Council warned of legal risk in 'tourist tax' housing plan
Plus: Edinburgh Labour backs Meagher to be next leader; and university hires ‘turnaround specialist’
Council’s £5m a year housing plan ‘may go beyond tourist tax legislation powers’
The city council has been warned it’s proposal to use Visitor Levy revenue to fund affordable housing may be open to legal challenge.
The local authority intends to use the first £5m a year raised from the tourist tax to help fund ‘key worker accommodation’ by enabling borrowing of £70m to alleviate the city’s affordable housing crisis.
However, in response to the council’s consultation on its plans, the Federation of Small Businesses (FSB) has warned that may go beyond the powers laid out in the Visit Levy (Scotland) Act. The warning follows two successful court challenges to the city council’s crackdown on short-term let accommodation and highlights the risk of a another legal battle.
Edinburgh intends to be the first local authority in Scotland to introduce a local tourist tax, which is expected to raise £45-50 million a year by 2028/29.
The question of what these funds can legitimately be spent on has been the subject of much debate. The tourist industry is generally pushing for funding of visitor facilities and marketing of the capital as a visitor destination, while the council wants to spent the funds more broadly.
Where the money could go: The council is consulting on plans to take the first £5m a year for housing and 2% for community projects through ‘participatory budgeting’. The rest would be split between city operations and infrastructure, such as street cleaning, parks and tourist attractions (55%); culture, heritage and events (35%); and tourism marketing (10%).
The law says: The Visitor Levy (Scotland) Act states income from the Visitor Levy must be spent on “developing, supporting or sustaining facilities or services which are substantially for or used by persons visiting the scheme area for leisure or business purposes (or both).”
‘Hard to justify’: In its formal response to the council consultation, FSB says: “Given this statutory direction, it is difficult to understand how the council’s decision to prioritise spending of revenues on housing and participatory budgeting can be justified.”
The council says: The council official who led the development of the Visitor Levy proposals, Elin Williamson, has said the housing funds would help “ensure there is somewhere for people who work in the tourism and hospitality industry to live”. The council intends to invest in both ‘social rent’ housing, generally the cheapest available, as well as homes for mid-market rent (more expensive but fixed below private rent levels). “(Tourism industry workers) don’t all need social housing. Many of them have a steady income but can’t afford to live in private homes in Edinburgh,” said Ms Williamson.
A work in progress: The council has stressed it is still developing its full proposals and the exact detail of its housing investment plans. It is not clear at this stage whether it will attempt to restrict any housing to tourism workers or simply make them generally available to help ease general pressures.
What happens next: The council will consider the responses to its consultation and is expected to bring forward more detailed proposals early in the New Year, with a view to introducing the levy within 18 months.
YOUR EDINBURGH BRIEFING
CONTENDER READY: The city’s housing convener Jane Meagher (above) has won the race to replace Cammy Day as the leader of the Labour group on the council. Meagher (pronounced Marr), a former youth worker and founder member of Edinburgh’s Rape Crisis Centre, may also have moved into pole position to be next overall leader of the local authority. Her main rival, the Liberal Democrat’s Kevin Lang, has yet to declare his intentions amid doubts he wants to take on the role. Councillors will choose their next leader on Thursday.
MEN TALK: Sir Chris Hoy has said men need to talk to each other more about their health. The Oympic legend has been credited with inspiring a surge in men getting checked for prostate cancer after talking openly about his own terminal diagnosis.
SMART BINS: Regular collections for glass recycling are to be scrapped in the capital with the introduction of sensors which indicate when the bins are full. More than 3,000 bins across the city are to switch to ‘dynamic’ collections as part of the council’s ‘smart city’ plan to embrace technology. One benefit is expected to be a reduction in noise due to fewer collections for people living beside the communal bins.
UNI HIRES ‘COST CUTTER‘: Edinburgh University has appointed a “turn around” specialist to help deliver cost savings, The Scotsman reports. Interim finance director Nirmal Borkhataria has described himself as a “turnaround specialist” with expertise in restructuring and delivering “substantial change”.
NEW HOTEL: An A-listed office building on Castle Street is to be turned into a 28-room "exclusive, high end" hotel and bar after the city council approved plans by Perle Hotel Group.
BATTERY WARNING: Plans to site a large battery storage plant less than 100 metres from Dalkeith School campus have raised concerns among councillors in Midlothian. The proposed plant - which would store enough energy to power around 200,000 homes - would be part of a nationwide network designed to make the UK more energy self-sufficient. However, councillors have raised concerns about potential fire safety risks with the Scottish Government.
SOLAR FARM SPLIT: Controversial plans for a solar farm in West Lothian that will cover 150 acres of farmland near the village of Threemiletown have been passed by councillors – but only on the casting vote of development management committee chair Tony Boyle. The solar farm will have 80,000 panels and local residents and several councillors had objected to the scale and impact of the plan by Ampyr Solar.
