

The Stornoway Port development is operational with the new linkspan due for delivery in early 2026. This will conclude the Deep Water Terminal phase of development. The next phase, Deep Water South, is currently in development with site investigation works and detailed design underway funded by the Scottish Government’s Offshore Wind Investment Programme through HIE.

The Port is also leading a partnership project to deliver a fully dual tracked road at Arnish to support the offshore wind, energy and manufacturing sectors. This is a partnership between Stornoway Port, SSEN and HIE with a third of the funding coming from the Offshore Wind Investment Programme.

Orkney and Shetland

The Scottish Government continues to invest in enabling port infrastructure, including investing up to £500 million over five years to support the infrastructure and manufacturing facilities that are critical to growing the offshore wind sector. We have also provided £5 million for the Scapa Deep Water Quay and over £1.1 million for the Ultra Deep Water Quay at Lerwick Harbour.

We are also maintaining support for the delivery of community-led, island specific resilience initiatives with through schemes such as the Scottish Government’s Islands Programme and Carbon Neutral Islands Project.

Commitment 2.5 Drive the many socio-economic opportunities arising from the 2019 Science and Innovation Audit report ‘Maximising Opportunities for the Marine Economy in the Highlands and Islands’ as well as enhance those arising from growth deals.

Islands Growth Deal

The £4.4 million Shell-volution project is a multi-phase initiative that runs until 2032-33 and is aimed at advancing new, sustainable ways to farm mussels in the marine environment.

The phased programmes of research and development started delivery in April 2025 with formal governance structures in place. A Project Board, chaired by the University of Highlands and Islands (UHI), oversees project activities aligned with the aspirations of the business plan. UHI appointed a project director and project officer who are both based in Shetland. The first year has focused on security of spat supply, with interactive mapping of spat recruitment in Shetland, spat modelling and forecasting. It is anticipated that these projects will inform year two projects which will aim to optimise spat collection, improve yield through retubing strategies, and launch a hackathon to explore methods to monitor growth.

The Shell-volution project is designed as an innovative technical programme aimed at enabling future growth in the low carbon and sustainable mussel farming sector in Shetland and eventually, throughout Scotland. This initiative focuses on enhancing output and efficiencies while promoting and maintaining employment opportunities. It will achieve its aims through significant investment in research and development, increasing the productivity and resilience of existing farm sites and developing new locations. Island Growth Deal partners anticipate that employment, supported by the sector, will broadly double as a result of this investment. Consumer markets are considered to have capacity to absorb this gradual increase in production and mussel processors in Scotland will also benefit from the sustainable growth in farmed production.

Inshore Fisheries Management and Coastal Communities

Following the 2024 review of our Regional Inshore Fisheries Groups (RIFG) network, the Scottish Government has worked with stakeholders to improve the effectiveness of this structure, ensuring it is fully engaged with the challenges faced by Scottish inshore fishing businesses.

In May 2025, we reinstated a second year of interim measures for inshore fisheries improvement which includes:

• prohibition on landing of egg-bearing lobster into Scotland;
• and controls on creel fishing within six nautical miles of Scotland’s coast by certain vessels, based on size and fishing effort.

These measures were reviewed following a comprehensive period of engagement in 2024 and 2025 with our National Inshore Fisheries Management and Conservation (FMAC) Group to ensure maximum stakeholder engagement. The measures were the first phase in our ongoing Inshore Fisheries Management Improvement (IFMI) Programme. As committed in the 2025-26 Programme for Government, we will develop a framework for agile, regionalised management of inshore fisheries to meet the needs of our marine environment and fishers, based on best available science.

In addition, we published the analysis of responses to our Call for Evidence in June 2025 which sought views to support delivery of IFMI. We are now considering this evidence and intend to consult on proposals for a framework to underpin this Programme in Q1 2026.

Seafood Trade

Scotland produces world-class, nutritious and low carbon seafood products which are enjoyed worldwide. In 2025-26, the Scottish Government’s Marine Fund Scotland has awarded £900,000 to six island-based projects including £180,000 to support four young fishers to purchase their first fishing vessel and helping to secure their place in the industry. QA Fish in Shetland were also awarded £512,000 to purchase lobster holding tanks which can be placed at sea. This will create four new jobs and help the business manage year-round demand, improve animal welfare and result in £1.2 million total investment.

Commitment 2.6 Display leadership in the public sector by demonstrating that jobs and careers can be successful on islands.

