National Islands Plan Annual Report 2022

Sustainable Economic Development

Strategic Objective 2 – To sustain and promote sustainable economic development

We committed to identifying key actions to drive inclusive and sustainable economic growth on islands such as community-run businesses, e-commerce and digitally enabled island-based businesses.

Implementation Route Map 2022 action

• We will establish a Digital Productivity Fund focused on supporting business to improve firm-level productivity through the adoption and successful integration of new and advanced technologies.
• We will develop joint programmes of action to increase digital understanding and adoption in sectors where business models have been transformed rapidly due to new technology.
• To ensure that the National Islands Plan leads to meaningful, positive and sustainable change, there needs to be ongoing collaboration with our island communities for the duration of the Plan. We will continue to consult and collaborate with our island communities on a regular basis.
• We will continue to work with teams delivering the projects of the recently published National Strategy for Economic Transformation in ways that maximise benefits for island communities.

Work is ongoing in relation to this commitment.

Digital Economy and Data Driven Business

Digital technologies continue to be vital for our economy and businesses regardless of sector or location. Through 2022 we have continued to offer our Digital Development Loan to businesses offering a zero-interest loan up to £100,000 to develop their digital capacity in skills. This is in addition to the DigitalBoost Programme offering digital support to SMEs including workshops, 1-2-1 advice and health checks.

Data produced through previous programmes have shown that some businesses need more than just financial support to successfully implement digital projects. Government is currently piloting its Digital Productivity Labs so that future programmes can be fully aligned to the specific support SMEs require.

Work is also ongoing with Scottish enterprise agencies, including Highlands and Islands Enterprise, to identify how the full range of stakeholders delivering services in this area can best work together to deliver a single joined-up national service for businesses. Outputs from this collaboration, along with findings from the Digital Productivity Lab pilot will determine next steps which will be taken forward as part of work on the Government's National Strategy for Economic Transformation.

There are many community initiatives and projects in island areas that contribute to the local economy and have a focus on supporting the Gaelic language. A number also have a digital capability. These are varied and include initiatives such as Sabhal Mor Ostaig, Ceolas, Feisean nan Gàidheal. Projects operating in the heritage sector also make an important contribution to Gaelic and local economic growth. The work of Gaelic community development officers is also important here and a number of community trusts are taking steps to support Gaelic in their areas.

Highlands and Islands Enterprise (HIE) lead on the Destination Development Programme in the Islands Growth Deal which consists of five third sector led tourism projects. These projects are rooted in the communities and aim to increase community cohesion through employment and year-round facilities and events, alongside expanding the tourism offer to support economic growth.

We committed to exploring how best to ensure the needs of islands are met within emerging regional economic partnerships including the Convention of the Highlands and Islands (COHI).

Implementation Route Map 2022 action

• All island Local Authorities are active members of, and their needs well represented at, CoHI. Local Authorities across the Highlands and Islands region are currently discussing whether a Regional Economic Partnership would provide additional value to existing partnerships. Scottish Government will continue to engage with and support them as required.
• Ongoing work with Highlands and Islands Enterprise to develop understanding of the issues faced and how the Talent Attraction and Retention Programme, Skills Recognition Scotland, and Student Retention project can positively impact repopulation efforts.

Work is ongoing in relation to this commitment.

The Highlands and Islands Regional Economic Partnership (REP) has become more established during 2022, following its inaugural meeting in December 2021. This regionally led body brings together regional interests across Highland and Island areas, focuses and aligns resources, shares knowledge, and develops joined-up plans to drive the regional economy in the Highlands and Islands. It has a standing update at each meeting of the Convention of the Highlands and Islands (CoHI) and is closely aligned to CoHI's work. In 2022, key areas of focus for the REP have included efforts to promote Highland and Island contributions to national frameworks such as Strategic Transport Projects Review 2 and National Planning Framework 4, engagement with the Scottish Government's new National Strategy for Economic Transformation (NSET) and in particular the workstream around productive regions, long-term planning for the future transformational developments around renewable energy, and building understanding of how wider factors such as population and transport constrain or enable economic growth.

We committed to tailoring business and community support for island communities to ensure products and services are fit for purpose, accessible and effective. This will include exploring new and innovative models and working with national providers to consider how programmes can better address needs of island communities and businesses.

Implementation Route Map 2022 action

• The Scottish Government has committed to growing Community Wealth Building (CWB) in Scotland as a practical approach to delivering on our wellbeing economy aims. The Scottish Government has supported five pilot areas, including the Western Isles, to develop bespoke CWB action plans. Alongside this pilot work, the Scottish Government committed £3 million to advance CWB across the Ayrshire region, through Ayrshire Growth Deal. The 2021 Programme for Government and the recent NSET confirmed our plans to introduce legislation on Community Wealth Building during this Parliamentary session. The legislation we plan to introduce will attempt to address blockages identified within the areas leading the implementation of CWB, and support further embedding of this approach across Scotland. A Bill Steering Group, chaired by the Minister for Public Finance, Planning and Community Wealth, has been established and contains representation from a range of public, private and third sector stakeholders, including Comhairle nan Eilean Siar and North Ayrshire Council.

Work is ongoing in relation to this commitment.

Community Wealth Building

Community Wealth Building (CWB) continues to be implemented in a number of localities and sectors, in addition to the pilot areas supported by the Scottish Government, who have now embedded this economic development model. In the 2022‑23 Programme for Government, we outlined our commitment to hold a consultation on CWB prior to the introduction of legislation, this builds on the learning gained via the pilots and other areas implementing CWB, and feedback received from a range of stakeholders and members of the CWB Bill Steering Group. In addition to the work on CWB, within NSET, we have committed to undertake and publish a review of how to best significantly increase the number of social enterprises, employee-owned businesses and cooperatives in Scotland, supporting regional regeneration and the wealth of local communities.

Highlands and Islands Enterprise (HIE) continues to offer bespoke and tailored support to island community organisations and social enterprises through the Support for Communities Framework and Delivery Resource Programme (employment of development officers), working closely with Scottish Government. Support ranges from developing new income generating assets to delivering new services that focus on Net Zero and environmental sustainability.

