G8 event 'made £5m for Scotland'

The G8 leaders gathered at Gleneagles for the summit

Scotland gained a net profit of £5m by hosting the G8 summit, according to an report for the government.

The study was commissioned by the Scottish Executive and carried out by SQW Economic Development consultants.

It calculated the cost to the executive as £60m, while spending directly linked to the summit was worth £65m to the Scottish economy.

However Scottish Nationalists argued that pictures of police in riot gear had damaged Scotland's global image.

More than 350 people were arrested during trouble related to the July summit, which was attended by world leaders from the United States, Canada, Russia, France, Italy, Germany and Japan.

The total cost of the event was £90.9m, with £72m spent on policing.

G8 REPORT Total cost - £90.9m Cost to Executive - £60.1m Cost to Treasury - £20m Cost to Foreign Office - £10.7

The UK Treasury has agreed to pay £20m of the cost, £10m has been paid by the Foreign Office with the remaining £60m bill being met by the executive.

The report calculated the value of worldwide media coverage at more than £66m, which is separate to the £65m directly generated by the event.

The independent consultants estimated the financial benefit of the media coverage in the six months leading up to the event at £618m.

The report stated: "The most important impacts will occur over the next few years as the increased profit that Scotland generated takes effect and is used to create new economic opportunities."

What was beamed worldwide was trouble and confrontation Kenny MacAskill SNP MSP

However, it did concede that there were "inevitably winners and losers".

It estimated that Edinburgh city centre retailers lost about £7.4m in sales but said this was mainly displaced to other areas of the capital, other parts of Scotland or took place later in the month.

In Auchterarder, close to Gleneagles, 60% of businesses reported reduced sales while resident expenditure was likely to have been temporarily displaced outside the village.

Policing costs

The report's authors added: "While the G8 event attracted new visitors, delegates and journalists, they also deterred others from visiting.

"Based on occupancy data, the report estimates that around £6.5m of potential tourism expenditure was lost in July."

Many opposition MSPs, particularly from Edinburgh and Perthshire, have been sceptical about the claimed benefits to their areas as a result of the summit.

They have demanded that Westminster pays all, or a greater share, of the £72m policing costs for the event.

Finance Minister Tom McCabe said that additional costs incurred by Scotland's local authorities and police forces would be met in full.

He said: "Not only did the additional spending in Scotland outstrip the net costs of organising the Summit, but the report also concludes that Scotland enjoyed at least as much, if not more, exposure as the previous G8 Summit, despite the inevitable impact of the London terror bombings on its first full day.

Protesters clashed with police during the G8 summit

"This provides an excellent platform for us to secure further benefits for Scotland from tourism and enables us to strengthen our position on the international stage.

"There were, of course, costs to the executive associated with hosting a high-profile event of this magnitude.

"But the summit delivered immediate economic benefits which were far greater than these costs - with the potential for further longer-term benefits."

However, the Scottish National Party said the summit had damaged Scotland's global image.

SNP justice spokesman Kenny MacAskill said: "I think the media advertising Scotland wants is of our castles and lovely hills and glens.

"What we don't want is police in riot gear and fighting in the streets. What was beamed worldwide was in fact the trouble and the confrontation."

Scottish Socialist Party leader Colin Fox described the report claiming that the summit had been of benefit to Scotland as "laughable".

Murdo Fraser MSP, Conservative deputy leader and enterprise spokesman, said: "Businesses in Edinburgh, Stirling and Edinburgh made serious economic losses during the period of the G8 summit.

"If Her Majesty's Government are not going to be contributing more than £20m to the security cost of holding the summit, the first minister should ask for some help in compensating the businesses which suffered."