Even police out of pocket in Gathering debts fiasco

Lothian and Borders Police and the Scottish Ambulance Service have also been left out of pocket by the centrepiece event of Scotland's Year of Homecoming celebrations.

The City of Edinburgh Council, whose marketing company has agreed to try to revive the event to coincide with the London Olympics, is also still due money – despite stumping up an advance grant of 100,000.

Organisers are understood to have failed to pay a penny of charges due to public bodies who had helped ensure the event – which attracted around 47,000 people – went ahead. It is thought poor advance ticket sales and a failure to keep costs down led to the event making a 600,000 loss.

The company behind the world's biggest clan gathering owed Historic Scotland, which is responsible for both the castle and the Royal Park, 73,000 when it was on the verge of being put into liquidation this week.

The heritage agency has been forced to wipe out the money it is owed by The Gathering Limited as part of a deal which saw Lord Jamie Sempill, the entrepreneur behind the event, hand over intellectual property rights to the Destination Edinburgh Marketing Alliance.

The new body, which was only formed in April, has agreed to inherit 300,000 of debts owed to contractors, suppliers and performers.

But various public sector bodies have been forced to write off money they are owed after being warned they stood little chance of ever seeing it recouped.

The Scottish Government, which gave The Gathering 280,000 from its own budget and those of EventScotland and Homecoming, was also forced to write off a 180,000 loan agreed just weeks before the event to ensure it went ahead as planned.

A spokeswoman for Historic Scotland said: "In agreement with other departments within the Scottish Government, we agreed not to pursue the debt. We have had a very good start to the year, due in part to The Gathering which brought so many people to Edinburgh, many of whom visited Edinburgh Castle."

The police and ambulance service were due 27,200 and 12,000 respectively.

A police spokesman said: "We can confirm that we had intended to seek to recover salary costs associated with some staff members working at The Gathering. This was in line with our normal approach to the provision of officers to support public order and safety at events organised on a profit-making basis.

"It is worth noting that it is not unusual for us to assist with public safety policing without recovering costs and this decision is considered on a case-by-case basis."

The city council said it was still hopeful of recouping 24,000 which it spent closing off the Royal Mile to accommodate a huge parade of more than 8,000 and diverting traffic around the city centre.

Lord Sempill was unavailable for comment yesterday.

The global downturn is being blamed for the failure to sell enough tickets. The cost of all- inclusive packages was slashed after a slow take-up overseas.