Here in Chipping Norton, there is a picture-perfect little theatre. It’s exactly the same as a London theatre, with a balcony and a bar, only it’s much, much smaller. You really do feel, as you perch on your primary-school chair, gazing on the Punch and Judy stage, that you are locked in a Cotswold-stone dolls’ house.

It’s an enchanting place and everyone round these parts is very proud of it. So consequently everyone is very cross that the Arts Council recently announced it would no longer be supplying £40,000 a year to help fund it.

And Chipping Norton is not alone. Even though the Arts Council has just received a £50m income boost from the government, it has sent letters to 194 mostly provincial playhouses, galleries and so on, saying they no longer fit with its “agenda”.

“Hmmm,” I wondered, “and what might this agenda be?” So I checked, and it seems that to get funding these days what you’ve got to be is black or mad or preferably both.

For instance, the Arts Council has recognised that there are very few people from ethnic minorities in senior positions in the arts, but instead of thinking: “Aha. This shows that very few black or Asian people are interested, so let’s concentrate on the white middle classes”, it has now become involved with several schemes to get inner-city kids out of their big training shoes and into an Othello suit.

There’s more. The Arts Council has never offered to translate my books into Urdu. Or Jilly Cooper’s. But it “remains committed” to spending a fortune supporting ethnic-minority writers. Indeed, it claims to have six priorities in place at the moment. And of course “celebrating diversity” is one of them. Not at all surprisingly, “celebrating Mrs Thatcher” isn’t one of the others.

The council spends nearly half a billion pounds a year and, so far as I can tell, in 2007 most of that was given to Benjamin Zephaniah and others in exchange for some ditties about how awful the slave trade was and how everyone in Britain ought to commit suicide.

But wait. What’s this? It seems there was some money left over to send a bunch of kids from Calderdale to the Yorkshire Sculpture Park, which is a field full of what look like big bronze sheep droppings. It’s not my cup of tea but no matter – the droppings were sculpted by Henry Moore, so that sounds fine.

Sadly no. Because afterwards the kids were taught about rap music and how to graffiti a wall. That has absolutely nothing to do with the arts at all. It’d be like teaching kung fu at a flower-arranging class.

Here on the Chipping Norton arts scene things are rather different. Plans for 2008 include a play about space travel, devised by Niki McCretton, who I’m afraid is white. Then there’s a tribute to Abba, who were a very popular Swedish pop group featuring no disabled Bangladeshis, and a talk by Arabella Weir, who is the daughter of a notable diplomat.

There are films too. But none, so far as I can see, is Brick Lane or that tosh from Al Gore. And then of course there’s the Christmas pantomime. Much loved by Douglas Hurd, who never misses it, and 7,000 children, all called Henry and Araminta, it’s a professional show featuring traditional storylines at this Christian time of year.

You can see immediately why none of this fits in with the Arts Council’s “agenda”. And I’m afraid the concert planned for next Saturday doesn’t work either. Yes, the pianist, Hélène Tysman, is foreign, which is good, but I’m afraid she’s only French. And that’s hopeless because they had an empire too, the bastards.

What the management should be doing to maintain its grip on the Arts Council’s funding is hosting a celebration of haiku poetry, in silence, by the Al Gore polar-bear workers’ collective. Of course nobody would come, but hey – serving the needs of the area? Since when did that ever matter?

It does, and that’s why I’d like to conclude with some words of encouragement for the management of Chipping Norton theatre and the other organisations around the country that don’t fit in with the Arts Council’s taste.

It is extremely likely that you will be better off without the council’s 40 grand a year. Because tied up in this rather small chalice is a ton of poisonous red tape demarcating what you can do, what you can say and how many ramps have to be fitted at each urinal.

You can wave goodbye to all that BBC-regional-news-tick-the-ethnic-boxes nonsense when you replace the lunatics at the Arts Council with a set of different benefactors.

I know this because just last week I spent some time with some chap from a notable charity. Each year, it needs £4m to stay afloat, and none comes from the government.

“Trust me,” he said. “We don’t want even 4p of their money. It’s always more trouble than it’s worth.”

Or you can look at the Millennium Dome. When it was run by the government the dome was full of faith zones and Cherie Blair, celebrating diversity. And it was a disaster. Now it’s in private hands it’s full of Led Zeppelin and recently became recognised as the most popular concert venue in the world.

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