Leaked letter shows all funding to be cut from 2013

Architecture quango Cabe will be officially wound up with just 20 staff transferred over to the Design Council when the long-awaited merger is announced in the coming days.

According to a leaked letter from culture secretary Jeremy Hunt to deputy prime minister Nick Clegg, published on the web this afternoon, the Design Council will receive funding from the Communities Department for two years to carry out a limited number of Cabe’s functions. Building magazine has taken steps to independently verify the report, and understands the letter is genuine.

It says the remainder of Cabe will be wound up, with any remaining property rights transferred to the Design Council.

Both organisations confirmed late last year that they had agreed to merge, following the Department for Culture Media and Sport’s decision to cut funding for it in last autumn’s spending review, with the decision requiring government ratification.

Yesterday Building revealed an expected announcement last week was delayed as final confirmation was sought from the Cabinet Office, which is headed by Clegg.

However, the leaked letter says specifically that the only approval which is being requested from Clegg is for the dissolution of Cabe.

It says:

“As DCLG still has a need for built environment design advice in improving homes and neighbourhoods, the solution found is to extend the Design Council’s remit to cover architecture and the design of the built environment by altering its Royal Charter and to import from Cabe a limited number (about 20) of its staff (under TUPE terms) to give the Design Council the necessary expert capability. DCLG has agreed to provide funding to the Design Council in 2011-13 to support its charitable activities that will secure better design of homes and neighbourhoods.

“I propose that the remainder of Cabe should be wound up and the organisation will be dissolved and, if necessary, its property, rights (including those relating to employees) and functions may be transferred to other organisations (including the Design Council) using existing powers under Cabe’s governing legislation, the Clean Neighbourhoods and Environment Act 2005.

“The general proposal has been agreed in principle by Ministers in all three departments affected, and the only matter for which clearance is being sought is for Cabe’s dissolution.”

In the letter Hunt adds that the decision will allow important elements of two leading bodies in design to come together.

“The Design Council would be strengthened by bringing in the valuable skills, knowledge and expertise from Cabe to create a one-stop shop, providing a service to industry, councils and local communities.”

The news confirms speculation in recent days that the proposed merger was more likely to be a takeover by the Design Council. Last week reports emerged of major staff reductions at Cabe, including the departure of two directors. It does not specify the amount of funding given to the Design Council for Cabe’s functions, but says that money will only be available from 2011-13, with the assumption that Cabe will be self-funding from then.

It also does not specify exactly which of Cabe’s function will continue, with its design review role, where it assesses the quality of major projects, widely seen as its most valuable activity.

Cabe and the Design Council were both unavailable to comment immediately on the leak. A spokesperson for the DCMS said: “The department does not comment on leaks.”