SCOTTISH finance secretary John Swinney has confirmed that the revenue gap required to run Shetland’s inter-island ferries – estimated to be nearly £6 million – will be covered by the government.
Shetland Islands Council runs ferry services to nine islands, carrying around 750,000 passengers every year on its 12 ferries.
During the next financial year, the service will cost over £23 million to run – an increase of more than £5 million on the previous year.
The Scottish Government provides money towards the council’s deficit for running the ferries, but initial budget figures for 2023/24 suggested the council was in line to receive the same as the current financial year – leaving a hefty deficit.
However, today’s (Tuesday) announcement the Scottish Government will honour its previous commitment to fully fund inter-island ferry services in council areas such as Shetland and Orkney.
Swinney said he recognised the cost impact of inflation and rising fuel prices on ferry operations.
It comes as MSPs vote on the budget in the parliament chamber this afternoon.
Council leader Emma Macdonald said: “The importance of the inter-island ferry service to life in Shetland cannot be overestimated.
“The ferry service is the social and economic backbone of our islands. The ferries take commuters to work and essentials to community shops. The ferries take patients to hospital and children to school.
“They are a lifeline in the truest sense of the word, and the key to unlocking economic success not just for Shetland, but for all of Scotland.
“Our engagement with John Swinney and his team at the Scottish Government has been extremely open and productive. John understood our concerns, he understood the importance of the services, and he responded immediately.
“His announcement today will keep people on our boats, and keep our boats in the water.”
The Scottish Government commitment to cover the council’s deficit in operating its vessels came after a long-running campaign for ‘fair ferry funding’.
The average age of Shetland’s ferry fleet is almost 30 years old, and four are approaching 40.
Shetland Islands Council is in discussions with the Scottish Government, the UK Government and others about the future of these routes, either via replacement vessels or tunnels.
The council said the inter-island routes are of “significant economic importance”.
“They serve salmon farms and other aquaculture and fishing operations, they are the only route to the SaxaVord Spaceport and they play a vital role in Shetland’s, and therefore Scotland’s, renewable energy future,” it added.
Swinney confirmed government officials are engaging with councils specifically on the level of funding required and the Scottish Parliament will be informed once those discussions have concluded.
Scottish Lib Dems leader Alex Cole-Hamilton, who visited Shetland recently, welcomed the commitment regarding ferry funding – although he said the budget had not gone far enough to win his party’s support.
Highlands and Islands MSP Emma Roddick said: “I am glad to see the Scottish Government recognise the difficulties that our island authorities face in managing the cost increases and how that impacts the inter-islands ferry network due to the effects of inflation and rising fuel prices.
“The SNP made a commitment to fully fund these vital services and it’s clear that this will be honoured through engaging with councils specifically on the level of funding required. Ferries provide vital links for our island communities and this assurance will be hugely welcome for everyone.”
Swinney meanwhile told parliament that the new proposed budget includes a three per cent real terms increase in funding for councils.
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