Marketing Edinburgh affair: It just doesn’t add up – John McLellan

Marketing Edinburgh still hasn’t filed its accounts with Companies House for reasons that are all very odd, writes John McLellan.

Could Mystic Meg work out what's been going on at Marketing Edinburgh? (Picture: Julie Bull)

I’m not one for clairvoyance, but it didn’t take much to correctly predict last week’s council meeting would not shed any light on the failure of Marketing Edinburgh’s three directors, all councillors, to submit accounts due at the end of December.

Apparently it was something to do with last Thursday’s vote to transfer liabilities to the council, although what that had to do with accounts up to March 2019 wasn’t properly explained. Apparently accounts couldn’t be filed until the liabilities were transferred, but sure enough the Companies House website still showed they were overdue.

However, I understand former senior Marketing Edinburgh figures have been made aware that the Council believes the previous board gave incorrect information about financial commitments in the 2018 accounts to the auditors French Duncan.

This is all very odd for a number of reasons. The break-up of Marketing Edinburgh was driven by the Council’s director of place Paul Lawrence and if this is the case, why did he not explain when asked at more than one council meeting?

Subvention commitments – incentives to attract events to Edinburgh – which are apparently at the heart of the problem, were included in the draft accounts, which also show that as of December 31 the company had about £270,000 available to it. So if there was an issue, why wasn’t it flagged up?

If the previous board had indeed given incorrect information to the auditors then it’s a serious matter for all members, particularly the chair Gordon Robertson, Edinburgh Airport’s marketing director. Lord Provost Frank Ross, an accountant himself, FinTech Scotland chief executive Stephen Ingledew, Scottish and Southern Energy’s head of development Sandra Blake and Dr Gordon Rintoul, the recently retired director of the National Museums, might also have something to say. The auditors too will want to know how a mistake apparently crept into the 2018 accounts, and if I was Edinburgh Council’s appointed observer, the head of strategy & insight Laurence Rockey, I’d be asking the same questions. Or having the same questions asked about me.

Insiders deny there was any such problem, so what’s going on? Perhaps there was no such error, that the accounts were good to go, but weren’t filed for another reason? Something doesn’t add up. Who knows if the whole story will ever come out, but last week’s events meant the City Council took on liabilities it hadn’t properly calculated – estimated to be around £200,000, according to Mr Lawrence – and took formal responsibility for a company whose accounts are over six months overdue. It’s hardly surprising Scottish Enterprise rejected a grant application to cover the cost of maintaining Marketing Edinburgh’s digital assets, which the council estimates is a hefty £135,000 a year.

Back in October when the city had a tourism industry and the Council administration decided it didn’t need a destination marketing company, Marketing Edinburgh’s renewal proposal would have cost £0.45m this year. According to last week’s committee papers, the cost of that decision is now £0.52m, plus the £55,000 it has now agreed to give the Edinburgh Tourism Action Group to help fund its recovery programme. And according to the same report, there may be other as yet unquantified liabilities coming the council’s way. It’s an extraordinary state of affairs, especially with growing anecdotal evidence of Scotland being written out of holiday plans for English people because of the First Minister’s repeated threat of quarantine restrictions for visitors crossing the border.

As a promotional video commissioned by the old Marketing Edinburgh board appeared on social media this week, with its images of happy shoppers at Harvey Nicks, and indeed the Melville Monument, while George Street remains deserted, the city is desperate for business. The grant to ETAG is conditional on the organisation aligning its plan to the Council’s net-zero carbon commitment but at the moment the only thing likely to be net zero is tourism.

A message from the Editor:

Thank you for reading this article on our website. While I have your attention, I also have an important request to make of you.

The dramatic events of 2020 are having a major impact on many of our advertisers - and consequently the revenue we receive. We are now more reliant than ever on you taking out a digital subscription to support our journalism.

Subscribe to the Edinburgh Evening News online and enjoy unlimited access to trusted, fact-checked news and sport from Edinburgh and the Lothians. Visit www.edinburghnews.scotsman.com/subscriptions now to sign up.

By supporting us, we are able to support you in providing trusted, fact-checked content for this website.

Joy Yates

Editorial Director