The £50 million that David Cameron pledged to regenerate Old Street roundabout, considered by many to be the epicentre of London's Tech City, is being held by the Treasury until City Hall can convince government of its regeneration plans.
The funding, announced in December 2012, was going to be used by City Hall and Tech City UK to give the 'Silicon Roundabout' (above) a much-needed makeover so that it could act as the poster-child for London's vibrant tech sector. As part of the investment, the government pledged to build a high-tech institute on the site of Old Street roundabout.
Speaking at the time of the announcement, Cameron said: "We're investing in creating the largest civic space in Europe - a place for start-up companies and the local community to come together and become the next generation of entrepreneurs."
The new building, which was set to include a 400-seater auditorium with boardrooms, labs and workspaces, and high-speed T4 broadband, was going to be used to help thousands of students develop their programming and business skills. It was also going to host 3D printing services for visiting start-ups and other members of the wider community.
The government said the centre would support around 200 start-ups per year, help 1,000 young people find skilled employment and host two major international conferences for the creative and tech industries each year.
At the time of the announcement, Mayor of London Boris Johnson, said the civic space would provide a "vital resource to nurture upcoming technology and creative superstars from around the world, while driving huge investment into the capital and helping to create thousands of jobs."
However, the £50 million set aside to build the civic space and the wider regeneration of Old Street roundabout is being held back.
"Given that a permanent solution for the roundabout will be technically difficult and some way off that money has now been held pending alternative proposals for its use," a City Hall spokesperson told our sister site Techworld.
"The Mayor's team are 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."
Tech City UK initially said building work on the new civic space would begin in 2014 but this week it revealed that the £50 million investment has remained with the Treasury and will not be released until plans have been agreed and formalised.
Old Street tube station 'to become less ugly'
While many of the redevelopment plans initially outlined by David Cameron are unlikely to come to fruition any time soon, City Hall added that Transport for London is set to begin work on environmental improvements including landscaping of the Old Street roundabout and improvements to the subway and station.
George Burgess, the 21-year-old entrepreneur behind Shoreditch-based education app, Gojimo, told Techworld: "Ultimately, Shoreditch will still thrive as a great start-up ecosystem, but the government should be following through on commitments it makes, particularly those which could have such a strong benefit for the wider community.
"I'm particularly disappointed that the government won't be following through with it's student centre. This country needs to encourage more young people to take up programming and to think in a creative and entrepreneurial manner."
David Gildeh, CEO of East London based IT infrastructure monitoring firm, dataloop.io, said: "Old Street definitely could do with a regeneration as its very run down for an area that is apparently the hub of digital businesses in the UK."
David, who is currently running his business out of a Microsoft accelerator, added that he believes Old Street is slightly overhyped. "We actually think Kings Cross is a better area and will get our office around there," he said. "With Google's massive investment their for their new office and all the transport connections, we think it will be a better area for our company long term in London."