Islands Cost Crisis Emergency Fund 2025/26
Argyll and Bute Council · 21 August 2025
Back to Policy and Resources Committee — 21 August 2025 and its agenda
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE DEVELOPMENT AND ECONOMIC GROWTH 21 AUGUST 2025 ISLANDS COST CRISIS EMERGENCY FUND 2025/26 1.0 EXECUTIVE SUMMARY 1.1 On 6 May 2025, the Scottish Government announced that Islands Cost Crisis Emergency funding (ICCEF) of £1 million would be available for the 2025/26 financial year. The funding will be distributed to the six Local Authorities with responsibility for islands through the 2025/26 Local Government Revenue Grant. The fund will be administered by Scottish Futures Trust (SFT) on behalf of the Scottish Government. 1.2 The funding for Argyll and Bute Council is £145,000 for financial year 2025/26. 1.3 Rising energy costs, inefficient housing stock and lack of mains gas all contribute to higher levels of fuel poverty on our island communities. Reducing levels of fuel poverty is currently one of the strategic objectives set out in the Scottish Government’s National Islands Plan. As such, the proposals detailed in this report are considered to have a strong alignment with national and local policy. 1.4 Local Authority decisions on where funding will be directed should be based on their local knowledge and understanding of the impacts of the cost crisis on their islands. The fund should be used to target island areas only by providing immediate help to those who are struggling most, either through existing schemes and/or other new support where the need is greatest. The outcomes of this funding are also expected to support efforts to address child poverty. 1.5 Members are asked to approve proposals to work in partnership with ALI energy to fund a scheme which will support wider efforts to address high levels of fuel poverty on local island communities. Fuel poverty rates are generally higher on Scottish Islands, and this is exacerbated in households with low incomes. It is further recommended that support for island ` banks is also continued. Funding support will be targeted at those in greatest need.
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RECOMMENDATIONS It is recommended that the Policy and Resources Committee:- a) Note the funding announced by the Scottish Government for 2025/26 financial year for Local Authorities with responsibility for islands; and b) Agree to the allocation of the Islands Cost Crisis Emergency Fund for 2025/26 to support the projects set out below:- ICCEF 2025/26 Distribution Targeting Fuel Poverty with ALI energy’s Affordable Warmth Service £120,000 Food Bank Grants £25,000 TOTAL ICCEF 25/26 £145,000
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE DEVELOPMENT AND ECONOMIC GROWTH 21 AUGUST 2025 ISLANDS COST CRISIS EMERGENCY FUND 2025/26 2.0 INTRODUCTION 2.1 On 6 May 2025, the Scottish Government announced that Islands Cost Crisis Emergency funding (ICCEF) of £1 million would be available for the 2025/26 financial year. The funding will be distributed to the six Local Authorities with responsibility for islands through the 2025/26 Local Government Revenue Grant. The fund will be administered by Scottish Futures Trust (SFT) on behalf of the Scottish Government. 2.2 This report provides the Policy and Resources Committee with an overview of proposed arrangements for the fund in 2025/26. 3.0 RECOMMENDATIONS 3.1 It is recommended that the Policy and Resources Committee:- a. Note the funding announced by the Scottish Government for 2025/26 financial year for Local Authorities with responsibility for islands. b. Agree to the allocation of the Islands Cost Crisis Emergency Fund for 2025/26 to support the projects set out below – Table 1 ICCEF 2025/26 Distribution Targeting Fuel Poverty with ALI energy’s Affordable Warmth Service £120,000 Food Bank Grants £25,000 TOTAL ICCEF 25/26 £145,000
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4.0 DETAIL 4.1 The Scottish Government has announced that there will be an allocation of £1 million Island Cost of Crisis Emergency funding for 25/26, and this will be distributed across the six Local Authorities with responsibility for islands. 4.2 The funding for Argyll and Bute Council is £145,000 for the Financial Year 2025/26. 4.3 The allocation for Argyll and Bute in 2024/25 was £141,000 and Members agreed the projects which this fund supported at the Policy and Resources Committee on 15 August 2024 ISLANDS COST CRISIS EMERGENCY FUND and Table 1 includes details of the projects funded. Table 1: ICCEF funding 2024/25 4.4 Members are asked to note that it has been challenging to evidence the impact that some of the interventions funded to date have had on poverty reduction. There is no way to currently evidence of how school meal top ups are being spent and the administration of the gift card payments has also been onerous to manage and incurs significant administration costs with the operator. As such, officers have been working to identify alternative projects to fund in 2025/26. 4.5 Members are being asked to approve proposals to work in partnership with ALI energy to extend their Affordable Warmth service which supports residents most at risk of fuel poverty. Fuel poverty rates are generally higher on Scottish islands, and this is exacerbated in households with low incomes. ALI energy’s current process for the Affordable Warmth scheme is set out below:- Table 1 ICCEF 2024/25 Distribution Argyll and Bute Council Love Local Gift Cards £100,000 Food Bank Grants £16,000 Free School Meal Top Ups £25,000 TOTAL ICCEF 23/24 £141,000
