Empowering Scotland's Island Communities

Why Scotland's islands are special

Scotland's unique and special islands

In recognising the potential of our islands it is essential to recognise the challenges and opportunities that our island communities face.

Just as the Scottish Government believes independence will better enable Scotland to address the issues we face as a nation, so autonomy and empowerment for the islands should provide island communities with the means and the support of national government to address the challenges they face and to seize the immense opportunities that are available.

Scotland's islands are recognised as places where communities take responsibility for shaping their future; where social enterprise as a sector is innovative, strong and growing; where community asset ownership and service delivery are well established and supported; and where unique cultural assets, including Gaelic, play a significant role in creating vibrant, strong communities.

With independence we will no longer rely on Westminster to recognise or support these aims. Instead the Scottish Parliament, Scottish Government, Islands Councils and other island stakeholders will be able to meet island needs and to support island communities in grasping these opportunities, building sustainable economic growth and securing the benefits such as increased island populations that will result.

Island priorities

Islands by their very nature are special places with special requirements. For example, the Western Isles, Shetland and Orkney each have their own strong sense of identity, just as the Argyll islands differ from Arran; yet what they share is an abundance of natural resources and a pride in their cultural traditions.

Just as the Scottish Government believes independence will better enable Scotland to address the issues we face as a nation, so autonomy and empowerment for the islands should provide island communities with the means and the support of national government to address the challenges they face and to seize the immense opportunities that are available.

Our islands include many fragile areas, characterised by factors such as declining population, scarcity of economic opportunities, proportionately fewer young people, geographical and transport challenges, and below average income levels. The issues of remoteness, and of how best to deliver services for the benefits of Scotland's islands efficiently and effectively, remain. Island Areas still face challenges of connectivity to the mainland transmission network in relation to taking advantage of the opportunities of on and offshore renewable energy development. And the remote nature of our islands will always present transportation challenges that must be addressed.

These challenges form the basis of the Our Islands Our Future campaign and the Island Areas Ministerial Working Group has focused on the way in which empowerment of our island communities can address these issues.

The Scottish Government and its public bodies, together with the local authorities covering the islands, are fully aware of the particular opportunities and challenges in Scotland's islands, and using the powers of devolution we collaborate closely with local communities and other stakeholders. This focus is reflected, for example, in the collaborative work of the Convention of the Highlands and Islands, and in the strategic priorities of Highlands and Islands Enterprise, which are to:

• Support businesses and social enterprises to shape and realise their growth aspirations
• Strengthen communities and fragile areas
• Develop growth sectors, particularly distinctive regional opportunities
• Create the conditions for a competitive and low carbon region

Scotland's people are best placed to make decisions about our future, and to know what is needed to deliver sustainable and resilient communities. This recognition is central to the Scottish Government's outlook, including its proposals in the recently launched Community Empowerment (Scotland) Bill, and its joint work with COSLA ^[3] to strengthen community planning. And building on that work upon independence, with island-proofing of Government policy-making duly embedded, our islands will have more input to policy-makers on a regular basis. The Scottish Government believes that independence provides the best opportunity to extend the partnership that exists between Scotland's island communities, their local authorities and the Scottish Government into new areas.

Islands by their very nature are special places with special requirements.

The Community Empowerment (Scotland) Bill will help to shift the balance of power towards communities. It will give them new rights to have their voices heard in relation to the design and delivery of public services, in the community planning process and at their own initiative, and it will make sure that their proposals to take over public sector assets are properly considered.

The Bill will also reinforce the Scottish Government's message that it expects all local authorities, and other public sector bodies, to support communities to become more empowered and to participate in the decisions made by those bodies. Those authorities that are already doing this well should not find the Bill onerous, but it will make others catch up to that best practice.

Funding for Islands Councils

Budgets distributed according to need

Ensuring island communities, like all communities, can fulfil their potential requires a fair allocation of resources.

Independence would give Scotland access to all of our wealth and resources. Decisions on the level of public expenditure and its allocation will be a matter for the people of Scotland and the government they elect, rather than decisions at Westminster.

The devolution of local government funding to the Scottish Parliament has enabled the Scottish Parliament to provide protection for local government, despite real-terms cuts in Scotland's overall funding imposed by the Westminster Government. For example, in recent years, decisions taken by Westminster governments have resulted in an 11 per cent reduction of Scotland's budget. This has taken place despite the opposition of the Scottish Government. And in 2013-14 the Scottish local government settlement represented a flat cash settlement on a like-with-like basis, whereas the UK settlement reduced English local government spending power by 1.7 per cent.

Funding for the Islands Councils

Because the distribution of the local government budget is designed to properly account for characteristics such as remoteness, dispersed populations and characteristics unique to island communities, Shetland, Orkney and Eilean Siar receive greater funding from the Scottish Government, per head of population, than any other local authority in Scotland. The other local authority areas with significant island populations - Argyll & Bute, Highland and North Ayrshire - all receive block grant funding per head of population above the Scottish average.

In addition to their needs-based share of Grant Aided Expenditure, the Islands Councils also benefit from the Special Islands Needs Allowance ( SINA), which recognises the increased cost of delivering services to island communities and allocates extra funding to those authorities. SINA redistributes around £20 million each year to authorities with island communities. The three Islands Councils receive around 85 per cent of this sum, reflecting the agreed means of distributing SINA to reflect the additional costs associated with public service delivery in such communities.

Financial autonomy

Local authorities in Scotland now have greater autonomy in determining how to spend their budgets. Prior to 2007, central government required local authorities to spend particular proportions of their budgets on particular services, thereby constraining the choice of locally elected members to adjust spending to meet local needs. This 'ring-fencing' of budgets has reduced from a total of £2.7 billion, across of all of Scotland's 32 local authorities in 2007-08, to just over £240 million in 2014-15.

The Scottish Government is providing local authorities with total funding of over £10.6 billion in 2014-15 and this will be maintained in 2015-16. This continues the protection of local government's share of the total of Scottish budget, in stark contrast to elsewhere in the UK.

Additionally, the Islands Councils and communities will accrue extra spending capacity as the community benefits described elsewhere in this prospectus are realised to help empower them and address specific island challenges.

On independence, the Scottish Parliament will have the opportunity to design a tax system for Scotland which reflects a collective view of the social and economic model which the country wishes to pursue. The Scottish Government has committed to building a simpler system of taxation after independence, following our model of collaborative policy development, as seen in the implementation of tax powers devolved under the Scotland Act 2012. The application of derogations and localised concessions is determined by EU law. The Scottish Government notes the Islands Councils' proposals for targeted measures such as to address fuel poverty or reduced VAT for construction and will invite the Islands Councils to contribute to a programme of work reviewing the inherited UK tax system following independence, with a view to identifying reforms that would allow all of Scotland to gain from the full benefits of a modern and efficient tax system.