Tourist tax targeted as Edinburgh festivals raise 'stagnation' fears

The Herald Scotland

2 days ago

She suggested some were still in a 'precarious' position despite securing new long-term Scottish Government funding earlier this year.
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In an exclusive interview with The Herald, Ms Anderson suggested that Edinburgh's proposed new visitor levy - which will be introduced just before next year's summer festivals - was a 'huge opportunity' to help event organisers move from 'survival mode to thriving".
Ms Anderson is the third director of the organisation Festivals Edinburgh, which was launched in 2007 to help secure the capital's status as the world's leading 'festival city".
Lori Anderson is the director of Festivals Edinburgh. (Image: Colin Mearns)
Ms Anderson works with 11 of the city's annual festivals, including the Edinburgh International Festival, the Fringe, the Tattoo, Edinburgh's Hogmanay celebrations, and the city's celebrations of jazz, film, visual art, science, storytelling, children's entertainment and books.
Ms Anderson revealed that the 'scale and ambition' of some festival programmes had already had to be reduced as a result of lower-than-hoped-for Scottish Government funding, particularly for this year's events.
Lori Anderson is director of Festivals Edinburgh. (Image: Colin Mearns) She suggested that the new Scottish Government funding deals announced by its arts agency, Creative Scotland, in January had not reversed the impact of prolonged standstill funding, which dated back as far as the 2008 global financial crash.
Ms Anderson said: 'Edinburgh's festivals are finally in a more stable position after been in crisis mode for a good few years now with significant budget cuts, the pandemic and negotiating Brexit.
'But most of the festivals did not get as much as they wanted for their multi-year funding programmes and the timing of the announcement was much later than expected, which is making 2025 a difficult year. A number of festivals have had to adjust their scale and ambition of their programmes.
The Edinburgh International Book Festival relocated last year to a new home at the former Edinburgh Royal Infirmary. Picture: Edinburgh International Book Festival
'Looking ahead to the future, they are really at a bit of a crossroads now. They have a bit of stability at the moment, but their funding is always precarious and always a challenge.'
The Scottish Government committed an additional £40m for Creative Scotland's multi-year funding programme, however this is being rolled out over two years.
The Edinburgh International Festival's annual funding has increased from £2.3m to £3.25m this year, with a further £1m increase to come in 2026-27. The book festival's annual funding will has gone up from £306,000 to £520,000 this year and will rise a further £160,000 next year, while the art festival's funding is going up from £100,000 to £130,000 then £170,000 over the same period.
Two of the city's most high-profile festivals, the Fringe and Edinburgh's Hogmanay festival, do not have long-term funding from the Scottish Government or Creative Scotland.
Texan rope performer 'Duke Loopin' on the Royal Mile during the Edinburgh Festival Fringe. Picture: Gordon Terris
Ms Anderson added: 'Creative Scotland's funding announcement was really welcome, but that doesn't mean that everyone is really settled now.
'The fire-fighting has subdued a bit and it has provided a bit of stability, but some of the festivals are still in quite a precarious position.
The Edinburgh International Film Festival has been running since 1947.
'I think the two directions the festivals could go in from this crossroads moment are either stagnation or ambition.
'There are some opportunities ahead which mean they can start to think more about their future ambitions now, a couple of years ahead of their 80th anniversary.
Lori Anderson is director of Festivals Edinburgh. (Image: Colin Mearns)
'We don't want to see the stagnation of the festivals. We want to see them thrive and not just be in survival mode.'
Edinburgh's long-planned visitor levy, which is also known as a 'tourist tax,' will be introduced by the city council just days before the main summer festival season gets underway in 2026.
Anyone booking accommodation from October 1 will be liable to pay the new five per cent levy, which will be capped for visits of up to five nights.
The council, which has predicted the new levy will raise up to £50m a year by 2028, and has pledged that it will be 'reinvested directly into initiatives that benefit residents and enhance visitor experiences.'
Ms Anderson described the visitor levy as a 'really exciting opportunity' to secure the future of the festivals.
But she warned there was a risk of the city 'robbing Peter to pay Paul' if event organisers and their artists had to pay the extra charge but did not see it reinvested in the festivals.
Ms Anderson said: 'The festivals are really entrepreneurial when it comes to looking at creative ways to raise income and being financially sustainable.
'The big challenge for them at the moment is around the cost of doing business in Edinburgh.
'It is an expensive place to live, work and visit and to put on a festival. In particular, there are very high accommodation costs at the moment.
'Visitors, performers and festivals that support the accommodation costs of their artists will have to pay the visitor levy when it comes in.
'But I think it's actually a really exciting opportunity. It's a huge moment for Edinburgh to think holistically and have significant investment across the whole city. It's a moment to be looking forward to and planning for.
'We would hope that, given the contribution that the festivals make to the city, some of the visitor levy income would come back to them, otherwise it would just be a case of robbing Peter to pay Paul.'
Under the council's current spending plans, 35% of the money raised via the levy will be ringfenced for culture, heritage and events, although detailed proposals have not yet been agreed by councillors.
Ms Anderson said: 'A lot of the festivals are keen to look at investing in their programmes. It could make a huge difference to enable longer-term planning.
'But there is also a huge opportunity to take a strategic approach to the whole city.
'We could see some really exciting projects to the fore to improve infrastructure and connectivity around the city and really help to invest in our cultural organisations, venues and attractions. There's lots to be looking forward to there.'
Ms Anderson said the long-term funding secured by many of Edinburgh's festivals earlier this year needed to be the 'start of a new conversation' about how they are supported by the Scottish and UK governments, and the city council.
She added: 'Edinburgh's festivals make a huge contribution socially, culturally and economically to Edinburgh, Scotland and the UK. We need to value them and support them with the resources that are needed to maintain and develop them.
'The festivals are second only in scale to an Olympic Games. You have to think about the support and resources are put into an Olympic Games.
The festivals have survived for nearly 80 years. They're something that the city, Scotland and the whole of the UK should be incredibly proud of. They're a huge asset, which makes a really significant social, economic and cultural contribution.
'They are joyful, they are inspirational, they are diverse, they happen all year round and they change year-on-year.
'We want to see them supported in order to take forward their ambitions, to continue to represent Scotland and be something that we are incredibly proud of.'