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Figure 1: ALIenergy Affordable Warmth Process 4.6 It is estimated that the additional funding provided via ICCEF will enable support to be provided to over 1,200 island households by providing energy vouchers. The voucher application process will necessitate engagement with ALI energy advisors who can then help clients to access any other crisis grants they are eligible for in addition to providing advice on a range of home energy related topics to increase resilience to fuel poverty going forward. ALI energy will also undertake robust monitoring and evaluation of outcomes and benefits achieved from this funding. 4.7 The application process can be carried out entirely via telephone but can be more effectively followed up by a home visit. With current resources, ALI energy typically achieves home visits for about a quarter to a third of all clients across Argyll and Bute however, this is more challenging on the islands due to costs and logistics. ALI energy will prioritise home visits where possible for those who are most vulnerable / in need. 4.8 It is considered that these funding proposals have key synergies with the Argyll and Bute Flexible Food and Fuel Fund. This offers financial support and wider confidential professional help to anyone suffering hardship. Working in partnership with the Community Food Forum, Bute Advice Centre and ALIenergy, households with low incomes and no access to cash savings can apply for immediate financial support. The fund will help support daily living expenses. 4.9 It is intended to use the remaining funds to support the work of island food banks that play an important role on the islands working with people in greatest need. This sum is £25,000. 4.10 In addition, reducing levels of fuel poverty is a key target of the Scottish Government and is one of the key objectives of the current National Islands Plan. As such, this project is considered to have a strong alignment with national policy.
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4.11 Further details of the proposed ICCEF distribution for 2025/26 is set out in Table 2, below:- Table 2: Proposed ICCEF funding Distribution 2025/26 5.0 CONCLUSION 5.1 The £1 million Islands Cost Crisis Emergency Fund allocation will support those on islands facing significant cost of living challenges. Estimates indicate that Islands face up to 66% higher costs of living than the UK average. High fuel costs, a colder climate and the lack of consumer choice is also intensifying the impact of the cost crisis. 5.2 Argyll and Bute Council’s share of the ICCEF fund is £145k in 2025/26 and this figure is based on our island population. Members are asked to approve the proposals set out in this report which will support households on low incomes through 2 distinct proposals and to mitigate against some of the unique cost of living challenges faced by people living on Argyll and Bute’s Island communities. 6.0 IMPLICATIONS 6.1 Policy – The Scottish Government’s £1 million Islands Cost Crisis Emergency Fund allocation will support those on islands facing significant cost of living challenges. 6.2 Financial – Argyll and Bute’s allocation for 2025/26 is £145,000. 6.3 Legal – All funding spent requires to be compliant with the relevant Scottish Government conditions of grant. 6.4 HR – None. 6.5 Customer Service – None. 6.6 Risk – Funding requires to be fully spent in the 2025/26 financial year and any unspent funds require to be returned to the Scottish Government. Table 1 ICCEF 2025/26 Distribution Targeting Fuel Poverty with ALI energy’s Affordable Warmth Service £120,000 Food Bank Grants £25,000 TOTAL ICCEF 25/26 £145,000
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6.7 Climate Change – Funding will be used to support those facing fuel poverty. Supporting interventions can assist residents with energy efficiency advice. 6.8 Fairer Scotland Duty: Socio-economic Duty – None. 6.9 Equalities – protected characteristics – None. 6.10 Customer Duty - This funding will ensure the Council are supporting our island communities and households across Argyll and Bute. 6.11 Island Communities – The Islands Cost Crisis Emergency Funding announced by the Scottish Government will help support our island communities who are facing a higher cost of living than the UK average. 6.12 Children’s rights and wellbeing – This funding will assist those in greatest need and at risk of poverty. This will include island households with children. Kirsty Flanagan Executive Director with responsibility for Development and Economic Growth Councillor Jim Lynch, Policy Lead for Economic Development, Islands and Rural Communities, Housing 2 July 2025 For further information contact: Fergus Murray - Head of Development and Economic Growth fergus.murray@argyll-bute.gov.uk Jonathan Welch - Transformation Projects and Regeneration Manager jonathan.welch@argyll-bute.gov.uk