Whole Family Support Third Sector Delivery Fund: Island Communities Impact Assessment

Summary of aims and expected outcomes of strategy, proposal, programme or policy

1. Step one – develop a clear understanding of your objectives

The Fund, i.e. Whole Family Support Third Sector Delivery Fund, will provide up to £20m to support third sector organisations to provide more support that wraps around families in their communities.

We know that the third sector are a critical partner in delivering whole family support. The Fund aims to enable third sector partners to strengthen and scale up interventions that are already demonstrating positive outcomes for families experiencing, or at risk of, child poverty.

The Fund supports holistic, person-centred support within communities with high levels of deprivation and is intended to improve family wellbeing, reduce barriers to accessing services, and reduce the risk and impacts of child poverty over the long term.

The aim of this Fund is to support delivery at scale - funding will be available to partners who can work nationally, or across multiple local authority areas, to deliver holistic, person-centred support that integrates effectively with the wider public sector.

The Fund is expected to benefit families most at risk of poverty, particularly the six priority family groups identified within Scotland's Tackling Child Poverty Delivery strategy: lone parent families, minority ethnic families, families with a disabled adult or child, families with a younger mother (this is mother under 25 years), families with a child under one year old, and larger families (this is 3+ children).

The Fund also seeks to strengthen collaboration between national and community-based third sector organisations, increasing the reach, sustainability and effectiveness of support for disadvantaged families.

Wider Scottish Government Programmes

The Scottish Government's National Islands Plan recognises the vital role of the third sector across Scotland’s Island Communities. The Scottish Government continues to provide investment through the Community Led Local Development (CLLD) programme, which operates across all of Scotland’s islands. The programme is delivered in partnership with Local Action Groups (LAGs) and Youth LAGs and supports community designed responses to local challenges. Funding decisions are made by volunteer led groups, in line with locally identified priorities, ensuring that decision making remains rooted in local knowledge and experience.

Existing programmes, including the Whole Family Wellbeing Fund, Fairer Future Partnerships, and the Child Poverty Practice Accelerator Fund (CPAF), are also already available to public sector partners in local areas, including remote, rural and island areas.

In addition to this, the Islands Cost Crisis Emergency Fund (ICCEF) was established in December 2022 to help local authorities address cost-of-living pressures among vulnerable island households. Since then, it has provided £5.4 million in support of projects ranging from winter payments and Christmas meals to food bank grants and free school breakfasts. A £1 million allocation is confirmed for 2026-27 (included in the £5.4 million in total). As in past years, funding is distributed to local authorities on a population basis.

What are the intended impacts and outcomes and how do these potentially differ across the islands?

Families experiencing poverty have told us that they need:

• practical help
• financial advice
• emotional support

They also said they need this help to be provided:

• in a joined-up way
• not separately by lots of different organisations
• at the right time and in the right places

In recognition of this feedback, the Fund will initially be awarded to up to ten third sector organisations or partnerships, who can work nationally or across multiple local authority areas, to provide the support that families need, delivered in their communities.

Successful organisations must be able to demonstrate that funded activity is as joined-up as possible with existing local work to deliver Whole Family Support (WFS).

We recognize that remote island communities face distinct challenges including distance, workforce scarcity, transport costs, digital connectivity limitations, and service fragility, which makes delivering Whole Family Support more challenging in these locations.

Step two – gather your data and identify your stakeholders

The Islands (Scotland) Act 2018 identifies six local authorities representing island communities in Part 4 of the Act (Section 20 (2)), which are: Argyll and Bute Council, Comhairle nan Eilean Siar, Highland Council, North Ayrshire Council, Orkney Islands Council and Shetland Islands Council. Orkney, Shetland and Na h-Eileanan an Iar are entirely island authorities; whilst Highland, Argyll and Bute and North Ayrshire local authorities cover island regions in addition to mainland regions.

We know that island communities face specific challenges and that it is critical to ensure the availability and accessibility of support services in all of our communities.

Demographics

Data reveals almost a third (31%) of the Highlands and Islands population is projected to be aged 65 years or older by 2043, ranging from 35% in Argyll and Bute, to 28% in Shetland. The projections across Scotland and the UK are considerably lower (25% and 24%, respectively) ^[1].

Workforce Supply

Over the 10-year period from 2013 to 2023, the working age population (aged 16- 64) in the Highlands and Islands declined by 3.8% compared to an increase of 0.6% for Scotland as a whole ^[2]. It is recognised that rural and island areas face particular challenges as a result of issues of depopulation and an ageing workforce, and securing and retaining talent is a pressing concern for stakeholders and employers across the region.

