Islands bond: consultation

1. Introduction

Background:

Scotland's National Islands Plan, published in 2019, was developed following the introduction of the Islands (Scotland) Act 2018 and sets out a series of objectives for improving outcomes for island communities across Scotland.

During the consultation for the National Islands Plan, depopulation was highlighted by island communities as their top priority issue. The National Islands Plan commits the Scottish Government to address population decline and ensure a healthy, balanced population profile. This commitment is underpinned by a range of actions including:

• Identify islands where population decline is becoming a critical issue in order to ensure that these islands have their needs addressed;
• Work with young islanders to identify actions to encourage them to stay on or return to islands; and
• Develop an action plan to support the repopulation of our rural and island communities, and work with partners to test approaches using small-scale pilots.

Development of the Islands Bond is seen as a key action in delivering on these National Islands Plan commitments.

Islands Bond Manifesto Commitment:

The SNP Manifesto stated that: “To help stem depopulation, we will establish an Islands Bond – offering 100 bonds of up to £50,000 to young people and families to stay in or move to islands threatened by depopulation. The bonds will support people to buy homes, start businesses and otherwise make their lives for the long term in these communities”.

This commitment provides us with a number of high-level details in relation to the purpose of the Islands Bond:

• The bond will be a £5 million fund across the lifetime of the parliament.
• The bond value for each individual ‘award’ will be up to £50,000.
• Capital funding will be made available to young people and families to stay in or to move to islands currently threatened by depopulation.
• Bonds issued will support people to buy, build or renovate homes, start businesses and otherwise make their lives for the long-term in island communities.

Proposed aims of the Bond:

The Islands Bond will aim to address the issue of depopulation through delivering a direct intervention responding to some of the key financial barriers to remaining in, or moving to, the islands.

This intervention will involve providing up to £50,000 for up to 100 households across the lifetime of the parliament. The bond will be an agreement to provide financial assistance based on set criteria to support island residents to remain in their community, or to encourage households outwith the islands to move there.

Recognising the potential tensions arising from those outwith the islands moving into island communities, we will also look to develop, in parallel to the bond mechanism, options for a relocation support or advisory service. This could help to provide a ‘soft landing’ for those looking to move to island communities.

Providing support in the form of capital funding through an Islands Bond will stimulate local island economies and address financial barriers to accessing land, housing and/or business space that will facilitate both population retention and growth in island communities.

In particular, the bond could be expected to create sustainable and inclusive growth in the island communities recipients of the bond move to or remain in, and, through careful development of its criteria, would also reduce inequalities and give equal importance to economic, environmental and social progress.

Potential Considerations:

Defining and identifying islands that are currently threatened by depopulation

Understanding the population challenge we want to address will be a major factor in where we direct interventions, and may involve for example:

• Identifying islands that have historically suffered decline.
• Identifying islands that are projected to see a decline.
• Exploring whether population decline is experienced differently across individual islands e.g. does a more granular investigation demonstrate that some areas are experiencing a population growth.
• Considering whether we are solely focused on overall population levels or whether we should target specific demographics.

Eligibility

At this moment, we do not have a list of specific islands that would be covered by the bond. This is due to the range of considerations outlined above. We would hope to be able to improve our understanding of these population challenges through our consultation this year.

Another crucial consideration will be in how the bond may support both those looking to remain in or return to island communities, and those looking to move to island communities.

Consideration will also need to be given to which capital costs are eligible, and this may be influenced by locally identified priorities and/or need.

Value of the Bond

In order to ensure the level of funding is reasonable, the value of individual bonds may require to be needs based. Development of the assessment process will need to explore what evidence would provide sufficient reasoning for requesting a bond, reassurance that funding would be spent against agreed criteria, and options for monitoring/evaluation. This will need to be balanced against the capacity of any assessment panel/team, and the need to make the bond accessible.

Measuring/Evaluating the Bond

Measuring the progress and success of the bond would involve both quantitative and qualitative analysis.

Quantitative:

• Number and value of islands bonds issued;
• Number, individual value, and location of households in receipt of the bond to support remaining in an island community;
• Number, individual value, destination moving to, and original location of households in receipt of the bond to support migrating to an island community;
• Analysis of wider impact of bond investment including additional employment created, increase in local school roll, bond spend in local area/business.

Qualitative:

• Case studies of households in receipt of the bond which would highlight both the benefits and potential challenges of remaining in or moving to island communities.

Through the above measurements, we will be able to measure the success of the bond, and adapt the criteria of the bond to ensure it continues to deliver against island community population needs.

Note on Geographies used in the Consultation:

Questions within the survey requesting information on island location will refer to “Island Groups”. These groups were developed through the framework for the National Islands Plan Survey published 9 July 2021. The groups and the islands they contain are provided in the table below.

The survey, and the methodology can be found at National Islands Plan Survey: final report - gov.scot (www.gov.scot).

Argyll Islands

Coll, Colonsay, Easdale, Gometra, Iona, Islay, Isle of Gigha, Isle of Mull, Jura, Kerrera, Lismore, Luiing, Oronsay, Seil, Tiree, Ulva

Arran, Bute and the Cumbraes

Bute, Great Cumbrae Island, Isle of Arran

Lewis and Harris

Great Bernera, Isle of Lewis and Harris, Scalpay

Orkney Mainland

Burray, Mainland of Orkney, South Ronaldsay

Orkney Outer Isles

Eday, Egilsay, Flotta, Graemsay, Hoy, North Ronaldsay, Papa Stronsay, Papa Westray, Rousay, Sanday, Shapinsay, Stronsay, Westray, Wyre

Shetland Mainland

East Burra, Mainland of Shetland, Muckle Roe, Trondra, West Burra

Shetland Outer Isles

Bressay, Bruray, Fair Isle, Fetlar, Foula, Housay, Papa Stour, Unst, Whalsay, Yell

Skye and the Small Isles

Canna, Eigg, Eilean Tioram, Isle of Ewe, Isle of Raasay, Isle of Skye, Muck, Rona, Rum, Sanday, Soay

Uist and Barra

Baleshare, Barra, Benbecula, Berneray (North Uist), Eriskay, Grimsay (North), Grimsay (South), North Uist, South Uist, Sunamul, Vatersay