In an emotive subject such as this, its often useful to try and keep calm and look for patterns of reason and even positive outcomes. The fuss over the abolition of the UK Film Council did not entirely conceal the fact that this particular quango - Wikipedia definition here, topically published BBC definition here - was spending a great deal of money just maintaining itself. We also know that the £50m of money for film funding will still be available.
This government has come to power with a promise to reduce the deficit by cutting red tape. This is a familiar claim from an incoming administration and surely harder to implement than to talk about. However, it does strike me that in the prosperous decade just past, a culture of optimism and ready cash may well have contributed to a significant escalation in the number of these outfits (indeed that's what the BBC claim, in the link above).
So, quangos may be the place to start - a positive step, given the circumstances. I'd also say this. With (according to the graphic above, 28) bodies set up in order to administer funds and provide a link between arts groups and that government, there is a risk that the previous government set up a firewall of delegation. This is the opposite of the new 'big society' idea that Cameron and his coalition have suggested for maintaining local interests, exactly the sort of institutions that live or die by modest government handouts. The ability of a local group to campaign for recognition and funding without having to work in conjunction with a (by its nature) disinterested group is an important issue to absorb.
For example one of the quangos on the abolition watchlist is the Government Advisory Committee on Libraries. No one needs to tell anyone how important libraries are, in general terms (to this blogger they are at the very top of the list of civilising institutions). Yet for local library users to be able to petition government directly on their library needs is extremely important: local campaigns are always more convincing; work towards unifying a hitherto diaspora in a community that then means the point of the campaign is guaranteed fulfilment; and invariably cost nothing.