The arts do more than just lift a nation's spirits. They also raise its profile, boost its tourism and create a virtuous circle of intellectual excitement and economic prosperity, as Glasgow proved and Liverpool is now demonstrating. Britain already has an enviable reputation as one of the most exciting centres of artistic excellence in the Western world. For the Government, therefore, to announce an extra £50 million for the arts is not only fitting reward for excellence; it also makes sound economic sense.

Such a bold investment necessarily demands a thoroughgoing reappraisal of government policy. Sir Brian McMaster has drawn up a report on state funding of the arts that suggests without a hint of irony that Britain on the verge of a “new Renaissance”. It announces a determination to recapture for this country the verve and creativity of Italy six centuries ago.

Such grandiosity aside, the report outlines two guiding principles: to broaden access to the arts and to focus money on pinnacles of proven excellence. Each is a worthy goal. They are not, though, the same. James Purnell, the Culture Secretary, declared that “the time has come to accept that the highest quality and the broadest audience can go hand-in-hand”. Excellence and popularity sometimes coincide, but often they do not. Bold investment in inspiring talents is admirable enough, but it will not always sell tickets. The wisdom of crowds cannot be relied upon in arts funding.

The report insists rightly that excellence should be supported, and proposes that Britain's ten most “innovative cultural companies” should receive long-term ten-year funding packages to encourage them to take risks. The Government, Sir Brian argues, should not be afraid to withdraw support from projects that fail to excite, or are designed more to tick the right political boxes than to voice what is real and compelling.

But how does this square with greater access? Sir Brian risks incoherence. If the price of continuing a £17 million grant to English National Opera is the abandonment of the acclaimed Birmingham Opera, which fears closure if its £324,000 funding is removed, there will be precious little evidence of reward for local initiative or democratisation of access. And Birmingham is just one example.

Dozens of other small projects, the crucibles that foster talent, risk being swept away. Here, the danger is incompetence. Many worthy theatres have not been given the time to make decent submissions for funding.

The McMaster proposal solution, to force all companies receiving public funding to offer a week's free access is symbolic, but insubstantial. It is unfunded and, for many institutions, ill- thought-out. Arts organisations should decide for themselves how best to reach the largest possible audience. Free is just one option.

The Government is setting itself up as a grand patron of the arts. It is proposing that the Department for Culture, Media and Sport identifies a rare breed of artistic genius, which happens to be both currently alive and widely admired. Arts cannot easily be directed from above. Local initiative is the patron. Competition to be heard is the spur.

It is not the job of the Culture Secretary to be a modern, mass-market Medici.