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Competition by definition leads to the creation of winners and losers ? whether in sport, in business, or indeed, in the arts. The latest round of capital funding announcements from the Arts Council of England (p1) is a case in point.

Sixty lucky ?winners? are celebrating a potential windfall which will enable them to turn their dreams into reality - or at the very least, solve structural problems which have inhibited their growth, limited their artistic potential or threatened their viability. This is great news, and we wish them well as they progress towards submitting their full funding bids. Perhaps we should run an advice column so that all those organisations who went through the process of submitting bids under the earlier ACE Capital Programme can share the lessons they learned during what proved for many to be a bitter and fruitless process. Fortunately this time the bidders know that there is some ?fruit? to be had at the end of the new process, which wasn?t the case before.

But let?s also spare a thought for well over three hundred unsuccessful applicants who, like Oval House, who are the losers in this whole process of competing for limited resources. Many will find that their dreams are in tatters, which will feel to them just like a punishment meted out in the absence of a crime. Staff, disillusioned at the prospect of a more limited future, will leave; and those left behind will be faced with Hobson?s choice ? fundraise like mad to realise the dream in the absence of ACE funding (an uphill struggle in anyone?s book), or tread water until the next opportunity to try for the jackpot.

Who?s to blame? Well, maybe (and unusually in the arts funding system) nobody in particular. Competitive schemes which publish specific selection criteria, openly invite applications, encourage organisations to apply who are most likely to meet the criteria, evaluate and select proposals on the basis of those criteria and operate a feedback and appeals procedure (which we have been given assurance by ACE is in place for the new Capital programme) must surely be the most sensible, effective and fair way of distributing a lot of money across a lot of hungry mouths. ... unless, that is, you?d prefer it all to be spread thinly across all the applicants, allowing none of them to achieve anything of much value... or you?d prefer to give officers in the funding system the task of seeking out ?good projects? and putting them forward for consideration (... remember the early days of Chris Smith?s £5m New Audiences windfall?). No. We?d opt for the competitive process every time.