For the sponge: Preheat the oven to 180C/160C Fan/Gas Mark 4. Then grease and line a 33x22cm cake/roasting tin and set aside.
In a large bowl, cream together the butter and sugar until light and fluffy. Then beat in the vanilla and yoghurt. Then beat in the flour, baking powder and salt. Your batter will be very thick at this point. Finally, beat in the milk until just combined. Then spread evenly in your prepared tin, and bake for 25-27 minutes until golden brown and a toothpick inserted into the centre comes out clean.
Leave to cool in the tin for 10 minutes, then remove from the tin and place on a cooling rack to cool completely.
For the icing: In a medium bowl, whisk together the icing sugar and water until there are no lumps remaining and you have a fairly thick paste. Place the cooled cake back into the baking tin for ease, and pour over the icing making sure its even. Then scatter over the sprinkles and leave to set.