More than £48 million is to be spent on three new vessels for the Isles of Scilly – including a new ferry for the Penzance to the islands crossing.

In this afternoon’s Budget, the Chancellor of the Exchequer announced that the Levelling Up Fund would invest £48.4m in the project.

The Council of the Isles of Scilly submitted a bid back in June for the proposal for three new shipping vessels – the passenger ferry Scillonian IV, a new cargo vessel and an inter-island launch – as well as related harbour works.


Supporting the bid, alongside the Isles of Scilly Steamship Group, Tresco Estate, Duchy of Cornwall and Cornwall Council (as the owners of Penzance Harbour) has been MP Derek Thomas, whose constituency the islands fall in.

He said: "The air and sea links between the mainland and the Isles of Scilly are the lifeline for the communities and businesses of Scilly.

"The existing passenger ferry and the freight vessels will soon come to the end of their economic lives, and need to be replaced to maintain a sea link.

"The age of the vessels is resulting in increased maintenance and operating costs, and increased unreliability of services. Only Government investment in these transport links could maintain a sustainable local economy."

Mr Thomas has been chair of the local transport board since 2020 and, based on meetings and a survey sent to everyone living on the Isles of Scilly, he pushed for new transport links that would provide year-round passenger travel by sea, with a particular emphasis on cargo capacity and accessibility for those with disabilities.

Infrastructure will also be updated, both in Penzance as well as on Scilly, to help improve passenger safety and the handling of freight and luggage for the off-islands.

How the cafe seating could look Picture: Spear Green Design

How the cafe seating could look Picture: Spear Green Design

The vessels will initially use a hybrid battery/engine propulsion system, but have been designed to take on additional battery capacity as the technology advances. The aim is to increase cargo capacity and reduce journey times, while still cutting carbon emissions.

Mr Thomas said: “The new vessels will enable the local economies to be stronger, greener and more resilient.

“Now that the Government has agreed to fund the new vessels, we need to ensure that they deliver the benefits for Penzance and the Isles of Scilly we have been working for.”

“Levelling up” is the term used for the government's commitment of “not just investing in our rural and coastal areas, but giving them far more control of how that investment is made”.

Mr Thomas added: "This is a great example of how levelling-up is going to work – MPs, councils and local businesses working together, to identify what local priorities are and then finding a solution with the government."