John Kampfner: Margate proves investing in our culture makes economic sense

If the current hiatus in funding capital projects becomes a long-term pattern, our country's regions will suffer enormously as a result

As I write, I am staring out to sea on the Harbour Arm in Margate. I am surrounded by thousands of visitors, from near and far, part of a new generation savouring the delights of the British seaside.

The catalyst for the influx here is the opening of Turner Contemporary. I might be a little biased, as Chair of the board, but you don't have to take it from me. In this newspaper, across the media, and – crucially – among citizen critics and social networkers, the gallery has received rave reviews since it opened just over a week ago. Critical acclaim is vital. But overall success requires more than that.

When construction began in November 2008, a large proportion of townsfolk were openly hostile or quietly sceptical. Margate has some of the toughest social and economic problems in the country. Exploitative landlords and shoddy housing stock had turned the poorest neighbourhoods into miserable homes for asylum seekers. A difficult jobs market has been made worse by the decision of Pfizer, the largest private sector employer in the region, to close its huge complex near Sandwich, a few miles down the coast. Margate's high street had the second highest proportion of boarded-up shops in England, exceeded only by Middlesbrough.

So far, so grim: it took, therefore, considerable political courage and vision from Kent County Council, yes a Conservative council, to invest heavily in a capital project for a, yes, art gallery. Why not a sports complex? A school? A hospital? The council's decision was even more risky after plans for a first architectural project were abandoned when costs spiralled.

I was convinced of the argument from the outset; it was much tougher, however, to persuade others of the logic. Turner Contemporary – if all went well – would become a magnet for international tourism. Jobs would be created, not just in the gallery (a small number), but more crucially a new spirit of entrepreneurialism in the town and outlying areas would spawn hotels, bed and breakfasts, restaurants, shops, private galleries and more.

This has, I am delighted to say, already begun. The Old Town, an enticing warren of lanes just behind the sea front, is packed with eclectic boutiques, pubs and cafes. With flair and business savvy, other parts of the town will follow suit. Some 40 small firms have opened since January – in the midst of a deep recession. While there remains a small but vocal pocket of dissenters, the vast majority of the town has rallied round, and are becoming Turner Contemporary's most effective ambassadors.

So what are the broader lessons? It helps when a capital project is properly managed. This marvellous building, designed by the UK's architect of the moment, David Chipperfield, was delivered on time and on budget – a rare occurrence in the UK. Buildings are buildings. British politicians and opinion formers are often bashful about making a case that is more than economic and utilitarian, but there is much evidence over the years that great, and accessible, art (not an oxymoron) can lift communities, having a direct impact on health, education and happiness.

Anecdotally, I believe we have already begun this in Margate. On the first of our four preview nights, a lifeboat operator told me he had never been in a gallery before, how much he was enjoying it, and how he and his friends would come back often. It had, he said, changed his perspective.

The publicity Turner Contemporary achieved (dozens of foreign journalists flocked to the site for a tour) has given it a unique place in the cultural landscape; but it is not unique. Across the south east a number of galleries have appeared or been spruced up over the past decade and a half – from Towner in Eastbourne, to De La Warr in Bexhill and soon Jerwood in Hastings and FirstSite in Colchester. The picture is similar elsewhere. Birmingham has the Ikon; Nottingham Contemporary is a striking addition to that city; Arnolfini is a landmark in Bristol's thriving dock area. In the North East, the Baltic has given Newcastle and Gateshead a lift, as MIMA has done for Middlesbrough.

Galleries, theatres and other institutions in the regions rely on a familiar mix of local authority and Arts Council funding, with a smattering of privately raised money from foundations and individuals. Having been an outsider who has always worked in the private sector, I can sympathise with the Coalition Government's demand for a harder-headed approach to arts funding. Arts institutions and other third sector bodies should not rely on being "helped" or "saved" by the state – just because they are, or think they are, "doing good". In broad terms, Darwinian rules should apply. The best will survive and thrive, if they have the right combination of excellence, inclusiveness, education and a strong business model. The Arts Council has already recognised that; hard-pressed local authorities would score an economic own goal if they cut back on their prized cultural assets.

The real problem is going to be the funding for capital projects. The last in this generation is the Hepworth gallery in Wakefield, Chipperfield's sister project, which opens next month. Neither of his extraordinary buildings, nor pretty much any of the galleries I have mentioned, would be built if they had started out according to current priorities. If this hiatus becomes a long-term pattern, the UK's regions will suffer enormously as a result.

Culture-led regeneration works – almost always. There have been one or two examples of failure over the past decade and a half, but these have occurred through poor management or governance. The principle is not at stake. The Guggenheim in Bilbao is held up as the great example, and it is. But one does not have to look overseas to see the correlation between attendance at galleries, the improvement in the lived environment, local pride and ambition and the benefits for local people.

In Bilbao it took a couple of years for levels of service to meet the expectation of the international traveller. In Margate it is already beginning, although much more needs to be done. Quick-witted entrepreneurs will clean up if they open attractive and affordable hotels, restaurants and shops. A cycle of decline can be reversed. A single building is never going to achieve regeneration on its own. It sows the seeds, requiring local decision-makers to exploit the opportunities presented. At times of hardship, it requires more such examples, not fewer. The greatest poverty of all is poverty of aspiration.

John Kampfner is Chair of Turner Contemporary. He is also Chief Executive of Index on Censorship

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