In another blow to the arts and hospitality sectors, the world-famous Edinburgh International Film Festival may have seen its last red carpet as the trustees of Centre for the Moving Image (CMI), which runs the film festival alongside The Edinburgh Filmhouse and Belmont Filmhouse in Aberdeen have called in administrators.

The Edinburgh Film Festival, Edinburgh Filmhouse and Belmont Filmhouse will cease trading immediately. In this article, we will outline the conditions which led to the businesses’ collective failure.

A “Perfect Storm” of rising costs and reduced footfall

Despite optimistic predictions from the industry, the film sector has not bounced back to pre-pandemic levels. Alongside this the continuing cost of living crisis led the board of the CMI to state: “Unfortunately, the combination of sharply increasing energy and other costs, together with both the lasting impacts of the pandemic and the rapidly emerging cost of living crisis affecting cinema attendances, means that we have had no other option but to appoint administrators at this time”.

What does this mean for the employees?

By appointing administrators, 102 staff have been made redundant – 58 of these at CMI, 22 at the Edinburgh Filmhouse, a further 20 at the Belmont Filmhouse and two at the film festival. Five staff have been retained to assist with the transitionary period during the administration.

Administrators FRP Advisory will manage the process, working closely with Creative Scotland, The City of Edinburgh Council and Aberdeen City Council to consider the path forward for the charity and offer support to former employees.

The energy price cap and public funding

The UK economy is currently in turmoil after the announcement and subsequent government U-turn on the proposed scrapping of the 45p tax rate. Energy prices have been rising for more than a year and in this current climate, even despite the current energy price cap, the CMI’s energy costs would have purportedly risen a further £200,000 over the next 12 months.

CMI as an accredited Real Living Wage employer also must front up to a 10.1 per cent increase in payroll costs in the coming 12 months.

In addition, as a charity funded by the Scottish Government, CMI are at the mercy of the public purse, stating that the government has “indicated that the outlook beyond March 2023 for public funding is highly uncertain”.

Moreover, public spending in Scotland has been static and reducing in some areas for almost a decade, declining in real terms against inflation. The steep upward curve of inflation in recent times combined with the lingering effects of the pandemic ultimately proved too high a hurdle for CMI to clear.

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