The Leader of Orkney Islands Council has formally challenged the UK Government's decision to exclude the Highlands and Islands from the newly announced Local Growth Fund (LGF).

In a letter to Douglas Alexander, the Secretary of State for Scotland, Councillor Heather Woodbridge urged an immediate review of the funding methodology.

The appeal follows an announcement on 8 January 2026 which revealed that no part of the Highlands and Islands region—including Orkney—would receive support from the fund.

The LGF is the successor to the UK Shared Prosperity Fund (UKSPF), which was established to replace previous EU support for rural and island communities. Orkney has received approximately £2.37 million from these linked funding streams since 2022, but this financial support is set to end abruptly in the coming financial year.

Councillor Woodbridge argued that the current measurement of income levels fails to account for the unique economic pressures of island life, such as ferry costs, high housing prices, and some of the UK's most expensive energy rates. She also highlighted a perceived flaw in the allocation process that allows lower-need authorities to qualify through partnerships, while Orkney—ranked 13th out of 32 for need—received no allocation.

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"We were extremely disappointed to receive no funding in the Local Growth Fund announcement," said Cllr Woodbridge. "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."

She continued: "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."

The Council Leader also stressed Orkney's strategic importance to the UK's national interests: "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."

Orkney Islands Council is now standing with fellow local authorities across the Highlands and Islands to call for an urgent rethink and a more equitable approach to regional investment.