Islands Bond: consultation responses analysis

Executive summary

1. The Scottish Government intends to launch an Islands Bond which will offer financial support to those wishing to move to, or remain in, one of Scotland's island communities. A consultation seeking views on the design and implementation of the proposed Bond was carried out between 2 August 2021 and 25 October 2021.

2. The consultation paper, Islands Bond: Consultation, set out background information on island depopulation, and the role of the proposed Islands Bond in addressing this. It outlined a number of matters for consideration in developing the detail of the Bond. These included understanding population challenges and the implications for different islands, determining how the Bond scheme might be implemented, and establishing processes for measuring its impact. The paper contained a mix of 12 open and closed questions.

About the responses and respondents (Chapter 2)

3. The consultation analysis was based on 1,654 responses. These comprised 1,615 responses from individuals and 39 responses from organisations. Organisational responses came from community groups and community trusts; public organisations including local authorities and NHS boards; third sector organisations, charities, and membership bodies, as well as other types of organisations including hospitality and tourism organisations, educational organisations, and cultural organisations.

4. Overall, 42% of respondents lived or were based on islands and 58% were not. However, there was a difference between individuals and organisational respondents, with 41% of individuals classed as 'island respondents' compared to 74% of organisations. Among the individual respondents who lived on the islands, the largest proportions were from Lewis and Harris (29%), the Argyll Islands (22%) and Uist and Barra (13%).

Population challenges in island communities (Chapter 4)

5. Island respondents repeatedly identified three key population challenges in their areas: (i) an ageing (largely retired) population, (ii) young people and young families moving away, and (iii) a shortage of working-aged people in key sectors of the economy. The views of respondents were consistent – both among individuals and organisations – across all island groups.

6. Respondents attributed these challenges to four main issues: (i) a lack of (suitable) (affordable) housing, (ii) poor infrastructure in terms of public transport, roads, digital connectivity, water supply, etc., (iii) a low-wage economy and lack of (quality) employment opportunities, and (iv) a lack of childcare and education services.

Overall views on the Island Bond (Chapter 5)

7. Across all the consultation questions, respondents offered their overall views on the proposed Islands Bond scheme.

8. Non-island respondents were often strongly in favour of the Islands Bond proposal, and many described the initiative very positively as a 'great opportunity', 'a fantastic idea', or an 'amazing scheme'. However, the views of island respondents were fairly evenly split between those in favour and those opposed. Island respondents in particular (and non-island respondents to a lesser degree) raised a number of questions and concerns about the scheme and many were not convinced that the approach set out would achieve the objective of reversing population decline.

9. The main benefit identified by both island and non-island respondents was that the Islands Bond could help address the issue of island depopulation both by attracting newcomers (and returners) and by retaining existing inhabitants. In particular, respondents thought it would (i) address the perceived financial barriers to moving to or living on an island, (ii) help people find accommodation, (iii) help people start businesses, and (iv) benefit the local economy through additional expenditure on local products and services, an increase in job opportunities and the possibility of attracting more visitors.

10. Respondents who were generally in favour of the proposal did, however, sometimes raise caveats. In particular, it was suggested that island residents should be given a higher priority for awards than those relocating (or returning). It was also suggested that newcomers would need assurances about jobs and the availability of housing and services, as well as about practicalities such as transport links and IT connectivity in order to be confident about the viability of making a move.

11. A wide range of disadvantages or potential disadvantages following the introduction of the Islands Bond were identified. These disadvantages were raised most frequently by island respondents but were also raised, less often, by non-island respondents.

12. Those who were strongly against the proposal thought that the concept of an Islands Bond was wrong in principle. The reasons offered for this view included that (i) it was a short-term fix to a long-term problem and would not address the underlying causes of depopulation, (ii) £5m was far too small an investment to have any impact on the depopulation of the Scottish islands, (iii) it was a waste of taxpayers' money, (iv) a cash incentive to individuals was a bad idea and would attract the 'wrong people', and (v) the scheme would be open to abuse. These views were held mainly, but not exclusively, by island respondents. More generally, both island and non-island respondents questioned whether the proposals represented a strategic response to the question of island depopulation. The potential for divisive impacts on communities and community cohesion was also raised as a key concern – mainly by island respondents.

Priority focus: retention or growth? (Chapter 6)

13. The consultation asked respondents what they thought the priority focus for the Islands Bond should be. Overall, 56% of respondents thought that the focus for the Islands Bond should be both population growth and population retention. A quarter of respondents (25%) thought it should be population retention only, 13% thought it should be population growth only, and 6% of respondents thought there should be some 'other' focus for the Bond.

14. There was a clear difference between island residents and non-island residents in relation to this question, with island residents giving more emphasis to population retention, and non-island residents giving more emphasis to population growth. However, these differences were seen mainly among individuals; island and non-island organisations, on the other hand, both largely thought the focus should be on both growth and retention.

Demographic targeting (Chapter 7)

15. The consultation asked island residents for their views about the under-represented demographics in their area that they felt should be targeted by the Islands Bond.

