Government-Funded Scottish Shipbuilder Collapses into Administration
Coastal Workboats Scotland Limited, a government-backed shipbuilding company, has entered administration, resulting in the immediate loss of all five jobs at the firm. The collapse leaves five vessels unfinished, including innovative electric boat projects that had received substantial public funding.
Company Background and Funding
The business first launched in 2023 after signing a 10-year lease agreement with Stornoway Port Authority for premises on Goat Island, Isle of Lewis. The company relocated its fabrication operations from England to this Scottish location with ambitious growth plans.
Significant government backing supported the venture, including:
- £6.2 million from the UK Government through Innovate UK
- £167,000 from Highland and Islands Enterprise
- Additional unsecured funding of £1.6 million from Damen Hardinxveld in February 2025
The company had employed five staff members and aimed to expand its workforce by an additional twenty positions as operations grew.
Ambitious Projects and Contracts
Coastal Workboats Scotland secured several significant contracts since its establishment:
- Early 2022 contracts to build two Landing Utility Vessels with Damen Hardinxveld
- July 2024 contracts with Damen Gorinchem to construct two tug vessels
- A pioneering Electronic Landing Utility Vessel (E-LUV) project - a fully electric inter-island workboat supported by shore-powered storage
The E-LUV project represented a UK-first innovation in electric vessel technology. The £167,000 grant from Highlands and Islands Enterprise specifically funded robotic welding equipment to support this ambitious electric boat initiative.
Financial Challenges and Administration
According to administrators FRP Advisory, the company encountered significant financial difficulties throughout 2025. Design issues and supply chain delays impacted vessel construction timelines, creating considerable pressure on cash flow despite the substantial funding received.
Brian Pogson, chief operating officer for Dutch shipbuilder Damen (a customer of the business), commented on the collapse: "As a family-run company, we've taken pride in building Coastal Workboats on a foundation of community; actively engaging with a local workforce and supplier network throughout each chapter of our work."
The administrators confirmed that all five employees have been made redundant, and work on the unfinished vessels has ceased immediately. The collapse represents a significant setback for maritime innovation in Scotland and raises questions about the management of government-funded business ventures in specialized manufacturing sectors.