Additionally, HIE delivers economic and community development for the region through eight area-based teams which enables the response to meet local needs and opportunities using extensive local knowledge, partnerships, and a customer-focused approach. Intervention rates and eligibility criteria for programmes are often flexed to increase support to islands. New products are developed to target the needs of entities in the area based on feedback from business survey reports and business census reports. Products are shaped in discussion with the national Business Support Partnership and are made available through the SG platform.

Scottish Enterprise

Some Scottish Enterprise (SE) activities operate across all of Scotland, including island communities. These include inward investment and overseas market development via Scottish Development International, operating in collaboration with Highlands and Islands Enterprise (HIE). SE also offers major grants programmes, including Regional Selective Assistance (RSA) and SMART: SCOTLAND grants, as well as growth investment funding for the early stage investment market. Companies in island communities have also benefited from the Scottish Manufacturing Advisory Service, Co-operative Development Scotland and Scotland Europa

We committed to work in partnership to support strategic projects which deliver sustainable economic growth in the islands, e.g., Orkney Research and Innovation Campus and Stornoway port developments.

Implementation Route Map 2022 action

• Through the Islands Growth Deal, in which both the Scottish and UK Governments will each invest up to £50 million, we will be investing in local people, projects and priorities in partnership with the island authorities and UK Government to spread the benefits of inclusive economic growth across the Orkney, Shetland and the Outer Hebrides, increasing opportunities for all.
• We will continue to work with stakeholders to support the development of a local energy plan for Islay, which is being developed for consideration as part of the Argyll and Bute Rural Growth Deal.

Work is ongoing in relation to this commitment.

Islands Growth Deal

The Islands Growth Deal has three main themes: leading the way to a low carbon future; supporting growth and future industries; and building thriving sustainable communities. Sixteen projects are included in the Islands Growth Deal, and these include the Islands Centre for Net Zero, Dales Voe Deep Water Port and Outer Hebrides Energy Hub, which are particularly focused on decarbonisation, and TalEntEd Islands, which will enhance the education and skills offer around green jobs, in preparation for the transformational move to renewable energy. Understanding, quantifying and minimising carbon emissions is also built into the design and development of all Growth Deal projects, which also must consider their long-term sustainability from a community and financial perspective. Highlands and Islands Enterprise (HIE) have been supporting partners in the calculation and quantification of their carbon emissions.

Argyll and Bute Growth Deal

The Argyll Rural Growth Deal regions covers the mainland but also many island communities. Specific projects such as the Islay Low Carbon and Rural Housing projects are based solely on islands with others such as the Rural Skills Accelerator project and Marine Industry Training Centre having significant positive benefits for island communities. HIE are involved in supporting the latter two and ensuring island communities benefit from these investments.

Stornoway Port Development

Following the signing of contracts for the construction of the Stornoway deep water terminal in March 2022, work commenced on the construction project and has proceeded throughout 2022 according to schedule and on budget. An Advisory Board of key partners sponsoring the project has been providing oversight to ensure that planning for the infrastructure required to respond to increased port activity (including cruise traffic) is in place and to secure the broader socio-economic benefits from the project, for example by maximising synergies with aspects of the Islands Growth Deal, such as the Outer Hebrides Energy Hub.

A Cruise Forum was formed during 2022 with partners (Stornoway Port Authority, HIE, Comhairle nan Eilean Siar, Visit Scotland, Outer Hebrides Tourism) coming together to create a Cruise Destination Development Strategy and Action Plan.

We committed to drive forward the many socio-economic opportunities arising from the 2019 Science and Innovation Audit report 'Maximising Opportunities for the Marine Economy in the Highlands and Islands' as well as enhance those arising from growth deals.

Implementation Route Map 2022 action

Several projects are being taken forward as part of both the Islands Growth Deal and the Argyll and Bute Growth Deal that have a strong focus on the Marine Economy. Both the Scottish and UK Governments will continue to work closely with partners in both deals to develop these projects to the benefit of coastal communities.

Work is ongoing in relation to this commitment.

Inshore Fisheries Management and Coastal Communities

We continue with the delivery of Scotland's Fisheries Management Strategy, and published a delivery plan to support implementation in September 2022. The twelve-point action plan within the Strategy includes commitments to deliver increased sustainability on a range of sea fisheries management issues, including delivering enhanced environmental protections where these are required. As part of the Strategy, we introduced the Scottish economic link licence condition to increase the volume of fish landed into Scotland by Scottish fishing vessels, which in turn will increase the benefit of fishing to local communities.

The Fisheries Management Strategy places a strong emphasis on co-management, working in partnership with stakeholders to deliver fisheries management actions. The Regional Inshore Fisheries Groups (RIFGs) continue to play a pivotal role in this, along with our refreshed Fisheries Management and Conservation Group which we have worked to improve and refocus during 2022.

Seafood Trade

The Scottish seafood sector is extremely important to the Scottish island economy, with total exports of Scottish fish and seafood valued at £788 million in 2021. The Strategy for Seafood, published 6 October 2022, affirms the importance of the seafood sector and sets out how we are supporting industry to contribute to achieving our Blue Economy aspirations in these remote coastal and island locations.

Our marine environment contributes significantly to our commitment to being a Good Food Nation, with locally sourced seafood also forming part of a healthy sustainable diet which is the ambition of the Local Food Strategy across mainland and island communities.

The Strategy for Seafood takes an end-to-end look at the supply chain, recognising that Scotland's world-renowned seafood sector is a vital part of our economy, particularly supporting our coastal and island communities, and will also be an essential part of our green recovery. We are working on next steps to implement some of the recommendations contained within it, which will improve the socio-economic benefits from seafood, for island communities.

