Task Force on LA Ferry Fleet Replacement - meeting with Shetland Islands Council (SIC) - minutes - 16 August 2023


  • Fiona Hyslop MSP, Minister for Transport
  • Cllr Emma Macdonald, Leader, Shetland Islands Council
  • Maggie Sandison, Chief Executive, Orkney Islands Council
  • Neil Grant, Director of Development, Shetland Islands Council
  • Roddy Macdonald, Director of Ferries, Transport Scotland
  • Gary Cox, Director of Aviation, Maritime, Freight and Canals, Transport Scotland
  • Official, Ferries Directorate, Transport Scotland
  • Official, Ferries Directorate, Transport Scotland
  • Official, Senior Finance Business Partner, Scottish Government


Item 1 - Welcome / Introductions

The Minister advised that she would Chair the meeting in the absence of the Deputy First Minister (DFM) who was on leave. The DFM wished to chair future meetings of the Task Force. The Minister welcomed the opportunity to hear directly from Shetland Islands Council (SIC) about their challenges and expectations from the Task Force.

Item 2 – Presentation of ferry operations

Maggie Sandison gave a presentation outlining the extent of the services being provided in Shetland, the challenges being faced, and potential options for securing lifeline connectivity going forward. 

The Minister thanked SIC for the comprehensive presentation and noted that while responsibility for replacing the ferry fleet lies with SIC, partnership working was key to find a solution.

There was discussion around changing business and environmental needs, the impact of transport links on island populations, Just Transition and the opportunities provided by Shetland’s renewable energy sector.

Item 3 – Discussion on revenue funding

The Minister confirmed that the 2023-24 revenue funding grant offer letter had been issued and SIC noted they were pleased to receive the grant offer letter confirming full funding of £23.082 million that morning. Transport Scotland (TS) and SIC officials would engage to clarify the 2024-25 ask over the coming weeks.

Item 4 - Remit

SIC agreed they are content with the draft remit, which will be published on the TS website.

Item 5 – Update on Fair Isle Project

SIC noted challenges around the deadline of March 2026 for drawing down of Levelling Up Funding. The Minister agreed to raise with UK counterparts when she had the opportunity. Neil Grant agreed to provide a note for the Minister’s information.

Item 6 – Short Crossing Project

SIC is investing £1 million in its Short Crossing study, being taken forward over the next 12-18 months. The Minister noted that Just Transition is about communities as well as industry. SIC raised that onshore wind has a Community Benefit Fund, however, offshore does not.

Item 7 - Funding Model / Sources

Potential funding models were discussed, including utilising private investment, Scottish National Investment Bank, Green Investment and learning from Faroese and Norwegian examples. It was agreed that Scottish Future Trust could potentially assist once more detailed funding proposals are explored.

Item 8 – Business Case & Technical Expertise

It was agreed that Business Cases need to be progressed further before funding options can be properly explored. SIC noted that they are procuring a Fixed Link study and would be happy to share as it emerges.

It was agreed that a visit from CMAL to assess the fleet and harbour infrastructure and needs would be helpful.

Item 9 – Next Steps

The Task Force agreed on the need to take forward the business case work to clarify the costs and to set up the next Ministerial/Cllr Task Force meeting with DFM.


  1. SIC and TS officials to clarify 2024-25 revenue request by end Sept 2023 - SIC and TS
  2. SIC and TS to liaise regarding potential CMAL visit - SIC and TS
  3. SIC to discuss challenges procuring air services further with TS - SIC
  4. Neil Grant to provide a note on LUF for the Minister’s information - SIC
  5. SG Finance to find out which projects have utilised Green Financing - SG Finance

Published Date 16 Aug 2023 Type Mode of transport Topic