Sorry, forget the millennium. It was all about regeneration really

Lord Falconer was thrown back on his last line of defence by the Dome's latest £47m handout. The project turns out to have been the regeneration of a depressed part of London, not a national millennial celebration, after all. Ignoring the tactical point that it is a little late in the day to reposition the Dome, is it a sensible strategy? Do prestige projects help economic regeneration?

Lord Falconer was thrown back on his last line of defence by the Dome's latest £47m handout. The project turns out to have been the regeneration of a depressed part of London, not a national millennial celebration, after all. Ignoring the tactical point that it is a little late in the day to reposition the Dome, is it a sensible strategy? Do prestige projects help economic regeneration?

The answer, like so much in economics, is that it depends. It is certainly possible to point to examples of success. The reason many local authorities are so eager to compete for big attractions and developments is their firm belief that such enterprises bring money and jobs into an area.

Canary Wharf is one very successful case - one that cost far more than the Dome, and took a decade, under the wing of the London Docklands Development Corporation, to start having a visible impact on the area. Docklands regeneration has also worked in other cities such as Cardiff. The much-praised Tate Modern, alongside the Globe Theatre, seems likely to have the same impact on another part of the capital's depressed waterfront, judging from the early signs of housing-market and retail activity.

However, it is not always the case that regeneration needs bucketloads of public money to be poured over an expensive project. Or the solution might not be one single headline project but a varied mixture of developments including transport, education and housing, and both public and private sectors, as in the regeneration of central Manchester.

Nor do the plans always work out as expected. For instance, cities compete furiously to be able to host the Olympic Games but the immediate returns hardly ever exceed the costs, and the longer-term benefits once the crowds depart are uncertain.

It would be a mistake to underestimate the part that can be played by culture and entertainment in boosting a local economy. Art galleries, opera houses and fun fairs might be seen as frivolous compared to trams and hospitals, but they do bring a lot of money into their immediate neighbourhood and create jobs. Obviously, the bigger they are, the bigger these benefits can be expected to be.

But the truth is that we do not have a fail-safe recipe for economic regeneration. If all it took were a new museum or attraction, the run-down inner cities of Britain would be all the richer culturally. The Dome might work for Greenwich, or it might not. Building the Jubilee Line Extension even without a Dome to go to might well have done the trick by itself, as transport links play a large part in making areas thrive.

It would be interesting to see the economic assessments carried out in advance of the decision to build the Millennium Dome on the current site - how about publishing the papers, Lord Falconer?

What's more, having a worthy ambition is no excuse for financial incompetence; the ends do not justify any old means. David James, the expert brought in to rescue the Dome's parent company, has said that he was amazed at the lack of basic financial information such as a list of corporate assets.

There is far more of an onus on anybody handling public money to meet rigorous standards of accounting, and accountability, than on a private sector company. Those running the Millennium Dome so far have failed catastrophically to do so. If economic regeneration was really the aim, it is hard to feel confident it will work when the project has been run so amateurishly.