PLANS for a festivals tax aimed at raising up to £15 million for Edinburgh have been included in a £1 billion “city deal” presented to UK ministers.
It is believed the new tourist levy, known as the “culture and events contribution”, will involve a mandatory charge on hotel stays, adding around £1 per night to a typical bill.
The charge will apply during periods of peak demand, particularly the summer and winter festivals, when hundreds of thousands of visitors flock to Edinburgh. Proposals for a “city region” deal with the Westminster and Scottish governments – which it is hoped will secure £1bn in investment funds and leverage a further £3bn from the private sector – were formally lodged at the start of September.
Council sources have indicated that if the deal is approved by ministers powers to set and collect a levy would be devolved to the city.
This would mirror an agreement that was recently signed between the UK government and Cornwall Council, with control over key areas such as adult skills spending and regional investment passed to local officials.
It has also emerged that, following high-level contact in September and October, council chiefs in Edinburgh have scheduled a third meeting with Scottish ministers to discuss a tourist tax.
Government officials are said to be “open-minded” about the move after giving a similar plan the cold shoulder in 2011.
Liberal Democrat councillor Paul Edie welcomed the developments. He said: “I think this is progress – it would mean that the hugely important festivals are put on a permanent financial footing and that we can do that without having to dip into funds for vital services such as healthcare and education.”
However, business figures have voiced concern over suggestions that the levy could be mandatory and focused on hotels.
Graham Birse, director of the Edinburgh Institute at Napier University, said: “I would emphasise that if a scheme is brought forward that’s mandatory and it’s on hotels then the industry would not react well.”
City officials stressed that precise detail on how any new charge would be set and collected had not been finalised.
Council leader Andrew Burns said: “We submitted proposals for the City Region Deal on September 4 and are continuing to negotiate with the Westminster and Scottish governments on the deal.”
He added: “Our ambition is to bring greater autonomy and decision-making powers to the region as well as tackling inequalities amongst the public.
“What we also want to do is encourage investment in crucial infrastructure projects and increased opportunities in learning and development.”