Empowering Scotland's Island Communities

Promoting islands voice

Since the advent of devolution Scotland's islands have not only benefitted from policies on health, education, and justice being set by the Scottish Parliament but have seen their particular concerns addressed through legislation on, for example, crofting, Gaelic, transport and agriculture.

Since 2007 Scotland's cabinet has met at locations across Scotland's islands, and Scottish Ministers and parliamentary committees have regularly attended Scotland's islands to conduct their business and engage with island communities.

In addition the Scottish Parliament has provided a platform for Scotland's islands to be celebrated and for the concerns of island communities to be raised.

Independence will extend the advantages of devolution for the islands to the whole range of government activity. Instead of trying to influence Westminster, island communities and authorities will have direct access to the Scottish Government and Scottish Parliament to scrutinise the impact of government policies on the islands and present their views.

On a wide range of policy areas affecting the future of our islands engagement with the European Union has a vital role to play. Only as an independent Member State can the Scottish Government negotiate directly on Scotland's behalf, taking account of the impact on island communities, and the islands' voice and representation within the European Union.

Island-proofing and an Islands Act

In Scotland's Future, the current Scottish Government committed to bring forward a Bill for an Islands Act on independence, to implement the measures across this prospectus that require legislation.

This is a landmark proposition - a chance for the fullest public and parliamentary input and scrutiny, to ensure public service arrangements are fully aligned with our islands' current and future needs and aspirations. The Islands Act would place a duty on the Scottish Government and other relevant public authorities to 'island-proof' their functions and decisions, where those functions and decisions will have an islands impact.

The principle of island-proofing is one of building a broad-based islands awareness into the decision making process of all parts of the public sector. Island-proofing consists of considering the particular needs and circumstances of island communities when the Scottish Government and other relevant public authorities are exercising their functions and making decisions. The Scottish Government commits itself to this principle, and the Islands Act will formalise the approach in statute.

As part of island-proofing the Scottish Government would consider:

• when legislating in areas with an impact on island communities, whether particular functions and responsibilities could be given to island communities;
• when legislating, whether there was a particular need for differential application of legislation for island communities;
• the applicability of the principles contained within the Reference Framework on Regional Democracy of the Congress of Local and Regional Authorities of the Council of Europe; and
• when developing, formulating and implementing policy, the needs and circumstances of island communities.

The Scottish Government will ask the Parliament to consider amendments to the Scottish Parliament's Standing Orders to reinforce island-proofing within the Parliament's procedures, especially its legislative procedures, as the Parliament evolves to take account of the responsibilities of independence. Island-proofing will also provide a framework to take account of the recommendation of the 1984 Committee of Enquiry and Functions and Powers of the Islands Councils of Scotland (the Montgomery Committee) that Acts of Parliament can in certain respects be varied or adjusted in their application to Island Areas, where there is a reason to do so.

The Scottish Parliament already has the power to vary the application of legislation by geographical area. The process of island-proofing would provide an opportunity to consider, on a case-by-case basis, whether this might apply to particular pieces of legislation.

Islands Minister

The Scottish Government will create a post of 'Minister for Island Communities' in the first government of an independent Scotland. This post will provide a focus for island issues and a voice for island communities within the Government on all issues and ensure islands voice is represented at all times.

Legal and constitutional status

Recognising island status

The Scottish Government recognises that the island groups of Orkney, Shetland and the Western Isles are Island Regions which, alongside their significant natural resources and important place in Scotland's economy, also face significant and long-standing geographic or demographic challenges as reflected in Article 174 of the Treaty on the Functioning of the European Union.

The unique nature and requirements of Scotland's islands will be recognised in Scotland's interim constitution, ahead of the establishment of a formal constitution, through an Islands Act and island-proofing, the legislative protection of island constituencies and by the appointment of an Islands Minister.

In addition, Scottish local government will also benefit from constitutional recognition available under independence.

The unique nature and requirements of Scotland's islands will be recognised in Scotland's interim constitution.