Children in low-income families

Data reveals that island and remote communities display a distinctive poverty profile with nearly three‑quarters of children in relative low-income families living in households where at least one adult is in work, compared with around six in ten in other parts of Scotland ^[3]. This pattern highlights the prevalence of in-work poverty in more geographically isolated areas.

Since 2015, rural and island communities have also seen a steady rise in the proportion of low-income families with a lone parent, now representing a majority of households, contrasting with other parts of Scotland ^[4].

Fuel Poverty

Data reveals that Scottish island residents are more likely to face fuel poverty than the average Scottish resident. Island and rural local authorities generally had the highest proportion of the least energy efficient dwellings. Additionally, 55% of rural dwellings are not connected to the gas grid and therefore rely on more expensive heating fuel such as electricity and oil ^[5].

Community Empowerment

Data from the Scottish Islands Survey (2023) reveals that islanders generally report a strong sense of community belonging. 71% of island residents see themselves belonging to their local community ^[6]. Island residents are more likely to report that they feel they can influence the decisions of community organisations and community councils, particularly in the Outer Isles of Orkney and Shetland, in contrast with a lower perception of influence on decisions made by local and national organisations.

Third Sector

Evidence from a mapping review suggests that rural third sector organisations face structural constraints related to their small scale, limited resources, and geographic factors. Rurality creates additional pressures through dispersed populations, transport challenges, and challenges of engaging with dispersed communities. These factors can limit the pool of volunteers and staff available to rural organisations, creating constraints of recruitment and organisational sustainability ^[7].

Access to Amenities and Services

Evidence highlights that access to amenities and services varies widely across Scotland’s rural islands. Some islands have high levels of access to services, such as Arran, Bute, Mainland Shetland and connected isles, and Mainland Orkney and connected isles, whereas other small isles have lower access. Similarly, sparsely populated areas are also associated with high and increasing dependency ratios which can have an impact on community sustainability and growth

How does any existing data differ between islands?

A range of work is being undertaken by the Scottish Government to address the challenges that people in island communities face. The National Islands Plan recognises the critical importance of addressing data gaps and gathering robust island-level data to inform targeted interventions and measure impact.

For example, the Scottish Islands Surveys conducted in 2020 ^[8] and 2023 ^[9] have generated rich insights into the socio-economic circumstances of islanders and their perceptions of island life. The development of the latest National Islands Plan has also involved proactive engagement with local authorities to ensure the Plan complements local strategies, supports place-based solutions and empowers communities to shape their own futures

Who are your key Stakeholders?

Key stakeholders in island communities include:

• Third Sector Delivery partners in island communities;
• Community groups representing island communities;
• National Partners representing rural and island communities;
• Local authorities representing island communities;
• Children, young people and their families living in island communities.

Are there any existing design features or mitigations in place?

We know that rural and island communities face specific challenges and that it is critical to ensure the availability and accessibility of support services in all of our communities.

The Fund criteria includes specific reference to rural and island areas as follows: “When assessing applications, consideration will be given to the extent to which they include a focus on rural or island communities.” The Fund criteria also offer the opportunity for smaller local third sector organisations to partner with larger organisations to support challenges around reach, capacity (challenges experienced by rural and island locations). In addition, the guidance for the Fund also makes clear that while funding must go directly to third sector organisations, partnerships can include statutory/ public sector partners, who may be able to contribute to greater reach in rural and island communities.

Feedback on the design and delivery model of the Fund suggested design measures such as delivery through public bodies, or hybrid arrangements, that allow for posts to be aggregated across services.

We will continue to engage with relevant stakeholders to ensure barriers experienced by rural and island communities are considered in the ongoing delivery of our commitments to improve integrated whole family support, with the aim of making delivery of the Fund and associated programmes as equitable as possible.

3. Step three – consultation

In the early development of the Fund, officials engaged with the Third Sector Interface Network and delivered a webinar session attended by around 150 third sector professionals, where the proposals of the Fund were presented, providing an opportunity for attendees to ask questions and provide comments.

We received feedback on the design and delivery model of the Fund, specifically that expectations around scale, multi-local authority delivery, and capacity to operate at regional or national level, are more easily met by large, urban-based third sector organisations. They stated that in many remote, rural and island communities:

• The third sector landscape is characterised by small, locally rooted organisations with limited infrastructure.
• Capacity constraints and geographic isolation make it difficult for local providers to act as lead applicants in large-scale bids.
• National or urban-based providers may have limited physical presence or cultural connection to these communities, reducing the effectiveness and sustainability of delivery.

