Business group attacked for not spending enough on city

Essential Edinburgh, which is mainly funded through a levy paid by all businesses and property owners in the city centre, spent more on operating costs in its first year than it did on projects.

It did not even spend a further third of its 1.2 million budget, which also includes 257,546 of public funding.

More than a third of its budget for 2009 was used on running costs like salaries and travel.

Politicians and businesses today said that the figures are a concern, and called for the firm to do more to promote the city centre.

One senior city councillor said: "To have operating costs higher than project spending makes me wonder what's going on in there.

"It worries me somewhat, especially since there is some public funds involved."

The first annual report of Essential Edinburgh – set up to run the new city centre business improvement district (BID) between Princes Street and George Street – shows that 404,187 was spent on operating costs, while only 394,425 went towards projects.

A further 388,651 surplus will be carried over into this year.

Among its operating costs were 167,232 on salaries, 74,482 on legal and professional fees, 42,000 on consultancy fees, 20,481 on recruitment, 19,874 on insurance and 17,220 on stationery and subscriptions.

Patrick Browne, chief executive of the Scottish Beer and Pub Association, said: "BID levy payers will be concerned that so much of the BID's funding is being taken up meeting operational costs rather than directly benefiting services and the profile of the city centre itself. What we need is a strategy for Edinburgh's night-time economy and for enhancing the experience of visitors to the city centre."

Councillor Norma Hart, economic development spokeswoman for the Labour group on the city council, said: "There needs to be a stronger justification of what they do, particularly during a recession. There needs to be questions asked about the council's involvement and the leadership of the organisation."

Tom Campbell, chief executive of Essential Edinburgh, said the firm had a "very successful" first year, investing in a specialist "clean team", information wardens and new plants for Rose Street.

He said: "As with all BID companies, the first year brings costs that are not carried forward. In Essential Edinburgh's case, this included the transfer of staff, the establishment of the board, staff recruitment, the establishment of levy collection processes and planning project expenditure."