Edinburgh’s festivals have warned their global brand and appeal is in danger of “erosion” unless they secure a fair share of the city’s controversial tourist tax.
Leaders of the city’s flagship cultural events have joined forces to warn the city council that it is risking Edinburgh losing its competitive edge over rival “festival cities” because of the handling of the new visitor levy.
They are demanding a “proportionate share” of income generated by the scheme to help mitigate the impact of rising costs and the “cumulative real-terms erosion” of their core council funding.
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They have painted a bleak picture of “fewer premieres and commissions, less experimentation and innovation, and reduced national and international activity” due to the risk of “underinvestment” from the local authority.
A detailed dossier lodged by umbrella body Festivals Edinburgh urges councillors to take action to protect what it describes as “a golden asset for the city, the people who live here and the businesses that operate here”.
The festivals hope to secure more than £2m in new investment in time for their 80th anniversary season in 2027.
They have urged the council to ensure the landmark season is “a springboard, not a sunset”.
Under the latest visitor levy spending plans, senior council officials have recommended that just £550,000 is committed for the first increase in the core funding of festivals, venue and cultural companies in more than a decade.
However the eight-page dossier warns that the proposed increase is “not enough to sustain, let alone develop, such unique civic assets”.
Officials have recommended councillors approve a “blanket” five per cent increase in the core funding of arts events and organisations to “increase funds which have remained static over the last 10 years” and to help them address “inflationary pressures”.
However the council has proposed spending around £1.5m of visitor levy income in 2027-28 on a new “innovate funding” pot, which will be open to organisations across the city who do not have long-term support, while it carries out a long-term review of future funding for culture and heritage organisations.
The festivals instead want the council to commit the total £2.05m to a core funding increase in time for their 80th anniversary season, as well as a dedicated review, involving the Scottish Government and Creative Scotland, of how the festivals should be supported in the longer-term.
The dossier suggests that relocating the £1.5m to the core funding pot for culture would ensure “a level of support that better reflects both the pressures the Edinburgh Festivals face and the extraordinary value they generate for the city”.
The report states: “We recognise the very significant financial pressures facing the Council and the difficult choices it must make.
“But it is precisely because resources are constrained that investment needs to be directed towards assets that deliver substantial economic, cultural and civic returns. Edinburgh’s festivals are such assets.
“It is easy to become accustomed to the scale and success of Edinburgh’s Festivals. But what the city has created is exceptional and the envy of cities around the globe.
“Core funding from the council to the festivals has remained broadly static for more than a decade, while the cost of delivering world-leading cultural organisations and events has risen substantially.
“The festivals have already done what responsible organisations should do.
“They have reduced staffing, diversified income streams, developed sponsorship and commercial partnerships, delayed investment, and continually sought efficiencies - working collectively to increase public value through collaboration in areas including marketing, audience research and data, accessibility, environmental sustainability, community engagement and operational coordination.
“But there is a limit to what efficiency can achieve. Efficiency cannot indefinitely substitute for investment. It cannot mitigate the cumulative erosion of public funding in real terms. As such, the proposed five per cent uplift is not enough to sustain, let alone develop, such unique civic assets.
“The risk of underinvestment is not that the festivals suddenly disappear, but that their programmes are constrained in ambition and their reach and impact are gradually reduced - fewer premieres and commissions, less experimentation and innovation, reduced national and international activity, erosion of brand and appeal. We risk losing the things that give Edinburgh the edge over other festival cities.”
The new visitor levy, which was introduced by the council just days before the start of the summer festivals season in the city, adds a five per cent charge onto accommodation bills for stays of up to five nights.
The council’s web page on the visitor levy, which is expected to be generating up to £50 million a year by 2028, states the “overarching aim” of the scheme is “to sustain Edinburgh's status as one of the world's greatest cultural and heritage cities”.
However the council has yet to confirm any additional core funding for festivals and arts organisations, who have been on “standstill support” for more than a decade.
The Festivals Edinburgh dossier suggests the visitor levy was already putting a “financial burden” on events, venues and artists who pay accommodation costs, which have been estimated at around £1.25m in the first year of the scheme.
It adds: “These costs are counterproductive to any intended benefit of the visitor levy to invest into Edinburgh’s cultural landscape.”
The dossier raises concerns that the “spending power” of the festivals had already been reduced in recent years by rising charges and fees imposed by the council, which is said to be “recouping” up to half of its grants for arts organisations, including the Edinburgh Festival Fringe Society.
It states: “This effectively recycles public funding within the council, while adding administrative costs and reducing public benefit, by forcing the festivals to divert their resources.
“Excessive cost recovery risks reducing the capacity of the festivals to deliver this additional value, support jobs and livelihoods, and leverage further investment and partnerships. A more strategic approach would recognise the wider value the festivals generate for the city.”
The Festivals Edinburgh report, which describes the city’s festivals as “extraordinary assets with extraordinary returns”, highlights recent research which found that its programme of annual events is now worth £852m to the national economy.
However it warns that the projected £2.79 billion that the city’s major events are expected to generate over the next five years is “not guaranteed”.
The report adds: “It depends on sustaining the quality, ambition and international competitiveness that attract artists, partners and audiences to Edinburgh.
“Once specialist skills, relationships and international networks are lost, they cannot simply be switched back on.
“Investing properly now is therefore both prudent and economically sound: protecting the festivals’ future is less costly than rebuilding their position after it has been eroded.
“The visitor levy provides an important opportunity to strengthen the festivals and the wider cultural and visitor economy.
“We support the principle that visitors should contribute towards the costs and impacts of tourism, with the resulting income benefiting both residents and visitors.
“Given the significant role the festivals play in attracting visitors to Edinburgh, a proportionate share of visitor levy income should be reinvested in the festivals and the wider cultural infrastructure that underpins the city’s visitor economy.”
The Edinburgh International Festival, the Fringe and the film festival were all staged for the first time in 1947.
The Festivals Edinburgh report states: “The timing for such changes to our funding settlement could not be more significant.
“In 2027, Edinburgh will mark 80 years since the birth of our world-leading festival city.
“This be more than a celebration of what previous generations created. It should be an opportunity to decide what Edinburgh wants its Festivals to become over the next 80 years.
“Edinburgh has inherited an asset of extraordinary international significance. The 80th anniversary should be a springboard, not a sunset, an opportunity to strengthen the festivals’ international standing, support the next generation of Scottish artists, broaden community participation and build a sustainable foundation for the decades ahead.”
The SNP group on the Labour-run council has pledged to support the pleas from the festivals for the council to approve the £2m in new investment for the festivals and other cultural organisations in the city.
Culture spokesperson Finlay McFarlane said: “Edinburgh’s festivals and cultural organisations are not just a source of civic pride, they generate hundreds of millions of pounds for our economy and define our city on the world stage.
“Festivals Edinburgh have told us themselves that a flat 5 per cent uplift does not reflect the scale of the pressures they’re under and I agree with them.
“I’m asking colleagues from every group on this council to look past party lines and back this amendment, because our cultural partners need certainty now, not a further year of standing still.
“This is about backing the people who make Edinburgh the festival city the world envies, and backing those cultural partners across the entire city who spread joy and bring our communities together in dark times.”
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