The trouble with the Edinburgh fringe: It's failing to lose enough money

The organisers of Edinburgh's official and fringe festivals are today accused of failing in their "moral duty to lose money".

The shaming of his colleagues by veteran Edinburgh impresario Richard Demarco in an interview with The Independent brings a new dimension to festival controversies.

Where once they centred on cancelled productions, outrageous crudities or radical politics, 67-year-old Demarco has introduced a philosophical controversy. That alone is enough to bring discomfort to the venues buzzing to the jokes of TV stand-up comedians and the clinks of glasses of Perrier at pounds 2 a glass.

But the discomfort is increased because the ethical challenge comes from Demarco, an Edinburgh institution who attended the first festival 50 years ago, was a founder and vice chairman of the city's Traverse Theatre (the UK's first fringe venue) and for some time has run the Demarco gallery which annually brings cutting edge international theatre to the festival.

The awkwardness of Demarco's challenge was shown by the reaction of the present director of the Traverse, Philip Howard. Almost shame-facedly he admitted: "We do actually have a surplus."

He went on: "Richard Demarco is Edinburgh's greatest thinker. What he is saying is a very natural kickback to the Keynesian arguments of the Eighties about commercial drive. I like him for saying it. We need people like him. But I'm not sure morality has to encompass losing money."

Rather less deference and historical perspective was volunteered by William Burdett-Coutts, head of the premier fringe venue The Assembly Rooms and a champion of both stand-up comedy and balancing the books. He said: "It's madness. There's a moral obligation to lose money if you want to shut down. I can see the point of not making money, I can't see that there's a moral obligation to lose money. Perhaps it reflects the fact that some of his companies don't seem to make much money."

In his interview Demarco says: "It is a moral imperative to lose money. It should be like prayer. If you say you only pray to make a profit, then to hell with it.

"The fringe is now driven by a desire for fame and success. Its end is no longer just the Edinburgh festival but the spin-off that takes you into London and television. No television executive should be allowed near the festival unless they see at least five theatre companies, and pay to see them.

"As for the official festival, when it only presents guaranteed successes then the whole thing is about absence of risk. The festival should be where you come to make your reputation. The whole of the Edinburgh festival is now governed by the idea of balancing the books and making a profit. Everyone has forgotten that that is the one thing you should not be doing.

"I have never made a profit at the festival. Is it really better to put on a stand-up comedian with a beer sponsor so you don't have enough room for the company coming from eastern Europe that might have to be fed? I feel frustration as I remember a time when the festival was free of stand-up comics. I will lose money on the European and local community plays I am putting on including a Romeo and Juliet at Craigmillar Castle, but so what. I will paint more paintings, do more lectures."

At the official festival, Joanna Baker, director of marketing, replied: "Our programming is a judicious mix of the familiar and unfamiliar. We budget to break even each year."

If this aesthetic dispute is too taxing for the organisers of festival and fringe, several other controversies will keep them fraught in this acrimonious first week.

Fringe director Hilary Strong says she will extend the fringe by a week to four weeks next year so that it starts a full week before the main festival. Burdett-Coutts says that the Assembly Rooms will not be a part of the new Week Zero. Without publicity and the lure of the main festival the punters will not come, he said.

At the book festival Sir John Drummond, former Edinburgh Festival director and former head of Radio 3, criticised the BBC for its "dreary" coverage of the festival. "It is all based on the fringe. Who cares what Mark Lamarr thinks about Scotland?", he asked, referring to the comedian hosting the BBC's Edinburgh Nights.

Back at the fringe Hilary Strong has upset the Scottish cultural establishment, claiming in the Scotsman that there was "a conspiracy among the middle class intelligentsia to keep the arts to themselves. The people who fund the arts ... are very dismissive of popular tastes."

At the Traverse, Philip Howard, the artistic director, sighed: "All this self-loathing, the middle-classness of it all, it drives me absolutely berserk."

Perhaps there was a time when the organisers of the world's largest arts festival did not loathe themselves and each other. But it seems a long time ago.