Workforce Dispersal

The Scottish Government continues to offer flexible hybrid working as it reshapes its workforce and estate as a component of the Public Service Reform Strategy. Under our hybrid working policy, which took effect for the core Scottish Government in October 2025, staff deliver from a range of settings and locations across Scotland, including islands. This approach maintains the flexibility that better connects us with the communities we serve, strengthens working relationships and values wellbeing.

Education and Skills Reform

As part of education and skills reform, we are implementing a project to improve careers support for individuals of all ages. This will look at the careers support offer for those of school age, those leaving school, those in further and higher education or apprenticeships and adults needing or wanting to pursue a career change, to ensure that people of all ages can access high-quality and consistent career support when they need it, whatever their background and wherever they live. The project will also address how we can improve access to work experience opportunities and digital career resources, recognising that individuals need better access to high-quality information about opportunities in areas of national and regional economic and skills priorities, job prospects, and earnings, as well as information about the different training pathways to obtain their goals.

Commitment 2.7 Promote a thriving business environment that allows individuals to pursue a wide range of economic opportunities on islands.

HIE business support

HIE has supported the development and delivery of the Scottish Government’s Island Business Resilience Fund (IBRF). A total of £4.4 million was allocated to the IBRF to support island businesses which have been most affected by ferry disruption in recent years.

HIE have also provided financial support directly to island businesses, totalling £11.6 million from 1 April 2025 to December 2025.

Islands Growth Deal

The Deal’s pan-island TalEntEd Islands Skills Programme, which is in its delivery phase, seeks to grow the level of university activity on the islands by developing innovative new curriculum and delivery models aligned with identified key sector priorities. It will develop proactive approaches to talent attraction and retention to support the growth in sustainable green jobs across the islands, support businesses to test and commercialise new ideas and deliver tangible benefits to communities. The target audiences will vary, from young people seeking careers as entrepreneurs, to mothers heading back to work, to senior members of the community. Support will be delivered through four distinct work packages through the partners which include the University of the Highlands and Islands, Robert Gordon University, Herriot Watt University, and the island local authorities.

Commitment 2.8 Create and promote apprenticeships and job opportunities for young islanders.

Lifetime Skills and Apprenticeships

A key priority for the Scottish Government is to encourage apprenticeship delivery across island communities to support inclusive growth. As part of this, we introduced an increased payment to training providers to encourage provision on islands.

In addition, travel and subsistence (including accommodation) funding is also available to support apprentices who must attend structured and formal off-the-job training (outwith normal daily travel requirements) where this is required by the Modern Apprenticeship Framework.

In 2024-25, there were 150 new Modern Apprenticeship (MA) starts in Na h-Eileanan Siar, 95 in Orkney and 200 in Shetland. MA starts were highest in sectors such as construction, sport, health and social care, and IT and other services.

As part of our apprenticeship reform work, we will be looking to reduce the complexity of the existing apprenticeship system and make it more transparent to maximise the value of investment to learners and the economy. We will also seek to minimise disruption to the current apprenticeship delivery models whilst improvements are made over the next few years.

As we work on apprenticeship reform over the next few years, we will consider the impact any changes will have on island communities.

Graduate Apprenticeships

In May 2024, a Graduate Apprenticeship (GA) Enhancement Group was established, to help inform future policy and the potential to expand graduate apprenticeships. The first phase of work focused on building the evidence base for change and included a series of one-to-one discussions with employers, stakeholders, universities and STUC; group discussions with Small and Medium Enterprises (SMEs) and a workshop with stakeholders at the end of March. An employer insight survey was also issued in early May.

The next phase of work will be focused on improvements to the development process to make it faster and more efficient with greater involvement from employers; developing alternative models of delivery including college-university partnerships; exploring options to leverage in additional funding to create more GA places; and how to make GAs more accessible to young people and new entrants and how they can support our ambitions on widening access.

The Scottish Government has and will continue to engage with Colleges Scotland, Universities Scotland, NHS Education Scotland and local authority representatives to better understand issues around the delivery of Graduate Apprenticeships and opportunities to support the wider public sector across Scotland. To support this work, we have also commenced engagement with island-based employers. .

Foundation Apprenticeships

A Foundation Apprenticeship (FA) Enhancement Group was set up in 2022 following Education Scotland’s Review of FAs, to support the future strategic direction of FAs in Scotland. The Group is responsible for building an evidence base to understand how FAs are delivered across Scotland, how they contribute to the national outcomes and how funding is used by all delivery partners.

