A shadow has been cast over the appointment of CABE's new chief executive Richard Simmons following government criticism of his high-profile Hoxton regeneration push.
A consultation paper published by the Department for Culture, Media and Sport (DCMS) claims his gentrification of Hoxton Square in Hackney, east London - one of the most deprived areas in the UK - has pushed up property prices and forced out locals.
The DCMS report blemishes Simmons' track record as chief executive of Dalston City Challenge, when he personally took charge of the Hoxton initiative during the '90s.
The department concedes that 1,000 jobs a year have been created as a direct result of the regeneration but stresses that local unemployment levels remain the same.
'The impoverished artists credited with leading Hoxton's regeneration have moved on, as squats and low-cost accommodation have been replaced by expensive loft-style living, ' said the DCMS. 'In this climate, questions are being asked as to whether Hoxton can sustain its reputation as London's 'art hot spot'.'
Simmons, currently director of development and the environment at Medway council in Kent, takes the helm of CABE in September.
He denies the report has any bearing on his appointment but says there are lessons to be learned from Hoxton.
'It highlights the importance of engaging the local community in the processes of regeneration, ' he said.
Simmons blames Hoxton's failings on geographical and time constraints imposed before he took charge of the project.
He says: 'The City Challenge project was very focused on a targeted geographical area.
By the time I arrived, the geographical boundary was defined. Furthermore, five years was not long enough to create a sustainable programme.We felt that a more holistic approach would have been desirable.'
The DCMS has rallied to the defence of Simmons by insisting the report does not bring into question his suitability as CABE head.
'There are particular things that will make a project unsustainable but not necessarily because of the involvement of Richard Simmons, ' said a DCMS spokesman. 'This is not a reproach of Simmons nor is the DCMS having second thoughts about his appointment.'