Unpacking Edinburgh International Festival's seat-of-the-pants finances

The year-round work done here to create the Scottish capital’s globally renowned celebration of the performing arts, which kicks off tonight, remains out of sight most of the time.

Instead, much of what the public understands about Edinburgh’s festivals – of which the EIF is the jewel in the crown – tends to be informed by the state of public funding for the arts or the evaporation of corporate sponsorship in the wake of Baillie Gifford’s withdrawal from book festivals across the UK.

Yet every year the expectation among Edinburgh’s ticketed classes is that the EIF keeps carrying on - somehow.

On the surface, it does. Among highlights in this year’s festival is the return to the Scottish stage for the first time in a decade of Dundee-born actor Brian Cox as the 18 th century economist Adam Smith in a play about former RBS boss Fred “The Shred” Goodwin. But - to borrow the play’s title - what does it actually take to make it happen?

To say that the EIF flies by the seat of its financial and artistic pants would be an understatement. “It requires a great deal of faith and commitment that it’ll be all right on the night,” says Francesca Hegyi, the EIF’s seemingly unflappable executive director.

Managing the cycle of funding and artist booking is a Sisyphean task that most arts organisations deal with. But in the EIF’s case the task is harder due to its sheer scale. This year, more than 2,000 artists from 42 nations (a third of them based in Scotland) will perform in 133 shows.

Unlike single art form events – say, an opera festival – the EIF combines multiple performance types including opera, orchestral and chamber music, and theatre. “Our peculiarity is that we do all the art forms, with all of their different requirements and timescales, in three and a half weeks every summer,” explains Roy Luxford, creative director.

At 65 per cent of expenditure, the cost of productions and performances is by far the EIF’s biggest outgoing, followed by administrative costs at 18 per cent.

Visiting orchestras don’t come cheap. This year the Budapest Festival Orchestra will play Béla Bartók’s music for the ballet The Miraculous Mandarin, a score calling for large forces including bass drum, xylophone and celesta – all shipped from Hungary.

Most EIF income comes from a combination of philanthropic donations, including from Baillie Gifford, legacies, grants from foundations, and corporate support including from law firm Brodies. Ticket sales provided only 21 per cent of total income last year. The rest, about one third, was grants from Creative Scotland, a Scottish government agency, and the City of Edinburgh Council.

As hard as fund-raising may be for Hegyi and her team, the unpredictability of grant funding is arguably harder. In theory, this money ought to provide a foundational level of financial certainty to allow what she calls “programming certainty”.

That’s because productions and artists often must be booked up to three years in advance. This requires making financial commitments even if the grant funding has not yet come through in time – as has happened. Finding that risk capital from the operating budget instead at a time of inflationary cost rises isn’t easy.

Moreover, the EIF may make commitments to up to a dozen proposed acts for future festivals at any given time. Yet any squeeze in the budget because of a delay in grant funding means programming less. “We might go to print with our brochure each year before we’ve got financial certainty,” Hegyi explains.

That’s what happened with this year’s festival, which has shrunk by almost 20 per cent compared with last year’s 161 performances. A delay last year in the announcement of the latest funding round from Creative Scotland – the result of foot-dragging by the Scottish government - meant that even with a one-off grant of £1.6 million from the UK government to help plug the gap, the EIF had to cut its cloth accordingly.

Some stability will come in the wake of a new “multi-year funding” settlement between the Scottish government and Creative Scotland, which Culture Secretary Angus Robertson said in January “moves us beyond simply sustaining the [arts] sector to return our focus to where it should be – its long-term development”. He pledged to increase culture budgets by £100m annually by 2028-29.

The EIF has been allocated a total £11.75m over three years from Creative Scotland, starting with £3.25m this year. While the festival says this will help, “it does not give us additional capacity to invest in longer-term initiatives or more ambitious projects” given a backdrop of rising costs and a tough fund-raising environment in which corporate sponsorship has all but dried up. It also takes the EIF back to Creative Scotland funding levels in 2008.

What is to be done? One place to look is philanthropy. The Scottish capital is home to the largest angel investing community outside London, powering a thriving startup scene in Scotland. The EIF may not be able to deliver returns in pounds and pence, but as an investment in the resilience of one of the world’s greatest arts festivals, surely the EIF is deserving. Let’s make it happen.