We remain committed to increasing the skills of Scotland’s young people and will take forward a review of foundation apprenticeships in conjunction with the review of the senior phase qualifications. We want to consider what the best work-based learning offer for the senior phase could look like, and how it could support positive destinations for school leavers across our islands.

As part of the work to review Foundation Apprenticeships, we will consider improvements to encourage access for those in island communities, noting the potential for increased challenges with travel costs and timetabling.

Employability Hub

Skills Development Scotland (SDS) launched an employer campaign in May 2025, to encourage employers to recruit and train young people via the apprenticeship route to support their current and future business needs. The Workforce North initiative aims to support employers with their current and future workforce needs through the provision of Foundation, Modern and Graduate Apprenticeships.

For more information on the Workforce North please see commitment 2.2.

Commitment 2.9 Ensure that skills provision is agile and responsive to future demand and enables individuals to take up opportunities.

Islands Growth Deal

The Outer Hebrides Campus Redevelopment project opened in May 2025 and has seen facilities upgraded and expanded at the University of Highlands and Islands North, West and Hebrides’ Stornoway campus which will better support the delivery of a modern curriculum. The upgrade and expansion of facilities, learning technologies and outreach capability at the campus will help to develop the skills base needed by current and future employers to secure new jobs in areas like construction, engineering, renewable energy, hydrogen, robotics, sustainability and net zero. The investment will also provide outreach facilities and equipment which can be transported across Na h-Eileanan Siar, including the Uists and Barra. In 2023-24, the project was also awarded £250,000 from the Scottish Government’s Islands Programme.

Skills for Rural Scotland

Following the publication of the independent Commission for the Land Based Learning Review recommendations, the Scottish Governments is continuing the delivery of actions detailed in our Implementation Plan Progress Report published in June 2025.

These actions contribute to attracting and equipping more people with the skills and knowledge needed to work in industries which are important to island economies, such as land-based and aquaculture sectors.

Commitment 2.10 Build on Scotland’s National Marine Plan to ensure that fishing and other economic activities stemming from the sea provide increased opportunities for island communities, but at the same time that they are pursued in a sustainable manner.

Throughout 2025, work on Scotland’s second National Marine Plan (NMP2) has advanced, maintaining a participative approach and robust stakeholder engagement in line with the NMP2 Statement of Public Participation. Stakeholder feedback has been collected, collated, and utilised to inform the development of NMP2 to steer how the plan might respond to the demands of multiple marine uses and local contexts, and to provide greater clarity and direction for future regional marine planning.

Early in 2025, the NMP2 team hosted a series of community-focused workshops, both in person and online, in collaboration with Local Coastal Partnerships (LCPs). These sessions gave residents of coastal and island communities the opportunity to share their views on marine planning and comment on the development of NMP2. We published the NMP2 Community Engagement Analysis Report in August 2025 which gathered and analysed feedback to inform the development of planning policies.

The public consultation on the NMP2 Planning Position Statement ran from November 2024 to February 2025, providing stakeholders with an early opportunity to engage with proposed policy ideas. A total of 102 responses were received, including submissions from Marine Planning Partnerships (MPPs), community groups, and local authorities representing islands. A consultation analysis report has been published summarising the responses and key findings.

As part of the draft NMP2 assessment, both a Socio-Economic Impact Assessment (SEIA) and an Island Communities Impact Assessment (ICIA) will be undertaken. These processes will include dedicated opportunities for island and coastal communities to participate, including working with established MPPs and LCPs to harness community views and input.

NMP2 will continue to set the framework for regional marine planning and provide clearer guidance on how regional circumstances should be considered in decision-making. The Shetland Islands Regional Marine Plan, Scotland’s first regional marine plan, was adopted in late 2025, with the Orkney Islands Regional Marine Plan adopted in February 2026. In addition to this, a Regional Marine Planning Forum was established in November 2024 and has met throughout 2025, bringing together a range of island and rural representatives from respective MPPs and LCPs to help inform planning policy and input into the development of NMP2.

Inshore Fisheries Management and Coastal Communities

The current NMP provides guidance to Marine Planning Partnerships who recognise the fishing industry’s place, engaging with their representative associations, and existing representative mechanisms such as the Regional Inshore Fisheries Group (RIFG) Network.

The Scottish Government has clearly defined mechanisms in place for developing fisheries management policy which are guided by our Fisheries Management Strategy. From this we are developing a number of change programmes that are helping transition our inshore fisheries to a fit for purpose, evidence-led model, delivering locally appropriate solutions with co-management at its core.

