Mix together the flour, baking powder, salt and dried milk in a mixing bowl.
In another bowl, cream the butter and sugar then add the vanilla extract. Mix well. Add the egg and milk. Mix until soft, creamy and able to pour. Pour the mixture into the cupcake cases or tray.
Bake in the preheated oven for about 20 minutes or until golden. Remove from the oven and allow to cool.
For the icing:
Mix together icing sugar, dried milk and butter until a creamy paste.
When cakes are ready and cool, pour about 1/2 a teaspoon icing on each cupcake.