Through the Islands Deal, we are working with Highlands and Islands Enterprise (HIE), who have provided significant support to the University of the Highlands and Islands Shetland led Shellvolution projects. This project aims to increase output and efficiencies in the mussels industry – thereby increasing and sustaining employment in island communities. The project will achieve its aims through significant investment in research and development through both universities and the private sector.

The Shellvolution project has been designed as a new and innovative technical programme enabling future growth in the low-carbon and sustainable mussel farming sector in Shetland, and more widely in Scotland. Through a phased programme of research and development, focusing on better ways to farm within the marine environment, small businesses in the sector will be able to share in an anticipated growth in output to 18,000 tonnes by 2037. Productivity, efficiency and resilience of existing farm sites will increase, while some new locations will be developed. Employment that is supported by the sector is anticipated to broadly double to support this. Consumer markets are considered to have capacity to absorb this gradual increase in production; and mussel processors in Scotland will also benefit from the sustainable growth in farmed production.

We committed to display leadership in the public sector by demonstrating that jobs and careers can be successful on islands.

Implementation Route Map 2022 action

• Workforce Dispersal aims to demonstrate that work can be carried out from most locations. Plans to form a Workforce Dispersal working group are being discussed, initially looking at the Scottish Government workforce and how jobs can be undertaken from across Scotland. This work has been supported through engagement with the CoHI Population Working Group, who presented a paper at the October 2021 CoHI meetings setting out policy considerations and suggested locally led population initiatives for discussion. Scottish Government will continue to engage and reflect on this emerging work.
• Ongoing development of a Talent Attraction and Retention Programme.

Work is ongoing in relation to this commitment.

Sector Skills and Talent Attraction

The Scottish Government has committed through the National Strategy for Economic Transformation (NSET) to implement a focused Talent Attraction programme to attract key skills and talent from the rest of the UK. This will align with Scotland's identified key sector strengths and new market and cluster building opportunities and provide a joined-up "landing zone" for targeted employees and their families supported through our commitment to create a Migration Service for Scotland.

Brought together, the Talent Attraction programme and Migration Service for Scotland will improve Scotland's ability to attract and recruit workers from outside of Scotland with the skills that our economy will need in the future and support international workers in the migration and relocation process. An effective Talent Attraction and Migration Service takes the pressure away from the employer to provide relocation support, both initially and in the longer term, linking in with relevant experts and other services.

The wider Talent Attraction programme aims to attract people from the rest of the UK (rUK). Migration from rUK accounts for almost 50% of inward migration to Scotland and has no legal barriers. As part of this priority NSET action, an Industry Advisory Group for rest of UK Talent Attraction, chaired by Business, Trade, Tourism and Enterprise Minister has been formed to share talent attraction expertise to identify and develop effective approaches to attracting talent from rUK.

Membership of the Industry Advisory Group reflects the priority growth sectors identified in the NSET, which will create jobs and bring overall benefits to Scotland's regions and wider economy, including life sciences, technology/fintech, advanced manufacturing, mechanical and electronics, financial services, space, and renewables. This Industry Advisory Group will explore how best to shape a talent attraction programme which can expand Scotland's talent pool at all levels, to give employers the skills pipeline needed to take advantage of opportunities and benefit our economy.

We continue to support the Skills Recognition Scotland process, supporting workers with skills and qualifications gained outside the UK to overcome unemployment and underemployment and support employers to recruit talent and help address skills shortages. We will also develop a Student Retention programme to support students to stay, live, and work in Scotland post-qualifying.

We committed to promoting a thriving business environment that allows individuals to pursue a wide range of economic opportunities on islands.

Implementation Route Map 2022 action

• As is the case across Government, much of our work to support island economy sectors is mainstreamed and lies across many policy areas and as such we will continue to collaborate to ensure that the needs and interests of islands are served.
• We will continue to ensure that new and revised policies, strategies and services are island-proofed by supporting colleagues with their duty to conduct Island Communities Impact Assessments – which play a critical role in supporting and developing sustainable economic development on islands.
• Our Programme for Government makes a number of commitments to support Scotland's rural economy. These commitments reach across a wide range of sectors from agriculture to tourism, fishing and connectivity.
• In addition to mainstreamed business support, our Islands Programme will continue to support capital investment over the lifetime of the National Islands Plan (NIP), by supporting a range of areas, including tourism, infrastructure, innovation, energy transition and skills. In order to ensure that this investment provides best value for our island communities, whilst supporting them in their economic recovery, the framework for the Islands Programme is underpinned by the principles of place-based community wealth building, whilst also reflecting the four key pillars of the NIP to ensure it promotes a fair, integrated, green and inclusive approach to island policy.

Work is ongoing in relation to this commitment.

Islands Growth Deal

The Islands Growth Deal sets out a number of collaborative and island specific proposals, designed to address the islands' demographic challenges, as well as supporting business innovation, and the move towards net zero. The sixteen projects within the Islands Growth Deal focus on developing infrastructure to support the growing renewables cluster, innovation programmes to maximise the value of primary and emerging growth industries, boosting the sustainable tourism and cultural offering, supported by a programme to equip the islands workforce with the skills to meet current and future demand. The projects span several areas including low carbon, housing, skills, sustainable tourism, creative industries, space, food and drink and business innovation.

The Argyll and Bute Growth Deal projects span sustainable tourism, business innovation, housing, skills, aquaculture, low carbon and regeneration. In the context of the climate emergency and the need to address the economic challenges facing island and rural communities in Argyll and Bute, the Deal will look to harness opportunities provided by the region's abundant marine renewable resources.

Co-Innovate

The Co-Innovate Programme was supported by the European Union's INTERREG VA Programme, managed by the Special EU Programmes Body (SEUPB) and delivered in the Highlands and Islands by HIE. The aim of the programme was to stimulate innovation in some of the region's most rural businesses, supporting them to make local connections whilst also embark on international collaboration to drive innovation. Of the nine cross border business and academia projects completed in 2022, three of those projects were awarded to small to medium-sized enterprises (SMEs) in the Outer Hebrides which allowed them to create employment; develop new products, services and business models; as well receive expertise from an Irish academic partner. Many businesses accessed a business review with an innovation manager resulting in an action plan and signposting to further support. Programme activity completed December 2022.

