When you think of a city's economy, visions of smokestacks, large office blocks and factories spring to mind.

But Brighton and Hove has never had much heavy industry apart from the old railway works and has only one major office employer in American Express.

Financial services form the bedrock of the economy and even more people are employed in public services at councils, health trusts and universities.

Light engineering, given a boost after the Second World War through the creation of new estates, reached its peak in the Seventies and is still an important factor.

But Brighton has been a place of pleasure ever since the Prince Regent settled on the Steine more than 200 years ago and built his wonderful palace.

It may seem frothy, fun and inconsequential but culture is a major factor in the local economy, not only in Brighton and Hove, but also all over the South-East.

Culture is not limited to the arts but includes tourism, sport and nightclubs.

Only last month, Jim Brathwaite, incoming chairman of the South-East England Development Agency, put the value of the industry in the region at £14 billion and said it employed 500,000 people.

Brighton University director Sir David Watson also told a seminar at the Corn Exchange: "Cultural investment and innovation are potentially the main engine of regeneration in the South-East."

Nick Dodds, the new Brighton Festival chief executive, estimates 15,000 people work in the cultural industries in the city.

Brighton Festival itself, which runs the newly-renovated Dome complex, employs 200 people and Sussex Arts Marketing has estimated five million people attended artistic events in the city up to the end of September this year.

Figures produced by the city council say 9,000 people visit local clubs each night, spending £60 million a year.

People who attend artistic events in the city spend a total of £100 million a year and major venues, such as the Theatre Royal, the Brighton Centre and the Gardner Arts Centre, generate more than £19 million.

Almost 750,000 people visit the city's 19 art galleries each year and the city is home to about 1,000 artists, authors, actors and designers.

Total tourist spending in the city is about £380 million a year and the total value of arts and culture is about £184 million to the local economy per year.

Mr Dodds hails from Edinburgh, where Britain's biggest festival generated £160 million in business for the Scottish economy.

Brighton's festival is the biggest in England. Audiences doubled this year and it is worth millions to the city.

Mr Dodds hopes Brighton and Hove can come up with good all-round public and private sector sponsorship and investment to help further improvement.

He does not see the need for any great expansion in cultural venues but said:

"We need to invest more effectively in what we have."

Labour councillor Don Turner is the councillor for economic development in Brighton and Hove. He is about to chair a committee on culture for the South-

East Regional Assembly.

Coun Turner said: "We have a broad agenda for culture - not just arts but the club scene.

"It is such an important part of the economy. We are not downgrading it under the changes but are separating out some of the functions. Culture will have a higher profile than before."

Coun Turner is particularly keen for more emphasis to be placed on sports, which he feels has received less attention than its due.

His estimate was that tourism alone, which is part of culture, represents 17 per cent of the economy and is still growing.

Coun Turner is optimistic about the future, with big new projects coming along, such as leisure at Black Rock, the new central library in Brighton and the redevelopment of the King Alfred in Hove.

Long-serving Tory councillor David Smith is the party's culture spokesman on the city council and chaired the arts committee on Brighton Borough Council when his party was in control.

He described the council changes as a retrograde step and said the authority badly needed to have its own director in charge of this sector.

Coun Smith said: "I was angry rather than upset when I heard about the changes. I know we are in trouble financially but we should not be doing this. It is a disaster."

He said the council should show it is serious about tourism, culture and sport.

Tory opposition leader Brian Oxley said: "It is important we have a vibrant cultural heart in Brighton and Hove and it is available to be enjoyed by all.

"The nationally-known cultural events bring people into the city who would not otherwise come and these people spend and help local businesses to prosper.

Coun Duncan declined to
comment on his reasons for quitting. City council chief executive David Panter is currently carrying out a review to see how the department's work can be spread out and money saved.