Islands Growth Deal

The Island Growth Deal’s Outer Hebrides Food and Drink Programme will add value in fragile communities to preserve and enhance local markets for traditional fishing industries. The Programme includes life extension work to Acarsaid Harbour on the Isle of Eriskay, which is now complete, and will allow continued access to the fishing grounds on both the west and east coast of the island, and the creation of a gear storage facility at Vatersay Pier.

Commitment 2.11 Ensure that sustainable land use including agriculture and forestry continues to provide jobs and opportunities to island communities.

Scottish Forestry

There is increasing interest in native woodland creation schemes on Scotland’s islands. On Jura, Scottish Forestry (SF) is working with partners on woodland creation projects that will complement existing schemes on the island, expand forest habitat networks and contribute to rainforest restoration.

The Scottish Government supports partnership working on the Mull with Woodland Trust Scotland, who have submitted a Nature Restoration Fund bid for a landscape-scale deer management project. Scottish Forestry’s support is provided through a Co-operation Grant to explore natural regeneration and further deer management opportunities, helping the community prepare for future Forestry Grant Scheme applications.

SF continues to support privately owned forests on Mull, Islay and Jura through the Forestry Grant Scheme, including support for creating and renewing Long-Term Forest Plans. These support sustainable management and best forestry practice, promoting the long-term biodiversity and economical value of the forests whilst supporting jobs, community use, recreation, and access.

SF also continues to fund community woodland groups on the islands, helping to create and maintain jobs for communities. Continuing support is being given to Mull and Iona Community Trust, South-West Mull and Iona Development and North-West Mull Community Woodland Company to help them achieve economical, social and environmental benefits from their community owned forests.

Work continues on the implementation of the forestry sector’s skills action plan and the development of a technical training hub (Forest Training Service UK, being run from Scottish Rural College’s Barony College). This is a public/private sector initiative to create a not-for-profit company to address market failure in certain areas of technical training, which will grow forestry businesses across Scotland and the islands.

Additionally, SF continues to support the Women in Forestry and Future Foresters training funds. The funds are administered by Lantra and are open to all in Scotland who are either studying forestry, starting out or at the very start of their forestry career to help gain skills and improve career progression. The funds welcome applications from island communities and there have been a number of successful applications with particular administration support provided to ensure training is within a practicable distance.

Crofting

During 2025, the Crofting Commission delivered four grazings workshops in island communities working in collaboration with the Farming Advice Service (FAS). Active grazing committees are important as many common grazings are currently underused, with fewer than half the 689 common grazings located in the islands having committees in office at present. This also hinders the potential for common grazings to be harnessed for alternative uses such as peatland restoration or biodiversity initiatives. The Crofting and Scottish Land Court Bill, introduced in Parliament in June 2025, includes measures to make it easier for crofters to take forward environmental projects like these, both on common grazings and on their inbye croft land.

In March 2025, the Crofting Agricultural Grant Scheme (CAGS) introduced a new Standard Costs model for some of the most commonly funded items such as fencing and agricultural buildings. This system has streamlined the application process, both for crofters and Scottish Government officials, and will have a positive impact on croft businesses. The fact that applicants no longer need to gather several quotations before applying for funding is particularly helpful in some island communities.

Commitment 2.12 Work with relevant partners and stakeholders to make tourism more sustainable and less seasonal, and encourage development of a year-round offer across a wider range of islands that delivers economic, environmental and social benefits.

VisitScotland

VisitScotland has dedicated staff on a number of islands, supported by national resource and expertise.

VisitScotland’s market development work aims to attract year-round visitors to Scottish islands through a mix of strategic marketing, intermediary, partner and media relations activities. VisitScotland’s work with stakeholders informs their approach and seasonal focus, aligned to the unique opportunities and challenges of each destination. A key example of this in 2025 is the inclusion of many islands in VisitScotland’s autumn/winter marketing activity. The latter spotlights destinations with capacity to welcome visitors with the aim of growing Scotland’s share of global travel and stimulating domestic demand. This includes partnerships with the likes of NewsUK, Metro Mail, Expedia, TripAdvisor, NBC, Skyscanner, influencer collaborations, press trips and owned channel activity, all helping to showcase the breadth of experiences available on Scotland’s islands.

VisitScotland is engaged in the development of Growth Deal programmes and projects that will support the visitor economy and works closely with Regional Economic Partnerships to develop and deliver ambitious tourism plans. VisitScotland also continues to administer Rural Tourism Infrastructure Fund (RTIF) projects across the islands. The organisation works with partners to deliver tourism and events strategies on our islands and encourages responsible place development such as the 2025 Orkney Island Games which brought together 2,141 athletes and officials from 24 islands around the world. VisitScotland assisted in securing the event in 2017 and worked with Orkney 2025 and partners throughout in planning, managing £700,000 investment on behalf of the Scottish Government, developing visitor messaging and supporting tourism businesses. The event built Orkney’s international profile, boosted the local economy by £4 million, and delivered improved facilities to benefit the community.