16. The majority of respondents to this question said that the Islands Bond should be targeted at working aged adults (71%) and / or young people (67%). Just over a quarter (27%) thought the scheme should be targeted at professions and 8% thought it should be targeted at minority ethnic groups. Note that approximately two-thirds of those who wanted to see a focus on professions also thought the scheme should target working-aged adults and / or young people.

Bond value, allowable expenditure, and conditions (Chapter 8)

17. Some respondents commented on the implementation of the Islands Bond. These views focused on three main themes: (i) financial issues, including the value of individual bond awards, (ii) allowable expenditure, and (iii) the conditions that should govern the scheme.

18. Regarding financial issues, respondents were unclear if individual bonds were intended to be of a fixed value of £50k, or whether there would be a process for determining individual bond values up to that limit. Some argued that the bond award process should involve a financial assessment of some type, to ensure that the money went to those in most need.

19. Regarding allowable expenditure, respondents that the Bond should be able to be used to help recipients access affordable housing, to support existing businesses and to start-up new businesses. There were suggestions that other allowable expenditure should include (i) removal and relocation costs, and (ii) travel to and from the islands.

20. Regarding conditions of bond awards, there was a widespread view that appropriate financial and other conditions were required. Respondents repeatedly expressed concerns that the bonds would be open to potential abuse, exploitation, or misuse (e.g. with recipients using the money to fund projects intended for resale), and said that ongoing monitoring and scrutiny would be required to prevent or detect this. Respondents wished to see payback and / or clawback arrangements put in place.

Decision-making processes (Chapter 9)

21. Respondents – and especially island respondents – often asked for clarity about the process for decision-making in relation to the allocation of bond awards. Respondents said that there were many more 'worthy recipients' than the Islands Bond scheme could support, and it was therefore vital to ensure that the process of assessment and decision-making was 'fair', 'transparent', and 'evidence-based'.

22. Respondents wanted to know who would make decisions, and how the available funds would be distributed between (i) different categories of potential recipient, and (ii) individual award recipients. There was a view that the selection of bond recipients should involve identifying the 'right sort of people' who could make a positive contribution to island life. On the question of who would assess applications and make decisions, respondents most commonly emphasised the importance of community involvement in the process.

An advisory service for those relocating to island communities (Chapter 10)

23. Respondents were asked for their views about the need for an advisory service to support people relocating to island communities. More than two-thirds of respondents (70%) agreed that an advisory service would be needed – including almost half who 'strongly agreed' (46%). However, there were substantial differences between the views of island and non-island respondents. Almost nine-tenths (88%) of non-islanders agreed that an advisory service would be needed, compared to around half of islanders (45%).

24. Respondents put forward a wide range of functions for the service, including (i) helping incomers settle into island life and integrate into communities, (ii) providing information and advice on local services and amenities, (iii) advising on housing options, (iv) and providing business support and advice. There were differing views on whether the service (i) should provide direct advice and assistance or simply signpost to appropriate agencies, and / or (ii) should have island-based offices or be largely (or wholly) web-based.

25. In terms of who should be involved in the delivery of such a service, the most common view was that island residents should be involved. A range of specific types of individuals were also suggested along with a wide range of statutory and non-statutory organisations.

26. Respondents who did not agree with the need for an advisory service often expressed opposition to (or reservations about) the Islands Bond policy. More specific points made by this group included that (i) island communities are welcoming and would be able to provide any advice needed; (ii) those locating to the islands should be proactive in doing their own research and seeking assistance; (iii) moving to an island is not significantly different to moving to any other location; and (iv) other sources of information are already available.

Equality impacts of the Bond (Chapter 11)

27. Respondents were asked about the possible impact of the Islands Bond scheme on people with protected characteristics (as defined by the Equality Act 2010). Respondents identified both positive and negative impacts in relation to age, disability, sex, sexual orientation, transgender status, religion and belief, pregnancy and maternity and race. The most common view was that any scheme focused on young people and families (as indicated in the consultation paper) would inevitably discriminate against older people.

28. Respondents often discussed, queried and / or expressed concerns about the idea that eligibility for a Bond award might depend on a person's protected characteristics.

Measuring the impact of the Bond (Chapter 12)

29. Respondents were asked to suggest methods (beyond those outlined in the consultation paper) for measuring the progress and impact of the scheme.

30. In terms of monitoring the application process, the main issue raised by respondents was the need to have a full account of the awards made in terms of island location, whether the award was for retention or relocation, and the specific purpose of the award.

31. In terms of measuring the wider impact of the scheme, comments were wide ranging and discussed (i) general principles and considerations which inform the approach to measuring impact, (ii) suitable methodological approaches and research designs, and (iii) specific measures / indicators that it would be beneficial and / or important to capture.

Alternatives to the Islands Bond (Chapter 13)

32. Respondents who did not agree that an Islands Bond scheme should be established often made alternative suggestions for how depopulation might be addressed. The most common suggestions were to (i) invest in island infrastructure, (ii) invest in communities (rather than individuals and households), (iii) strategically target (a small number of) communities, (iv) provide loans rather than bonds, and (v) introduce new policies and / or legislation to address issues such as housing shortages and complexities in the planning process for croft acquisition.