Rural & Islands Insight Report 2025
The purpose of this 2025 Rural and Islands Insights Report is to provide new data insights, evidence and analysis on Scotland’s rural and island communities, focusing on demographic change, poverty and inequality, transport and connectivity, housing energy efficiency, care provision for children and older people, digital infrastructure, and agricultural transformation. This second Insights report follows on from our 2023 Insights report, funded through the ‘Novel insights on Scotland’s rural and island economies' (NISRIE) and ‘Reimagined Policy Futures: Shaping sustainable, inclusive and just rural and island communities in Scotland’ (ReRIC) projects within Theme E: Rural Futures of the Scottish Government’s Strategic Research Programme (2022–2027).
This report presents a comprehensive picture of Scotland’s rural and island communities, exploring the interplay between a range of important issues and using a wide range of official and proprietary data sources, together with original analysis, to highlight the persistent, long-standing challenges and emerging opportunities that are shaping these areas in complex ways. This report highlights persistent inequalities in access to services, infrastructure, and economic opportunities, compounded by demographic shifts, climate pressures, and digital divides. Despite these challenges, rural and island areas remain vital to Scotland’s identity, economy, and ecological stewardship.
What did we do?
The report draws on a wide range of public, official and proprietary data sources which, with original analysis of spatial variations and changes over time, highlight the persistent challenges and emerging opportunities shaping rural and island communities in Scotland. The report provides a significant compendium of evidence and new insights for use by a range of stakeholders to understand the changing characteristics of Scotland’s rural and island communities.
What did we find?
The policy context in which this report is situated has changed significantly over the past year. The Scottish Government’s priorities are now framed around four key objectives:
- Eradicating child poverty,
- Growing the economy,
- Tackling the climate emergency, and
- Improving public services.
For rural and island communities, these priorities sit alongside commitments such as the Rural Support Plan, Rural Delivery Plan, and the draft National Islands Plan (published in December 2025). These plans, with the accompanying (voluntary) Rural Assessment Toolkit - a “rural lens” designed to test the impact of policies across different geographies and community types – and (mandatory) Island Communities Impact Assessments respectively, are intended to integrate rural and island realities more fully into government decision-making. Rural and island economies and communities in Scotland are central to achieving national goals on economic growth, climate action, nature recovery, food security, and social justice. Yet these regions face persistent challenges, including higher living costs, ageing infrastructure and transport and connectivity barriers, poor access to affordable housing, persistent poverty – particularly fuel poverty – and economic change.
Demographic change is a major characteristic of rural and island areas. Populations here are ageing at a faster rate than in urban Scotland, with older people representing an increasing share of communities. Many continue to work beyond the age of 65, particularly in island and remote rural local authorities, but this masks deeper challenges relating to workforce renewal and service provision. Rural and island communities are ageing more rapidly than the rest of Scotland, and this demographic shift is increasing pressure on health and social care systems. While many older adults remain active beyond retirement age, rising demand for both home-based care and residential care homes highlights the human consequences of demographic change.
Whilst rural and island areas face growing demand for both home-based and residential care, service provision is sporadic and increasingly difficult to sustain. Care home places are fewer in remote areas, costs are higher, and workforce shortages are acute. Recruiting and retaining staff is particularly difficult in island communities, where housing shortages and lower wages deter potential workers. This creates pressure, not only on families but also on health and social care systems already struggling with financial and staffing constraints. Expanding at-home and community-based care, addressing workforce challenges, and securing sustainable funding for rural services are key priorities if rural and island Scotland is to meet the needs of its growing older population.
The population of young children has declined in many rural communities over the past two decades. This decline also threatens the sustainability of formal childcare provision, creating a cycle where fewer services exist to support young families. The Scottish Government notes that parents and carers in rural areas are less likely to utilise all of their state-funded childcare and are more likely to face childcare affordability challenges. Childcare provision in rural and island areas remains significantly more limited than in urban Scotland. There is higher reliance on local authority (and health board) childcare provision in islands and very remote rural areas in comparison to urban areas and more accessible parts of Scotland, where there is considerably greater private sector and voluntary/not-for-profit childcare provision. Families in rural and island areas often rely on informal arrangements with relatives or friends because nurseries and registered childminders are less available, especially in very remote areas. Where childcare is available, issues of accessibility and affordability are acute: long travel distances, limited hours, and higher relative costs restrict uptake. Case studies included in the report show how the lack of childcare options constrain parents’ ability to work or pursue training, limiting family incomes and reinforcing cycles of poverty.
Poverty, in particular fuel poverty, also continues to present significant challenges for many rural and island residents, although it often remains hidden. Around 17% of rural residents live in relative poverty, with 10% in severe poverty, levels that are slightly lower than in urban areas but carry a distinct character shaped by geography and cost. Estimates from 2023 also reveal that 44% of remote rural households experienced fuel poverty, with 30% facing extreme fuel poverty. Rural households experience what has been termed a “rural premium”, with living costs between 14% and 37% higher than those of their urban counterparts, depending on locality and household make-up. Using Energy Performance Certificate data, modelled energy bills in rural households on islands, for example, averaged £1,601 in 2022, compared with £1,072 in accessible rural areas (i.e. £530 per annum more, on average, in island areas compared to accessible rural areas). Food, clothing, and transport costs are also consistently higher, while limited access to childcare, healthcare, and other basic services compounds financial vulnerability. One-in-five rural children are living in relative poverty, and in rural areas, there is restricted access to affordable childcare.