In supporting business development, VisitScotland provides specialist support for tourism businesses and community enterprises on islands to help build digital capability, reach new markets and develop more sustainable and inclusive practices. In 2025, we held a series of in-person travel trade distribution workshops, designed to engage and educate businesses on how to build products and reach international visitors through intermediary channels. These took place in five island locations covering businesses in Arran, Lewis and Harris, Uist and Barra, Orkney and Shetland. They were attended by a total of around 90 businesses. This activity is a key part of VisitScotland’s wider business support programme which includes a free-to-access online Business Support Hub (launched in 2025), webinars, workshops and more.

In 2025, Orkney Islands Council and Shetland Islands Council published the results of the 2024 Islands Visitor Survey – a project supported by VisitScotland. This research offers an updated outlook on tourism and events recovery, and the importance and impact of tourism for both Shetland and Orkney.

Tourism and Hospitality Industry Leadership Group

Scotland Outlook 2030, Scotland’s national tourism strategy sets out the shared ambition for Scotland to be a world leader for responsible tourism and to be one of the most economically, environmentally, and socially sustainable destinations in the world. The Tourism and Hospitality Industry Leadership Group (ILG), co-chaired by the Minister for Business and Employment, provides strategic direction to drive this ambition. The ILG established five missions to help realise this ambition. These are:

• proud and valued people working for Scotland;
• data and technology empowerment;
• community-led tourism;
• pathway towards net zero;
• and sustainable transport.

Each of these missions has significant relevance to island communities and the sustainable growth of tourism to Scotland’s islands.

Agritourism

Scottish Agritourism has a long-term sustainable future that delivers a high-quality, authentic visitor experience with agriculture and food and drink at its core. Agritourism can sustain the future of family farms with self-generation of income and contribute to our islands’ economies by keeping multiple generations of farming families in employment.

An Agritourism Implementation Board, co-chaired by the Cabinet Secretary for Rural Affairs, Land Reform and Islands, brings together economic development agencies, government (local and national) and the private sector to oversee the implementation of the 2021 Scottish Agritourism Strategy. The Scottish Government has provided £146,000 of funding since 2022 to Scottish Agritourism to assist with delivery and leadership of Scotland’s Agritourism Growth Strategy.

In line with a commitment included in our 2024 Programme for Government, we are funding Scottish Agritourism to support preparations for Scotland hosting the 2026 World Agritourism Conference. Delegates to the conference will have the opportunity to visit Agritourism businesses in every area of Scotland, including the islands.

In November 2025, the Scottish Government announced the creation of the £1 million Agritourism Investment Scheme. Applications for this capital fund opened in January 2026.

Islands Growth Deal

The Calanais Visitor Centre project is part of the Outer Hebrides Destination Development programme, which aims to develop a suite of tourism and cultural heritage projects with a particular focus on St Kilda and the Calanais stones. The Calanais project, which began its build phase in summer 2024 and is due for completion in early 2026, is critical to the visitor offer, given its strategic role in facilitating and servicing increased visitor numbers anticipated from the recently opened Stornoway Deep-Water Cruise Terminal.

Highlands and Islands Enterprise:

In 2025-26, HIE approved 121 individual tourism projects across the islands, awarding a total of just over £1 million. This includes funding provided through the Scottish Government Islands Business Resilience Fund, which was administered by HIE.A total of £4.4 million was allocated to support island tourism businesses.

Cruise tourism remains a key area of activity across many islands. The HIE Shetland team continues to work proactively with the local authority and other partners to showcase opportunities in this market. More recently, efforts have focused on developing sustainable models for cruise visitor experiences within small island communities and contributing to ideas that help shape and understand the sector.

Supporting the Transition to Net Zero

HIE continues to prioritise support for island tourism businesses in achieving their net zero ambitions through the Green Grant Funding programme. In 2025, one project in Orkney was approved, receiving £27,690 in grant funding against total project costs of £69,226. Ongoing discussions are taking place with businesses on Arran, Shetland, and Na h-Eileanan Siar for future Green Grant Funding support.

