Why have costly arts projects that were supposed to transform the country's cultural landscape flopped?

Ten years on since the great Millennium Lottery rush to turn this country into an all-singing, all-dancing culture-box, the picture is distinctly less sparkly.

True, there have been the spectacular successes. Tate Modern, the British Museum Great Court, the Ondaatje extension in the National Portrait Gallery, even the wobbly Millennium Bridge – a decade later, these enterprises have artistic integrity, national and international acclaim and look fundamentally at home. Even the dreaded Dome is now the world's favourite live-music venue.

Yet there are so many more which – somewhere down the line – went seriously awry. And when surveyed as a whole, the unpalatable truth is that the Millennium arts projects have not delivered. As the BBC's arts correspondent for the decade spanning the turn of the century, I witnessed most from hard-hat stage to the champagne-fuelled opening. Ten years later, the much heralded legacy of the Year 2000 simply has not happened.

It's important to remember just how much capital outlay there was. The Millennium Lottery payola heralded one of the greatest building sprees the British arts world has ever known. A staggering £1.3 billion was spent on 222 projects across the country, of which Arts and Culture grabbed a third (the others being Community and Education). And instead of a glittering web of arts institutions across the land, what we are left with is a series of buildings by "named" architects, many of which are dark, vandalised or which are living in the crepuscular world of free comedy nights and amateur dramatics.

"They simply drowned in their own excesses," says arts administrator Keith Khan. He should know. Khan opened Bethnal Green's Rich Mix in London's East End. Rich Mix, which eventually cost £27 million, including £5 million from the Millennium Fund, was going to be "a major international arts centre", designed to bring the white working-class man and the Bangladeshi housewife together in a fantastic cultural pas de deux. Er, not quite. Khan has long departed and Rich Mix? Well, Shoreditch media types go there, but it is certainly not the popular cross-cultural hang-out it was supposed to be, after a wildly delayed opening, political wrangling and a budget overspend of £13 million. It is at least open, with something of the arty mélange it originally promised.

Which is more than can be said for the Bernie Grant Arts Centre, which opened in a blaze of hoopla and a building designed by architect David Adjaye. It was supposed to be a "flagship for cultural diversity" at a cost of £15 million, £6.4 million of which came from the Millennium Fund. On calling this week to find out what was on, the friendly woman at the box office could only guide me to a tea dance and a visiting arts troupe. Not quite the home of "nurturing, inspiration, stimulation and challenge", as promised on the website, and certainly no flagship. Let me repeat the figures. £15 million for an arts centre offering two events in the next month, one of which is a tea dance.

Down the road in Deptford, whoops, another blip on the David Adjaye CV and the sunny Millennium roster, namely the £10 million Stephen Lawrence Centre, which Adjaye built with some hopelessly impractical arty windows (with etchings from Chris Ofili). Cost to the Millennium Fund? £4.2 million. Repeatedly smashed, its glass façade has proved so difficult to replace and insure, that for a long time it was covered in boards. Some people thought this was an artistic statement in itself. "Until signage went up... we had no idea what it was... and even now, we wish the centre's purpose was more clear or somehow tangible," writes one blogger on the Deptford Dame webpage. What is it for? Er, education. And something called "incubator offices" in which businesses are meant to do something called "live work". No, I don't know what that is, and I don't think Stephen Lawrence's mother Doreen does, either. She's said to be very unhappy with how things are.

Ten years after the Queen was forced to sing "Auld Lang Syne" arm in arm with Cherie, the ideal that Britain would morph into a brave new world with glittering arts centre in every urban hub now looks as cringeworthy as that priceless footage. There's the Baltic (£33 million funded by the Lottery), which was supposed to be the Tate Modern of the North, but which instead cantered with spectacular disgrace through a series of directors, botched shows and a dwindling audience. Far from being the Northern mirror of Tate Modern, the Baltic started to symbolise everything that the serenely successful Tate Modern, wasn't. About its only saving grace has been its monumental building, a former flour depot, which thankfully was not designed by David Adjaye. A new director, Godfrey Worsdale, seems to have turned the corner, and the programme is at last looking solid, but a lot of cash and heartache have been expended on the way.

