Dawe furious after council officials pay Gathering debt

Published on Thursday 24 June 2010 11:04

FURIOUS city council leader Jenny Dawe has ordered an inquiry into why officials paid £6,000 to a company owed money from the clan gathering event, when the council itself was owed thousands more.

The Gathering, the flagship event in the Year of Homecoming celebrations, made a loss of 516,000 despite massive public subsidies, including 100,000 from the council.

The company behind it, The Gathering 2009 Ltd, went into liquidation with 726,000 of debts, including 344,000 owed to 103 private companies.

Now a report by Audit Scotland into The Gathering has revealed the council reached a 6,000 out of court settlement with one unidentified creditor in March this year, despite public assurances from Councillor Dawe that the council would not accept any liabilities arising from the Gathering's collapse.

Audit Scotland said the creditor had threatened in October last year to begin winding up proceedings against the company unless the 6,000 was paid immediately. This was at a time when negotiations were under way for Destination Edinburgh Marketing Alliance to buy the company and the council agreed to underwrite the debt.

The report says: "In late December 2009, the creditor lodged a claim against the council for payment of the debt. The council initially considered this to be inappropriate. Later, in view of The Gathering 2009 Ltd going into liquidation in late January 2010, the council reconsidered its options and entered into discussions with the creditor. This led to an out of court settlement in March 2010."

Cllr Dawe was today said to be "furious" that senior officials did not inform her of the pay-out and allowed her to continue denying any council responsibility for outstanding debts. It is understood she has demanded a report from chief executive Tom Aitchison in an angry letter to him.

The Gathering's 382,000 debts to public sector bodies included 24,000 to the city council for various services.

Senior Labour councillor Paul Godzik said: "Jenny Dawe has said one thing and the council has done another."

In a statement, Cllr Dawe said: "I have asked the council's chief executive to report on the review to the council, to assess the implications of Audit Scotland's recommendations for Edinburgh and, in particular, to investigate why the council apparently met a claim from a creditor against the Gathering 2009 Ltd."

Deputy council leader Steve Cardownie said "Jenny Dawe and I were explicitly informed by senior officials that no payments had been made to creditors as it was not the council's responsibility. We need to get to the bottom of what has happened, who made the payments and who sanctioned them."