Pillar of the community slips into red

A COMPANY set up to improve Edinburgh's city centre has slid to a six-figure loss - because businesses are failing to pay up.

Essential Edinburgh, which works with the city council to promote and improve the area between Princes Street and George Street, suffered a 186,040 loss in the year to the end of June 2010.

And it is now owed 229,200 by "trade creditors" - thought mainly to be the companies within its city centre "business improvement district" (BID), which are obliged to fund it.

Critics say that they are concerned about the level of debt the company is facing, and say the difficulty of getting money from businesses could be down to a poor perception of its performance.

But bosses at the company, which received free office space and a 72,500 grant from the council in the last year, insist it is performing well and that the deficit was countered by a surplus in the 2008/09 financial year.

Councillor Norma Hart, the economic development spokeswoman for the Labour group on the council, said: "Certainly you would have to be concerned about a loss as significant as this, particularly with the increase in the amount it is owed as well. There have to be questions asked about their debt management as it must affect cash flow. It must beg the question of why so many companies are not paying?

"I have had positive comments about them and I think there is a role for a business improvement district company like Essential Edinburgh, but I am sure their board will want to scrutinise why there is such a loss."

Essential Edinburgh was set up in 2008 and is funded by an additional one per cent rates "levy" imposed on all business rates payers in the BID area.

Bosses today defended performance, pointing out that a significant underspend of 383,383 was recorded in its first full year, to the end of June 2009.

In the last year, 29 separate projects were supported, including street cleaning teams, new CCTV cameras, crackdowns on fly-posting, new signage for Rose Street and supporting marketing campaigns.

However, the team of city centre "ambassadors", who provide on-street information and advice to shoppers and visitors, is being scrapped in order to focus on other projects.

The company insists its specialist street cleaning teams have improved the appearance of the city centre, while its "Checkout" initiative is said to have helped reduce retail crime by 17 per cent.

Tom Campbell, chief executive of Essential Edinburgh, said: "It has been a successful year. Our board are not complacent and we want to continually review our plan and ensure that the operational strategy is working successfully."