SADDER and wiser.

That was the tone of the statement from the board of Creative Scotland yesterday, following two days of soul searching. As The Herald argued on Tuesday in these columns: "This crisis will not be solved by the resignation of Andrew Dixon [the departing chief executive]." Nor was that the objective of the now-famous letter from 100 artists about cuts and skewed priorities at the two-and-a- half-year-old funding and investment body. In footballing parlance, they were going for the ball, not the man.

Some will not be happy with anything short of the complete abolition of Creative Scotland, formed from an unwieldy combination of the Scottish Arts Council and Scottish Screen, along with funding responsibilities for the creative industries. But this major reconstruction proposal goes a lot further than mere tinkering.

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First, there is a recognition that the board itself bears some of the responsibility for the breakdown of trust that has occurred between the funding body and Scotland's artists. Secondly, the biggest single bone of contention was the replacement of so-called flexible funding by project-based funding for 40 major arts organisations. This was fundamentally misconceived. Creativity can flourish only when there is a degree of freedom and continuity. Under the new proposals, long-term funding will be largely restored, as will support for some individuals. Thirdly, the unpopular idea of "strategic commissioning", which looks like old-fashioned patronage under another name, is to be abandoned and its £3.5m budget put back into the funding pot.

There is also a commitment to emphasise the language of support, rather than investment. The notion of creating a form of internal market in which Creative Scotland invested in the hope of a return was always misconceived. Many worthwhile projects can greatly enrich their audiences while never turning a penny of profit.

There is also a reference to the operational structure, with the suggestion that there will be a return to separate funding for different genres.

This marks an overdue recognition of issues that have dogged Creative Scotland from the beginning and which saw high calibre bodies lose secure funding while items like a cookery television programme landed grants. There was a conviction that funding was not disbursed in a way that reflected the quality of the work. Initially it was dismissed as a communications problem or the complaints of a small group of malcontents.

Some questions remain. These include whether radical reform can be achieved by the present board and its chairman Sir Sandy Crombie, who were so slow to realise the gravity of the situation. Simultaneously, the changes will come as a relief to those trusted, dedicated and talented staff at Creative Scotland who were never part of the problem. Scotland's artistic community contains a remarkable pool of talent. As yesterday's statement put it: "It is time that Creative Scotland stopped being the story".