Meanwhile, down the road in Sheffield, the £15 million National Centre for Popular Music closed down though utter lack of interest in 2000, and the £55 million Earth Centre in Doncaster also failed to light people's fires, closed in 2004. "It had something to say to us, but we weren't ready to hear it," smirks a caustic online entry.

Admittedly, hindsight is a very useful thing. I remember one over-excited BBC reporter on the national news covering the opening of the Pop Museum by jumping up and down on an illuminated dance floor and singing "Tainted Love" very badly. There should have been far more stern realism, not only from the press, but also from those in charge. Hard-headedness was replaced with an unseemly rush to grab the money and open the bubble.

This is because there were two powerful forces at work. The arts lobby, which perceived itself as having been left out in the cold for the entire Thatcher era, could hardly believe its luck. Secondly, there was a heady notion that British art – after years of dreary earnestness – was suddenly sexy. Arts grandees saw Damien Hirst on Top of the Pops, pointed to the queues outside Charles Saatchi's Sensation at the Royal Academy and convinced themselves that everyone could have their own little piece of the YBA phenomenon. Rather naively, they thought that everyone would dump their traditional British suspicion regarding art and charge into their Lottery-funded arts centres, to watch the subtitled movies, eat the focaccia al pomodoro and lap up shows of digital art. Yet when the wrapping paper was torn off and the much heralded projects completed, the goods were never delivered.

Take the spectacular New Art Gallery in Walsall, designed to huge acclaim by Caruso St John at a cost to the Lottery of £16 million. It had a permanent collection, the Garman-Ryan, with works by Epstein at its heart. Yet where were the temporary shows, the must-see exhibitions, the retrospectives, the touring presentations of interesting work? Last year, it had such difficulty attracting a crowd that it only managed to reverse its unstoppable downward visitor spiral by introducing a raft of free events. And a branch of Costa Coffee, the only one in the town. Which, unsurprisingly, perked things up by 24 per cent. "The Gallery started doing free comedy nights," says local news reporter Ben Lammas. "With free drinks thrown in. And free film nights. People go there, but not for the art. They want the free drinks, free comedy and free films. I have never heard anyone say, 'I'm off to the New Art Gallery this weekend'."

What a comedown for the New Art Gallery. The launch director, the engaging Peter Jenkinson, had such high hopes for it. He told me he hoped the Tate might use it for hosting the Turner Prize. I remember him walking proudly down the stairs, showing off the leather banister rail, specially installed because Walsall was once the country's centre for the leather trade, and laughing about the voice of Noddy Holder (a famous local) in the lifts. Ten years on, the upstairs restaurant is long closed and although the gallery has a new director and will celebrate its 10th birthday today with a splashy party, it is not a seriously rated contemporary arts venue. "Frankly, the collection was much better when it was hung in the local library," a contemporary-art curator murmured to me.

Let's not linger around the tale of The Public in West Bromwich, about which Margaret Hodge opined: "It chimes exactly with the way the arts in the 21st century are going. It will act as a trailblazer for regeneration in the area and will place West Bromwich at the forefront of this country's brilliant cultural scene." The public had another view of The Public. Who wanted to go to West Bromwich and hang out in a "digital arts centre" with nothing going on inside it? Nobody.

What a lottery: The four biggest failures

National Centre for Popular Music, Sheffield

£15 million spent on a giant building designed by Nigel Coates and filled with memorabilia such as ABC's gold lame jackets. No one turned up. Now the Student Union for Sheffield Hallam University.

The Public, West Bromwich

£54 million blown on a Will Alsop-designed building that never attracted anyone. Much heralded digital displays of art never worked and much of the gallery space was never opened.

Centre for Visual Arts, Cardiff

Interactive twaddle costing £9 million that only attracted a quarter of the visitors it was meant to. Actually closed down in the Millennium year itself, which is some achievement.

New Art Gallery, Walsall

Beautiful £16 million building that never achieved its potential and is now hauling in people via the time-honoured tradition of having a decent coffee shop.