Throwing good money after bad?

By Phyllis Stephen

Marketing Edinburgh (ME) has been on Death Row for about the last 18 months. It became a clear council policy that the body, set up to promote Edinburgh to the world, would be left to wither on the vine, without offering sufficient funding to keep it going.

But it appears that around

£1.2 million has been spent on winding the body up, twice what was budgeted for in retaining the services of ME.

The matter has largely been discussed behind closed doors, but council papers seen by The Edinburgh Reporter show that the intention was to disband the body and create a new one, possibly called Edinburgh and Partners. The articles of association of the ME company were changed in January to provide for only three directors, getting rid of the requirement to have any stakeholder directors. Prior to this the board included six non-executive directors, all highly experienced and all voluntarily sitting on the board.

The Council Leader, Adam McVey, says he has chaired an initial meeting of industry leaders about a recovery plan, but no details have yet been revealed.

Roddy Smith, CEO of Marketing Edinburgh said: "The tourism industry is starting to talk. We cannot be complacent. We need a city-wide effort to get Edinburgh to the top of people's wishlist of destinations. In the last few months before the coronavirus pandemic, there were a few issues between residents and tourism businesses, all to do with over-tourism. It is clear however, that the city's economy is driven by tourism. It has done so much good for the city."

All ME employees have been made redundant either voluntarily or compulsorily, and the organisation, which in 2017 and 2018 had income of £1.9 million, has been put into 'hibernation'.

At a recent council Leadership Panel meeting, the green light was given to provide another £400,000 to "meet Marketing Edinburgh's transitional costs'". In March the council's Finance Committee approved spending of £200,000 on ME to cover redundancy costs. In last year's budget, the council reduced funding for the body which they set up in 2010 to £590,000, a reduction of £300,000. More than that has now been spent on the winding up process.

No alternative business plan was deemed good enough for the council to adopt. A membership style proposal put forward by the former board under the chairmanship of marketing expert, Gordon Robertson, was dismissed by the Homelessness, Housing and Fair Work Committee, led by Convener, Cllr Kate Campbell. This plan, which we are told would have cost the council £450,000 and would have allowed ME to work towards financial independence, was turned down flat, leading to the mass resignation of the previous board in autumn 2019.

A suggestion from another council body to find an independent source of funding to keep the organisation's social media channels and its prestigious website going was rejected out of hand.

The income from the website is, according to the company accounts, in the tens of thousands, and could have covered the cost of at least one, if not two, members of staff. The digital income came from advertising and some affiliate arrangements. The url edinburgh. org was wrested from the hands of VisitScotland a few years ago before the successful This is Edinburgh campaign.

Who will use it now? Without Convention Edinburgh how will Edinburgh attract new business? We asked the board members for comment, but have not yet had a reply.

Geoff Morrison of Open Pass Scotland, who partnered with

ME, said: "There has never been a greater need to protect our

‘shop window’ in these uncertain times. The role that Marketing Edinburgh played in our visitor economy is crucial both in terms of nurturing industry partnerships and engaging visitors. The positive impact on our business over the last two years, via the digital channels managed by Marketing Edinburgh, is both tangible and significant.”

The final ME board was made up of three councillors, Cllrs Kate Campbell, Mandy Watt and Claire Miller. A senior industry source told us: "I don't believe they have any business experience to speak of. None of them know what they are doing. They think you can just turn this website off. It is the consumer facing site for the tourism industry in the city. How dare they think they should just decommission this and the related social media accounts without asking anyone in the industry first?

"The board has ignored any and all advice given to them in recent months. They think they know better.

"It would really have been better if the company had just been wound up months ago rather than drawing it out until now."

In letter to all staff, it was explained that the financial position of the company had become even worse than before. It had deteriorated to such a degree that the company would not even be able to meet any obligations if staff had been put on furlough under the government's Covid-19 job retention scheme. When the previous board resigned there was sufficient funding to close it down.

Redundancy consultations were conducted by an external company. The staff who remained oversaw the "protection of the company's core assets and assisting with hibernation" for a period of two months. This process included the preservation of intellectual property and data collected within the business.

Only those in Film Edinburgh were retained to work in-house at the council. Convention Edinburgh is also closed down.

In additon to the £200,000 spent on the organisation in March, a reliable source told The Edinburgh Reporter that a further £50,000 was to be billed to the council. That, in addition to the salaries paid to staff since autumn 2019, is likely to be the same figure as the cost of the rejected turnaround plan.

The timing of the demise of ME coincides with the coronvirus pandemic and all the business uncertainty that goes with that, but that is just coincidental.

There was always going to be a new body by 1 April 2020. The council said in its Revenue Budget update for 2020/21 that there will be a "saving" of £490,000 next year as they don't have to allocate any further spending on Marketing Edinburgh. There will be a need for marketing of some kind to promote Edinburgh as it recovers from Covid-19 and that costs money.The global tourism industry is on its knees and it's anyone's guess when international borders will reopen and travellers will feel comfortable enough to venture abroad. Edinburgh needs to be ahead of the game in ensuring it is marketed abroad to attract much needed tourist income.