Like many people, I am taken aback by Newcastle City Council’s proposal to cut its entire arts budget for the city, amounting to £1.6 million. While there will be consultation and some discussion with council leaders, this news is very worrying.

Newcastle and Gateshead offer a very fine example of how cultural regeneration can change the landscape of a city – economically, socially and educationally. Sustained investment over the past 15 years has made Newcastle and Gateshead a national and international centre for arts and culture and it houses some of the nation’s finest galleries, museums, theatre’s and art works. More significantly, this cultural renaissance has done much to bolster the local economy. Tyneside’s cultural organisations work very closely together. Their recently published economic impact assessment of cultural venues revealed that the arts and cultural organisations of Newcastle and Gateshead generate £4 into the local economy for every £1 invested by Arts Council England and councils.

Having axed the regional development agency One North East which put £250 million into helping business create jobs and infrastructure, the coalition government has asked Lord Andrew Adonis to chair a commission to investigate the strengths and weaknesses of the regional economy. In his first meeting with business leaders, held at Live Theatre, he emphasised the importance of Newcastle/Gateshead’s great cultural offerings – they help recruitment of talented individuals, retain talent coming through our universities and inspire confidence in clients and business opportunities. They are acknowledged as a key factor in the economy. So the council’s proposal appears somewhat perverse. My associate here at Live Theatre, Lee Hall, puts it more stridently and eloquently:

This is a straightforward attack on the arts buried underneath a load of smoke and mirrors about austerity. They can’t have it both ways. It is simply fiscally dishonest and illiterate not to count the economic value of the cultural businesses in Newcastle. Whenever I have a sell out show the restaurants around the theatre are also full. You would think a vibrant cultural life is crucial to attracting the high fliers the council are trying to attract to regenerate the business economy of the area, let alone to provide succour to the tax payers of the City. Something is wrong. Look at the figures. It just does not add up.

Interestingly, Gateshead Council, which has to instigate a similar series of cut backs to Newcastle has made no such draconian pronouncements about its arts expenditure.

The performing arts return to the exchequer many times more money than the government invests in them. Take, for example, Live Theatre, a small theatre with only 200 seats. It gave Lee Hall and Peter Straughan their first breakthrough in theatre and both were grateful for the small fees and commissions that they received as writers in residence to develop their early work. Lee’s film and musical Billy Elliot and his play The Pitmen Painters along with Peter Straughan’s screenplays such as Tinker Tailor Soldier Spy have earned the government far more than the arts council has ever invested in the Live Theatre.

If theatres such as Live are shut and the youth theatres are gone then where are kids from ordinary backgrounds going to get a chance?Chris Connel, actor

In my experience regional theatres and cultural organisations are incredibly enterprising and employ imaginative and creative solutions to maximise the investment we get from ACE and local authorities. For example, despite a capacity of only 200 and a turnover of £1.8 million, we earn about 60% of that total through income generated not only from box office and trusts and foundations but a social enterprise programme including retail, lettings and the exploitation of our intellectual copyright. Also, through hires, we maximise the assets that are our painstakingly restored former derelict industrial buildings which we are proud to have brought back into the public domain and made beautiful.

Many other regional theatres, like Live, invest substantially in education and youth theatre and, in our case, particularly in the development of new work and new writing. It’s a service we are proud to offer young constituents of Tyneside for free given that we receive local authority funding. We are constantly creating projects to engage as wide a cross section of the community as possible – and in our case it’s a community that is constantly changing and evolving. More than 50% of our resources go into funding these programmes. This work is hidden. As an industry we need to advocate its importance. Lee Hall’s play The Pitmen Painters is based on a true story of a group of miners from Northumberland in the 1930s who came together after shifts to attend art appreciation classes and paint – eventually producing a unique body of work that depicted their culture and expressed their feelings about their world.

An actor long associated with Live Theatre, Chris Connel, who appeared in the original production that transferred to the National and Broadway makes an interesting observation: “In ten years’ time there may be no young working class actors coming through. Their parents won’t be able to subsidise their training and if theatres such as Live are shut and the youth theatres are gone then where are kids from ordinary backgrounds going to get a chance? Their talent, their stories are just as valid and important and they deserve to be expressed through art alongside those who come from wealthier backgrounds.’’

To stop funding theatres, leading to their closure, will deny ordinary people access to places and professionals who can help them view the world and express themselves through art. This, I believe, is a denial of a basic right and a fundamental human activity. All people, no matter what their background and especially the young should, if they have a talent or an interest, be able to go to a place where professional people can empower them to paint, write, participate and watch.

Some people are born to stand on a stage and perform or write a play for that stage – like some people are born to run in an Olympic race or run a financial institution. What’s important is we must allow all people the opportunity to fulfil their creative ambition. If denied, our society will undoubtedly be poorer for it.

Max Roberts is artistic director of Live Theatre, Newcastle