Oil and Gas Transition Training Fund - Island Communities Impact Assessment

2. Gathering data and identifying stakeholders

Population

The total population of Scotland’s 121 permanently inhabited islands is just under 103,000

Employment

Employment rates across the Scottish Islands (ages 16-64):

• Orkney Islands: 88.3% (2024) ^[1]
• Highland (includes Skye, Raasay, Small Isles): 71.5% (2023) ^[2]
• Shetland Islands: 85.9% (2024) ^[3]
• Na h‑Eileanan Siar (Western Isles): 77.8% (2024) ^[4]
• North Ayrshire (includes Arran & Cumbrae): 70.3% (2024) ^[5]

Scotland’s employment rate in late 2024 to early 2025 was around 74.1%. This means some island areas are performing above the national average. Data from the Scottish Household Survey (2023) suggests that more islanders (58%) report managing well financially compared to those living in mainland Scotland (52%).^[6]

Oil and Gas Industry

In 2024, UK production of primary oils fell 8.9 per cent to 31 million tonnes, the lowest level since North Sea production was established in the 1970s, continuing the pattern of decline from the mature North Sea basin.^[7] The North Sea Transition Authority’s 2025 projections point to further declines in oil and gas output over the rest of the decade, even if there are occasional year‑to‑year bumps when new projects come onstream^[8]. Of the 283 active O&G fields in the North Sea, 180 will have ceased production by 2030.^[9]

It is estimated that 73,000 jobs were supported by Scotland’s O&G sector in 2022, comprising 23,000 direct, 30,000 indirect and 20,000 induced jobs. This contribution is equivalent to 3% of all of Scotland’s total employment. ^[10]

There is no suitable dataset available that confirms the total figure of O&G workers across the Scottish Islands. That said, the presence of the Sullom Voe Terminal, and Flotta Oil Terminal, in Shetland and Orkney respectively, would lead to a reasonable conclusion that the O&G industry has a notable impact on these communities.

Sectors for workers to transition into, including renewables

Scotland’s capacity for electricity generation from renewable sources continues to increase. At the end of September 2025, Scotland had 17.8 GW of operational renewable capacity - a 4.5% increase compared to 17.0 GW at the end of the third quarter of 2024. ^[11]

There are currently over 1600 renewable energy projects which have some community, local, or shared ownership in Scotland, many of which are in and around the highlands and islands.^[12] This does not count energy projects which do not have community, local, or shared ownership therefore the total number of the sustainable/ clean energy projects will be higher.

From 2022 estimates, the Scottish renewable energy industry turnover was £10 billion and supported 10,900 FTE jobs. Including spill-over economic activity and supply chains it was responsible for £15.5 billion of output, £6.6 billion of GVA and 47,000 FTE employment.^[13]

The above figures on renewable projects are not broken down into Scottish islands, but descriptions of key areas within the remit of Highlands and Islands Enterprise (HIE) shows that the main island groups all have significant industrial locations which cover potential destination sectors for TTF beneficiaries:

Shetland | HIE Wind and wave energy is an important part of the island’s future.

Orkney | HIE At the frontline of renewables and the European Marine Energy Centre leads research and development in wave and tidal prototype testing

Outer Hebrides | HIE Leading life science industries in the region.

Training Provision

SDS are the responsible delivery body for the TTF. As of the time of writing, there are 168 training providers who have approved training items or packages by SDS.