THE SCOTTISH government has moved away from its flagship culture policy of Irish-style tax breaks for artists and writers.

They have instead ordered a review of culture funding that incorporates attracting extra resources from philanthropists, venture capitalists and corporate sponsorship.

In opposition, the SNP promised to support Scotland's cultural community through the introduction of a "tax exemption scheme" for artists.

Based loosely around the Irish model, which exempts artists living in the Republic from tax, it would have allowed writers, painters and musicians to reclaim the tax paid on work they had sold up to £15,000.

This would have given artists a £2000 annual subsidy. The proposal was widely welcomed in the sector but civil servants had flagged concerns.

These included a fear of fraud and the suggestion that basing a subsidy on self-assessment tax forms may be overly bureaucratic.

A briefing note on the government's plans states the SNP wants to "take a more holistic and longer term view of the support offered to those in the cultural and creative industries".

It adds: "Nor is it about relying on grants and the public sector alone. There is a range of financial instruments operated worldwide; some of which are not yet operating in Scotland."

Importing the Irish model, where Scottish artists would pay no tax at all up to a certain point, is a non-starter. "At present the Scottish parliament does not have the fiscal powers to deliver this directly," the paper notes.

Culture Minister Linda Fabiani has ordered the review of how to fund Scotland's cultural and creative industries.

A source close to Fabiani said Creative Scotland, a new government agency being set up, will launch pilot projects for artists in the short-term.

Some of the ideas up for consideration include start-up funding, as already happens in the Highlands, and loans.

Fabiani said: "The Creative Scotland Project Team is working on a review now examining the financing of the cultural and creative industries and I welcome this. This early work is vital to ensure that Creative Scotland, as the delivery organisation of artistic financing, can hit the ground running when it is established. I look forward to the recommendations of this review and potential pilot scheme to trial the best ideas."

Anne Bonnar, the transition director of Creative Scotland, said: "Our creative sector and its people need investment to play its full role in all of their lives. Today's climate of increasing expectation against finite public resources makes it essential that we develop new models of investment to maximise the contribution that the creative economy can make."

Labour MSP Malcolm Chisholm said: "Given the SNP's list of broken promises so far, it comes as no surprise they are set to ditch their manifesto pledge of £2000 grants for Scottish artists.

"The SNP have already broken the promises they made to parents and pupils on class sizes and students on dumping their debt. It now seems it's Scotland's artists who are set to be let down by the SNP."

A Scottish Liberal Democrat spokesman said: "This policy was never workable and we said that before the election. If the SNP want to salvage any dignity, unlike with their other broken promises, they should immediately put up their hands and say it could not be done and instead focus on coming up with substantial policies to increase the resources for Scotland's creative communities."