Scotland's islands: proposed national plan

The proposed National Islands Plan provides a framework for action in order to meaningfully improve outcomes for island communities. It was replaced by the final National Islands Plan (published 27 December 2019).

Housing and Fuel Poverty

Despite the positive influence of current policy encouraging new and improved housing, the consultation process highlighted that the availability of affordable, fit-for-purpose housing on Scottish islands presents a challenge for island communities. In particular, access to housing affects population decline and influences the decisions of young people to leave island communities. This ‘in turn’ affects the sustainability of local services, especially schools. Lack of accessible and affordable housing is a barrier to attracting families to island communities too. It is also associated with various manifestations of rural poverty and general inequality, including homelessness and hidden homelessness. Adequate housing is an internationally recognised human right and forms part of the wider right to an adequate standard of living.

SG Policy

The Scottish Government’s Rural and Islands Housing Fund has so far approved nine projects on islands which will provide 16 homes, complementing a much larger number delivered through the mainstream affordable housing supply programme. One newly renovated house funded through the Fund on North Ronaldsay has provided accommodation for an essential worker to come to an island where the population had been declining. The island of Rum has started work on four new affordable rented houses supported by the Fund, following on from two private houses built directly by an aquaculture business, Mowi, for their employees. Joint working on infrastructure to provide services to the site has facilitated the building of these six houses.

Many of the consultation participants indicated that house construction on their islands is often more complicated and difficult than in many mainland areas due to transportation costs and distances (adding upwards of 30-40% on the price of building). Regularity and reliability of ferries, weather, availability of workforce, accommodation for workforce and so on can also add to the difficulties. Additionally, participants highlighted that, on some islands, the number of short-term lets or second homes can limit the availability of homes to local residents and workers.

Finally, respondents to the consultation told us that the way housing need is currently assessed through local authority Housing Need and Demand Assessments may not always pick-up on specific local issues. In order to support greater understanding of local needs, communities should be involved and consulted. There is also concern among island communities about poor quality housing stock driving inequality; this is an example of a concern which needs to inform the assessment of local need.

As one of the most sparsely populated places in Europe, it is ironic that so little land is available for housebuilding/business development. This is partly an issue with land management but also partly a planning issue.
(Consultation participant, Jura).”

SG Policy

The Scottish Government has committed to developing a vision for our homes and communities for 2040 and a route map to get there. This will be a vision for all of Scotland, of which thriving island communities play a vital part. Insights from island communities in preparing this Plan will help to inform that work. Our approach to housing to 2040,[26] building on this Plan, provides an opportunity to rethink housing provision on our islands by taking a fair and sustainable approach. This includes tailored locally affordable housing solutions that respond to the needs of island communities, including those who work on the islands on a seasonal basis to support tourism.

We are clear that Scotland must respond to the global climate emergency by improving the energy efficiency of all our homes whilst supporting those in fuel poverty to reduce their fuel bills and live in warm, comfortable homes. We are also making sure new homes are environmentally low-impact designed and built using materials and technology that reduce their carbon footprint and lower energy needs.

SG Strategy

The approach to housing to 2040 and the implementation of the Plan will evolve from existing housing related initiatives, policies, strategies and actions. Currently, the Scottish Government’s More Homes Scotland approach[27] supports the right homes in the right places and is informed by local authority priorities. It aims to increase supply across all tenures and supports rural housing, partly through a share of national programmes, including the Affordable Housing Supply Programme; Housing Infrastructure Fund; and Self-Build Loan Fund.

Mull and Iona Community Trust has been the anchor organisation for the delivery of the successful housing project at Ulva Ferry. By providing secure, affordable, passive houses with low heating costs there will be many wider social and economic benefits for this fragile community as local people can continue to live, work and go to school in the area.

The delivery of housing on islands is supported through specific interventions, tailored to local needs, such as the Rural and Islands Housing Funds and the Croft House Grant Scheme. Crofting plays a vital role in maintaining the population in remote rural areas including islands. Due to the nature of crofting as a form of land tenure and the predominance of self-build as a means to provide housing, it can be challenging for crofters to access conventional forms of housing finance.

