Edinburgh is poised to become the first local authority in Scotland to implement a visitor levy
POSTED ON August 14, 2024 BY James Garry
This funding, discussed since 2018, is highly anticipated.
Edinburgh is poised to become the first local authority in Scotland to implement a visitor levy on overnight accommodations, anticipated to commence in July 2026.
The primary objective of this initiative is to allocate the generated funds towards establishing a clean, green, and safe city, with a strong emphasis on heritage and culture, as highlighted in previous public consultations.
This initiative aims to introduce measures that will seek to preserve Edinburgh’s reputation as one of the world’s premier cultural and heritage cities, while effectively managing the effects of a thriving visitor economy in alignment with the priorities outlined in the Council’s Business Plan.
It is projected that the levy could generate approximately £40 million or more annually, with government assurances that these funds can be utilized to facilitate borrowing for both capital and revenue projects. For instance, the council intends to utilize around £5 million to secure £70 million for investment in affordable housing. The council estimates that had the tax been in effect, it could have generated £6 million in revenue just this month.
Next week, Edinburgh councillors will evaluate recommendations to implement a 5% tax on the cost of overnight accommodation, with a maximum charge applicable for seven nights. The proposal also outlines the intended use of the funds generated, which must align with objectives aimed at developing, supporting, or maintaining facilities or services primarily utilized by individuals visiting the area for leisure or business purposes.
The allocation of the raised funds is proposed as follows: 50% for City Operations and Infrastructure, 35% for Culture, Heritage, and Events, and 15% for Destination Management. A portion of the expenditure will be decided through a participatory budgeting process akin to Leith Chooses, allowing local residents to vote on their preferred projects.
Council Leader Cllr Cammy Day indicated that the newly acquired funds could potentially enhance locations such as Princes Street, Leith Theatre, or the Ross Bandstand. He also mentioned the possibility of upgrading Pilrig Park, which would serve both visitors and residents.
Cllr Day emphasized the importance of ensuring that the city benefits from this initiative. He stated,“We want the city to benefit from this as well. There will be a pot of money – we still need to meet the criteria – but it will allow local people to see the real benefit from this. If we spent funds on a park it could be upgraded and might become a potential venue for festivals – and could be used year round by the local community.”
The council leader stated that this funding, which has been sought since 2018, is highly anticipated. He remarked, “He said: “In the last decade we’ve seen about £3 to £4 million of unfunded pressures in Edinburgh alone at a time when reserves are sitting with government for a rainy day. Well the rainy day is well and truly happening in Edinburgh already. So we are looking at any opportunities for councils in Scotland to get tax raising powers and we’ve argued that for a long time. The SNP’s own manifesto said they would devolve powers to local government and all they’ve done is take powers off them which is why we need a change in government in Scotland.”
The implementation of the scheme is estimated to cost approximately £650,000, followed by an annual running cost of about £970,000 for the council. Accommodation providers will be permitted to keep 1.5% of the tax collected as compensation for their collection services on behalf of the council.
Councillors are scheduled to convene on the 22nd of August to deliberate on the proposals. Should they be approved, the scheme will be presented for public consultation the following day after the Scottish Government announces the commencement date.
Image: Pikabay
