Shona McCarthy said the city was in danger of “sleepwalking” into a social, cultural and economic disaster unless the prospect of funding cuts were headed off and extra investment could be secured.
Ms McCarthy suggested Edinburgh was being left behind rival cities due to a decade of “disinvestment”, which had left its flagship events in “real danger”.
She said a “draconian” clampdown by the Scottish Government and the city council on people renting out spare rooms to performers and festival workers risked turning the event into “the domain of the privileged”.
Citing the collapse of the charity running the film festival and moves by the book festival to cut jobs and scale back its programme, Ms McCarthy said she expected to see “a lot more” of the city’s cultural infrastructure “go to the wall” without significant intervention.
And she warned it would be a “real mistake” for decision-makers to “take it for granted” the festivals and other arts organisations would be able to “re-emerge and pull it out the bag year after year”.
Ms McCarthy was speaking ahead of the Fringe Society launching its annual review and publishing findings from a “mass listening project” conducted in the aftermath of this year’s festival. According to a survey of participants, 87 per cent felt accommodation and other living costs in Edinburgh would be a barrier to future involvement in the 75-year-old event.
Two thirds of local residents said the Fringe made Edinburgh a better place to live, while three quarters said it made Edinburgh a better place to visit. However, more than 90 per cent of local residents believe they should be offered discounted tickets.
Writing in the annual review, Ms McCarthy said it was a “small miracle” the 2022 Fringe – which attracted an overall audience of more than 2.2 million, the sixth biggest audience in its history – happened at all.
However, she added: “The Fringe and our sister festivals can certainly be part of the national recovery that is needed, but miracles are one-offs. We can only keep bringing the magic if we have the belief and support.”
In an interview with The Scotsman, Ms McCarthy said she expected the 2023 Fringe to be “the most challenging year to date.”
She said: “I think it will definitely be harder than this year. The context we’re operating in is really serious. We are in a massive cost-of-living crisis across the UK and there are huge cuts to budgets coming across everything.
“On top of what everybody else is experiencing, culture budgets have been seriously depleted in Scotland over the last ten years. The festivals have effectively had a 30 per cent cut over a period when England’s cultural budget has actually increased by just under 10 per cent.
“There are other parts of the UK and other festivals which are seeing a surge in support. We are in danger here. We’ve already seen the impact on the film festival and the book festival. We need to take a serious look at this or we’re going to sleepwalk into the loss of our cultural capital status.”
Ms McCarthy warned it would be an “own goal” if decisions were made to “disinvest” at a time when the cultural sector was grappling with the impact of the cost-of-living crisis and the impact of new legislation on short-term letting.
Asked about the implications of a cut in the Scottish Government’s culture budget, she said: “I think you will see a lot more of our cultural infrastructure go to the wall. The impact that will have, socially, economically and culturally, would be a disaster for Scotland.
"We’re in a really perilous situation at the moment in the arts sector.
“We’re nearly always first in line for cuts whenever there’s any kind of crisis. To take it for granted that we’re all just going to re-emerge and pull it out the bag, year-after-year, would be a real mistake.”
Festivals Edinburgh, which represents the city’s cultural events, has lobbied for a “light touch” approach to be taken over the proposed temporary festival exemptions for new rules requiring home-owners to secure a licence to let out spare rooms. However, Ms McCarthy said the regulations were being “implemented with a hammer”.
She added: “Accommodation is a real worry for people at the moment, both in terms of affordability and availability.
"It’s not about challenging the new legislation, it’s about the draconian interpretation of it and the unintended consequences, which would be a loss of a significant proportion of affordable accommodation for artists and festival workers. It will affect the ability of people to home share.
"The six-week exemption period is so complicated. If it remains as it is, it is going to be so difficult to get an exemption, which will impact on the availability of stock and also impact on local people who have made a few quid from renting out a spare room.”
A new blueprint for the future of Edinburgh’s festivals, published in the summer, warned of the need for “new investment models that can support maximum resilience and public value”.
Ms McCarthy said: “When you look at the role that Edinburgh’s festivals have played, economically, socially, culturally, to disinvest now would just seem like an own goal."
The Fringe Society chief executive said she did not have an issue with a smaller-scale Fringe emerging, but warned there was a risk of it becoming much less accessible in future.
She said: "If we go down a route where it is impossible for people to get affordable accommodation to be part of the Fringe and costs of doing everything just become so high, then it is going to become the domain of the privileged.”