VMI wrote to Fiona Hyslop, Cabinet Secretary for Transport of the Scottish Government on 20/7/2025 to outline the views of VMI members on the decision to exclude Mull and Iona from the Islands Business Resilience Fund to compensate island businesses for ferry disruption.  Read their responses below

Dear Fiona

Islands Business Resilience Fund

It’s a while since Visit Mull and Iona (VMI) has been in touch with you, as we patiently wait for the promised new ferries to enter service, to relieve the continual failures of our current ferry service.  With none of the Turkish ferries yet arriving, our 2025 season is a repeat of the last two years, with breakdowns and constant redeployment of MV Isle of Mull causing a lack of capacity that has caused a downturn in the number of visitors to the islands.

VMI, like everyone else on our islands, was therefore shocked to hear that businesses based on Mull and Iona are not eligible for the new £4.4 million Islands Business Resilience Fund.  How can the very obvious damage to our community and economy, caused by never-ending ferry disruption and chaos, be considered not to merit eligibility for support?

The decision to base support on the arbitrary criteria of an island having more than 15% of ferry cancellations over the last three summer seasons is simplistic in the extreme. It totally fails to recognise and examine the complexity of the damage that continual last minute ferry timetable changes and redeployment have on every aspect of island life. Mull and Iona Ferry committee has demonstrated that in 2025 alone, ferry capacity has been reduced by 22% since March, because MV Isle of Mull was out of service.

Ferry capacity determines how many visitors can book accommodation.  2025 holds the record for people booking accommodation and then cancelling because they cannot book a ferry, so accommodation bookings are down for the third year in a row.  Fewer visitors staying in accommodation affects all our hospitality sectors from cafes and retail to tour operators and visitor attractions.

Day visitors are also very important to Mull and Iona’s economy but now even day foot passengers often find that they cannot book a ferry ticket.  There is a clear downturn in visitor numbers and income across all our tourism sectors, not always because their ferry was cancelled but because they couldn’t book a ticket on the ferry.

And it’s not just hospitality that is affected, all other sectors on the islands face continual difficulties with incoming and outgoing goods and animals, which impact their ability to operate.

For years, Mull and Iona Ferry Committee warned of the impending crisis looming because of the unreliability of our ageing ferry fleet, and were ignored.  At the beginning of the 2023 season they were proved right as the ferry fleet started to fall apart at an alarming rate causing severe disruption to island lives and businesses. Mull and Iona, along with the other Hebridean islands have been paying a high price ever since, as the situation worsens.

Without any economic or social impact study on three years of appalling lack of ferry reliability, how can the Scottish Government or HIE make a fair decision on compensation for Mull and Iona or the other islands that have been excluded?

The Scottish Government need to look again at a fair and equitable way of compensating Mull and Iona, and other islands, for the scandalous years of neglect due to the failure of our ferry fleet; a situation which is still ongoing and will have far-reaching consequences for years to come.

Yours sincerely

Margaret

Margaret Matthew

Acting Chair, Visit Mull and Iona
Destination Marketing Organisation for Mull and Iona
www.visitmullandiona.co.uk

Cc           Mairi Gougeon, Cabinet Secretary for Rural Affairs, Land Reform and Islands
Rachel Hunter, Director of Enterprise and Community Support, HIE

Here is the response from Mairi Gougeon 20 August 2025

Cabinet Secretary for Rural Affairs, Land Reform and Islands
Rùnaire a’ Chaibineit airson Chùisean Dùthchail, Ath-leasachadh Fearainn agus Eileanan
Mairi Gougeon MSP/BPA
T : 0300 244 4000
E : scottish.ministers@gov.scot

Dear Margaret,

Thank you for your letter of 20 July 2025, regarding the Island Business Resilience Fund (IBRF) and the potential impacts on businesses and communities in Mull and Iona.

As I have Ministerial portfolio responsibility for both islands and the IBRF, I am responding to the points you have raised. My colleague, the Cabinet Secretary for Transport, Fiona Hyslop, will respond separately to the specific transport issues you have highlighted.

The Scottish Government fully recognises the significant impact that ferry disruption has had on many of our island communities. That is why we have worked closely with Highlands and Islands Enterprise (HIE) to design the IBRF as a targeted intervention to support the businesses and communities most severely affected.

