John McLellan: Tourist tax could raise vital cash

The tram fare from the airport and a tourist tax could bring in much-needed funds for the city. ''Pic Neil Hanna
The tram fare from the airport and a tourist tax could bring in much-needed funds for the city. ''Pic Neil Hanna
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Hooray for the increased tram fare from the airport. Hardly any of us locals will benefit from the service but there is a real danger the tram as it stands will be a drain on Lothian Buses which could hit the services we do use.

So making sure those who do benefit pay for the privilege is not unreasonable and the proposed £5 fare for a single journey doesn’t seem that steep when compared with prices on comparable airport links elsewhere.

The Heathrow Express has a whopping minimum single fare of £21, compared with £5.70 for a single Tube fare. And what do most people do when they get off the Heathrow Express? That’s right, get on the Tube.

Yet the Heathrow Express is busy, not just because it’s fast (if you’re not travelling far from Paddington) and clean but also because its main customers are visitors who aren’t worried too much about the cost, or business travellers who claim it back as an expense from their employer or the taxman.

The last annual report from the operating company showed a profit after tax of just under £6 million from roughly the same number of passengers, not a bad return.

The minimum single fare on the Gatwick Express is a hefty £17.75 if you book online in advance but £19.90 at the ticket office and it’s just a normal train service which doesn’t stop at any of the stations before Victoria.

Dublin Airport doesn’t have a city centre rail link, but the Aircoach to Grafton Street costs ¤7 so even that is more than the fiver from Edinburgh Airport to Princes Street. (It is cold comfort to know that the Dublin Port Tunnel, which opened in 2006 and through which most of the airport buses now run, cost ¤752 million, ¤269m over budget.) Closer to home, the Glasgow Airport Shuttle is £6, which is primarily a tourist/business service because, unlike Edinburgh, so few Glaswegians live in town.

So the £4 single fare on the Edinburgh airport bus compares pretty well with other places and £5 for the tram to the airport isn’t bad either.

It is vital the tram pays its way, but with so few locals able to make regular use of the service, it’s down to the visitors. They will enjoy a nice, smooth ride into town, half of it through fields, after all.

I doubt that even if the airport tram fare was £6 or £7, visitors would notice and it’s the same for the principle of the long-debated but never introduced tourism levy on hotels.

I have never accepted the argument that a tourist would choose not to visit Edinburgh, especially during the Festival, if a hotel room cost £121 a night, or even £125 rather than £120.

In the seven years till 2012, the number of accommodation establishments, from five-star hotels down to caravan parks, almost doubled in Edinburgh to more than 2000, mainly non-serviced. There are now 21,000 rooms available and 42,500 beds, an increase of about 12,000 since 2005.

It suggests an overwhelming demand and even with such an increase in capacity, recently complied hotel occupancy figures show that in this quarter last year city hotels were 85 per cent full. And that wouldn’t include Six Nations weekends.
In the Festival season, the Edinburgh Tourism Action Group’s recent accommodation study estimated that an extra 7000 rooms magically become available, mainly single student rooms which brings the bed total up to 50,000. Demand certainly drives price because even backpackers hostels stick more than a tenner on a bed price at Festival time.

So given the population of Edinburgh is said to increase by about 500,000 in August, that’s an awful lot of people crashing out on floors and couches.

In tourism terms this city remains a massive success story and conservative estimates put the number of jobs supported by the sector at 30,000 with a healthy average income of £24,500.

But with success comes stresses and strains on city infrastructure: the airport and railway stations need to expand; the attractions, hotels restaurants and bars need constant maintenance and new services to support them; the visitors and staff need to get around efficiently. The more people who come and settle, the more pressure there is on housing and schools.

None of this is unwelcome but it comes at a price. Failure to keep up means rivals fill the void, but in keeping up with and overtaking competitors we who live here should feel the benefit, not pay the price.

As far as I have seen, the objections to a local tourist tax have been based less on fears it will make the city uncompetitive, but more on the cost of collection and compliance. Of course, hotels and guest houses pay business rates like any other enterprise, but this would not be a levy on them or their property.

But even if a tourist tax of just £1 a bed per night was levied only in July and August, that could potentially bring in something like £2.5m into the city’s coffers.

Make it a fiver and it’s £12.5m for just two months when the city is crammed and accommodation prices are hiked up anyway.

Charge £1 for the rest of the year and even if occupancy was running at an average of only 75 per cent, that represents potential income of another £9m a year.

These are very rough calculations and there would be administration costs, but we could be sitting on revenues of around £20m a year paid by people who would hardly notice.

Not when they are propping up the bar in the Pleasance or Gilded Balloon at four in the morning, they wouldn’t. And if it helped improve the city or, perish the thought, keep domestic council tax low, we’d all raise a glass to that.

Poisoned chalices on the staff merry-go-round

Someone was going to pay the price for the Mortonhall baby ashes scandal and, without wishing to prejudice further inquiries, it looks like being Edinburgh City Council’s director of services for communities Mark Turley.

A long-standing senior official, Mr Turley, pictured, had responsibility for a vast array of services, from bin collections to libraries and the maintenance of all public buildings. His department is therefore linked not only to Mortonhall, but also to the fall-out from the statutory repairs scandal and the death of Keane Wallis-Bennett at Liberton High. He was also at the centre of a bullying allegation by fellow director Marshall Poulton, the former head of transport who subsequently moved on.

That is a huge amount for any man to cope with and the extent to which he should have known what was happening at Mortonhall when the managers would have been the last to flag up the issue, or the extent to which he was responsible for the despicable policy, will be a moot point in what is bound to be a very messy dispute. And having sorted out the long-running arguments with the binmen, he knows all about disputes.

Sadly for the parents, all this will be conducted in private and the outcome of the internal probe will no doubt be bound up by confidentiality clauses included in the inevitable severance agreement. It’s another argument for a public inquiry.

He is not the first to be suspended on full pay by chief executive Sue Bruce: former director of city development Dave Anderson quit after being suspended in the wake of the statutory repairs scandal, which could end up costing the city £200m.

Unrelated to all of the above, head of strategy and communications Tom Little, a former editor of this newspaper, moved on last year after less than two years in post. It’s a fast-paced world at the top of Edinburgh City Council, that’s for sure.

So if Mr Turley does become part of the senior staff merry-go-round, his successor will not only have to resolve the baby ashes scandal, the Liberton tragedy, the ongoing statutory repairs problems and after all that get on with the day job. Finding someone capable to take on this poisoned chalice will not be easy, even with the reward of a £123,000 salary.

Then there is the chief executive herself. Ms Bruce has not been free of controversy, having bagged a £50,000-a-year non-executive directorship with Scottish and Southern Energy which had a contract with the council. Ms Bruce and SSE denied there was any conflict of interest.

She is, as I acknowledged recently, adept at bashing heads together when there is a problem and it looks like Mr Turley is next in line for the Bruce mallet. But for how much longer is she prepared to go on head-banging? There is already speculation she will resign after the referendum, in which as Edinburgh’s returning officer she has a prominent role.

Maybe that’s wishful thinking by some, as she reputedly does not enjoy the best of relations with councillors and Mr Turley is not the only senior civic figure with whom relations are strained. I suspect she will be there until the 2016 Scottish elections, when she will have just turned 60. But the queue for her £160,000-a-year post will be somewhat longer than that for Mr Turley’s.