Delivery Resource Programme

During 2025-26, HIE supported the Scottish Government’s Delivery Resource Programme which enabled 17 community organisations to employ local delivery officers to implement prioritised projects for community benefit. Four of these organisations are directly involved in tourism activity, contributing to the wider visitor economy. These projects typically focus on asset-based, income-generating developments that create employment and improve resilience in overcoming barriers. The impact is transformational for island communities and is helping to reverse population decline and support a vibrant, sustainable visitor experience.

Fostering Innovation and Increasing Productivity

In 2025-26, HIE’s innovation programme was delivered to 21 tourism clients across the region, including three businesses in Na h-Eileanan Siar, one in Orkney, and one in Shetland. Clients included SMEs and Community Interest Companies. Support provided included innovation advice, intellectual property guidance, external funding assistance, participation in regional roadshows, and attendance at national conferences. These interactions have enhanced productivity, stimulated innovation, supported new product and process development, and increased knowledge and understanding to drive growth.

Commitment 2.13 Ensure that crofting continues to provide jobs and opportunities to island communities.

Crofting Policy

The Scottish Government recognises that crofting plays a key role in sustaining island businesses and communities. Each year, the Scottish Government approves and provides approximately £40 million to croft businesses through various support mechanisms including the Crofting Agricultural Grant Scheme (CAGS), Croft House Grant (CHG), Cattle Improvement Scheme (Bull Stud), Less Favoured Area Support Scheme (LFASS), Basic Payment Scheme (BPS) and Greening, and the beef and sheep schemes.

The CAGS supports the development of agricultural production on crofting businesses, thereby sustaining the economic basis of crofting. From January to the end of November 2025, the Scottish Government paid out over £3.8 million in CAGS funding, helping over 638 croft businesses. The application process for commonly funded items such as agricultural buildings and fencing has been simplified for crofters through the introduction of a standard costs model in March 2025.

The CHG provides support to improve and maintain the standards of crofter housing, with the aim of attracting and retaining people within our island communities, allowing them to achieve the full potential of their crofts while generating economic activity. In 2025, the Scottish Government awarded £431,000 in Croft House Grants, helping 18 crofters and their families, over 70% of whom were island-based crofters.

In June 2025, the Scottish Government introduced the Crofting and Scottish Land Court Bill in Parliament. The Bill makes a range of simplifications and improvements to the way crofting is administered, which will benefit crofters and the Crofting Commission and protect crofting communities. The Bill is currently progressing through Stage 2 of the parliamentary process.

Commitment 2.14 Deliver the Islands Passport initiative, which will promote the opportunity to visit a wider range of Scotland’s inhabited islands, encouraging visitors throughout all seasons and by public transport, thereby delivering economic opportunities for island communities.

Commitment fulfilled.

This commitment was fulfilled in 2022. Please see the National Islands Plan Annual Report 2022 for further details.

Commitment 2.15 Work with the food and drink industry to leverage its economic potential and explore options for sharing some of its benefits with island communities.

The Scottish Government has provided £15 million over 2023-26 towards the implementation of the Food and Drink Industry Strategy. The strategy sets out aims and actions for the sector to help food and drink businesses throughout Scotland leverage their economic potential. Work this year has seen:

• Regional Food Funding provided towards Orkney Food and Drink’s Food Festival and Eat Drink Hebrides’ Fine Food Festival and Food and Drink Awards.
• Production of an ‘Eat Drink Hebrides’ Buyer Guide, with planning underway for a Michelin Chef legacy tour to the Outer Hebrides.
• Bespoke training and coaching to Food and Drink Producers to showcase their food and drink offerings, including a number of islands producers who attended the Showcasing UK event held in Glasgow.
• Work with Regional Food Groups to promote local sourcing strategy has seen the Orkney producer group reporting £44,000 sales and £11,000 of trade orders at the Royal Highland Show in June 2026.
• Attendance from the following island producers on the Bookable food and drink experiences programme: Tobermory Fish, Mull; Arran Brewery; J Gow Rum, Orkney; Original Cake Fridge and Tearoom, Shetland; Appetite for More – Long Island Retreats and Larder, Outer Hebrides.

Islands Growth Deal

The Outer Hebrides Food and Drink Programme will add value in fragile communities via relatively small investments and seeks to preserve and enhance local markets for traditional fishing industries. It will enable the sustainable development of the islands’ primary food production industries in a radically altered socio-economic context: developing local food and drink markets and responding to sectoral opportunities linked to product diversification and value added, in order to build economic resilience, community wealth and wellbeing.

Commitment 2.16 Seek to expand the range of economic, social and environmental benefits that island communities derive from forestry.

