City chiefs say bill for running a capital is extra £33m a year

THE cost of running a capital city has been put at nearly £33 million a year by council leaders as they hand ministers their "shopping list" for extra funding.

It is the first time a figure has been placed on the extra burden borne by Edinburgh, because of what it does for the whole of Scotland.

Finance Secretary John Swinney has already pledged to introduce a new "capital city supplement" in the Scottish Government's next budget, and the council's study will now be sent to ministers for consideration.

The expensive wish-list is known to have raised eyebrows among civil servants, and is likely to prove unpopular with other Scottish councils. However, business chiefs in Edinburgh today said the sum should be even higher than £33m.

In the submission, council chiefs warn that unless they can respond to Edinburgh's "growing demands", the whole country will suffer.

Council leader Jenny Dawe said: "The unique elements of additional expenditure are not merely desirable, but essential to maintaining Edinburgh's role as an iconic national capital in an increasingly competitive global market.

"An investment in Edinburgh is, quite simply, investing in Scotland's future prosperity.

"I wanted to ensure that we make a really good case.

"We don't want Glasgow and Aberdeen turning around and saying 'that's nothing to do with being a capital city'."

She added: "I have no doubt that John Swinney is genuine in his desire to look at this."

The council has analysed the experience of Westminster Council, which receives several million pounds extra, in reaching its conclusion.

Much of the evidence also focuses on the summer and winter festivals, and the figures include the running costs for the events as well as the need to improve the theatres and venues that help to stage them. The high number of events that are staged in the Capital – from conferences to royal visits to protest marches – are included, as are the costs of looking after a world heritage site.

The total revenue costs are put at £10.67m, with long-term capital borrowing costs placed at £266m, or £22.17m per year.

This includes money for Meadowbank Stadium, the Royal Commonwealth Pool, Edinburgh Zoo, the city's transport network, and more affordable houses.

Without this, the council says, Edinburgh's economic growth will suffer because workers cannot afford to buy properties.

Ron Hewitt, chief executive of the Edinburgh Chamber of Commerce, said: "In some cases, we believe the figures quoted are extremely low – £500,000 for public realm improvements and £1.3m for affordable housing will not go far in a city short of 10,000 homes and with miles of patched and unsightly roads and pavements."

A Scottish Government spokesman said: "We look forward to receiving the City of Edinburgh Council's report in time to consider it as part of the local government settlement for 2009-10."