This week, theatre types were treated to one of the industry’s favourite spectacles, as a power-play inside the National Institute of Dramatic Art’s board room went public.

The trigger was a long essay by former NIDA board member Chris Puplick, to be published in Currency House next month, which dumps all over NIDA’s current board and management, and alleges serious declines in educational standards at the national drama school.

Described by Puplick, a former Liberal senator, as “both an investigation and a protest”, the essay is a trenchant critique of the direction of the institute under current director Lynne Williams, and includes some very personal attacks on Williams herself.

“Her CV makes it clear that Williams has never directed a significant theatre performance; taught acting students; supervised theatre training or auditioned students for placement in a training institution or ever earned a living in the professional theatre,” he wrote, adding later that Williams is “a woman with no appropriate experience and with a Thatcherite style honed after a quarter of a century in the UK”.

“The appointment in 2008 of Lynne Williams to the position as director and chief executive of NIDA is one of the defining moments in the school’s history,” he argued, alleging that “the appointment, and her subsequent tenure, split the then board, and has led to the departure … of almost all the senior artistic staff”.

Puplick doesn’t hold back about current NIDA chairman Malcolm Long either, describing him as “a man whose record suggests more interest in structures than content” and, quoting ABC historian Ken Inglis approvingly, as “short on vitality”, with a “tendency to lecture”.

Strong stuff. After initially refusing to comment, NIDA hit back this week, releasing a statement from the board repudiating Puplick’s attack. “The board of NIDA completely rejects the attack on the institute,” it read, continuing:

“Mr Puplick is an apparently disaffected former board member. His paper is a biased essay, the foundations being riddled with errors compounded by the selective use of source material.

“Mr Puplick’s three years (2007-2010) on the NIDA board were marked by conflict with the overwhelming majority of members over many issues, including future directions for NIDA and appropriate levels of involvement for a board member in the day-to-day operations of the Institute.”

Later in the statement, the board reiterates that Lynne Williams “has the board’s complete support”. NIDA also went on a publicity campaign this week, trotting Williams out to The Sydney Morning Herald. “This morning at 11 as I walked in to talk to the assembly, everyone applauded,” she told Fairfax’s Andrew Taylor, which may not be the best way to lay to rest rumours of personal arrogance.

Who’s right? As ever, gossip swirls in arts circles, but Crikey could find no one willing to go on the record to either attack or defend NIDA under Williams. That might be telling in itself, given NIDA’s high profile. But it doesn’t seem as though there is a groundswell of dissatisfaction with the current direction of the institution. On one hand, NIDA graduates are still numerous on Australian screens and stages; on the other, given NIDA’s reputation and its generous funding levels, it’s not surprising that many of  the most talented actors, directors and designers in the country go to the institute.

As even Puplick acknowledged, the latest audit of NIDA by the Australian Universities Quality Agency gave it a tick of approval. AUQA commends NIDA’s strategic plan and “human resource function”, and the recommendations it makes are not, on the whole, indicative of an institution that has run off the rails.

Whatever Puplick thinks, there’s no doubting the demand for places. Last year, NIDA received an astonishing 1834 applications for a first-year acting class that takes 24. Despite the dismal financial prospects of a life in the theatre, there appears to be no shortage of students desperate for a chance to strut their stuff.

Mind you, NIDA should be delivering high standards of teaching, considering the resources available to it. This column has examined the funding issues of creative training institutions several times, most recently in the context of tertiary music schools. As the government’s own Base Funding Review found, creative arts courses in universities  are underfunded, especially given the demands of teaching difficult crafts such as instrumental musicianship or fine arts.

NIDA doesn’t have to worry about the Base Funding Review, because it is not funded through the federal Department of Education. Instead, it draws nearly all its grant funding from Simon Crean’s Arts portfolio. In 2011, it received $6.8 million in ongoing funding, plus $2.4 million in capital funding.

In 2011, NIDA enrolled only 169 students, a gross funding ratio of more than $40,000 per student. That’s nearly four times the federal funding per student that university drama courses receive. NIDA also pulls in millions in sponsorship and fund-raising revenue each year, largesse that struggling acting courses at regional universities could only dream of. Given that, NIDA better be operating at the very highest level. Anything less would be an unconscionable waste of taxpayers’ money.

To my mind, the real scandal here is that we’re talking about an elite, highly funded drama school like NIDA at all. At a time when most creative arts courses in the country have fallen on desperately hard times, NIDA enjoys gold-plated educational resources. The imbroglio distracts from the bigger problems facing the arts and humanities in our universities.

The real questions we should be asking are about what steps we can take to improve the graduate outcomes for students of the arts in less-famous institutions.