The Scottish Government will ensure that the special status and needs of Scotland's islands and the principle of subsidiarity as it relates to the place of Scotland's islands within the EU are recognised in its planned Islands Act.

The Scottish Government will use Scotland's influence as a Member State of the EU to pursue joint objectives to further establish and enhance island access to networks in the areas of transport, telecommunications and energy infrastructure. This will take account of the need to link the island regions with the central regions of the Union in terms of Article 170 of the Treaty on the Functioning of the European Union.

Constitutional status

One of the early priorities in an independent Scotland will be the development of a permanent written constitution.

As set out in Scotland's Future, Scotland's permanent written constitution will be prepared, post-independence, by a constitutional convention in a widely participative and citizen-led process. The independent Scottish Parliament elected in May 2016 will establish the convention, including its membership and working procedures. Once established, the convention will work autonomously of both Parliament and Government. Therefore the Scottish Government will not control the membership of the convention or the subjects which the convention might choose to include in the permanent constitution. However, in Scotland's Future the Government sets out provisions the Government plans to propose for the Convention's consideration. The Government also plans to propose a provision recognising the unique position of Scotland's islands, building on the affirmation given by the First Minister in the Lerwick Declaration that the Scottish Government is committed to subsidiarity and local decision making.

Island communities and Islands Councils will be able to make proposals to the constitutional convention for inclusion in the permanent constitution; the Scottish Government would also expect that membership of the convention would reflect Scotland's diversity, including our island communities.

The Islands Councils intend to propose a provision for the permanent constitution which would reflect the principles contained in Articles of the Treaty on the Functioning of the European Union concerning issues such as subsidiarity, taking account of peripheral regions including islands, and reducing disparities in development of less favoured regions including islands. The Scottish Government believes that the convention would find such proposals a helpful and welcome contribution, and supports such an approach.

The Scottish Government will publish, for consultation, the draft Scottish Independence Bill, which provides for the interim constitution for an independent Scotland. This Bill, which will be published in June, will give Scotland's islands recognition in the interim constitution from the point of independence.

Following a vote for independence, this Bill, along with a refreshed Scotland Act, will be legislated for and will form the basis for Scotland's governance from the point of independence, and until the constitutional convention completes its work in preparing the permanent constitution. The draft Bill will also contain a wider protection for local government across Scotland.

Parliamentary constituencies

Under devolution the Scotland Act 1998 currently provides statutory protection for the Orkney and Shetland parliamentary constituencies. We believe this protection should be extended to the Na h-Eileanan an Iar constituency as the only other all island constituency. This will be done when legislating for the refreshed Scotland Act during the transition to independence.

Scotland's Future confirms that the Scottish Parliament will continue to be elected using the same electoral system as at present and would maintain the same number of Members. Scotland's islands are well represented in the Scottish Parliament across six constituencies and two parliamentary regions, with 20 MSPs in total representing our island communities.

Powers of the three Islands Councils

Local government is an integral and essential element of the overall good governance of Scotland - the public services it provides, along with those delivered by bodies such as the NHS, the Scottish Fire and Rescue Service and Police Scotland, help form the bedrock of our society. Local authorities also have a statutory responsibility to convene Community Planning Partnerships that bring together public agencies to plan and deliver services in their area.

Local people are a resource with skills and knowledge that we must respect, nourish and unlock to help deliver shared outcomes. The need to apply local knowledge to the delivery of national policies was never more the case than in the three Island Areas. Common to all is their remoteness, peripherality and, in comparison to most other local authorities in Scotland, their small population sizes.

Local democracy is important to the wellbeing and sustainability of island communities. Recognising this importance, the Scottish Government supports provision in a written constitution to embed the status and rights of elected local government. This would enable Scotland to guarantee the principle of local self-government in line with the European Charter of Local Self-Government. Such constitutional recognition is normal in developed democracies such as Germany, Denmark and Sweden, and should also be the case in a modern Scotland. In contrast to the UK's lack of a written constitution, under which local government could be dissolved by politicians, independence offers the opportunity to guarantee local democracy.

