Long-running festivals are said to have faced “overly bureaucratic and complex” funding processes, with some being allowed to “fall between the cracks” of support from government agencies.

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The government has been accused of prioritising one-off sporting events, including the Commonwealth Games and the UCI World Cycling Championships, at the expense of “perennial cultural assets”.

The concerns have been raised in a damning dossier for Holyrood’s culture committee by Festivals Edinburgh, which represents flagship events like the Edinburgh International Festival, the Fringe, and the city’s book, jazz and film festivals.

In-Kyu Bae, Ryun-kyung Kim, Hyeon-ho Kim, Geon-yeoung Lee and Mi-seon Kang performed in the show ‘1457, The Boy At Rest’ at this year’s Edinburgh Festival Fringe. (Image: Jane Barlow)

The report has criticised the “distress” caused in the arts industry by “frequent” budget cuts imposed by the government in recent years and warned that some festivals were facing “financial precarity” after new funding settlements fell short of what they had requested or were affected by delays on their core funding.

The festivals have complained that it was “not fully transparent” how the government’s arts agency, Creative Scotland, made decisions on long-term funding bids.

Edinburgh’s Hogmanay celebrations, its annual children’s storytelling and science festivals and the Tattoo are all involved with Festivals Edinburgh, which was formed 18 years ago to try to maintain the city’s reputation as the world’s leading “Festival City”.

The concerns have emerged more than two years after the Scottish Government pledged to “more than double” arts spending,  weeks after a new budget cut was imposed on Creative Scotland. At the time, the then First Minister Humza Yousaf promised an additional £100m in new investment would be delivered by 2028.

There was further controversy last summer when Creative Scotland suddenly shut down an open fund for artists after having more than £10m government funding in its budget was either put on hold or cancelled.

The government announced “game-changing” new funding for the arts sector as part of its Scottish Budget announcement last December, with £34m pledged for this financial year and a further £20m promised for 2026-27.

The vast majority of the funding was earmarked to allow Creative Scotland to roll out a huge expansion of its long-term funding programme, which has increased in value from £34m last year to £54m this year, and is due to rise to £74m by 2026-27.

In her report for Holyrood’s culture committee, Festivals Edinburgh director Lori Anderson said recent funding cuts had been “hugely detrimental and distracting” for Creative Scotland and the culture sector, and had caused particularly “distress” to artists.

She said most of the festivals which secured long-term funding via Creative Scotland had found its application process to be “very time and labour intensive”.

She said: “This impacted some organisations’ ability to deliver and support other work, artists and to capitalise on opportunities during the application period.

“The strategic purpose of the fund was not always clear and how decisions would be taken not fully transparent.

“The artistic programming and creative content, which should be the main focus for any arts organisation, were felt to be compromised in order to meet other criteria such as environmental, international activity, fair work, equality, diversity and inclusion, governance and management, quality & ambition, and engagement.”

Ms Anderson said the festivals were being “increasingly” impacted by climate change, with outdoor events either cancelled or scaled back in recent years, and insisted they were committed to reducing their impact on the environment in the line with the government’s own “net zero” ambitions.

She highlighted the growth of electronic ticketing, the piloting of green hydrogen and renewable energy at events, sustainable travel campaigns to encourage festivalgoers to walk, cycle or use public transport, and waste reduction programmes.

However she added: “Edinburgh’s festivals play a significant role in shaping public attitudes on climate and sustainability, and they are increasingly becoming platforms for scrutinising and challenging political responses to the climate crisis.

“The festivals are catalysts for climate awareness and political accountability through creative programming, public engagement, and strategic advocacy.

“Edinburgh’s festivals recognise that we can influence behaviour by talking openly about our progress and continually examining our work and where we can do better

“It is worth noting, however that through grant conditions funded organisations are often expected to influence audiences and peers and this can place an added burden, and it is difficult to monitor the impacts of this activity.

“There are increased asks of the culture sector to meet environmental ambitions without the provision of additional funding and organisations are expected to make these adjustments and adaptations through core funding which reduces the budgets for programming and core work.”

The government’s promised £34m increase in arts spending during the current financial including a commitment to ringfence an additional £4m for festivals.

However more than half of this is still to be rolled out, with festivals in Edinburgh and Glasgow sharing an additional £1.1m which has been allocated to the government’s Expo Fund in the current financial year. It has been opened up to festivals across Scotland for its next round, although it is unclear how much of the £4m will be ringfenced for its expansion.

Ms Anderson said: “The value of the current Expo Fund could be unintentionally undermined in the switch to the new funding programme through increasing eligibility and expanding the numbers who can access the funds.

“We therefore recommend that an increased budget is ring-fenced for the current cohort, in order to ensure that the impact of their vital work is not lost but rather evolved otherwise they may miss out on funding or not be able to take advantage of an increase in investment.”

Ms Anderson’s report highlights what she describes as “a lack of investment in home-grown events.

She added: “It is frustrating to see a lack of progress on alternative funding solutions for perennial cultural assets while Scottish Government has continued to invest substantial sums in one-off sporting events for benefits that cannot be sustained.”

A spokesperson for Creative Scotland said: “In January 2025, Creative Scotland announced the largest portfolio of organisations ever to receive three-year funding, with all organisations previously in receipt of funding receiving a significant uplift.

“This was possible due to a significant increase in budget available to Creative Scotland from the Scottish Government.

“The application process for multi-year funding was a competitive one, designed to reflect feedback from the last round, and taking into account organisation’s creative plans, as well as statutory and other requirements relating to climate change, equalities and diversity, and fair pay.”

A Scottish Government spokesman said: “A record number of artists and organisations are already benefitting from regular funding thanks to a £34 million uplift in the Scottish culture budget.

“The sector can expect further support and stability through Scottish ministers’ commitment to invest at least £100 million more in the arts and culture by 2028-29, with the government having increased funding by £49.8 million to-date.

“The ongoing independent review of Creative Scotland was commissioned in part to maximise the impact of this increase for artists and creative organisations supported by Creative Scotland. Ministers will consider how its findings can be applied after the review is published.”