In the last, quiet days of 2013, in a corner of the Tron bar in Glasgow, Steven Thomson is looking backwards and forwards - backwards to the 20th anniversary year of Glasgay!, the gay arts festival he has run since 2004, and forwards to some of the ideas he is working on for the 2014 festival.

The ideas include a farce about a Roman Catholic cardinal accused of sexual misbehaviour. Resemblance to real persons, living or dead, is purely deliberate.

Thomson thinks this idea of a comedy inspired by the Cardinal Keith O'Brien debacle is exactly the kind of work Glasgay! should be doing, although not the only kind. The mission statement he has composed for himself over the last few years is complicated: partly, it is about discussing the taboos around sexuality, including religious taboos; partly it is about being one of the few organisations in Scotland commissioning new theatre; partly it is about reflecting and inspiring changes in gay life and culture. And partly it is about having a good time.

The first part of the mission statement - breaking taboos - has certainly been achieved, although it has not always had good results for the festival. In 2009, for example, Thomson staged Jesus, Queen Of Heaven, a play that reimagined Jesus as transgender and inspired Christians to protest outside the Tron. The same year, work by the Spanish artist Dani Marti focusing on gay men's health was pulled from the Gallery Of Modern Art by Culture and Sports Glasgow because it was considered too graphic. Thomson believes the furore led to the council cutting the festival's funding in half - a decision that has never been reversed.

Five years on, Thomson is still displeased about that decision, and the new play he has commissioned about the cardinal, called Cardinal Sinne, feels like it might be a response to that and perhaps belated revenge on one of the organisations, the Catholic Church, that took part in some of the condemnation of Glasgay! The play will be a farce, says Thomson, because the hypocrisy of the Church is a farce.

"You couldn't write the real story of the cardinal right now because it's still unfolding and no one is talking," he says. "But why should we sit back, given the punishment that we took, losing 50% of our public funding? The hypocrisy is farcical and it is important people remember there is a battleground. Sexual abuse scandals have been kept in check by parental society and the Church and it is still the case that education committees within city councils have default places for church representatives."

However, Cardinal Sinne is not just about controversy and taboos - it is also part of the second part of Thomson's mission statement, which is to commission new work. Last year, the best of it was The Maw Broon Monologues by Jackie Kay; this year, Zoe Strachan has been commissioned to write a project inspired by the Paisley Witch Trials in the 1690s.

For Thomson, this part of the festival is critical, particularly as Glasgay! is one of the very few theatre organisations regularly commissioning new work in Scotland.

The third part of Thomson's guiding principles - to reflect the greater gay culture and how it is changing - is more complicated. It would be easy to assume Glasgay! is part of a wonderful march from homophobia to acceptance but Thomson says that is not the case.

"I wish it was true but the problem is that while metropolitan LGBT life is quite mainstream and pleasingly acceptable, in the sticks, that is not the case, and I know that, being a kid from Paisley who grew up being bullied in school.

"My refuge was the sofa and BBC2 and I constantly refer back to my childhood and remember the experiences of not being accepted and tolerated. That is why a lot of young LGBT veer towards the arts because it is a safe place."

Glasgay! is part of that safe place, says Thomson - a refuge, a place where gay people can hang out with each other and have a good time, which is why he would never turn his nose up at some of the more antediluvian elements of gay culture, such as drag queens and cabaret.

"One of the biggest satisfactions our audiences report is fellowship," he says, "and just being in a theatre with another few hundred lesbian and gay people. I don't want to perpetuate the notion of ghettos, although it is nice to go back to one every now and then."

He says part of his challenge is to convince funders of the value of that audience experience, and that continues to be difficult.

"We get £90,000 a year from Creative Scotland, which is not very much," he says. "The festival turns over about £250,000 a year so I have to raise the rest. The city council put in a tiny amount, £17,000 a year, and that has gone down and down. We get less than we got in 1999. But then, every arts organisation across the city has had their funding cut over the last few years."

And, despite the funding pressures, Thomson still believes Glasgay! is achieving one other important part of the festival's informal mission statement: to talk not just to gay people but straight people too, and to take gay culture from the outside of the mainstream to the inside.

"That has always been a drive," says Thomson, "It's fine for Glasgay! to talk to its own audience but it needs to talk to a broader audience too. It needs to show where the intersections between gay and straight culture are because fundamentally those cultures are not that different."