Edinburgh faces battle to see off festival rivals

The city of Edinburgh's position as the festival capital of the world is in jeopardy thanks to rivals eager to steal its thunder, according to a report.

The Scottish capital must not rest on its laurels in the face of a growing number of festivals in its own image in places such as Singapore, Melbourne and Manchester, the report warned.

This year is the 60th anniversary of the launch of the Edinburgh international festival after the Second World War. The fringe, where hundreds of comedy performers from Stephen Fry to Steve Coogan got their first big break, and the other events, which cover everything from books to jazz, developed in its wake.

But without increased co-operation between, and greater funding for, the different events which now form the annual shindig, Edinburgh will lose its position as the number one festival city, the report said.

This would have a potentially disastrous effect on the Scottish economy, which benefits to the tune of £184m from the influx of visitors and artists.

"Any fall from their pre-eminent position would have immediate economic repercussions for Edinburgh, the Lothians and the whole of Scotland," the consultants AEA concluded. The report was commissioned by the Scottish Arts Council to address fears that the festivals were "living off their capital" and faced a gradual attrition of their competitive position.

By contrast, Liverpool, Newcastle/Gateshead and Manchester have been spending "impressive levels of start-up investment" to get similar events under way. And festivals in the Middle East, Australia and Asia were also being developed as tourist and economic "magnets".

"The scale of finance being made available to support new cultural infrastructure and festival activity in other cities, and the rapidly developing quality of other festivals' programmes and managements, suggests that Edinburgh cannot risk complacency," the report said.

"As international competition for the attention of the cultural tourist and international media increases, Edinburgh will have to work hard to retain its edge, let alone lead the pack."

Those funding the festival, including the Scottish Arts Council, the city council and the Scottish Executive, needed to take "a more strategic view" of their obligations. The City of Edinburgh Council should increase funding from 2.8 per cent of its total spending - £19.2m for the last financial year - to 4 per cent, the consultants recommended. The Scottish Executive was told it needed to do more to help the city by providing increased investment in the cultural infrastructure.

The festivals' finances can seem precarious. The international programme finished last summer £1m in deficit, while the fringe will lose its £25,500 annual grant from the Scottish Arts Council next year with no guarantee of future support.

A joint marketing strategy should be developed and a centralised source of information for all events was crucial for the press, especially in coming years when attention will be focused on Liverpool as European city of culture in 2008 and London for the Olympics in 2012. Announcing the report's findings yesterday, Patricia Ferguson, the Scottish Culture minister, said: "Every summer Edinburgh becomes the cultural capital of the world, attracting hundreds of thousands of visitors from every corner of the globe.

"It is a status the city has enjoyed for more than 50 years but envious rivals are now seeking to emulate and even surpass Edinburgh's pre-eminent role. We know we cannot be complacent."

Paul Gudgin, who runs the Edinburgh Festival Fringe, welcomed the findings. He said the festivals co-operated more than most people realised but there was no formal mechanism. "We've got to get ourselves co-ordinated," he said.