THIS was to have been the Year of Creative Scotland, when the new arts body that replaced the Scottish Arts Council and Scottish Screen would "position Scotland as one of the world's most creative nations".

To many, this has been more akin to the year of Creative Scotland's unravelling. Rarely has a public body established with such great expectations run into so much trouble so rapidly. Creative Scotland has failed to capture the hearts and minds of artists, writers and film-makers and seems to devote much of its energy to placating the very community it was set up to represent.

The embattled director, Andrew Dixon, has been accused of being a bean-counter lacking understanding or appreciation of the needs of Scottish arts organisations, or of the nature of Scottish culture and artistic tradition.

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It is hard not to feel some sympathy for Dixon, who has been criticised by powerful figures from the arts world including poet Don Paterson and the playwright David Greig, backed by 100 leading figures representing the Scottish arts.

The core problem appears to have been the switch from long-term funding to project-based funding. Creative Scotland disburses some £80 million in lottery and other monies, and some long-established arts organisations, such as the Scottish Youth Orchestra, feared their financial lifeline was being severed.

If the intention was to create a kind of internal market, with arts organisations competing for funding, it seems to have failed. Artistic endeavour does not happen that way. There needs to be a degree of continuity and security for true creativity to flourish. This has been accepted by the chairman of Creative Scotland, the banker Sir Sandy Crombie.

More damning is the criticism that Creative Scotland has been investing in the wrong kind of creativity. As we reveal today, some £300,000 went into a teen movie, Love Bite, that has flopped. Creative Scotland has not helped its case by mistakenly identifying its predecessor, Scottish Screen, as the body responsible for allocating the cash.

There are those who believe the idea of publicly funded art is misconceived: that bureaucracy stifles creativity and that the arts should be left entirely to the private sector. We disagree. The National Theatre of Scotland could not have created works such as Black Watch without support from public funds.

The ambition of Creative Scotland was right; implementation has been the problem. Crombie has promised major changes next month. Unless these address the fundamental problems, Creative Scotland will remain the central character in an unfolding drama not of its liking, or indeed that of the wider arts community.