Transport and connectivity remain central to the resilience of rural and island economies. Scotland has more than 200 ports that provide essential lifelines for freight, fisheries, and timber transport, as well as supporting tourism and local employment. Yet collectively, Scotland’s major ports have seen freight volumes fall by 59% since 2000, largely due to declining oil sector activity. However, some ports such as Cairnryan and Loch Ryan have seen rising car and freight traffic linked to Northern Ireland. Peterhead continues to dominate in fish landings, with over £200 million worth of fish landed in 2023. The TimberLINK service has moved more than two million tonnes of timber since 2000, reducing lorry miles and associated emissions. Scotland’s ferry fleet, however, is ageing rapidly, with an average vessel age of 25 years and some boats approaching half a century in service. In Orkney and Shetland, inter-island ferries average 30 to 31 years of age, highlighting the scale of replacement needed. Only 8% of ferries are currently low-emission, well below the government’s 30% target for 2032. A number of new vessels are under construction, but delays and cost overruns have raised concerns about renewal plans. Seasonal pressures on many ferry routes exacerbate the strain: routes such as Mallaig–Armadale carry more than forty times as many passengers in summer as in winter. This can lead to pressure on services, and strain local access to ferry routes in peak seasons due to high tourist demand. Air links remain vital, particularly for the Northern Isles, while proposals for fixed links raise sensitive debates around island identity, connectivity, and environmental impacts.
Digital infrastructure remains both a success story and a source of persistent inequality for rural and island Scotland. Over the past decade, fixed broadband and mobile coverage have improved considerably, with more households and businesses now able to access reliable services. However, a stubborn gap persists between urban centres and rural or island areas, particularly when it comes to the availability of full-fibre broadband, ultrafast connections, and next-generation mobile coverage. Superfast broadband (30 Mbps or above) is now widely available, but significant pockets of rural Scotland still lack access. In island and very remote communities, a notable proportion of premises remain unable to achieve even the basic 30 Mbps threshold. Ultrafast broadband (over 300 Mbps), while increasingly common in urban Scotland, is still rare in remote regions, limiting the ability of households and small businesses to take advantage of digital opportunities such as remote work, online education, and e-commerce. Mobile connectivity presents a similar picture. While 4G outdoor geographic coverage has improved, not all areas benefit equally. Coverage blackspots persist in remote glens, coastal areas, and islands. The rollout of 5G has further exposed these disparities: urban centres have seen rapid deployment, but rural and island regions lag far behind. The distinction is particularly stark in terms of “wider geographic coverage,” where 5G remains patchy or absent in many rural local authority areas.
Housing and energy costs remain among the most persistent challenges. For decades, policy documents have recognised the shortage of affordable housing in rural and island Scotland, and the evidence here confirms the depth of the problem. Analysis of housing and energy performance data from around 200,000 Energy Performance Certificates (EPC) issued annually (e.g. for marketed sales, rental, and newbuild completions) shows that housing in remote and island areas were dominated by poorer energy performance compared to more accessible and urban areas. This performance gap may reflect the reliance on oil and electricity for heating sources in rural and island areas off the gas grid, but also the higher prevalence of larger, older, detached housing. Only 22%-29% of existing dwellings (i.e. not newbuilds) that were issued EPCs in 2022 in islands, remote and very remote rural areas on the mainland had EPCs ratings of C band and better, compared to 60% in urban areas (where A is most efficient and G least). Urban and accessible regions have seen steady improvements in EPC ratings issued since 2013. Energy costs are consistently higher in rural and island areas, intensifying fuel poverty.
The rural economy remains deeply intertwined with agriculture, which continues to play a vital cultural and economic role despite long-term structural decline. Livestock numbers, particularly sheep and cattle, have fallen significantly in upland, crofting, and island areas over the past two decades – reducing the local economic and employment multipliers that activity brings. The number of people actively engaged in agriculture has also declined. At the same time, agricultural activity generates strong ripple effects, supporting local supply chains, jobs, and services that are especially important in fragile areas. Crofting and common grazings remain integral to both community identity and environmental stewardship, containing large shares of Scotland’s peatlands and nature recovery areas. However, only 45% of common grazing shareholders submitted support claims in 2022, reflecting administrative hurdles, low returns, and shifting land use. The transition away from the EU’s Common Agricultural Policy toward Scotland’s new four-tier support model, established under the Agriculture and Rural Communities (Scotland) Act 2024, marks a significant opportunity. From 2025, all farms receiving support have to complete Whole Farm Plans, with payments increasingly linked to sustainability and biodiversity outcomes.
- Highlights, Executive Summary and Report Conclusions
- Introduction and Policy Context
- Port and Ferry Infrastructure
- Broadband and Mobile Connectivity
- Nurseries, Childminders and Early Years Provision
- Older People: Activity and Care Services
- Housing: insights from Energy Performance Certificate data
- Supported Agricultural Activity
- Annexes
