Leader comment: Few winners when the party's over

If we think that a threat to the scale of Christmas and Hogmanay celebrations in Edinburgh is just a little local difficulty with no significance for the rest of the country, it's time to reconsider.

Hogmanay celebrations are expensive to host when money is tight but they generate significant revenue. Picture: Greg Macvean

What the situation presents is an example of the consequences of austerity measures on the budgets of local authorities. And while few outside the capital city will shed any tears over the prospect of a smaller party taking place next winter, what this in effect means is that the economic boost which the area receives will be diminished.

As has been highlighted this week by job figures, Scotland’s economic growth is not improving, and while an economy can’t be built on a seasonal jamboree, it would be wrong to ignore the contribution that such events make to the revenue of nearby shops, hotels, cafes and public transport.

When a local authority is forced to make hard decisions, it is inevitable that a festival will be hit before welfare services. A council’s first priority is to serve those who live in the area and pay council tax, not entertaining tourists. If provision of an important service can only be saved by scaling down a party, it’s an easy decision for anyone to make.

However, this demonstrates a contradiction in strategy when central government policy is to increase economic growth while tasking local government with cutting spending. By forcing a council to downsize a non-essential item of its expenditure, central government shoots itself in the foot by stifling growth.

This effect applies across the country, on different scales. Until there is joined-up thinking over the consequences of austerity, we will be caught in a dilemma which will result in dreaded economic stagnation.