Every year there are 87,000 incidents of violence involving the drunken wielding of glassware. This costs the NHS an estimated £2.7bn (I've no idea how they work this out).

Is there anything we can do about this? The police proposed compulsory plastic glasses, but this smacked too much of the nanny state. Instead, as part of its Design Out Crime initiative, the Design Council commissioned an unbreakable pint glass that was still made of real glass. The agency Design Bridge came up with two solutions: one uses a coating of bio-resin that strengthens it considerably; the other uses two thin layers of glass bonded together like a car windshield. In both cases, the glass will crack but not shatter. When these models actually make it into pubs we can expect "glassing" to be a thing of the past, although the NHS may see the incidence of alcohol-related bruising go through the roof.

This is just one of the many initiatives undertaken by the Design Council, which this week merges with CABE (Commission for Architecture and the Built Environment). The merger is the result of funding cuts: on one level it's good news because it means that both bodies were spared the Tory bonfire of the quangos; on the other, it means they'll each be getting by with a third less funding. This is a buy-one-get-one-almost-free kind of deal – which may be counter-productive, especially during a recession, as the Design Council is the only dedicated body in the UK that proactively pairs up designers with businesses.

One doesn't hear much about the Design Council, partly because it supports a brand of worthy, socially-minded design that is too unglamorous to attract attention. That's unfortunate, because their work can have far-reaching consequences. In 2009 the Design Council worked with the Department of Health to investigate how good design could help reduce the risk of infection in hospitals – a fear so pervasive that even the seriously ill worry about setting foot in one. The Design Council sent out a team of designers. One of the results was a commode, or a wheelchair-toilet – I told you this wasn't glamorous – designed by PearsonLloyd. Now these are nothing new, but the old ones were designed before the age of the superbug, and are so difficult to clean that nurses have to use toothbrushes. PearsonLloyd's smoother, screw-free version requires none of that, saving nurses valuable time and minimising the potential for nasty superbugs to breed. Their design is now being trialled across the country.

Now, no one at a hospital said, "Can you design us a new commode?" It took the Design Council to bring the designers in to meet with frontline staff and microbiologists and manufacturers. It also created a local manufacturing opportunity by bringing all the stakeholders to the same table. And that's the kind of thing we should be seeing more of during a recession.

What the Design Council does well is promoting design as a service, by helping businesses to be more creative and competitive. Its Designing Demand initiative has paired a network of design "mentors" with 650 small businesses; for every pound spent, it generated £9.90 in added value, while creating or saving 3,000 jobs. Yorkshire company Naylor Industries, which has made clay drainage pipes since 1890, was going out of business because of cheap imports from the Far East, but a design mentor helped it reconfigure its operation to produce flowerpots. It is now the only terracotta flowerpot maker in the UK, and a thriving business. Rather more cutting edge is the Navetas smart meter, which calculates the energy consumption of every device in your home so that you can read it on an LCD screen, or even on your iPhone. The market potential is huge and yet it took a design mentor to get venture capitalists to fund the team developing the technology at Oxford University.

The Design Council, or the Council of Industrial Design as it was then, was founded by a wartime government in 1944 to help catalyse British industry and the rebuilding effort. It could be serving a similar purpose now. The government is supposed to be rebalancing the economy, away from financial services and back to manufacturing. George Osborne has called for a "march of the makers", and yet there was precious little in his budget to back that call.

The UK, contrary to popular belief, is still a major manufacturer, the seventh largest in the world. We may not own Mini or Rolls Royce any more but they're still made here, along with Formula 1 cars, Brompton bikes and Vitsoe shelving. In a recession, and with China becoming gradually less good value, this is the perfect opportunity to stimulate local manufacturing. Britain is a global talent pool when it comes to design, and the rest of the world comes here to fish for that expertise. The government should be improving links between that talent and local industry. Instead, while it pays lip service to "the creative industries", it is trimming down the only dedicated body in the UK that does create those links, and wheeling out feeble initiatives such as StartUp Britain: a website promising a "£1,500 rescue package for small businesses" when in fact it's just a bunch of links to money-off deals that are already widely available and may or may not be relevant to you.

Just to be clear, the Design Council isn't complaining – frankly it's relieved that it's still being funded, unlike say the UK Film Council. But I would argue that that's not enough. If the Design Council could get away with being only semi-visible before the recession, it should be coming into its own now – and that could be more difficult as a downsized operation. The Design Council does create opportunities and in areas that add social value. So, not consumer and luxury goods but healthcare, education, crime prevention and sustainable living. Next challenge: the 56,000 physical assaults that take place every year in A&E. It's a tough job, but someone's got to do it.