SAFETY CHECKED: Edinburgh’s Christmas festival-goers have been reassured they can continue to enjoy one of the event’s most popular attractions, the Star Flyer, after a similar ride in Birmingham failed injuring several people. Safety officials at Edinburgh’s Christmas pointed to the event’s “exemplary safety record” and said all rides were “continuously monitored to ensuring they are being operated safely and to the highest standard.”
AIRPORT DELAYS: An IT issue at Edinburgh Airport caused delay and disruption to dozens of flights yesterday. The “technical issue” hit flights for more than four hours, starting from around 2pm, before technicians working resolved the issue.
PARKING PROTESTS: North Berwick has introduced parking charges in and around the town centre despite hundreds of objections. Parking on the High Street is free for up to 45 minutes, with charges rising to £2 for a maximum 90-minute stay. Councillor John McMillan said: "We want to make it easier for people to park by increasing the turnover of available spaces in the town centre. By providing easier access to the town centre for purposes such as shopping, we hope to see increased footfall within local businesses." Parking outwith the Controlled Parking Zones remains free, including in the car park at Recreation Park.
THE BUSINESS
Growth firmly on agenda for private firms in Capital
Scotland’s privately-owned businesses are overwhelmingly optimistic about growth as they head into 2025, according to a major survey by international business consultants KPMG.
In their latest UK Private Enterprise Barometer, the firm says that 90% of private companies north of the border are confident of growth, with two main factors quoted being easing cost pressures (46%) and access to finance (43%) – both of these figures are well above the UK average of 32% and 31% respectively.
The new survey captured insights from 1,500 private business owners across the UK, including 125 from Scotland, spanning sectors such as professional services, finance, technology, industrial manufacturing and retail.
And that confidence, says the report, is likely to result in seven in ten (70%) setting their sights on international expansion and over a third (35%) planning to diversify through new products or services within the next five years.
Vishal Chopra, Scotland Office Senior Partner at KPMG UK, said: “These findings underscore the resilience and forward-thinking nature of Scotland’s private business community, driven by a strong culture of innovation. With 90% of respondents feeling optimistic about their prospects going into next year, and 70% planning to expand into new markets – the second-highest percentage of any UK region – it’s clear that businesses are confident and firmly committed to their ambitious growth strategies.”
BOSTON BOUND: Airline JetBlue is to add a second destination to its Edinburgh Airport operation. A summer service to will run to and from Boston next summer, with flights from May 23 to 25 October, flying daily on an A321neo.
STEADY INTEREST: The Bank of England is expected to hold interest rates at the same 4.75% level at its next policy decision on Thursday. An increase in inflation last month is set to dissuade a further cut.
LEGAL AID: Law firm Gillespie Macandrew has donated a record £51,000 to charity partners the Edinburgh Children’s Hospital Charity (ECHC) and Alzheimer Scotland thanks to the volunteering and fundraising collaborations by colleagues of the firm.
THAT’S ENTERTAINMENT
HALLELUJAH HANDEL: Handel’s Messiah Oratorio at the Queen’s Hall on Wednesday, performed by the unfailingly excellent Dunedin Ensemble, promises to be one of the classical highlights of the festive season.
IT’S TRICKY: From Kevin Quantum to Richard Weisman, the history of magic to online conjuring classes, there is plenty to choose from in the impressive line-up for Magic Fest. The Edinburgh International Magic Festival, to give it its Sunday name, gets underway tomorrow and runs through to 30 December
RICK ‘N’ ROLL: Join Rick Astley and his big band at the Usher Hall on Thursday on a romp through all your favourite festive and swing classics. Expect plenty of Sinatra numbers in his ‘Swinging’ Christmas’ show, rather covers of The Smiths for which Rick used to be renowned.
QUICK BITES
SALT AND SAUCE: A new restaurant which "reimagines the coastal chippy" has opened at 29-31 North Bridge. Landy’s is the latest venture of city-based Vittoria Group, taking over the premises formerly used by Byron Burger.
VEGGIE SALE: Popular neighourhood restaurant Susie's Vegetarian Kitchen, on Marchmont Road is closing its doors. The restaurant, which seats 20 customers, has been listed for sale with a leasehold price of £27,500 and rent price of £12,000.
AIRPORT FARE: Sainsbury’s has opened its first-ever airport store as part of the raft of planned new openings at Edinburgh International Airport to revamp its selection of restaurants bars and shops. And Brewdog has also unveiled its new bar, close to gate 11. Work remains ongoing on the new PizzaExpress and Seoul Bird restaurants, and the Icons sports bar, all of which will open in departures in the new year.