​Community buy out faces uncertainty over £3m debt

One of Scotland’s pioneering community buyouts is in severe financial trouble, it has been revealed.

The Isle of Gigha Heritage Trust, which took over the Hebridean island for about £4m in 2002, is estimated to be £3m in debt.

It comes after the trust completed a review of its operations with the help of Highlands and Islands Enterprise (HIE).

As a result, Islanders are due to take part in a vote of confidence in the chairwoman of the trust on Thursday.

Since the takeover, residents have been developing the local economy and have income-generating wind turbines and a housing refurbishment programme which provides high-quality accommodation for local people.

In a statement, the trust said: "The trust has invested in the housing and other developments on the island some of which has been borrowed, some granted from supporting organisations and some raised from the island's own businesses and efforts."

The management of debt is part of our plans for the future

In addition to improving housing stock, £1m was paid back to lenders within a year of the original purchase of the island; over £800,000 has been raised through Trust's renewables companies; and the value of the island has increased to over £7m, said the trust.

A spokesperson added: "We have recently carried out a strategic review, with the support of Highlands and Islands Enterprise, which has focused on the use of our assets, financial performance and debts of the trust.

“The management of debt is part of our plans for the future."

Sold by businessman Derek Holt in 2001, the community buyout – backed by £3.5m lottery cash – was one of the first of its kind and promised to regenerate the island as well as boosting the economy via community-led projects.