In 2025/26, we also undertook a targeted programme of work, supported by Glasgow Council for Voluntary Sector (GCVS) and Children in Scotland, to assess the effectiveness of partnership working with the third sector in six FFP areas. This has helped local areas to deepen relationships and understand gaps and barriers, and learning from the project was shared at a national conference on 9 March 2026 ‘Collaborating for Impact’.

In developing the latest Tackling Child Poverty Delivery Plan 'Bringing Hope, Building Futures' a targeted consultation process was conducted in 2025 to gather feedback from community based and national third sector organisations, local authorities, health boards, COSLA, and the Scottish Parliament, in line with the requirements of the Child Poverty (Scotland) Act 2017.

From this wider consultation process, examples of engagement with island organisations regarding specific impacts on their communities include:

• Poverty Alliance hosted a members’ seminar on embedding rural and island experiences into the next Tackling Child Poverty Delivery Plan, with a written briefing submitted to Scottish Government.
• A written consultation response from Comhairle nan Eilean Siar.
• A session with the Rural Stakeholder Group, consisting of various internal and external stakeholders on rural and islands child poverty.
• The Scottish Poverty and Inequality Research Unit (SPIRU) convened a research and analysis workshop at Glasgow Caledonian University on behalf of the Scottish Government, bringing together researchers from academia, government, and the Third Sector to provide evidence-based insights to inform the development of the plan. This included discussions on the needs of rural and island communities.

While some of this feedback was provided in the context of work on the overall Tackling Child Poverty delivery plan, it has proved useful in informing the design of the WFS Third Sector Delivery Plan also.

Step 4 – Assessment

While no immediate negative impacts on Island Communities have been identified, we recognise there is a possibility of unintended consequences emerging as the fund is implemented.

Funding decisions have the potential to affect island communities differently due to the geographic distribution of awarded third sector organisations.

We recognise that island communities face unique challenges with access to services, including geographic distance, transport costs, workforce constraints and digital connectivity limitations, which may affect service accessibility.

There is a risk that provision may be:

• concentrated in more accessible areas
• reliant on digital or centralised delivery models

This may result in unequal access to support, particularly in smaller or more remote island communities.

Furthermore, workforce availability is a recognised constraint in island areas with recruitment challenges. There is a risk that delivery models may lack:

• sufficient local staffing
• continuity and local knowledge

This may affect the quality and sustainability of provision.

To mitigate these risks, the Fund assessment criteria required consideration of how applicants will meet the needs of rural and island communities. Applicants were asked to demonstrate credible and sustainable delivery approaches that reflect local circumstances and address barriers to access. The assessment process also recognised the importance of local partnership working, helping to ensure that proposed approaches are informed by local knowledge and effectively reach communities that may otherwise face barriers to participation.

The Fund also included design features to mitigate these risks; the Fund supports partnership delivery models that enable collaboration between larger organisations and locally based providers. This approach helps strengthen local capacity, maintain community knowledge and improve the sustainability of service delivery.

In addition, funded organisations are encouraged to adopt locally embedded approaches and work closely with community-based organisations that have trusted relationships within island communities. Flexible delivery models, including outreach activity where appropriate, will be supported to help ensure services remain accessible to those who may be unable to engage through more traditional delivery methods.

Step Five – Recommendation

In preparing the ICIA, the Scottish Government has formed the opinion the Fund is expected to have positive impacts for island communities by improving access to early, preventative and holistic support for families experiencing, or at risk of, poverty. The emphasis on joined-up, whole family approaches aligns with evidence that families require coordinated, accessible support delivered within their communities.

However, there are credible risks of unequal access and delivery, primarily linked to geographic factors, workforce constraints and the scale of funded organisations, with potential risks identified and mitigations outlined above.

These risks will be actively managed through ongoing assessment, review of programme delivery, and monitoring through grant management processes, with a continued focus on ensuring equitable access to whole family support across all communities, including island areas.

There is opportunity to further consider the delivery of the WFS Third Sector Delivery Fund on an iterative basis to ensure that optimum outcomes are achieved for all parts of our island communities. As part of the funding criteria, awarded organisations will be expected to share learning from programme activities to enhance knowledge exchange, and spread innovation and learning in the delivery of Whole Family Support more widely.

It is recommended that ongoing stakeholder engagement with relevant representative groups and those with lived experience is undertaken as delivery of support under the Whole Family Support Third Sector Delivery Fund progresses.