Exclusive:Edinburgh Festival Fringe: Creative Scotland raises concerns over ‘precarious’ running of Fringe Society

Creative Scotland's chief executive Iain Munro has described the running of the Fringe Society as “particularly precarious” after the arts agency was condemned for two funding snubs in the space of a month.

Mr Munro has accused Fringe Society chief executive Shona McCarthy - who has demanded a review of Scottish culture funding and a crisis summit into how the festival is supported - of painting an "inaccurate picture” over its public funding.

Earlier this month Ms McCarthy told The Scotsman that a lack of funding was making the Fringe, which has been valued at more than £200 million to the economy, "almost impossible” to deliver.

Ms McCarthy has called for urgent action to address the Fringe Society’s financial situation, including a current deficit of around £1.5 million and the need to pay back a £1 million Scottish Government loan, which was agreed to help it withstand the impact of the 2020 festival due to the Covid pandemic.

However, in a letter to Ms McCarthy, Mr Munro said the key funders needed to know why the Fringe Society has “become less secure in recent years”.

He also accused Ms McCarthy of trying to set “pre-determined outcomes” ahead of talks with funders, insisting decisions had to be made on a “fair, transparent and accountable basis”.

Ms McCarthy has hit back, saying recent funding decisions by Creative Scotland and Edinburgh City Council had left the charity battling to "keep the lights on".

She has insisted that a "sustained level of public sector support" is needed for the Fringe Society to remain viable while it keeps costs down for artists, performers and companies.

Ms McCarthy has issued a number of public pleas for more funding support for the Fringe Society and the festival since the event emerged from the shadow of Covid restrictions in 2022.

In January of this year she told the Scottish that the “old economic models” of both the Fringe Society and the Fringe were no longer sustainable. She warned the event was being allowed to “fall through the cracks” of Scottish Government funding while one-off sports events received multi-million support packages.

Creative Scotland has been warning for 18 months about the impact of a “perfect storm” of rising costs, standstill funding, pay demands and the cost of living crisis on arts organisations. Last Septemmber it told the Scottish Parliament that its own analysis suggested that one in three organisations were at “serious risk of insolvency in the short term,” with more than 900 jobs under threat.

Creative Scotland is facing a projected gap of around £47 million to meet demand for its next multi-year funding programme. The Fringe Society failed to get past the first round of decision-making.

Earlier this month Ms McCarthy said the complexity of the festival appeared to have been used as an “excuse” not to support it, claimed Creative Scotland funding decisions were being made on “hearsay and gossip,” and suggested there was an “unconscious bias” against the festival.

But Mr Munro pointed out that Creative Scotland had provided more than £3 million worth of support to the Fringe Society for various programmes over the past six years, including the festival’s annual Made in Scotland showcase.

In his response to Ms McCarthy, which has been seen by The Scotsman, Mr Munro said: “Like so many festivals and cultural businesses, the Fringe Society is reliant on a mixed blend of support from multiple public funders, commercial sponsorship and business

income. This is not an unusual funding model.

"Following the pandemic and the ongoing challenges of the operating environment, most festivals have undertaken operational reviews, which have resulted in changes and adaptation of their business model.

"I am concerned, like all partners, that the Fringe Society seems to be in a particularly precarious place in terms of its business operations, especially given the business development input and the support provided by Scottish Enterprise and the city council from previous multi-agency discussions.

“This is in addition to several financial interventions to support both the Fringe Society and the Fringe’s constituent parts by all the funding partners both during and after the pandemic."

Mr Munro said the key funders wanted to know what progress the Fringe Society had made on delivering on recommendations which had emerged from previous talks.

He pointed out that the Fringe Society was able to access funding through sources that were not available to other events, including the Scottish Government’s Festivals Expo Fund, which only supports festivals in Edinburgh and Glasgow.

He added: “Whilst the Fringe Society has had difficulty in recent years in being able to meet set funding criteria, the picture being publicly painted that it does not receive funding from Creative Scotland is not accurate.

"The paper you provided of ‘a history’ between our two organisations contains errors, has omissions and does not accurately reflect the full facts.

“The Fringe also has significant opportunities for support from commercial and business partners, as well as funders beyond Scotland, so achieving a collective understanding of how the Fringe Society is maximising all funding opportunities will be an important part of discussions at our joint meeting with the other partners.

"We also all need to ensure there is a shared understanding of why the Fringe Society has become less secure in recent years and establish what is needed longer term for it to sustainably move forward.

"However, the meeting cannot have predetermined outcomes, particularly around the negotiation of public funding which needs to be awarded on a fair, transparent and accountable basis.”

Ms McCarthy said: “Our specific ask is for funding that is annual, sustained and towards our core costs, not project funding.

"Recent rejection from Creative Scotland’s multi-year funding process and from transition funding, and reallocation of our only core council funding, is what has led to our public concern. How do we keep the lights on without support?

“While we aim to use our convening role to support the whole Fringe ecology, we need our public agencies to support the Fringe Society.

"As the cultural sector recovers from the turmoil of the last few years, our business model, like every other festival organisation in the city, requires a sustained level of public sector support towards core costs to be viable.

"Recovery takes time, and we are all still carrying deficits, in addition to a cost-of-living crisis, an unsympathetic policy environment and a geopolitical landscape that is putting unforeseen pressures on every cost line."