On Friday, I was invited to the opening night of The Diary of a Nobody at the King’s Head Theatre. It was a wholly enjoyable experience and I would recommend it as the centrepiece of an evening’s diversion.

However, there was one thing that particularly struck me about the performance. As the audience settled down, the King’s Head Theatre’s creative director, Adam Spreadbury-Maher, made an appeal to the audience for cash. He informed us that the theatre needs £100,000 a year just to keep going.

The theatre at the King’s Head, a pub dating back nearly 500 years, has been putting on shows in its modest performance space at the back of the pub since 1970. The theatre has become a jumping-off point for budding talent, incubating generations of artists. Recently, it has changed policy to further support the next wave of creativity in theatre: half of everything on its stage will be new work and all of those working there will receive the union-directed minimum pay, not a claim many small theatres are able to make. And it will strive to do all this while continuing to offer £10 tickets to every production to keep theatre accessible to everyone.

This is an ambitious, potentially risky but, nevertheless, admirable manifesto. For a city that has played host to some of the most important players, playwrights and plays of the last 600 years, in a country whose artists have sculpted movements and eras for even longer, sustaining somewhere that houses fledgling talent should surely be a priority. Instead, despite the £585.5m taken by London’s top theatres in 2013, as the audience filed out of the King’s Head Theatre in high spirits from the charmingly silly 90-minute production, they were greeted again by the venue’s artistic director, cap in hand.

In the UK, half of theatre directors earn less than £5,000 a year and, at entry level and in fringe theatres, that figure is even less or, in some cases, nothing at all. The government’s theory of austerity is squeezing an already unevenly balanced arts sector over the edge. Cash flow now informs so many decisions in the arts out of necessity: risks get minimised, experiments get pushed out and, ultimately, creativity is hampered. Contrast that with 52 of London’s largest theatres represented by SOLT, which, this time last year, reported record takings for the tenth year in a row.

Recently, shadow culture minister Chris Bryant MP spoke out about the gang of posh boys who seem to have taken over British cultural output: Redmayne, Cumberbatch, Blunt and their ilk. While addressing the problem of economically constrained artists is admirable, this boasting tweet from Mr Bryant’s own party shows that, when it comes down to it, art will still have to be judged on its economic merit.

Politicians have been falling over themselves recently to shout about the importance of freedom of speech in the wake of the terrorist attacks on Paris. But what of the importance of freedom to create? When producers, commissioning teams, editors and curators are constrained by cash, only the most economically viable art and financially stable artists will sustain. To entirely misquote Virginia Woolf, an artist must have money and a space if he or she is to create art.

So it is with admiration that I wish the King’s Head Theatre well in its next phase; The Diary of a Nobody is testament to the rewards of funding small-scale culture. The story is secondary; the enjoyment comes from watching the four talented actors switch between the play’s stash of Victorian characters. The singular, homemade set, farcical spirit of the action and witty script are endearing and provide laughs from start to finish. Having seen half of the West End’s hit farce The Play That Goes Wrong (we couldn’t bear to sit through the second half), it was with slight trepidation that I entered the theatre. But, this deft production showed me that, when done well, the form can be truly funny and, in the process, proved that funding should never be an indicator of art’s worth.