Scottish Forestry

Scottish Forestry continues to support community-owned woodlands on the islands through the Forestry Grant Scheme, including the Sleat long-term forest plan renewal on Skye, tree production and replanting on the Isle of Eigg, and native woodland sites on Lewis, Harris and Shetland.

Forestry and Land Scotland

Forestry and Land Scotland (FLS) continues to sustainably manage the Scottish Minister’s National Forest and Lands on the islands, supporting local economies, increasing biodiversity and providing opportunities for people to access and use local woodlands.

FLS has worked with Scottish Forestry to renew its 10-year Land Management Plans for North Mull, Central Mull and Aros Park, near Tobermory, with well-attended public consultations events, demonstrating the interest that islanders have in their local forests. These forests provide important habitats for wildlife, produce sustainable timber and are a valuable resource for both locals and visitors to Mull. For example, at Aros Park, FLS is assisting Tobermory Harbour Association to put in place services for their Aros Waterfront development following the successful asset transfer of the old pier buildings and slipway in 2019.

FLS also continues to maintain and promote high-quality visitor facilities on Skye and Raasay, such as the Otter Hide at Kylerhea, where further investment is planned. In addition, FLS delivers substantial forest management programmes, including peatland restoration in the Kinloch Hills area.

On Arran, FLS has proactively engaged with the community regarding the challenges of exporting timber from the island, facilities and accommodation for forestry staff, and visitor services. This engagement has been targeted via community updates and two public ‘drop-in’ days at Brodick and Whiting Bay. A major milestone for FLS on Arran has been the successful tendering of a new 15-year standing sales contract, uplifting the quantity of harvesting and export from the island to 85,000 tonnes per year. FLS has also invested in the Brodick timber yard and slipway as the island’s primary export site, demonstrating the commitment of both FLS and the timber industry to invest in jobs, infrastructure and equipment on Arran.

Commitment 2.17 Review Scotland’s National Planning Framework to ensure sufficient flexibility for island interests, including in how best to meet housing need.

Commitment fulfilled.

Th is commitment was fulfilled in 2022. Please see the National Islands Plan Annual report 2022 for further details.

Commitment 2.18 Reflect the National Islands Plan and relevant regional perspectives in the review of the National Planning Framework and preparation of National Planning Framework 4.

Commitment fulfilled.

This commitment was fulfilled in 2022. Please see the National Islands Plan Annual report 2022 for further details.

Commitment 2.19 During the preparation of the 2020 Infrastructure Investment Plan, consider the implications of the National Islands Plan on future infrastructure requirements.

Commitment fulfilled.

This commitment was fulfilled in 2020. Please see the National Islands Plan Annual Report 2020 for further details.

Commitment 2.20 Recognising the services that island abattoirs provide to their communities, we committed to work with relevant partners to deliver sustainable and economical viable operations.

Commitment fulfilled.

This commitment was fulfilled in 2021. Please see the National Islands Plan Annual Report 2021 for further details.

Commitment 2.21 Ensure that legislation and policy relating to early learning and childcare is appropriately island proofed.

Early Learning and Childcare

The Scottish Government recognises how vital early learning and childcare (ELC) is in island areas, both in relation to giving children the best start in life and supporting families to work and study. We recognise the provision of childcare is a key factor to support more people in island communities to enter and sustain study, training, employment and start a business, and will continue to identify, develop and enable place-based solutions to navigate the challenges island communities face.

The Scottish Government continues to work in close partnership with COSLA in the delivery of ELC to realise the benefits of the 1,140 hours programme. In working with local government to enable the delivery of high-quality ELC services, we seek to ensure the needs of island communities are understood and met. We fully fund local authorities to deliver 1,140 hours of ELC to eligible children, backed by almost £1 billion of funding each year, with each council responsible for ensuring that local provision meets families’ needs.

In addition, the Scottish Government is currently supporting projects to improve childcare provision in island communities, including through our Early Adopter Communities, and the Programme for Scotland’s Childminding Future.

Our childcare Early Adopter Communities are expanding access to affordable childcare for low-income families with children from early years through to the end of primary school and evaluating the difference this can make. This includes work in Shetland to gather learning and insights about what it takes to deliver childcare that meets the needs of families living in island communities.

The Scottish Government’s Addressing Depopulation Action Plan sets out the our strategic approach to supporting local communities facing population decline. In both 2024-25 and 2025-26, our Addressing Depopulation Fund (ADF) has awarded Highland Council £60,000 in support of activities aimed at tackling depopulation, which have included research on an alternative model of supported childminding. The Highland Council’s ELC team has been working to identify a suitable geography and list of candidates for the pilot.