Highlands and Islands Enterprise Innovation Support

HIE continued to provide support to enterprises seeking innovation advice. Support ranged from protecting Intellectual Assets, to new product development and Research and Development advice and across sectors including aquaculture and textiles. HIE's innovation programme launched in November 2022 and is open to all enterprises across the Highlands and Islands.

We committed to creating and promoting apprenticeships and job opportunities for young islanders.

Implementation Route Map 2022 action

• HM Inspectors are producing a report for Scottish Government in 2022 to evaluate Foundation Apprenticeships. This will identify what is working well, highlight any barriers to implementation, and make recommendations regarding aspects for improvement. The review of Modern Apprenticeship provision was paused in 2020/21 in response to the pandemic and will recommence in 2022. On completion this process will build on the evidence base for how apprenticeships can support pathways to positive destinations in our island communities.
• Work on the Student Retention project is continuing. Student Retention aims to encourage students to remain in Scotland (and rural locations/move to islands or Highlands) after completing study – this applies to any students from Scotland or the rest of the UK. Working with young islanders will help to develop our understanding of what would make them want to stay or return after study.

Work is ongoing in relation to this commitment.

Scottish Government provided a £40,000 investment through The Adhartas Trust, to help deliver a targeted host employer service in the Outer Hebrides, with a focus on remote communities suffering from pronounced population decline. The funding offer to the Adhartas Trust enhanced the existing local offer, for those aged 16 years upwards.

The project, which is supported by the local authority and Skills Development Scotland (SDS), is underpinned by existing infrastructure, experience and skills to help retain and retrain members of the local community or support and attract new talent to transition into communities in the Outer Hebrides. This has supported small businesses to employ apprentices, who were supported to upskill/reskill and provided with sectoral specific training. All opportunities are linked to identified economic needs, by equipping remote island communities with the innovation, skills and infrastructure to thrive, even under the most challenging of economic circumstances, and by providing a host employer service; all enabling communities suffering from population decline to be supported to remain sustainable. During 2022, the Adhartas Trust has supported apprentices across a range of academic opportunities, from SVQ level 2 through to Masters level courses. Additionally, the Trust has supported 8 apprentices into full-time employment, 2 into part-time employment and 12 have commenced skills and training development activity connected with what is hoped will become a positive employment destination in 2023.

This programme has been instrumental in the support offered to local organisations that would otherwise not have the mechanisms and/or capacity in place to support apprentices. Simultaneously, young people are provided with the opportunity to learn specialist skills and continue to live, earn and learn locally.

We committed to ensuring that skills provision is agile and responsive to future demand and enables individuals to take up opportunities.

Implementation Route Map 2022 action

• The 2019 Future Skills Action Plan (FSAP) sets out Scottish Government's ambition that people across Scotland should have access to high quality skills support throughout their working life. Since the Plan's launch, socio-economic conditions have changed greatly and while some of the trends and actions set out in FSAP have been delayed, others have been accelerated. Scottish Government have now progressed into a second phase of the plan, allowing us to take stock of labour market changes and emerging economic challenges, and to align closely with the National Strategy for Economic Transformation.
• The Skills Action Plan for Rural Scotland (SAPRS) sets out our partnership approach to developing the skills and talent needed to make sure that Scotland's rural and islands economy and communities continue to flourish and grow. It is a joint initiative supported by Skills Development Scotland, Scottish Government, stakeholders and partners. An evaluation of the SAPRS is currently underway; it will be published in 2022. This will help inform what future action is needed to drive forward coordination and delivery of skills across Scottish rural and islands communities.
• We have set up a Commission to undertake a review of learning for Scotland's land-based and aquaculture sectors – from early years to adulthood – to provide opportunities and qualifications through school, college, university and work-based learning including apprenticeships, for more people, and specifically more women, to work with and on the land, particularly in green skills. The Commission will provide independent, evidence-based advice and recommendations to Scottish Ministers.

Work is ongoing in relation to this commitment.

The Future Skills Action Plan sets out our strategic, partnership approach to support the skills needs of rural and island Scotland, by addressing skills shortages, talent retention and attraction and demographic challenges through enhanced work-based learning pathways and increasing access to education and skills provision in rural and islands areas. The Plan was launched in 2019 as a two-year plan and an evaluation was published in November 2022. The Scottish Government will respond fully to the evaluation findings and recommendations in 2023.

The Commission to review land-based learning committed to submit their report and recommendations to Scottish Ministers in January 2023. Commission membership included island representatives who contributed a wide range of expertise and experience.

We committed to building on Scotland's National Marine Plan to ensure that fishing and other economic activities stemming from the sea provide increased opportunities for island communities, but at the same time that they are pursued in a sustainable manner.

Implementation Route Map 2022 action

A statutory review of Scotland's Marine Plan was published in March 2021 which found that whilst the plan remains effective, national and global developments point to a need to update and replace. Scottish Ministers have considered the findings of the Review, including the recommendation to update the National Marine Plan, and all feedback received from stakeholders on the Review. We anticipate making a formal announcement on the outcomes of the Review shortly.

Work is ongoing in relation to this commitment.

Inshore Fisheries Management and Coastal Communities

Our approach to securing fishing opportunities through international negotiations seeks to maximise the benefits of fishing to our local communities whilst also ensuring that fishing activity is carried out at sustainable levels. This includes many of our fishing communities based in the Highlands and Islands, with significant benefits flowing to (for example) Shetland as a result. Quota secured at an international level helps to maintain and grow local businesses, providing employment opportunities both offshore and onshore.

Extensive research commissioned by Highlands and Islands Enterprise (HIE) has recognised the contribution the blue economy makes in ensuring the future resilience of island communities, whilst simultaneously supporting economic growth and responding to climate change. As a priority, HIE will pursue significant regional opportunities in marine environmental services, offshore renewable energy and aquaculture.

