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The money was meant to be used to create facilities for startups and entrepreneurs by building incubator facilities in the East End.
But it has now been confirmed that the £50m earmarked for Tech City two years ago has not been used so it is going back into general expenditure.
City Hall and Number 10 gave Computer Weekly exactly the same response when asked why this money had been withdrawn:
“Given that a permanent solution for the roundabout will be technically difficult and some way off that money has gone back to general expenditure,” said a City Hall/Number 10 spokesperson (delete as appropriate.
“It is normal practice for any money that hasn’t been spent to return to the Treasury to help reduce the deficit,” added Number 10.
Surely that money should be redistributed elsewhere?
According to the statement, the Mayor’s team are now seeking alternative funding for a landmark proposal in Tech City and are collaborating on alternatives that might achieve the original objective over a shorter timeframe.
Meanwhile the statement was keen to point out that Transport for London is about to begin work on environmental improvements including landscaping of the Old St roundabout and improvements to the subway and station.
“These improvements form part of the wider work TfL is carrying out across London to deliver the recommendations of the Mayor’s Roads Task Force to tackle the challenges facing London’s streets and roads. This independent body brings together a wide range of interests and expertise, united in their commitment to major investment in street management and urban design.”
So Old Street will have a tidier tube station and pretty flower beds adorning London’s “rival” to The Valley?
But does the tech startup scene even need government’s help anymore? Alastair Mitchell. CEO and co-founder of Huddle said Silicon Roundabout is currently regenerating just fine by itself. In fact Mitchell moved the Huddle team out of its Old Street offices because it was being knocked down to build bigger offices.
“I’m a big fan of market forces growing funds and investments,” he said.
“I think government has missed the trick,” he added. “There are far greater ways to drive innovation, not just in Silicon Roundabout but other parts of London, Birmingham, Sheffield, Manchester and also Cambridge. Lots of companies flock to areas of regeneration because the office space is cheaper.”
Mitchell said that the Tech City area of London has done a great job of attracting tech companies, incubators, networks and investment. He believes government needs to fix the fundamental problems first -which is spending more with SMEs.
“They’re failing woefully on their objective of 25% of spend going to SMEs – who often operate in areas of regeneration,” said Mitchell. “They’re not pumping money into the SME economy, which would be the single driver of regeneration.”
So rather than one-off funding projects, if government spent money regularly with SMEs – as they have promised to do – there would be less of a need to pimp up the underground and plant daffodils in the middle of Old Street.