The Scottish Government commits that the three Islands Councils will continue to enjoy all such special powers as they have at present, and there is no intention to legislate to diminish those powers or to adjust the territorial jurisdiction of the Councils. This position is with particular reference to the provisions contained within the Zetland County Council Act 1974 and the Orkney County Council Act 1974, both of which would continue in an independent Scotland.

The Scottish Government will progress as required any proposals from Comhairle nan Eilean Siar regarding which provisions from the 1974 Acts would also be relevant and appropriate for the Western Isles to have.

Enhanced representation for Scotland's islands within the EU

The Scottish Government would welcome a strong islands voice in the European Union.

In the event of a 'yes' vote in the referendum on 18 September 2014, the current Scottish Government will encourage greater representation for Scotland's island communities within the EU. This would be set out in a Memorandum of Understanding between the relevant parties. The following opportunities for enhanced island representation will be considered:

• The islands to collectively nominate one of an independent Scotland's members of the Committee of the Regions, subject to agreement with COSLA.
• The islands to provide input to the position to be adopted by the Scottish Ministers at meetings of the Council of the European Union on policy areas which will have a significant impact on the Islands, including through participation in delegations to meetings of the Council of the European Union where appropriate.
• The appointment of a person within the Scottish Representation to the EU to specifically consider the interests of the Islands, and, where appropriate, host representatives of island communities and the Islands Councils.

Throughout this prospectus where the interests of Scotland's islands relate strongly to areas of EU policy we have considered ways in which the voice of Scotland's islands can be better represented.

Throughout this prospectus where the interests of Scotland's islands relate strongly to areas of EU policy we have considered ways in which the voice of Scotland's islands can be better represented.

State aid

Scotland's islands are very much a 'market apart', facing issues of accessibility and insularity where local businesses tend to compete with each other rather than with mainland competitors whilst often facing higher marginal costs arising from, say, higher transport and energy costs than the equivalent businesses elsewhere. One key element of EU Law is State aid rules, which aim to limit public resources that distort competition and trade within the EU. For example, de minimis aid is limited to €200,000 (currently around £160,000) per beneficiary within any three consecutive years.

If it can be demonstrated that a particular intervention will not distort the wider national and EU markets, then the State aid rules would not be applicable - including limitations on the type of activities supported, the size of the beneficiary or the proportion of aid given.

Independence would allow Island Areas to be better represented within the institutions of the EU by Scotland as an independent Member State. The Scottish Government would work to ensure the EU takes island issues such as physical isolation, importance of transport infrastructure, and dependence on sectors such as fisheries and tourism into account in State aid rules. In future reviews of regulations, an independent Scotland would be able to make its own representations directly to the Commission without the Westminster Government's veto or reprioritisation of views. The Scottish Government commits to ensuring that the Island Areas would be represented in the Scottish delegation at State aid meetings with the European Commission, where the islands have a particular and significant interest.

The Scottish Government will take action to ensure that the application of State aid rules on Scotland's islands is appropriate and effective. Scottish Government State aid advisers covering all policy areas will be made available to local authorities with islands. By being able to access such expertise, especially in the policy areas of most importance to the islands such as agriculture, forestry, fisheries, renewables, tourism, and small business development, the Councils will be better able to develop measures to assist their economies in compliance with State aid rules. For schemes that require notification to the Commission, the Scottish Government will deploy its expertise and resources in Brussels.

More immediately, the European Commission has recently consulted Member States on the proposed new fisheries State aid regulations. The Scottish Government has submitted a Scottish response, after consulting our stakeholders across Scotland, citing the issues raised by the islands and including a request that the de minimis threshold be increased from €30,000 to at least €60,000 and opposing the proposed exclusion of aid for small fishing boat engines. We have also asked the European Commission to continue to allow aid to be given for the permanent and temporary cessation of fishing activities. Scotland's concern is that the implementation of a discard ban could see many whitefish boats going out of business. The removal of these articles is inconsistent with the European Maritime and Fisheries Fund ( EMFF). If accepted, these amendments would allow public bodies to better assist the fishing sector, encourage sustainability and help them to respond positively to the pressure of market and regulatory constraints which are disproportionately burdensome for small companies.