Kaly Group

Supported by Scottish Enterprise, Kaly Group Ltd completed a seed investment round led by the TRICAPITAL Syndicate LLP in 2022. Kaly will use the proceeds to develop a seaweed farm and associated operations on the Isle of Skye. The investment highlights the growing interest from private capital in seaweed farming as part of the Blue Economy. The project provides investors with an opportunity to participate in the growth of an industry that will create much needed jobs and economic growth in coastal and rural communities while delivering environmental and health benefits and a diverse array of lower-carbon products in areas like food, animal feed, fertiliser, and bio-based feedstock for plastic replacements, cosmetics, pharmaceuticals, and textiles.

We committed to ensure that sustainable land use including agriculture and forestry continues to provide jobs and opportunities to island communities.

Implementation Route Map action

• As part of the green recovery, Scottish Forestry is doubling its recruitment of Assistant Woodland Officers, and Forestry and Land Scotland is doubling the number of opportunities for young people (including modern apprenticeships) creating an additional twenty-five jobs for young people. The Scottish Government will continue to encourage forestry companies to support new jobs on islands.
• The Crofting Commission received additional funding in 2020/21 which enabled it to appoint four permanent Crofting Commission staff in the Western Isles. The Commission intends to review this in the future, with a view to considering further Commission positions in other island crofting areas. The new officers will liaise with crofting communities to encourage croft occupancy, working with assessors, landlords and townships to encourage opportunities for new entrants, and encourage active croft use and management of common grazing land. The Commission has also expanded its Residency and Land Use team, in order to increase its work in addressing absenteeism and bringing crofts back into active use.
• The Scottish Government continues to provide support to help sustain croft businesses. Officials continue to consider potential changes to the Crofting Agricultural Grant Scheme, which include widening the scope of activity which can be grant supported.
• SDS will shortly undertake a review of the Agriculture Modern Apprenticeship and seek industry input to develop and future proof the qualification.
• The Agriculture Reform Implementation Oversight Board (ARIOB) was established in August 2021 to contribute to Scottish Government's work to implement policy reform, incorporating the relevant recommendations of the farmer led groups to cut emissions across agriculture, support the production of sustainable, high-quality food, and design a new support system and approach. The Board are helping to develop the National Test Programme, which will support and encourage farmers and crofters to learn about how their work impacts on climate and nature, including offering financial support to carry out carbon audits and nutrient management plans, establishing a clear baseline and options for action for all who participate.
• Our Vision for Agriculture was published on 2 March 2022 and outlines our aim to transform how we support farming and food production in Scotland to become a global leader in sustainable and regenerative agriculture. This commitment will sit at the heart of a robust and coherent framework to underpin Scotland's future agriculture support regime from 2025 onwards. A new Scottish Agriculture Bill will be brought forward in 2023 to replace the Common Agricultural Policy (CAP) and deliver on the vision.

Work is ongoing in relation to this commitment.

The Scottish Government continues to support the expansion of the forestry workforce to respond to the increase in woodland creation and sustainable timber production. The Scottish Government published its Scotland's Forestry Strategy Implementation Plan 2022-2025. The plan contains a number of partnership actions that will support forestry jobs across Scotland and the islands including implementing the forestry sector's skills action plan and the development of a technical training hub. Work has commenced on the Land Use and Agriculture Just Transition Plan which will publish in draft alongside the Climate Change Plan in November 2023.

We committed to work with relevant partners and stakeholders to make tourism more sustainable and less seasonal and encourage development of a year-round offer across a wider range of islands that delivers economic, environmental and social benefits.

Implementation Route Map action

To support the long-term recovery of Scotland's tourism and hospitality industry, the Scottish Government established its Scottish Tourism Recovery Taskforce (STRT) in June 2020. Phase One of the Tourism Recovery Programme is well underway. Alongside implementing Phase One, officials have been working with Scottish Tourism Emergency Response Group to co-produce plans for a Phase Two of recovery (2022-23 and 2023-24) and we are now considering the best approaches to support Phase Two recovery work.

Work is ongoing in relation to this commitment.

We have focused on the holistic recovery of the Tourism and Hospitality sector in 2021-22, including for island communities, through the implementation of 10 projects from the Tourism Recovery Programme. We established the Tourism and Hospitality Industry Leadership Group in 2022. The group is a network of individuals from across the public, private and the third sector. The ILG will champion the national tourism strategy, Scotland Outlook 2030, a key component of the Scottish Government's National Strategy for Economic Transformation (NSET). More specifically, the ILG will provide strategic leadership to help grow the economic value and enhance the benefits of tourism, while delivering the very best for visitors, businesses, and communities. The Group has regular meetings and is co-chaired by the Scottish Tourism Alliance and Minister for Business, Trade, Tourism and Enterprise. Collaboration is at the heart of the ILG. It will work with industry, public agencies and Scottish Government to help drive recovery and sustainable growth in the long term. In addition, in 2023, VisitScotland in partnership with Bòrd na Gàidhlig, Scottish Government, the Gaelic tourism industry and other stakeholders will be revising the Gaelic tourism strategy which, among other things will focus on opportunities in island areas. Creative Scotland and Historic Environment Scotland will be working with Visit Scotland on this new strategy.

We committed to ensuring that crofting continues to provide jobs and opportunities to island communities.

Implementation Route Map action

• The Scottish Government continues to provide support to help sustain croft businesses. Officials continue to consider potential changes to the Crofting Agricultural Grant Scheme, which include widening the scope of activity which can be grant supported.
• The Crofting Commission received additional funding in July 2020 which enabled it to appoint four permanent Crofting Commission staff in the Western Isles. The Commission intends to review this in the future, and, if successful, can consider further positions in other island crofting areas.

Work is ongoing in relation to this commitment.

The Scottish Government continues to provide support to croft businesses, helping to support the rural economy. The Crofting Agricultural Grant Scheme (CAGS) and the Croft House Grant (CHG) play a key role in supporting rural and island businesses and communities. The CAGS is designed to aid and develop agricultural production on crofting businesses, thereby sustaining the economic basis of crofting, and the CHG provides support to improve and maintain the standards of crofter housing, with the aim of attracting and retaining people within our island communities, allowing them to achieve the full potential of their crofts while generating economic activity.