SG Policy

The Croft House Grant Scheme part funds new builds and home improvements making croft housing affordable, the More Homes Scotland approach also includes initiatives to support access to home ownership through shared equity schemes, such as the Open Market Shared Equity Scheme (OMSE) and Help to Buy (Scotland).

SG Strategy

The Housing and Planning Delivery Framework[28] sets out how Scottish Government and local authorities work together to understand and respond to housing demand. As part of this, local authorities are required to prepare Local Housing Strategies setting out how national and local housing policies and priorities will be met. This includes the environmental and energy performance of housing, such as implementation of the Energy Efficient Scotland programme, including the introduction of minimum standards for energy efficiency in private rented housing. In developing their Local Housing Strategies, local authorities need to comply with the requirements of the Island (Scotland) Act 2018 and should work with a range of stakeholders including forestry, land, housing and community interests to address the challenges of delivering houses and housing-related services in rural and island communities.

Although the next National Planning Framework is to set targets for the use of land for housing we note the recommendation from the Strategic Islands Group which advocated some areas such as islands to set targets locally based on their distinct development context and demand profile.

While short-term lets can have a positive impact and help boost the tourism economy across all areas of Scotland, we know that they can also create challenges. We want to ensure that short-term lets are regulated appropriately and we want to give local authorities the powers they need.

SG Policy

We have recently consulted on the need for a registration system for short-term lets, as part of taking an evidence-based approach that will deliver the best solution for Scottish circumstances, including for our island communities. The Planning (Scotland) Act 2019[29] enables local authorities to designate control areas for short-term lets where planning permission will always be required if owners want to change the use of their property to a short-term let. We will bring forward proposals for regulation of the sector later this year.

Improving the availability and quality of homes for island communities is challenging. With its £3.3 billion commitment for this Parliament, the Scottish Government has made the single biggest investment in, and delivery of, affordable housing across Scotland since devolution. We have also developed tailored interventions to help rural and island communities. However, we have listened to what island communities have told us and this Plan is only the first step in a process of change and improvement.

There are unique challenges and opportunities for tackling fuel poverty within island communities. Extreme fuel poverty rates are higher for most of the island authorities (ranging from 18% in Shetland to 25% in Na h-Eileanan Siar over the 2015-17 period) than for Scotland as a whole (12%). We also know that extreme fuel poverty can be particularly difficult to eliminate in island communities where building types are harder to improve to the required energy efficiency standard and opportunities to reduce fuel costs are more limited. In addition, the hard to treat housing stock can vary between the islands. Such issues combined with the colder climate in the islands means that some of these homes might have the heating on throughout the whole year. Higher living costs on islands, combined with higher fuel costs, for households on low incomes, can create the conditions for extreme fuel poverty.

Strategic Objective 4

To improve housing on Scottish islands

In order to improve housing on Scottish islands the Scottish Government will:

  • Continue to develop our approach to Housing to 2040 and ensure that it truly reflects the distinct needs of island communities;
  • Ensure that proposals for the regulation of short-term lets take account of the unique circumstances of island communities and make special provision for them where required;
  • Explore how the rural and island housing fund might be adapted in the future to expand the range of options to support housing development in remote and island communities;
  • Continue to provide grants to crofters to build and improve croft houses; and
  • Build on current policy in order to make best use of all housing stock including derelict properties and options for compulsory purchase; Consider how best to improve access to homes for people looking to settle in, or return to, island communities, in collaboration with local authorities and relevant stakeholders; we will examine the full range of options to do this, making best use of our existing homes and new supply.

Strategic Objective 5

To reduce the level of fuel poverty currently present on Scotland’s islands

In order to reduce the level of fuel poverty currently present on Scotland’s Islands the Scottish Government will:

  • Review how delivery schemes can work better locally and review funding for island communities;
  • Develop a remote rural, remote small town and island Minimum Income Standard uplift, with the uplift for island areas to be determined separately; and
  • Produce an Island Community Impact Assessment (ICIA) on the final Fuel Poverty Strategy, ensuring that representatives from island local authorities are fully involved in its development.



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