Tech City UK, the organisation set up by prime minister David Cameron to support the burgeoning UK tech sector, saw its funding pulled by UK Trade & Investment (UKTI) for this year, according to a Techworld source.
UKTI, which falls under the Department of Business, Innovation and Skills (BIS), has been providing Tech City UK with an annual budget of approximately £2 million in taxpayer money since 2011 but Techworld understands that rifts between the two organisations intensified recently to the extent that UKTI no longer wished to prop up the quango.
A source close to the matter said Tech City UK fell out with UKTI because of Joanna Shields, the chair of Tech City UK and prime minister David Cameron’s digital advisor, in addition to “the age old overlap of remit” that saw both parties effectively doing the same job at times.
The source said they were informed of the fallout approximately two months ago by a former Tech City UK employee. It's currently unclear when the reported dispute actually took place.
After UKTI pulled the funding, Tech City UK managed to secure investment from Innovate UK, also under BIS.
Following the publication of this article, Tech City UK revealed that it has been funded by Innovate UK since January 2014. This appears to be the first time the agency has announced this publicly.
"The funding for 2015-2016 is £2.2 million and covers Tech City UK’s programmes, policy informing and championing work," said Tech City UK in a statement. "In addition to this, government is funding Tech City UK with £2 million for the new TechNorth programme in 2015-16."
UKTI and Tech City UK both deny any falling out but the question remains as to why the quango had to turn to another government department within BIS for funding.
Tech City UK claims the transition to Innovate UK happened when the organisation changed its remit.
The news comes amid rumours that Tech City UK is increasingly moving towards becoming a privately-funded organisation.
It’s understood that Tech City UK has accepted funding from auditing giants PwC and KPMG, as well as professional services and investment management firm Jones Lang LaSalle.
The organisation’s latest newsletter promoted a “partnerships” breakfast which is being held on 15 May and is open to everyone via Eventbrite.
Techworld registered to attend the open event and received tickets by email only to be told subsequently by someone at the organisation that a “mistake” had been made.
“Unfortunately, the event has been oversubscribed and there is now a waiting list,” wrote the organisation’s head of partnerships, Becky Golland. “This should have been clear when you tried to register on Eventbrite, but I think our event manager made a mistake when the page was set up.”
Golland did however invite Techworld to the the next breakfast, which will take place within the next few weeks, she said.
A Tech City UK spokesperson said: “In order to deliver greater support to the digital business community we complement a small percentage of our funding through sponsorship – a common model among similar organisations.”