The Crofting Commission has received an increase to its budget, which has enabled it to increase its staff resource. Since 2020, the Commission has employed over twelve individuals from across the crofting counties, including on the islands, and remains committed to employing individuals from within the communities it serves.

In 2023 the Commission intends to expand its Assessor network, providing opportunities for individuals to become involved in supporting crofting for our rural and islands areas.

We committed to delivering the Islands Passport initiative, which promotes the opportunity to visit a wider range of Scotland's inhabited islands, encouraging visitors throughout all seasons and by public transport, thereby delivering economic opportunities for island communities.

Implementation Route Map action

Work on delivering the Islands Passport Initiative is led by Scottish Government's delivery partner, HITRANS, alongside wider stakeholder engagement. Scottish Government have continued funding of this project in 2021-22, bringing our total support for the project to £200,000. The project officially launched in 2022.

Commitment Fulfilled

The Scottish Islands Passport was launched by the Minister for Business Trade Tourism and Enterprise on 11 April 2022. The website contains information on sixty-six island locations and HITRANS continues to work on supplementing the information through engagement with island communities and businesses. HITRANS continue to gather data on the Passport and its performance which is expected to improve as it grows in popularity year on year.

We committed to work with the food and drink industry to leverage its economic potential and explore options for sharing some of its benefits with island communities.

Implementation Route Map action

The three-year Food and Drink Sector Recovery Plan was launched in November 2020 and has so far received £10 million from Scottish Government to support the programme, with industry also committed to raising £3 million in private sector funding to support the programme through to 2023. The plan does not provide direct financial support to businesses but is wrap around holistic support identified by Industry themselves and contains fifty actions to support all sectors of Scotland's food and drink industry, including Island communities to recover from Covid-19 and mitigate the impact of Brexit. Moving forward we will be working with the industry in refreshing Ambition 2030 as the sector adapts to the changing operating landscape post pandemic and Brexit. This work will, as the Recovery Plan before it, underpin the sustainability of the sector and the jobs it creates, especially in remote, rural and island communities.

Work is ongoing in relation to this commitment.

Food and Drink Recovery Plan

The Scottish Government provided support of £15 million towards the Food and Drink Recovery Plan over 2020–23. The Plan contains fifty actions to support all sectors of Scotland's food and drink industry to recover from Covid and Brexit, including help for businesses on the Islands. With the Recovery Plan phase due to end in March 2023 we are working with the Scotland Food and Drink Partnership in a refreshed Food and Drink Strategy, which will set out aims and actions for the sector over the coming years.

Isle of Eigg Brewery

Isle of Eigg Brewery is Scotland's first co-operative brewery, and they have ambitions to become carbon neutral. This is an innovative project demonstrating the commercial opportunities a community business can bring alongside community benefit. This example is a values led business that demonstrates the principles of inclusive growth and aligns with the Scottish Government's Community Wealth Building ambitions.

We committed to seeking to expand the range of economic, social and environmental benefits that island communities derive from forestry.

Implementation Route Map action

Scottish Forestry will continue to work with a range of partners to increase the use of forests and woodlands on the islands to help improve people's health, wellbeing and life changes.

Work is ongoing in relation to this commitment.

Scottish Forestry continues to support sustainable woodland creation on the islands through the Forestry Grant Scheme. In response to demand the Shetland Amenity Trust's tree nursery in Lerwick is expanding its production. This demand for trees has been generated by the success of local crofters integrating trees into their crofting businesses. Funding of around £400,000 from the Strategic Timber Transport Scheme has supported projects on the Isle of Arran on the Ross Road and at North Sannox that will help reduce the impact of timber transport on residents and visitors.

Forestry and Land Scotland (FLS) continue to sustainably manage the Scottish Minister's National Forest and Lands on the islands supporting local economies (through direct forest management activity, outdoor recreation use and related wildlife tourism), increasing biodiversity and providing opportunities for people to access and use local woodlands. FLS continues to run the Community Asset Transfer Scheme providing opportunities for communities to buy or lease land in support of local objectives. This includes the transfer of six hectares of land to the Arran High School Mountain Bike Club to develop an all-weather skills trail facility at Dyemill Forest, Lamlash. Also in 2022, Raasay Community Renewables celebrated switching on their community hydro schemes, which are operating under 40-year leases agreed with FLS.

We committed to review Scotland's National Planning Framework to ensure sufficient flexibility for island interests, including in how best to meet housing need.

Implementation Route Map action

The draft National Planning Framework 4 (NPF4) was laid in the Scottish Parliament in November 2021 for scrutiny and is also available for public consultation until 31 March 2022. We are working towards laying a final version for the Scottish Parliament's approval in Summer 2022. The draft NPF4 proposes land use planning policies on key issues supporting island and coastal communities' lives, such as: engagement, local living, housing, spaces and places, rural and coastal policies, health and wellbeing and connectivity.

Commitment Fulfilled

National Planning Framework 4 (NPF4) has been adopted and is now in force. It forms part of the development plan for day-to-day decision making in the planning system. It also informs the preparation of local development plans by planning authorities across Scotland, including the islands.

NPF4 sets out six spatial principles that apply across Scotland and form the basis of the national spatial strategy and planning policies: just transition, conserving and recycling assets, local living, compact urban growth, rebalanced development and rural revitalisation. NPF4 spatial strategy addresses the northwest coast and islands. It reflects the National Islands Plan priorities including growing the population and economy, improving transport and housing, and ensuring island communities are served by the facilities, jobs, education and services they need to flourish.

The strategy aims to build long-term resilience and self-reliance by minimising the need to travel whilst sustaining dispersed communities and rural patterns of development. The strategy is clear that the concept of local living, including 20-minute neighbourhoods, can be applied in a flexible way in island communities to find local solutions to local living, which may include service hubs with good public transport links. For homes, greater choice, flexibility and affordability are needed including to support varying housing needs.

