It was billed as a “box of delights”, a cathedral-sized cabinet of curiosities to bring art to the people of West Bromwich “in surprising and beneficial ways”. They got the surprising bit right: just five years after opening, The Public arts centre in the West Midlands now faces closure, having been slammed by the government as “a gross waste of public money”. But perhaps the biggest surprise is that the flawed project lasted this long.

Marooned on the edge of New Street, like a great tanker cast adrift, the building has been a catalogue of catastrophes since it was conceived in the 1990s as an experimental home for interactive digital art. Intended as a new kind of art space for this ephemeral, immersive medium, it instead turned out to be a giant inflexible shed. With a riotous interior, dressed up by Will Alsop with the heady trappings of dynamic fluidity, it was in fact an intransigent container that foretold the institution’s demise in every detail of its fluorescent fabric.

Foil accident … one of the crumpled pods on the rear of The Public Photograph: David Levene/The Guardian

While the big black box now stands as a monument to an ill-conceived vision – the Black Country's great black elephant – the £72m complex was doomed before it even opened. Alsop was removed from the project in 2004, 17 months after construction had begun, when his practice went into receivership. After major cost over-runs caused by these delays, the charity set up to oversee the project also went into administration in 2006. When it finally opened its doors in 2008, two years late and £15m over budget, The Public's interactive galleries weren't even up and running – they remained closed due to technical difficulties, forcing the company into administration in 2009. With no other option, the project was rescued by Sandwell Council, which set up the Sandwell Arts Trust that now operates the building.

All the while, the Arts Council had pumped in £31m, as well as committed to £600,000 a year to fund the artistic programme of a building whose purpose remained utterly opaque. “In summary,” concluded a damning ACE report in 2011, “Arts Council England agreed to fund a building that was not fit for purpose.”

So what exactly goes on inside? From the street, the building reveals little. The black metal facade is punctuated with pink-framed windows in the shape of speech bubbles, like plaintive voices crying out from the abyss within. Around the back, it looks like someone's had an accident with a roll of kitchen foil, as crumpled metallic pods emerge, housing toilet and office blocks.

Facebook Twitter Pinterest 'A graveyard of interactive technologies with no apparent purpose' … one of the exhibits inside The Public. Photograph: Elliott Brown/flickr

The interior is one cavernous open space, through which a snaking ramp weaves between a world of suspended pods and inscrutable installations. This 350-metre long journey of discovery takes you from pink neon scribbles that writhe across the ceiling, through forests of metal trees, hung with monitors and panels of glowing light, to stepping-stone “flypads” that allow you to control computer characters with your feet. It is a jumble sale of bits and pieces, a graveyard of interactive technologies with no apparent purpose. It makes the Millennium Dome look like a triumph of curatorial coherence.

The whole place seems full of bewildered families traipsing around. “I was expecting interactive exhibits on a par with the Science Museum in London, though perhaps not on such a grand scale,” writes one parent on TripAdvisor. “In reality it was very disappointing … There is nothing there really for the kids to do, many of the touchscreens did not work and the things that were there had no explanation as to what you had to do, or indeed why you were doing them.”

Facebook Twitter Pinterest Flypad … one of the interactive exhibits in The Public, by Blast Theory

Besides the impenetrable interactive exhibits, which fill most of the building, there is a well-used 250-seat theatre – a valuable addition to a town that hadn't had such a venue for 40 years – as well as offices for a number of startup companies on the upper levels and a temporary exhibition space. But these are small returns for the £1.4m subsidy that must be stumped up annually by Sandwell Council, who look set to turn the building into a sixth form college instead.

The project's supporters feel it is only just beginning to come into its own, now that the New Square development has materialised next door. This £200m shopping complex features a vast Primark, a five-screen multiplex cinema and the largest Tesco in Britain – perhaps appropriate neighbours for The Public, in keeping with its big box vernacular.

Whatever its future – whether it continues to struggle along as a dysfunctional attraction with a well-used social hub, or as a sixth form college with arts provision – The Public should serve as a reminder that it's usually a good idea to think before you build.