Cake decoration set in an art institute (8)
I believe the answer is:
angelica
'cake decoration' is the definition.
(I've seen this before)
'set in an art institute' is the wordplay.
'set' becomes 'gel' (I've seen this before).
'in' is an insertion indicator.
'art institute' becomes 'ica' (Institute of Contemporary Arts).
'an'+'ica'='anica'
'gel' going within 'anica' is 'ANGELICA'.
(Other definitions for angelica that I've seen before include "Candied leaf-stalks, used to decorate cakes" , "Candied plant stalks" , "Aromatic plant" , "Candied stem, decorates cake" , "Candied leaf-stalk" .)