Refurbishment of existing building stock is supported, and the additional costs of island-based development is recognised as an element to be factored into the planned approach. Local, place-based solutions and innovation is recognised as needed, including to provide homes for older people and younger people to stay in or return to their communities. The strategy supports encouraging economically active people to previously inhabited areas. Key sectors are also recognised, including the blue-green economy and renewables, oil and gas decommissioning, ports and harbours, spaceports, food and drink and tourism.

The thematic policy on rural development will apply country-wide and encourages economic activity, innovation and diversification whilst safeguarding and enhancing the distinctive character of rural areas, the service function of small towns, and the natural and cultural assets in the area. Policy on housing has been revised to separate out rural homes and seeks tailored approaches to rural housing provision by local development plans, including for small scale housing and resettlement of previously inhabited areas. It aims to meet identified local housing need, linked with service provision, while retaining distinctive character, sense of please, natural and cultural assets in the area.

We committed to reflect the National Islands Plan and relevant regional perspectives in the review of the National Planning Framework and preparation of National Planning Framework 4.

Implementation Route Map action

The draft NPF4 was laid in the Scottish Parliament in November 2021 for scrutiny and an online consultation ran until 31 March 2022. The aims and priorities of the National Islands Plan are reflected in the draft NPF4 in the spatial strategy and supporting policies including for: engagement, local living, housing, spaces and places, rural and coastal policies, health and wellbeing and connectivity. We are working towards laying a final version for the Scottish Parliament's approval in Summer 2022.

Commitment Fulfilled

National Planning Framework 4 (NPF4) has been adopted and is now in force. It forms part of the development plan for day-to-day decision making in the planning system. It also informs the preparation of local development plans by planning authorities across Scotland, including the islands.

The aims and priorities of the National Islands Plan are reflected in the NPF4 with the spatial strategy and policies identifying a range of challenges and opportunities for islands, supporting a just transition to net zero and creating flourishing communities.

During the preparation of the 2020 Infrastructure Investment Plan, we committed to considering the implications of the National Islands Plan on future infrastructure requirements.

Commitment Fulfilled

This commitment was fulfilled in 2020. Please see the National Islands Plan Annual Report 2020 for further details.

Recognising the services that island abattoirs provide to their communities, we committed to work with relevant partners to deliver sustainable and economical viable operations.

Commitment Fulfilled

This commitment was fulfilled in 2021. Please see the National Islands Plan Annual Report 2021 for further details.

We committed to ensure that legislation and policy relating to early learning and childcare is appropriately island proofed.

Implementation Route Map action

The Scottish Government will continue to engage with island stakeholders in the development of Early Learning and Childcare policy and legislation, including conducting an Island Communities Impact Assessment where appropriate.

Work is ongoing in relation to this commitment.

We work in close partnership with COSLA in the delivery of early learning and childcare and particularly, the 1140 Hours Programme. This partnership working with local government enables delivery of high-quality Early Learning and Childcare (ELC) services across Scotland, to help ensure that the needs of remote areas and islands are reflected and met. Since 2021, we have been phasing in a funding formula that more closely tracks evidenced local need and considers rurality and measures of deprivation, as well the numbers of eligible children in a particular area. In 2022-23, over £1 billion is being invested in the delivery of the 1140 Hours Programme.

An upcoming legislation change in August 2023, means all children who defer starting Primary 1 can automatically access an additional year of funded ELC. To evaluate the impact this change may have on different communities, ten pilot local authorities introduced the policy early. Argyll & Bute and Shetland Islands Councils have been involved in the pilot to ensure we understand the impact on island communities.

The Scottish Government provided £476 million of capital funding to local authorities to refurbish, re-purpose and extend existing nursery settings, as well as providing over 120 new facilities across Scotland. Individual local authorities have been responsible for deciding how this funding is used, based on local, evidenced need. This is now 90% complete with 825 capital projects delivered (August 2022).

The childcare sector representative organisations, including Care and Learning Alliance, are also crucial the development consultation and implementation of Early Learning and Childcare. Stakeholders have provided valuable feedback and insight during the refresh of the Funding Follows the Child and National Standard guidance, including through the Joint Delivery Board, Childcare Sector Working Group, ADES Early Years Network and ELC Quality Improvement Group. They have also played an integral part in informing our response to the impacts on the childcare sector brought about by the global COVID pandemic, in particular through of the Childcare Sector Working Group and, previously the ELC and Childcare Sector Recovery Group.

Impact assessments have been carried out throughout the programme to expand the provision of funded ELC to 1140 hours per year for all three and four year olds and eligible two year olds, including an islands impact assessment that can be found online. An agreed principle of ELC funding is to acknowledge regional differences and seek to support local authorities to make decisions that support evidenced need within their own communities. Our evaluation of the ELC expansion will consider rurality in the analysis where possible with the data and sample sizes available. For example our recent survey of parents' use of and views on ELC (2022) drew out some differences for parents living in rural areas.

We committed to ensure that opportunities to develop the wellbeing of the Gaelic language and increase the number of speakers and users are considered as part of sustainable economic development.

Implementation Route Map action

We will continue to explore and develop a broad range of opportunities that promote and support the Gaelic language across Scotland and operating across a number of sectors. These functions all have a significant economic impact, through direct employment and attracting visitors while simultaneously supporting grassroots, community language use and the wellbeing of the Gaelic language.

Work is ongoing in relation to this commitment.

Sustainable economic development in island areas remains a key priority for Gaelic policy and programmes. Scottish Government supports a number of Gaelic projects which make an important contribution in island areas. In addition, a new focus was brought to this last year with the establishment of a ministerial short life working group to look at Gaelic and economic issues and how these could both support each other. This ministerial group will be presenting its recommendations to ministers in 2023. In addition to this, the Scottish Government will maintain its commitment to work towards increasing the number learning, speaking and using Gaelic in Scotland.

