Nearly £4m of public money has been ploughed into the Tech City initiative, a government-backed project that aims to spur the success of technology start-ups in East London.
The Tech City initiative's budget for the 2011 and 2012 financial year is £1,791,500. On top of that it has been allocated a £2m grant fund for projects that seek matched investment from the private sector, according to a response to a parliamentary question, published in Hansard on Monday.
The Tech City initiative, which is backed by UK Trade and Investment, has hosted various networking events for London-based entrepreneurs in recent months. In January it invited entrepreneurs from Austin, Texas over to the UK to tour the start-ups around Shoreditch and in March it brought in mentors to coach London entrepreneurs on how to develop their businesses.
As the government grapples with the UK's poor growth prospects, it has tried to capitalise on the success of UK start-ups such as Songkick and Moshi Monsters-creators Mind Candy by drawing attention to East London as an incubator of technology-orientated companies.
In November, 2010, David Cameron announced plans to plough almost £400m of public money into funding businesses and creating 'technology and innovation centres' across London. The prime minister also encouraged private businesses to get involved.
Subsequently, companies ranging from Cisco, to Google, to F5 Networks have all poured money into the area. In January, 2011, Cisco pledged to invest $500m into the UK with an undisclosed amount going to Tech City, while Google announced plans in September to lease a seven-storey building in East London to create Google Campus, a place to host and incubate start-ups. The company plans to give more details on Campus in the future, it said in March.