THE balance sheet of Edinburgh’s flagship conference centre is under review amid “serious concerns” about its future finances.
Independent auditors are poring over accounts belonging to the Edinburgh International Conference Centre (EICC) after council officials raised doubts about its commercial performance following a £30 million extension which doubled capacity.
It is understood the council-owned venue has failed to attract enough conferences to justify the cost of the work – which introduced a pioneering hall-wide moving floor system – and is now suffering “immediate shortfalls” in its business plan.
The unsettling financial picture contrasts sharply with an announcement in March suggesting conferences in the EICC had injected £50 million into cash registers across the city and had propelled Edinburgh to 33rd in an international league table of the most successful conference destinations in the world.
A brief but damning analysis of the EICC’s finances said the project had been “flagged red” because of “immediate shortfalls” in the business plan which “raises serious concerns regarding the achievability over the lifecycle of the project”.
It comes almost a year after EICC chiefs came under fire for choosing to move into the most expensive offices at the revamped venue – a space twices as expensive as others on the shortlist – amid warnings it would put a “fairly large dent” in its business plan.
Today, finance chiefs have branded the news “alarming” and vowed to scrutinise the Ernst and Young report when the auditors present their findings next month.
EICC bosses said the expansion had delivered a “record economic impact” and welcomed the independent review of their finances.
But Cllr Gavin Corbett, finance spokesman for Edinburgh Greens, said the tone of the forecast was “damning”.
He said: “The EICC extension always carried risk if new business was not captured. I’ll be looking closely at the review in June to get a clear direction on what the council can do put things back on course.
“However, that is also why the Greens did not support the proposal last year to allow EICC staff to move into new, much more expensive office space.
“We warned then that this would be too much of a burden on the business plan and it now looks as if our fears were well founded.”
A council source said the venue’s business case had “clearly been over-optimistic”.
A spokeman for the EICC said: “We welcome the independent review of our business plans and will be active participants in the process.”
A council spokeswoman said: “An independent review is under way to review the EICC business plan and the opening of the new facility to recommend appropriate actions.