Gathering lessons 'must be learned'

Published on Wednesday 25 August 2010 17:52

COUNCIL chiefs today admitted that lessons have to be learned from the collapse of the company behind a key Homecoming event - as it emerged that more than 100 firms are still owed nearly £750,000.

City council chief executive Tom Aitchison said that problems relating to the collapse of the company behind The Gathering - the centrepiece of last year's Homecoming Scotland celebrations - must change the way that the public and private sector work together on events.

His report also revealed that 344,000 is still owed to 103 private firms as a result of the collapse of the event organiser, The Gathering Limited, while 382,000 is owed to six public sector bodies. A move by the Destination Edinburgh Marketing Alliance (DEMA) to take over the event for future years was later dropped.

The new report was ordered by city leader Jenny Dawe in June, after it emerged in an Audit Scotland report that council officials paid 6000 to compensate one creditor without her knowing.

Mr Aitchison said the payment happened because the council's director of finance, Donald McGougan, wrote to the creditor saying that the council would "underwrite their debt until such time as the Gathering transferred to DEMA and settlement could commence".

As DEMA never did take on the event, a claim was lodged in court in December 2009 by the creditor against the council for recovery of the debt, with the firm saying that Mr McGougan's letter "amounted to a guarantee". The legal action was dropped in March this year after the council reached an out-of-court settlement with the creditor.

In his report, Mr Aitchison said that there are "a number of lessons to be learned", including that there should be more formal arrangements for events, a protocol that explains how private and public sector organisations work together, and a more detailed risk assessment and consideration of the "financial stability of organisations applying for grants to run events".

The report was today welcomed by Councillor Dawe, who said: "Given that I was determined to learn how the council came to make this payment, I welcome the explanation that has been provided. I also welcome the recommendations that lessons require to be learned about the public sector's role in such events."

Labour councillors accused Cllr Dawe of "misleading" councillors over the 6000 payment in June. But Andrew Burns, leader of the Labour group on the council, said today: "I welcome the clarifications in this report. It appears that the council leader did not know that invoice had been paid."