Following detailed analysis of disruption data provided by Transport Scotland and CalMac, the islands of South Uist, Colonsay, North Uist, Eriskay, Benbecula, Berneray, Grimsay and Arran were identified as eligible for support. Each of these experienced more than 15% ferry disruption across the last three contract years (2021 – 2024), compared to a network average of around 6 – 7%. The focus on cancellations, rather than delays or alternative service impacts, reflects the most severe form of disruption, where no travel or freight movement is possible.

We recognise that any scheme based on threshold criteria may leave some communities feeling unfairly excluded, and we understand your concerns. However, our work with HIE has focused on ensuring the £4.4 million allocation towards those islands and businesses most disproportionately affected by sustained disruption.

Tourism plays a vital role in the economy of Mull and Iona, and of Argyll and the Isles more widely. In 2023, overseas and domestic overnight visitors took an estimated 461,000 trips to the region, with an associated expenditure of £135 million. This comprised 371,000 domestic visitors, spending £92 million, and 90,000 overseas visitors, spending £42 million.

We remain committed to supporting all of Scotland’s island communities and to ensuring islanders are meaningfully involved in the design and delivery of policies that affect them.

I hope this letter provides you with further clarity on the current position regarding the IBRF and reassures you of the Scottish Government’s wider commitment to supporting tourism and economic resilience in Mull, Iona, and across Scotland’s islands.

Yours sincerely,

MAIRI GOUGEON

Here is the response from Fiona Hyslop 22 August 2025

Cabinet Secretary for Transport
Fiona Hyslop MSP
T: 0300 244 4000
E: scottish.ministers@gov.scot

Dear Ms Matthew

Thank you for your correspondence of 20 July 2025 regarding the recently announced Islands Business Resilience Fund (IBRF) on behalf of Visit Mull and Iona.

I understand Mairi Gougeon, Cabinet Secretary for Rural Affairs, Land Reform and Islands, will respond to your points relating to the background and criteria for the Island Business Resilience Fund, as the lead Minister responsible for this Fund.

With regards to the ferry issues you raised in your email, the need by CalMac to re-deploy vessels has been a necessary measure to address exceptional circumstances, caused by issues which have emerged as a result of planned and unplanned maintenance. The recent deployments have been necessary to ensure lifeline connectivity is maintained.

Vessel deployment is an operational matter for CalMac, and not all vessels are suitable for every route. When determining vessel deployment options, they are best-placed to balance the needs of all communities, and will take into consideration a number of factors – ensuring island connectivity, including delivery of essential supplies, is maintained.

One of these challenges involved MV Isle of Mull which had her Marine Evacuation System (MES) condemned whilst undergoing annual overhaul in December 2024. This meant the Maritime and Coastguard Agency (MCA) reduced her Passenger Certificate to 45. As a result, CalMac deployed her on the Lochboisdale route which better aligned with her limited capacity. This was the case until successful installation of her new MES, when she resumed operating at full capacity from 30 June.

I understand that moving MV Isle of Mull to the Lochboisdale service resulted in a reduced capacity on the Oban-Craignure route, but note that CalMac ensured it continued to be served by two vessels, MV Courisk alongside MV Loch Frisa. However, it is acknowledged this still resulted in reduced overall route capacity. In addition, I believe MV Isle of Mull called into Craignure when possible, during this time.

Significant progress has been made to deliver six new major vessels including work to deliver seven new electric ferries. In the coming year, we intend to invest over £530m maintaining and enhancing our networks, and strengthening resilience of ferry services. This represents a near 23% increase on 2024-25 funding levels.

Of the seven new smaller vessels in Phase 1 of the SVRP, three are for routes serving Mull, Lochaline—Fishnish, Tobermory—Kilchoan and Iona—Fionnphort. In addition, Transport Scotland is progressing the project for the new Oban—Craignure service; the current timeline being 2030. On delivery of the Islay class new vessels, CalMac will be better placed to consider alternative vessel cascade options in support of the Isle of Mull community.

I recognise that having confidence in ferry services is key and this can influence peoples’ decision to live, work, and visit the islands. These human impacts are at the heart of Scottish Ministers’ commitment to supporting lifeline services through continued investment in ferry services across Scotland. Finally, let me reassure you that the Scottish Government, remains committed to supporting all of Scotland’s Island communities and to ensure that islanders are able to participate in policy design and delivery.

Yours sincerely,

FIONA HYSLOP
Cabinet Secretary for Transport