I associate Edinburgh's Engine Shed venue with Scottish Child magazine, the independent left-wing journal of youth issues and more, which I used to help edit and distribute.

We had editorial meetings over coffee there and once hosted an event in the bright, warm wood-panelled meeting-space. Using the Steiner model, the project was one of my earliest encounters with social enterprise as it gave people with learning disabilities a range of work experience in a lively vegetarian cafe.

That was in the early 1990s, and Scottish Child is long defunct, but the venue in the shadow of Arthur's Seat is still going, nearly 25 years after it started.

Not for long, however. Last month, after protracted negotiations with Edinburgh City Council and despite a vigorous but ultimately doomed campaign by supporters, its management said it will close. The reason is the withdrawal of annual funding from the council, amid demands that the group change its model, which is out of kilter with the council's employability agenda for people with disabilities.

Edinburgh is moving away from what is known in the trade as "non-open" employment, in favour of putting people in "real" jobs and supporting them there. Rather than deal with a number of suppliers they also want one supported employment service to take on the task of getting those with physical or learning difficulties into work. The Engine Shed was invited to join a consortium and bid on this basis, but declined to do so. Other attempts to find new ways of funding it have failed.

There is a case to be made that a social enterprise needing £211,000 funding a year is not really succeeding on business terms. Too many social enterprises are permanently grant-dependent. As the Engine Shed claims to have been running on less in 2013 than it did in 2003, despite inflation, those behind it must have had some financial nous. But how is success measured? Winners in Edinburgh's "supported employment tender opportunity" will have 70 per cent of funding linked to their ability to put people into jobs.

The Learning Disability Alliance Scotland says there are big questions about this approach. Will it lead to cherry-picking, where attention is focused on those with the least complex needs? Has tendering seen all organisations limit their ambitions, to enable a competitive bid?

And, crucially, how does all this fit with the idea of choice? The council's vision of how support should be provided has changed, so the Engine Shed is to close. But should that happen when the policy watchword is supposed to be "personal choice"?

Last year, according to the Scottish Consortium on Learning Disability, only 13.1 per cent of people with learning disabilities were in work or training. Those in non-open jobs fell from 702 in 2012 to 592. Those in the open job market went down too, from 981 to 884. The situation is worsening.

Edinburgh says it is setting up a more effective service aimed at giving people "the best chance of finding a job". This shouldn't be a crude numbers game, but such changes certainly need to deliver measurable results.