Scottish Enterprise has developed its first Gaelic language plan. At the heart of the plan is an ambition to ensure all customers, stakeholders and colleagues have equal opportunities to maximise Scotland's economic potential via the use of Gaelic. Not only will this help ensure we are making the most of this unique asset, but it will help support our ambition to ensure everyone in Scotland can contribute to and benefit from economic growth. The plan importantly will require SE to be proactive and seek out opportunities (including with partners) for Gaelic speakers and Gaelic speaking communities to engage more significantly in economic development and share in the rewards of doing so.

We committed to support women in agriculture on Scottish islands to succeed, including encouraging their participation in the leadership development programme, addressing unconscious bias by organisations and businesses and breaking down cultural barriers.

Implementation Route Map action

We will deliver Islands-specific Women in Agriculture Development Programme courses during 2022 and will continue to promote online and in person training provision to women in Scottish islands.

Work is ongoing in relation to this commitment.

Scottish Government has committed to increase support up to £600,000 per year over the course of this Parliament to deliver practical solutions to improve the lives of women living and working in agriculture, including enabling women to build more resilient businesses, this support is available to all women living and working on the Scottish islands. Funding in 2022 year has been used to deliver the Be Your Best Self (BYBS) personal development course. This online course is easily accessible, with five of the participants attending from the islands. In addition to the BYBS course The Women in Agriculture Development Programme delivered further practical training through the Practical Training Fund, administered by Lantra, including providing support for women from island communities. For those women we were able to offer additional support to cover travel and accommodation costs if they had to travel off the islands to attend the training course.

In 2023 we will be launching a new Business Skills programme, comprising two courses 'Knowing your Finances' (an entry level course) and 'Knowing your Business'. This programme is designed to equip women involved in agriculture with the skills to increase their knowledge and confidence in relation to business, profitability, effective business planning, climate change, diversification and improving overall business performance. The programme will be delivered online and will therefore be available to all women living and working on the islands.

In 2022 we provided external funding of £40,000 and £8,000 respectively to support the Scottish Association of Young Farmers' Clubs (SAYFC) and the Women in Agricultural Scotland membership group. SAYFC have just over 260 members on the islands and the funding provided will develop a training programme for Board of Trustees, which will encourage behaviours and cultural changes which will make SAYFC a more inclusive and diverse organisation. Funding to WiAS supported the group to provide networking events to allow women from across Scotland, including the islands, to make new connections and to increase the membership of, and engagement in, the WiAS Group.

During 2022, the Women in Agriculture (WIA) team continued to work with Scottish Government Islands Communities and Early Learning and Childcare colleagues to award £180,000 to the Mull and Iona Community Trust (MICT) to develop and deliver school-age childcare services on Mull, considering the flexibility that is required in island communities as well as utilising local partnerships and existing community resources.

The findings from the project and the recommendations made in the Accessing School-Age Childcare in Scotland's Rural and Island Areas research report will help support the development of new school age childcare policies and the WIA team will continue to work in partnership with Scottish Government colleagues to develop solutions that deliver for women in agriculture in relation to their childcare requirements, including the specific challenges of providing that provision on the islands.

We committed to work with relevant local authorities to develop regional food and drink action plans to support growth of the sector on islands, including a focus on the vital Whisky sector.

Implementation Route Map action

We will continue to engage with sector leads across Scottish Government and their industry stakeholders on the Working with Business Action Plan to identify actions that could be taken to help mitigate the effects of labour market shortages on businesses and to help stimulate economic recovery. We will continue to feed this information into the ongoing development of the Talent Attraction and Retention programme.

Work is ongoing in relation to this commitment.

Labour Market Strategy

High unmet demand for staff continues to drive shortages in Scotland's labour market. We are working with business, providing further upskilling, and retraining support in response to skills and labour shortages, and to promote Fair Work, which will benefit business and make organisations more attractive to workers. Through our No One Left Behind approach to employability, and our devolved employability service Fair Start Scotland, our employability support system aims to deliver a system that is more tailored and responsive to the needs of the individual and the local labour market. However, many of the levers the Devolved Governments require to tackle these challenges remain reserved – restricting the action we can take to fully address these labour shortages issues. The Minister for Just Transition, Employment and Fair Work has written to the UK Government in tandem with the Welsh and Northern Irish Governments, to request a joint Taskforce to tackle labour shortages.

Regional Food and Drink Plans

Grants of £10,000-£15,000 have been made available to fund a co-ordinator in regional food groups across Scotland which were match-funded from within their local area. Regional Food Groups in Orkney, Shetland and the Hebrides were all successful in securing funding for their respective groups and to help drive individual growth of businesses on the islands which, in turn is growing the value of the food and drink sector as a whole in a truly collaborative way, and for the first time offers some real linkage between Scotland Food and Drink, Regional Food Groups and Local Authorities on a partnership level.

We committed to work with relevant local authorities to encourage take up of Food for Life accreditation to help stimulate local sourcing in public sector settings.

Implementation Route Map action

We continue to support the delivery of the Food for Life Programme with a focus on school meals, and the Soil Association are targeting all Scottish local authorities to encourage them to apply for accreditation through the scheme. Through a process of education, and relationship building, delivery of the program is progressing steadily, and there are currently eighteen councils who now hold FFL accreditation; this includes Orkney and Shetland who achieved bronze level accreditation in 2020/21 and 2021/22 respectively. Our support this year includes increased funding for a Public Sector Expansion Pilot in Glasgow to bring fresh, local and sustainable meals to new public sector settings across the city, with the aim of taking learnings from that and scaling up the programme in other areas of Scotland.

Work is ongoing in relation to this commitment.

We continue to support the delivery of the Food for Life Programme with a primary focus on school meals, and the Soil Association are targeting all Scottish local authorities to encourage them to apply for accreditation through the scheme. Through a process of education, and relationship building, delivery continues to progress against a backdrop of increased pressure on local authority catering budgets. There are now nineteen accredited councils, with several actively working to upgrade their level of certification.