Separately, thanks to ADF funding, Comhairle Nan Eilean Siar has delivered a suite of small-scale projects to support population retention in Uist. Two of these have had a childcare focus, testing models of novel outdoor childcare provision and facilitating parental participation in skills training via provision of childcare.

This initial two-year delivery period is due conclude at the end of the 2025-26 financial year. Work is being undertaken to scope a second phase of delivery for the Addressing Depopulation Action Plan, which is anticipated to launch from the 2026-27 financial year. This second phase will continue to be led by the evidence base which promotes the effectiveness of place-based approaches, with prospective delivery partners enabled to develop bespoke interventions which are in line with locally identified priorities.

The Scottish Government remains committed to building a vibrant, thriving childminding sector, and we are working with the Scottish Childminding Association to address the decline in the childminding workforce. We have delivered a further £1.6 million of funding this year in support of the Scottish Childminding Association’s national three-year programme of childminder recruitment and retention which in 2025-26 has successfully expanded to 30 local authority areas. The recruitment programme is now available in Highland, Orkney, Shetland and Argyll and Bute areas. The programme includes a range of measures to aid retention of the existing childminding workforce, providing more practical support with workloads and development, including a mentoring scheme and models of funded time off the floor. Retention pilots have been made available in the above local authorities areas, as well as Na h-Eileanan Siar.

HIE, in partnership with the Care and Learning Alliance (CALA), presented a report to Scottish Ministers, which consolidated the knowledge of the childcare accessibility challenges facing rural and island communities. The report demonstrated the scale and impact of childcare pressures facing the region, especially on islands, and assessed the feasibility, potential impacts, and deliverability of proposed actions to respond to, and address, these challenges. The work was carried out under the banner of the Highlands and Islands Regional Economic Partnership (HIREP), who also have an established HIREP Childcare Subgroup. The HIREP Childcare Subgroup has members from all the island local authorities, and in 2025-26 Bòrd na Gàidhlig were invited to join. Informed by HIE report, we will be working with partners to understand the key drivers of change that would be most impactful in facilitating access to childcare in rural and island areas.

Commitment 2.22 Ensure that opportunities to develop the wellbeing of the Gaelic language and increase the number of speakers and users are considered as part of sustainable economic development.

Please see commitment 1.6 for more information on the Tog action group.

Commitment 2.23 Support women in agriculture on Scottish islands to succeed, including encouraging their participation in the leadership development programme, addressing unconscious bias by organisations and businesses and breaking down cultural barriers.

Women in Agriculture

In 2025-26, we have allocated £250,000 to the Women in Agriculture Practical Training Fund to help reduce barriers by funding practical and business skills training for women and girls aged 13+. We are also providing support to individual organisations to increase leadership opportunities for women in agriculture on islands, including:

• the Women in Agriculture Scotland (WiASG) Group to support an island event in Orkney;
• the Scottish Crofting Federation (SCF) to support the development of Phase 1 of the Wild Streams Project in Argyll, Na h-Eileanan Siar, and Skye;
• and a sustainable and regenerative agriculture pilot to test the use of seaweed as part of circular sustainable island economy in Mull.

Commitment 2.24 Work with relevant local authorities to develop regional food and drink action plans to support growth of the sector on islands, including a focus on the vital whisky sector.

Regional Food and Drink Plans

The Scottish Government in partnership with Scotland Food and Drink continues to support our 14 regional food groups – including in Arran, the Outer Hebrides, Orkney and Shetland – to increase economic growth by ensuring easy access to locally sourced high-quality products.

Through the work of these groups and alignment with local authorities, we continue to see boosted local sales, an increase in food tourism opportunities as well as wider regional collaboration. This means more quality products from Scotland’s islands are available on independent retailers’ and supermarkets’ shelves, on bar and restaurant menus, and in visitor attractions.

Commitment 2.25 Work with relevant local authorities to encourage take up of Food For Life accreditation to help stimulate local sourcing in public sector settings.

Food and Drink Industry Growth

The Scottish Government continues to support the delivery of the Food for Life Scotland Programme (FFLS), which has a primary focus on school meals and seeks to increase the amount of healthy and locally sourced produce being served. Sixteen local authorities currently hold an accreditation award, including Orkney and Shetland – both continuing to hold bronze FFLS awards. In 2025-26, the FFLS programme has continued to expand and embed FFLS principles into the wider public sector.