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I understand that the Culture Minister Ed Vaizey will today announce that having decided in the summer to abolish the UK Film Council, he will now place the future of UK film production with the British Film Institute (BFI).

Getting rid of the has upset a lot of people at home and abroad; concern was even voiced by Clint Eastwood - not a man many would want to cross.

But the government always made it clear that the decision was about removing bureaucracy and not about support for the industry. So while the grant for film has been cut by 30%, there will be an increase on the Β£28 million Lottery money the industry currently receives to an estimated Β£43 million by 2014.

Responsibility for investing this will now be the BFI's, which is inheriting an industry on form with well-received films such as The King's Speech, Tamara Drewe and Another Year.

The move will have its critics. One very senior and successful film producer I spoke to thought it was a bad move as the BFI is an academic institution based around an archive, not philosophically or corporately set up for the vulgar activity of making commercial movies.

Colin Firth in The King's Speech

There are other issues. The BFI will now have to turn itself into a Lottery distributor, which inevitably means added red tape and costs. Why, one industry insider asked me, is the money not being put through , which is already a Lottery distributor with the necessary expertise and capability? It could have simply absorbed this function, they said, fearing that the BFI decision would create more rather than less bureaucracy.

The BFI is not going to take on all the UK Film Council's previous roles. Responsibility for inward investment - encouraging foreign film-makers and studios to make and post-produce their movies in the UK - will be taken on by . This might raise the odd eyebrow at the regional screen agencies across the rest of the country and fears that the newly-empowered London agency will favour its own patch within the M25.

The regional agencies will, though, have other matters on their minds: a new logo, for instance. As part of the shake-up, the old regional agencies will be re-christened Creative England and see their remit broaden to include the development of the video-game sector as well as supporting other types of creative industry. Why Film London isn't also re-named Creative England has not been made clear to me.

The decision throws up what one expert considers an anomaly. Film London will be responsible for selling the UK as a location and a film-making destination but the BFI will be in charge of the , the old Film Council department that oversaw the points system awarded to foreign film-makers that triggers the generous tax breaks that lured them here.

Much of the detail still has to be worked out. The government is unsure what savings, if any, the change will make; the rationale is about creating a coherent industry structure, freed from red tape and easier for film-makers to access.

It should be noted that the UK Film Council itself recognised that the old structure could be improved and had entered into talks with the BFI about a possible merger, an avenue of enquiry which was brought to an abrupt halt in June.

It will be interesting to see whether the BFI is able to marry successfully the commercial and the curatorial and whether the new structure will end up any less bureaucratic than the council it is replacing. One thing is for sure: the government is still very much in the movie business.