A LEADING figure in Edinburgh's festivals has called for the city to consider a tourism tax to boost the funding of its annual events.

Julia Amour, the new director of Festivals Edinburgh, the umbrella body for all such events, said that warnings in a recent report of a looming "fiscal cliff" which endangers the continued success of the festivals means a public debate on a new tax or levy is needed.

Ms Amour said it was "reasonable to expect" the many businesses that benefit from the annual festivals could contribute towards them through the levy - likely to be a bed tax on hotel room charges.

Councillor Richard Lewis, culture convenor for the council, said he supports a targeted levy to specifically support cultural activities in the city.

However he said businesses have to be convinced that such a new levy will be used only for the festivals and culture, and not be used to fund other areas of council activity.The Herald: Performers at the Edinburgh Festival Fringe on the Royal Mile last year

The 'Fiscal Cliff,' estimated to be represent a £10m shortfall in coming years, is the phrase coined in the Thundering Hooves 2.0 report to describe the effect of declining public support for the dozen Edinburgh festivals.

At the moment, £9m of the £36m that funds the annual festivals currently comes from public sources, mainly Edinburgh Council, Creative Scotland and the Scottish Government.

"It's very clear that the public funding rounds are going to be very tight," Ms Amour said.

"I think the festivals have responded brilliantly - earned income has gone up by a third in the last five years, but it is really important to understand what economies might look like, that's why the Thundering Hooves report calls for a wider debate on alternative sources of income."

Ms Amour said "if people think that the festivals can make the difference up through sponsorship, that isn't very realistic."

She said: "There needs to be a very realistic public debate about if Edinburgh wants this jewel in its crown, if Scotland wants this jewel in its crown, we do need to find a sustainable mix of funding sources.

"There's lots of different solutions. Berlin has a city tax, Barcelona has a city tax.

"Some cities have a margin on rates, others have a city VAT, Montreal has local VAT.

"We know there are a lot of people that have interest in how this complex system would work, and some of them are concerned about the possible negative impact on visitor growth.

"We would like to be part of an open debate on might the impact be, and what the different options are. There is a solution out there."

Ms Amour said the tourism levy would most likely be a "hotel room tax, or mark up".

Edinburgh council does not have the power to install such a tax at present.

Last year's Thundering Hooves 2.0 report warned that looming short falls in public funding, named a "fiscal cliff", could see the city "relegated" from the top tier of cultural cities.

Ms Amour, from Inverness and now based in Edinburgh, has succeeded Faith Liddell in the role, and has previously held senior positions with the British Council, Scottish Development International and the Scottish Higher Education Funding Council.

Last year, Cllr Sandy Howat, deputy leader of Edinburgh council, supported a levy.

He said: "A bed tax or a 'transient visitor levy' would have a great attraction for me because you are not only taxing tourists, of course, but you are taxing visitors for the retail experience or those coming to make business opportunities."

Cllr Lewis, who noted Paris already as a levy in place, said: "We are behind the times with this and we have to keep working with business to make the case for it and make it clear, and show, where the money would be going."

The City Deal being considered by the UK and Scottish Governments for Edinburgh, East Lothian, Midlothian, West Lothian, Scottish Borders and Fife includes a Tourism Visitor Levy in its submission.