Growth deal signed for Orkney, Shetland and the Outer Hebrides will release total investment of £335 million



A £100 million investment in the future economic prosperity of Orkney, Shetland and the Outer Hebrides was agreed today, as representatives of the UK and Scottish governments joined the Leaders of Comhairle nan Eilean Siar, Orkney Islands Council, and Shetland Island Council to sign the Heads of Terms for the Islands Growth Deal. 

The agreement commits both governments to work collaboratively with Islands Deal partners, which includes Heriot-Watt University, to deliver a deal focused on: placing the islands at the forefront of the transition to net zero; supporting growth in key sectors of opportunity such as tourism, food and drink, space and creative industries; and, supporting thriving, sustainable communities.

The Islands Growth Deal will capitalise on the Islands’ unique assets with an investment of £50 million each from the Scottish and UK Governments and an anticipated £235 million from project partners.  The 10-year programme of investment has the ambitious target of creating up to 1,300 jobs and tackling the depopulation concerns facing many parts of the 3 island archipelagos.  Partners will now be working towards the development of Full Business Cases for approval by both Governments, with the anticipation of funding being approved and released from 2022/23 onwards. 

Dr Gill Murray, Deputy Principal for Enterprise and Business said: “Heriot-Watt University is delighted to welcome today’s signing of the Heads of Terms for the Islands Deal.

“The University, in a project led by the European Marine Energy Centre, will establish the Island Centre for Net Zero within our specialist campus on Orkney, home to the International Centre for Island Technology (ICIT) and part of our prestigious School of Energy, Geoscience, Infrastructure and Society.

“Through the Islands Deal, the Scottish Islands will come together for the first time to undertake an integrated cross-sectoral energy transition programme to address the need for fundamental change in how we approach energy transition.

“Our world-leading Global Research Institutes and frontier research related to smart energy systems, green logistics and sustainable synthetic fuels are already shaping and driving a net zero future. Clean Growth represents a huge opportunity for economic prosperity, and we strive to support innovation and catalyse opportunities through our leading role in industrial decarbonisation to deliver benefit for industry, society, and the environment.

“The Centre is a distinctive, trans-disciplinary collective which encompasses cutting-edge expertise from public sector, global business, and community groups. We look forward to driving success and achieving demonstrable results in carbon and energy transition.”

The Island Centre for Net Zero academic programme is led by Professor Susan Krumdieck, Chair of Energy Transition Engineering at Heriot-Watt.

Iain Stewart MP, Parliamentary Under Secretary of State for Scotland, said:

“Today we have signed a transformational deal which will bring jobs, investment and innovation to communities across all three island areas. 

“These exciting plans show the path to a fairer, more sustainable, more prosperous future as we build back better from the pandemic.

“The UK Government’s £50 million investment will boost green jobs and innovation in: sustainable energy, health, tourism, food and drink, and decarbonisation.

“Across Scotland we have committed more than £1.5 billion to Growth Deals.” 

Speaking following the virtual signing, Michael Matheson, Cabinet Secretary for Transport, Infrastructure and Connectivity, said:

“I am pleased to be signing the Heads of Terms agreement for the Islands Growth Deal, confirming that the Scottish Government will invest £50 million in the region over the next 10 years to deliver sustainable growth and support economic recovery.

“The projects supported through this Deal will focus on retaining and attracting young people in our island communities, encouraging new visitors, boosting innovation and skills, growing key sectors like food and drink and the creative industries, and building the infrastructure and expertise needed to capitalise on renewable energy opportunities."

Cllr Roddie Mackay, Leader of Comhairle nan Eilean Siar, said:

“We are delighted to have reached this stage in the process, and to have secured this level of investment through the deal, which represents the highest per capita investment of any of the Scottish growth deals.”

Cllr James Stockan, Leader of Orkney Islands Council, said:

“The signing of this deal seals a significant opportunity for our three island areas to further showcase our promise, our worth and our uniqueness - not just within the United Kingdom, but to the rest of the world."

Cllr Steven Coutts, Leader of Shetland Islands Council, said:

“Our ambitious deal proposals will provide significant economic growth in our islands. We can be confident that this investment in key projects will deliver lasting benefit for our island communities, Scotland and the UK.” 


Susan Kerr