Regional aid and assisted area status

The assisted areas map for the UK for 2014-20 was approved by the Commission on 21 May 2014. This map sets the regions in which companies are eligible for regional aid - enhanced capital aid which is permitted under State aid rules in recognition of the barriers faced by the selected regions. These barriers are typically defined by low GDP per capita, high unemployment and population sparsity, based on Europe-wide criteria.

For the 2014 map, for example, there was a significant risk that neither Shetland nor Orkney islands would meet the criteria for regional aid coverage at all. This would have exacerbated the additional costs of doing business in a remote area by removing a significant source of support for investment. The Scottish Government therefore worked closely with the Orkney and Shetland Islands Councils to set out evidence which secured the assisted areas designation by the Commission. Although the rules are changing across Europe to make it much more difficult to support large companies, this successful collective work towards negotiations means that businesses in the islands will remain eligible for the vital enhanced capital support permitted by these rules until at least 2020, when the rules are next reviewed.

EU funding

We recognise the importance of European structural and rural development funds to the communities of the Island Areas. These issues are addressed in detail in other parts of this prospectus.

The Scottish Government supports closer islands involvement in the management and monitoring of EU funding. This will include involvement in Scotland Rural Development Programme ( SRDP) and Structural Funds governance.

Further to the Scottish Government's invitation for this purpose, the Islands Councils have agreed to nominate representatives to sit on the Rural Development Operational Committee ( RDOC) and Joint Programme Monitoring Committee ( JPMC) for SRDP, ensuring a direct islands voice.

A new model for public service delivery

One model of public service delivery considered in detail by the Island Areas Ministerial Working Group was the concept of one local public authority delivering all services in its area. This is consistent with the principle of subsidiarity and has significant potential to ensure particular functions properly reflect local needs and wishes, with more direct accountability between the providers of the service and the local electorate as users of the service. The counter to this is that certain services more readily lend themselves to being provided by central government, usually to allow financial risks to be spread across a broader base or to exploit the efficiencies of scale. These are perhaps exemplified by the provision of specialist health care requiring a sufficiently large population to establish and maintain expertise and clinical experience or the reduced global reach of a local economic development agency compared to one operating on a national basis. Indeed these considerations and trade-offs are at the heart of any consideration of whether a particular function or responsibility might best reside at which level of government.

The Scottish Government and local government have recently been working with partners to strengthen Community Planning. These processes bring partner bodies together to identify joint priorities and commit resources accordingly in line with local community needs and aspirations. The Islands Councils are atypical in Scotland in that each local authority boundary is coterminous with each local NHS Board area - more typically one NHS Board operates across a number of local authority areas.

The unique circumstances of each Island Area should allow such collaborative working to be further developed and new models for public service delivery explored.

An early benefit of these circumstances will be in the delivery of more integrated health and social care on the Western Isles, Orkney and Shetland Isles. Already, Comhairle nan Eilean Siar and Shetland and Orkney Islands Councils, working with their NHS partners, have capitalised on the scope for a more integrated approach to deliver improved outcomes for their communities and through programmes such as the Early Years Collaborative.

These established joint working arrangements mean the implementation of the Public Bodies (Joint Working) Scotland Act 2014, which will ensure the better integration of health and social care, is well placed to advance in the Western Isles, Orkney and Shetland.

The policy ambition for integrating health and social care services is to improve the quality and consistency of services for patients, carers, service users and their families; to provide seamless, joined-up, quality health and social care services in order to care for people in their homes or a homely setting where it is safe to do so; and to ensure resources are used effectively and efficiently to deliver services that meet the increasing number of people with long term and often complex needs, many of whom are older.

Once the chosen means of collaboration between each Council and NHS Board has successfully bedded in, the unique circumstances of each Island Area should allow such collaborative working to be further developed and new models for public service delivery explored.