Small firms lose out over Gathering debts while multinational is repaid
The Scotsman can reveal that the council paid 5,647 to Yorkshire-based Portakabin, which has a turnover of more than 150 million, to cover a debt the company was owed from its involvement in the Gathering event.
Council finance bosses made the payment to the temporary building provider, while refusing to cover the costs of a group of 11 small businesses from Edinburgh owed money after the event collapsed amid huge debts.
Edinburgh city council has faced calls to compensate firms owed money after the Gathering Ltd went into receivership with debts of 516,000, with 11 of the creditors threatening legal action against the authority to recover more than 100,000 owed to them.
However, a report on the Gathering from Audit Scotland last year said that the council had paid 5,647 to an unknown company, after the creditor threatened legal action.
Now a letter obtained by The Scotsman from Edinburgh city council's director of finance revealed that Portakabin was the firm being compensated with taxpayers' cash, for temporary buildings it had provided for the event.
The letter from council finance director Donald McGougan to Portakabin said: "Edinburgh council is prepared to underwrite the outstanding debt you are owed of 5,647.82."
Martin Hunt, whose Edinburgh-based Tartan Silk PR firm is owed nearly 8,000, claimed that handing the cash to Portakabin showed a "lack of concern" for the creditors in the Scottish capital. He said: "Covering the costs of Portakabin in this way shows a lack of integrity on the part of Edinburgh city council.
"It also shows a lack of concern for these businesses that pay rates in Edinburgh and contribute to the economy of the city."
Tom Davidson of Buffalo Power, whose firm is owed more than 33,000 for providing generators for the Gathering event, claimed that Edinburgh council had given in to Portakabin, while brushing aside the group of smaller creditors.
Mr Davidson, whose firm has a base in Edinburgh, said: "I feel that the council has looked at the size of the company asking for its costs to be covered and decided it would pay up. But I think the council thinks it can brush us aside."
Graham Birse, of Edinburgh Chamber of Commerce, which is owed 230, said: "Local creditors have been left out of pocket, while a larger organisation that could have sustained the loss has been compensated."
Edinburgh city council yesterday denied claims that it had caved in to Portakabin because of the size of the firm, which has its head office in the city of York.A council spokeswoman said: "In response to the company now being named - it makes no material difference to the action that the council took at the time."
Portakabin said that its contract had included provisions to recover debts, which it said was "good business practice."