Edinburgh festivals: Is the party over?

Published on Wednesday 11 November 2009 21:09

THEY are the jewels in the crown of Scotland's cultural scene, attracting hundreds of thousands of visitors and pumping £200 million into the nation's economy every year. But despite Edinburgh's money-spinning festivals enjoying one of their best summers yet, in the face of the recession, dark clouds are on the horizon.

The flagship events are facing a mounting funding crisis over the next few years – due to cuts in public funding, dwindling sponsorship and the impact of the economic downturn on donations. Senior festival figures are warning of severe implications for future years if projected funding gaps are not filled.

Core funding for events such as the Edinburgh International Festival, Fringe, Tattoo and film and book festivals is set to come under threat as early as next year.

The Scotsman can reveal that all the capital's major events have been warned to expect budget cuts of up to 4 per cent from the city council for the forthcoming financial year and ordered to start work on sharing resources.

Two major reports for the authority say that festival directors are already warning that the downturn is beginning to hamper fundraising efforts, while the council admits there are growing signs of "declining support" for the major events.

Council officials have warned that the arts sector faces added pressure from budget cuts as a result of the threatened demise of the Lloyds TSB Foundation and the controversial merger of the Scottish Arts Council with Scottish Screen.

However, the major events largely rely on commercial sponsorship, funding from the city council and major donations and trust funds to pay for the bulk of their activities.

The Scottish Government's backing of the festivals was based on a project-by-project basis through its dedicated "Expo", although 2010-11 is the last in a three-year deal worth 6m. No details have yet been confirmed of any future support.

The council's new reports said ticket sales this summer were roughly 11 per cent up on last year, with most festivals able to sustain funding levels from 2008. However, Jim Inch, corporate services director at the council, said: "The final out-turn of the summer festivals cannot be gauged collectively until the end of the financial year.

"However, feedback from individual festival directors indicates that the economic downturn is beginning to impact on fundraising across the private and public sectors."

The council currently ploughs 2.47m into the Edinburgh International Festival, while the film festival receives 87,000 and the Fringe 100,000.

Mr Inch said meetings were being held with all arts organisations, including festivals, throughout this month to ask them to identify 4 per cent worth of cuts and begin talks to share resources.

Major sponsorship deals involving the troubled banking giants RBS and the Lloyds Banking Group, whose brands include Bank of Scotland and Intelligent Finance, are being reviewed for 2010 and future years.

Festivals' officials were yesterday remaining tight-lipped on which major deals are secure for next year, with many subject to ongoing negotiations. Insiders, though, admitted it was proving a struggle to attract new backers and admitted most events were banking on extending existing deals, which are yet to be confirmed for 2010.

Other experts said funding problems were likely to increase over the next few years because of the impact of the curbs on public spending.

One senior festival official said: "Many festivals have built up good relationships with sponsors over several years. "With the festivals still performing well, we hope they are seen as a good investment. The problem is many companies just don't have the finance to get involved in festivals for the first time.

"If an existing relationship comes to an end and a major backer moves on, it will be a real headache to replace them. That's likely to remain the case for years to come."

The Bank of Scotland's long-running sponsorship of the annual festival fireworks concert is due to expire next year, while RBS's only confirmed involvement post-2010 is with the book festival in a deal which runs out the following year. RBS is currently the main backer of the Tattoo and also sponsors the free street theatre arena in the Royal Mile during the Fringe.

The Fringe has had a major sponsorship deal in place with Magners for several years, but it is not known if this will be continuing next year.

Standard Life is a long-running backer of the Edinburgh International Festival and the film festival, and although deals are secure for next year, the company would say only that arrangements are reviewed on an annual basis. The Edinburgh International Festival, which was backed by the likes of Lloyds TSB, Bank of Scotland, Heineken and Renault, said it was not in a position to confirm any sponsors for next year's event.

A spokeswoman said: "It is a tough economic climate for every industry. We have developed strong relationships with sponsors and supporters over the years and are cautiously optimistic to reach comparable levels of private and public funding in 2010."

A spokesman for the Fringe said: "The Fringe had a record year in 2009, with more people going to see more shows in more venues than ever before. This suggests that the Fringe and Edinburgh's other festivals are strong enough not only to buck the trend when it comes to tough economic times, but also to play a key role in the capital and Scotland's future growth and development.

"We are currently engaged in productive discussions with potential commercial sponsors for the 2010 Fringe."

A spokeswoman for Standard Life said: "All of our sponsorship activity is reviewed on an ongoing basis. We have no current plans to make changes to our sponsorship of Edinburgh's festivals and look forward to supporting both the EIF and EIFF in 2010."

Alan Smith, the marketing manager at the Tattoo, said the only confirmed sponsorship deal for next year was the backing of RBS. He added: "RBS has been our major sponsor for some time and we have them on board for next year. We work on other sponsorship arrangements on a year-to-year basis, and these will be confirmed nearer the time for the 2010 event."

One senior arts insider said: "Loyal long-term corporate supporters have tended to stay on board, but getting new corporate sponsorship is quite a difficult sell at the moment. Companies are preoccupied with other things."

Stewart Collins, the chairman of the British Arts Festivals Association, said: "There is no common experience across the country, particularly in that individual festivals and individual towns and cities have individual patterns of funding which have changed in different ways.

"However, the common feeling is that 2009 wasn't necessarily the worst of it, particularly for those organisations reliant on public money. There is an attrition with these long-term deals. They are not expected to last for ever, but you do need to replace them when they go. There will be a lot of pressure on fundraisers to replace them."

FESTIVALS AND THEIR FUNDING

EIF

EDINBURGH International Festival officials would not disclose details of any confirmed sponsorship deals for next year's event, although the programme is due to be released in March. Bank of Scotland and Lloyds TSB sponsored individual shows last year, while Bank of Scotland has been the long-running backer of the fireworks concert, in a deal which expires in 2010.

FRINGE

BANKING giant RBS and Irish drinks firm Magners have been the Fringe's two main backers in recent years. Although RBS has confirmed it will be backing the festival next year, Magners' involvement is less certain, although talks are ongoing with Fringe officials. Other backers this year included Edinburgh Napier University, ScotRail and HMV.

FILM FESTIVAL

CINEMA operator Cineworld, whose Edinburgh complex hosts the bulk of the film festival's gala premieres, was the main sponsor this year, along with Standard Life. The festival did not want to discuss any of its commercial deals, although Standard Life is back on board next year.

TATTOO

THE headline backer of this year's events was RBS. Other major sponsors included motoring giant Ford, drinks firm Highland Spring, the five-star Sheraton Hotel, and Design Links. RBS is back on board for next year's event, but it is not committed to the Tattoo beyond 2010.