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I was talking about the Scottish arts scene with the at the yesterday. He was saying that although much smaller than the English arts sector, the Scots have a vibrant and successful creative community.

He cited Dundee by way of example. He talked about how it had turned itself into a global centre for the video games industry.

The city's he said, has a highly regarded department running prestigious courses in computer games and then of course there is , a video games company headed-up by Dave Jones, the creator of Grand Theft Auto, which is a leading player in the market.

What we didn't know was that as we spoke Realtime Worlds was itself becoming a virtual reality and had gone into administration. Which makes what Ian said later in the conversation all the more prophetic.

He was expressing his frustration with the Scottish government's prevarications and indecision around their arts policy, which like health and education has been fully devolved from Westminster. He says there have been too many culture ministers, too many meetings and not enough action.

What he feels the arts in Scotland need is support in developing and producing new ideas, otherwise emerging businesses will either move away or go bust.

It's an opinion that is shared by the current Culture Minister Fiona Hyslop, who I met this morning at the .

She told me there are big differences in the political philosophy between her government and the coalition one in Westminster. She feels the London lot have cut too much, too quickly and points out that while Jeremy Hunt has already cut arts budgets in England, her government have left the subsidy they provide to Scottish arts institutions untouched. So far.

Quite reasonably she was unwilling to be drawn on the possibility of any future cuts as the Scottish government have yet to receive their funding settlement from the Treasury in London. But I did get a sense, which was shared among all of those in the Scottish arts sector to whom I have spoken, that her government's approach to arts funding will be different to Westminster's.

Ever since Sir Walter Scott helped create the modern image of Scotland through his books, there has been recognition here that the arts have the power to do much more than entertain, enlighten and educate; they also pull in punters from across the world and enhance Scotland's image.

Fiona Hyslop is keen to point out that while the international tourism industry saw a drop of 4% in the last year, visits to Scotland were up by over 2%, a success she puts down in part to a vibrant arts offer.

She was also proud of their new arts funding body called , a conflation of the old Scottish Arts Council and the Scottish Screen Agency. The idea is to cut down on bureaucracy, streamline decision-making, back innovation and bring together Scotland's creative industries, all the things that Ian Rankin was calling for in fact.

So, with this new vibrant arts body now open for business, would she be asking them to step in and help out Realtime Worlds? No she wouldn't, she told me, as this was an area for her Scottish government colleagues in the Enterprise department who are aware of the situation apparently and have started discussions with the relevant people.

As she looked around the buzzing Pleasance Courtyard and commented on what she thought felt like the busiest Edinburgh Festival, she commented that the Festival had developed out of a time of austerity.

It'll be interesting to see, come the autumn, whether the Scottish government will continue to back the arts to the same degree as they have in the forthcoming period of austerity.

Update 19 August: The word "coalition" appeared in the wrong place in a paragraph above - apologies; now rectified.