HAVING been in a real Capital of Culture - Rome - for the past two weeks I missed the news that seems to have been received on a level with a royal death: Newcastle and Gateshead losing to Liverpool in the race to become European Capital of Culture in 2008. Catching up now, the coverage appears incredible.

"Betrayed", was one front page headline, attacking the Government's decision to ignore the so-called people's choice. A vox-pop saw one reader's bile level race to full. The contributor was quoted as saying: "I would just like to say, as the football song goes, 'In your Liverpool slums'. Need I say more? I can't believe we did not get it."

How extraordinary as well as wrongheaded, as the Liverpool writers Beryl Bainbridge, Jimmy McGovern and Alan Bleasdale could tell her, while pointing out their city's 2,500 listed buildings and six theatres.

But in amongst the outrageous, there were some sounder reasons for being disappointed; namely that the North-East appears to have missed out on a jobs and investment bonanza. Now you might think that, because every report about the benefits of clinching the title of the Capital of Culture has told you that billions of pounds will follow, as will thousands of jobs.

If that's your reason for spitting bile North-Westward, then cool your jets as we say on Teesside, the economic benefits are never that great. I do regular pieces for the telly outlining the economic benefits of events such as Euro 96/Hartlepool United gaining promotion/ The region's first Test Match.

Without fail, commentators will tell me that any of the above means a flood of inward investment and practically kissing goodbye to unemployment. But it never happens and it would not have happened thanks to "culture" in 2008.

According to Beatriz Garcia, of Glasgow University's cultural policy research centre, it is important to analyse the type of jobs that are created. Employment is often "not very skilled, hospitality-related".

And here is another thought. Does culture really regenerate? In Stockton, we saw the most expensive Lottery project outside the capital in the Arc arts centre. It had plays by unpronounceable Polish playwrights, subtitled films, and bands so hip it hurt. Today, it is empty and neglected.

But if I haven't convinced you, at least you can take heart from the news that it's been decreed that 2005 will now become The People's Year.

Forget all about 2008 and celebrate such things as the opening of the Sage music centre in Gateshead.

I'm planning my economic benefits piece already.

- lan Reeve is Business Correspondent, BBC TV North East & Cumbria.

Published: 17/06/2003