Scottish Government was alerted to film festival crisis weeks before staff were suddenly made redundant

The charity behind the Edinburgh International Film Festival and the Filmhouse cinemas raised the alarm about a possible financial collapse with the Scottish Government nearly a month ago.

The Centre for the Moving Image (CMI) warned the government and its quangos Screen Scotland and Creative Scotland about the risk of insolvency in the middle of September, less than a month after this year’s festival had ended.

However it is understood the prospect of public funding being used for a bail-out was ruled out at the beginning of last week due to concerns about the charity’s future viability.

Staff were kept in the dark about its financial collapse until last Thursday, when it was announced that the charity had gone into administration and they were being immediately made redundant.

The Fillmhouse cinema in Edinburgh has been closed since the charity which ran the venue, the Centre for the Moving Image, went into administration last week. Picture: Lisa Ferguson

A former artistic director of the film festival has called for "full and proper investigations" to be carried out into the financial collapse of the event and the Filmhouse cinemas that the CMI ran in Aberdeen and Edinburgh.

Mark Adams, who quit his role three years ago, told industry website Screen Daily he was "mortified" at the festival’s demise after 75 years.

More than 13,000 people have backed an online petition calling for the EIFF and the two Filmhouse cinemas – which went into administration with the loss of 102 jobs last week – to be saved.

The Scottish Government announced an “additional” £250,000 in funding for the EIFF at the start of August ahead of the event’s 75th anniversary. The CMI had already received more than £1.5m in public funding for the current financial year, as well as £1.3m in emergency funding to help the charity recover from the impact of the pandemic.

Mark Adams is the former artistic director of the Edinburgh International Film Festival.

Screen Scotland, which is part of arts agency Creative Scotland, has revealed it is trying to salvage a 2023 edition of the film festival.

A spokeswoman said: “The CMI executive and board has been responsible for the running of CMI, the business decisions it took, and the organisation’s responsibilities to CMI staff and audiences.

“The CMI contacted Creative Scotland on 15 September stating that they were facing significant financial challenges threatening the viability of the business. The CMI also informed Creative Scotland that they were taking advice from insolvency experts.

“CMI provided a summary of the position and some financial information to Creative Scotland on 19 September and Creative Scotland met with the organisation on 20 September, and again on 26 and 27 September.

“Creative Scotland’s board were briefed and met on 3 October to discuss the situation and confirmed funding remained available if the CMI could demonstrate ongoing viability.

“The CMI and its professional advisors had continued to assess and discuss the financial position but concluded that there were no available options, or time, in the current financial climate to change the underlying structural challenges of the business, or the longer-term prognosis.

CMI informally tested the prospect of additional funding with Creative Scotland when we were informed of the severity of their financial challenges mid-September.

“We understand it was similarly tested with Aberdeen City Council and City of Edinburgh Council. Creative Scotland indicated further funding was unlikely. No formal request was made.

“The CMI board met on 3 October and moved to formally appoint administrators to begin the process of winding-up the business.”

A Scottish Government spokeswoman said: "The CMI contacted the Scottish Government in September and were advised to first speak with Creative Scotland as the funding body responsible.

“The Scottish Government is engaging with Creative Scotland as well as Aberdeen and Edinburgh City Councils to provide support where possible.

“The Scottish Government is in regular dialogue with the culture sector, which has been clear that the impact of rising costs are significantly hampering its ability to recover following the pandemic.”