Islanders have expressed "dismay" that the Scottish Government has refused compensation for ferry disruption while offering hundreds of householders and tenants affected by Storm Babet grants of £1,500 each as part of a funding package.

Businesses that can prove their trade was severely impacted by storm-related flooding will be given £3,000.

The funding will be given to councils in affected areas to allocate to the tenants and businesses.

The move has upset islanders on South Uist who have been calling for compensation after it was the victim of cuts when ferry breakdowns and delays in annual maintenance meant that islanders lost their service for nearly the whole of June.

It has been drawing the short straw because it is felt according to the way CalMac runs its lifeline service disruption management, that the least number of people will be affected if their allocated vessel, MV Lord of the Isles, is withdrawn to help out elsewhere.

A parliamentary vote on providing a multi-million pound fund to compensate islanders hit by disruption to lifeline services due to breakdowns in CalMac's ageing fleet was blocked by the SNP in June.

The catalyst for action came when an estimated 500 residents, 200 cars, 40 vans and 20 lorries converged on Lochboisdale – the port which links South Uist to the mainland – on June 4 to protest about the cancellations.

The South Uist Business Impact Group, which is raising concerns about the compensation failure to the transport minister Fiona Hyslop estimates that losses to local companies due to ferry disruption reached over £3 million.

The Herald: An estimated one-third of South Uist's population protested against the three-week closure of its

A study by MKA Economics shows local businesses losses are up, with around £2.6 million in lost turnover between March and June this year. Combined with the consultancy’s 2022 report on the wider impact of ferry service cuts, the losses amount to at least £3 million.

However, it pointed out that actual losses may be higher than the figure arrived at by the study, which was funded by Stòras Uibhist, a community owned company that manages the 93,000 acre South Uist Estate comprising the Outer Hebridean islands of Eriskay, South Uist and parts of Benbecula.

John Daniel Peteranna of the impact group, whose South Uist-based renewable energy company supplies wind turbines to make help make homes self-sufficient said: "It would appear that some of us are more equal that others. Or our government is prepared to cover acts of God but not acts of government failure."

Mary Schmoller, chairman of Stòras Uibhist told Ms Hyslop in a letter: "The response of our community has been disbelief that some communities are considered worthy of support and others not so, we had already seen this with the Edinburgh trams works as well as in Glasgow with the fires at the school of art. Our community has funded research to evidence the scale of loss to us over the last two years.

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"The ferry situation is exacerbating things, our inter-island ferries are now also in disarray.

"Our airline situation is now difficult because of the prices even with the Air Discount Scheme, which have substantially increased and the timetable changes that have happened without any consultation with people on the island.

"I would like to suggest a meeting, to make it clear the level of disruption we have been suffering again since early October, we understand about the Uig / Lochmaddy disruption is unavoidable, the rest of the fleet of vessels available is totally under resourced."

In June, a Labour-led motion called on MSPs to back islanders' pleas for a compensation fund after South Uist residents lodged a public protest after years of frustration at being impacted by major ferry cancellations.

But SNP transport secretary Màiri McAllan effectively wiped away the motion put by Michael Marra, the Scottish Labour's transport spokesman.

The Scottish Government-owned CalMac Ferries Ltd amassed nearly £12m in fines for poor performance since it took charge of lifeline services.

It was hoped that the penalties would be used as a resilience fund to support islanders who have been adversely affected by CalMac disruption and withdrawal of services.

The motion was put to MSPs after calls from the Lochboisdale Ferry Business Impact Group for a 'resilience fund' to be launched to support islanders who have been consistently hit by cancellations to services through a CalMac route prioritisation matrix which attempts to place ferries in positions to ensure the least impact on the public.

But it has emerged that MSPs were never given the opportunity to directly say 'yay' or 'nay' to the islanders' compensation scheme after Ms McAllan's intervention.

She amended the motion to remove any mention of the resilience fund - and instead asked for recognition that all CalMac penalties are used to improve the resilience of the existing fleet following network failures.

She says the penalties "part-funded" the £9m emergency nine month charter of MV Alfred from Pentland Ferries. The vessel cost the ferry company just £5m more to buy in 2019.

The storm grants were agreed during the first formal meeting of the Storm Babet Ministerial Taskforce.

Cabinet Secretary Mairi McAllan MSP said: "Given the unprecedented scale of damage and impact caused by Storm Babet we have concluded that additional funding is required to support households and businesses."

Ms McAllan said the new grants were in addition to the Scottish government's annual funding for flood risk management and coastal change adaptation over the course of this parliament.

She added the funding sat alongside the Bellwin Scheme, a discretionary fund to help councils facing extra costs as a result of large-scale emergencies, as well as the Scottish Welfare Fund, and additional funds to farming businesses and organisations.

Seven local authorities - Aberdeenshire, Angus, Perth and Kinross, Fife, South Lanarkshire, Highland, and Moray - have notified the Scottish government of a potential claim under the Bellwin scheme.

Brechin in Angus was one of the areas worst-affected by flooding with dozens of residents evacuated from their homes.

The South Uist business impact group was formed in early 2022 in the wake of a two-week disruption to the South Uist service, caused by the sudden and unexpected removal of MV Lord of the Isles for repair work to her firefighting system.

For a short time Uist was left without a service after North Uist's MV Hebrides struck a pier.

It returned to normal service following repairs to its damaged hull.

The outage was preceded by a three-month period which saw the almost complete removal of the service, during which, the locals say, these repairs could have been implemented.