John Woodward, chief executive of the UK Film Council, briefed an unprepared staff about the decision at the council's central London headquarters this morning. No one had seen it coming. He said the decision had been taken with "no notice and no consultation".
In a statement Woodward called the proposal "short-sighted and potentially very damaging, especially as there is at present no roadmap setting out where the UK Film Council's responsibilities and funding will be placed in the future".
Film producer Tim Bevan, who chairs the council, said: "Abolishing the most successful film support organisation the UK has ever had is a bad decision, imposed without any consultation or evaluation. People will rightly look back on today's announcement and say it was a big mistake, driven by short-term thinking and political expediency. British film, which is one of the UK's more successful growth industries, deserves better."
Since it was created by Labour in 2000 the UKFC, with 75 staff, has been responsible for handing out more than £160m of lottery money to over 900 films. Successes range from Bend it Like Beckham to Gosford Park to Fish Tank with the occasional dud – notably Sex Lives of the Potato Men – along the way. Last August the Labour government began consultation on merging the film council with the BFI.
Hunt today told MPs that the film council also spent £3m a year on administration and the money would be better used going directly to film-makers. The question remains however: how will the cash be distributed? The Department for Culture, Media and Sport said work would be done in the next few weeks to answer the many questions thrown up by the council's abolition.
Today's statement also promised "a direct and less bureaucratic relationship with the British Film Institute" but said the BFI, as a charity, could not take on the film council's production functions.
Lord Puttnam, president of the Film Distributors' Association, said the news had arrived out of the blue. He added: "Over the past decade, the Film Council has been a layer of strategic glue that's helped bind the many parts of our disparate industry together. It is sure to be widely missed, not least because the UK cinema industry is in the midst of a fundamental transformation at the heart of which is digital roll-out."
The union Bectu, which represents thousands of workers in the film industry, condemned the move. Its assistant general secretary, Martin Spence, said: "This decision is economically illiterate and culturally philistine. Film is an export success story: we sell British production skills throughout the world. And film is also a crucial cultural resource. But the industry is desperately fragmented and long experience tells us that it needs a national agency to achieve its potential."
Hunt has proved one of the most pro-active of David Cameron's cabinet in coming up with a response to Treasury demands for 25%-40% spending cuts. He has axed £45m for a new national film centre and last week the Guardian revealed how he plans to make between 35% and 50% of DCMS civil servants redundant and move out of the departmental headquarters off Trafalgar Square.
The DCMS also announced that it was to look at who was responsible for what in the field of heritage, examining the role and remit of English Heritage, the Heritage Lottery Fund and the National Heritage Memorial Fund. It also proposes merging Sport England and UK Sport; merging the National Lottery Commission with the Gambling Commission; and abolishing advisory committees on libraries and historic wreck sites.
Hunt said: "Many of these bodies were set up a considerable length of time ago, and times and demands have changed. In the light of the current financial situation, and as part of our drive to increase openness and efficiency across Whitehall, it is the right time to look again at the role, size and scope of these organisations."
There was a more sanguine response to abolition at the MLA. Its chief executive, Roy Clare, said he learned of its abolition in "a very civilised" phone call on Friday. He vowed to keep working "up to the finish line", and told his staff so.
"There is no point in standing aside yelling from the sidelines in these circumstances, the truth is the country is bust and we accept that the government has to find a way of dealing with that."
Clare expects some of its responsibilities, including the Renaissance programme - which currently passes on around £50m a year of central government funding to regional museums, though that figure is not expected to survive the Autumn spending review - to be absorbed by Arts Council England. Some of the present 110 staff could also be transferred to the ACE.
In a joint statement with the MLA chairman, the former poet laureate Sir Andrew Motion, they pledged to work for "a smooth and orderly transition".
The statement continued: "We will work methodically and calmly to continue to deliver a vibrant and effective expert service for the public who rightly expect excellent, sustainable museums, libraries and record offices in their local neighbourhoods. Our accent is on strong strategic leadership; access to expert advice which can help people to weather the effects of recession; strong investment programmes; joining up across the network; good links into local government, and provision of resources that demonstrate good practice. We are committed to arguing for these to be reflected clearly in the new arrangements."