Orkney Council Leader Urges UK Gov Funding Rethink

Calls for review of funding methodology and reinstatement of support, warning current system ignores unique island costs 

Cllr Heather Woodbridge, Leader of Orkney Islands Council, has written to Douglas Alexander, the Secretary of State for Scotland, urging the UK Government to provide Local Growth Fund support for the islands and review the methodology used for its allocation. This follows the Council learning it received no funding in the funding announcement on 8 January 2026, meaning the next opportunity to apply will not come for another three years.

The Local Growth Fund (LGF) takes the place of the UK Shared Prosperity Fund which was designed to replace EU funding that previously recognised the challenges faced by rural and island communities. However this new fund will not reach any part of the Highlands & Islands, including Orkney.

The method used by the UK government to measure income levels does not appear to reflect the unique costs of island life - such as some of the UK’s highest energy prices, additional costs of ferry travel within Orkney and to the Scottish mainland, higher housing costs, and the additional expenses involved in transporting goods and services between islands. 

Additionally, the methodology for allocation benefits local authorities which appear to have the lowest need, however qualify for funding due to being in an Economic Partnership with high need areas. This has led to Orkney – ranked 13th out of 32 – receiving nothing whereas areas further down the rankings have been successful.

Orkney has relied on linked UK Government funding streams since 2022, totalling £2,375,871, but this will end abruptly in the new financial year. 

In her letter, Councillor Woodbridge urged the Secretary of State for Scotland to reinstate UK government revenue funding to Orkney and to urgently review how this funding is applied after missing out the Highlands & Islands.

Leader Heather Woodbridge said: “We were extremely disappointed to receive no funding in the Local Growth Fund announcement. This fund was created to replace EU support that recognised the unique challenges of islands and remote communities, yet none of Scotland’s counties in the Highlands & Islands have benefited. 

“The methodology used to measure local residents’ income appears to completely ignore the significant costs of living in Orkney, which is deeply unfair. These are real, unavoidable expenses that most people elsewhere in the UK do not face. We also believe Orkney, even using the UK government’s current measurement, is still high enough in the local authority rankings to merit funding. 

“It is also concerning that, after relying on this funding for four years, it will stop abruptly with no transition at all. 

“Orkney plays a vital role in meeting the UK’s net zero targets and leads in renewable energy, including building the UK’s largest community wind farm – we are also a leader in food & drink and tourism, bringing money into the UK Treasury. To keep delivering projects the UK depends on, we cannot be undermined by decisions that strip essential funding from our Council. 

“We stand with our Council colleagues across the Highlands and Islands – all of which did not receive any funding – in calling for an urgent rethink.” 

ENDS

Notes;

UK Government funding announcement the above press release is in response to: £140m Scottish Local Growth Fund to drive economic growth   - GOV.UK