Business district left with shortfall as firms fail to pay

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A COMPANY set up to improve Edinburgh's city centre has been left short of funds after many businesses failed to stump up the cash that funds it.

Essential Edinburgh is funded through a levy paid by all businesses within the city's "business improvement district" (BID), which covers the area between Princes Street and George Street, but the city council - which collects the money - has revealed that 15 per cent of the 902,000 it was supposed to collect last year did not come in.

The economic downturn and some negative perceptions of the value of projects carried out by Essential Edinburgh have been blamed.

At the end of the 2008/09 financial year, only five per cent - or 44,000 - of the income due had not been collected. But at the end of March 2010, 137,000 had gone uncollected.

The amount owed has continued to fall in recent weeks and both the council and Essential Edinburgh say they will continue to pursue money.

Patrick Browne, chief executive of the Scottish Beer and Pub Association, which opposed the levy being forced on its members, said: "We have always said that the key to a BID working is seeing tangible benefits. I don't think Essential Edinburgh has been good at displaying these tangible benefits. Economically, things have also got much more difficult for people in the last 12 months so they are looking closer at what benefits they get for what they spend."

It is not the first time that Essential Edinburgh - which also receives some public funding - has faced criticism. Earlier this year, it emerged it had spent more on operating costs than it had on projects in 2009, but the company - which has introduced specialist clean teams and information wardens to the city's streets and also manages St Andrew Square and the Edinburgh Farmers Market - today said it will not let firms off without paying.

A spokesman for Essential Edinburgh said: "Our budget is set on a collection target of 95 per cent, and we are confident this figure will be achieved. Payment of the levy is statutory once the businesses have voted in favour of a BID.

"While some non-collection is inevitable due to business turnover or businesses closing, non-payment is pursued through the normal channels."

A city council spokeswoman said: "We are confident that the BID target of 95 per cent collection will be achieved within the next two to three weeks."