Thirteen projects across twelve islands will share in the Scottish Government’s £3 million 2026-27 Islands Programme Fund.

Lismore Community Trust was awarded £272,506 for Achnacroish Affordable Homes. The project will deliver two community-owned, affordable family homes, bringing an energy-efficient, high-quality rental option to the local housing stock. This will allow two families to start or continue living on Lismore and protect the island’s population.

These three-bedroom, semi-detached homes, located within the Achnacroish settlement, will be within walking distance of Lismore primary school and the ferry to Oban, and feature south-east-facing seafront gardens with superb views. Completion is anticipated for July 2027. The Islands Programme award is conditional upon Lismore Community Trust’s application to the Rural and Islands Housing Fund (RIHF) being successful.

A total of £76,000 was also awarded to provide contractor accommodation on Canna.

Meanwhile, Orkney Islands Council has welcomed confirmation that it has been awarded funding to support the repurposing of St Rognvald House in Kirkwall.

The funding represents a significant investment in addressing workforce accommodation challenges in Orkney and will help transform the former care home into temporary accommodation for essential workers – predominantly social care staff in Orkney Health and Care.

St Rognvald House is due to become vacant following the move of residents to the new Kirkjuvagr House care facility.

The council’s proposals will see the building refurbished and adapted to provide accommodation for visiting agency staff who play a vital role in delivering services across the county.

Current plans would see the building provide accommodation for up to 39 people through a mix of en-suite and shared facilities, alongside communal kitchens, dining areas, laundry facilities and social spaces. The accommodation would offer a temporary base for workers while helping to reduce pressure on the private rented housing market.

The project supports the ambitions set out in the council’s Essential Workers Housing Strategy, which identified a need for a broader range of housing options for essential workers and key staff. It will also make productive use of an existing Council asset ahead of the site’s longer-term redevelopment for affordable housing.

The project will help improve recruitment and retention while reducing the substantial costs currently associated with providing accommodation for agency and temporary workers. Recent analysis has shown that accommodation costs for agency workers within Orkney Health and Care alone amount to around £750,000 per year.

Health secretary Angela Constance said: “It was great to visit St Rognvald’s House today and hear about the exciting plans to repurpose the care home as accommodation for health and social care workers and move residents to the brand new Kirkjuvar House when work is complete.

“The funding announced today by the First Minister includes over £200,000 for this project which will also help release private rental properties back to the housing market for permanent Orkney residents and families.

“I am acutely aware that access to housing and accommodation can be a barrier in attracting workers to Orkney and our National Islands Plan puts an emphasis on population retention and attraction.”

Council leader, Councillor Heather Woodbridge, said: “We are delighted that the Scottish Government has recognised the importance of this project through the award of Islands Programme Capital Funding.

“Like many island communities, Orkney continues to face significant challenges in recruiting and retaining staff across a range of essential public services, and the availability of suitable accommodation is frequently identified as a barrier.

“This investment will allow us to make effective use of an existing Council building, providing much-needed temporary accommodation for key workers while helping to ease pressure on local housing supply.

“The project demonstrates how we can take an innovative approach to supporting our workforce, strengthening service delivery and ensuring our communities continue to receive the services they rely on. We are grateful to the Scottish Government for their support and look forward to progressing the development.”

The council will now move forward with the next stages of project development, including final design work and delivery planning, with refurbishment work expected to begin following completion of the necessary approvals.

St Rognvald House has been identified within the council’s Strategic Housing Investment Plan for future redevelopment into permanent affordable housing. The repurposing project will ensure the building continues to provide value to the community in the intervening period while supporting Orkney’s workforce and public services.

Other recipients include:

• A project to regenerate two neglected buildings on Skye into multi-use community hubs. These will include childcare space, gym space, arts and craft workshop spaces, and rentable units for small local businesses. 
• A project to establish a permanent veterinary facility on Tiree. This will used by local crofters, helping safeguard the future of crofting on this island. 
• A project to modernise and expand training facilities within the UHI Scalloway Campus, helping young people access skill development opportunities on the island.

First minister John Swinney said: “Our island communities have so much potential, and this funding will help them pursue ambitions rooted in local priorities, strengthening their long-term resilience and prosperity. From delivering critical infrastructure to offering opportunities for small businesses, these projects will support employment, generate revenue and improve community wellbeing.

“The Scottish Government is committed to making islands even more attractive places for people to live, work and raise families –securing the populations and livelihoods that island communities need to create a sustainable future.”