Delays to Castle House tech hub plan in Sheffield

Cash for the project in Sheffield city centre was announced in the Budget in 2015.

In April, Sheffield-based Kollider Projects won a competition to run it.

But it is understood government red tape around making it ‘state aid compliant’ - paying public funds to a private sector organisation - has caused delays.

A Sheffield City Council spokesman said: “Following a series of positive engagements with the developer we believe a deal is within reach and hope to be in a position to formally announce more details after Christmas.”

The building is owned by U+I.

The plan is for Castle House to become a £3.5m incubator for digital start-ups in a move set to boost the tech sector and a rundown area of the city centre.

The five-storey partly-listed structure has been empty for several years, apart from a vintage clothing shop on the ground floor.

It is set to have an interior makeover before housing small firms specialising in software, hardware, 3D printing and product design.

Last year, Sheffield City Council ran a competition to run it which attracted pitches from several organisations.

Kollider is led by Freeths lawyer Adrian Hackett and entrepreneurs Steve Petty and Nick Morgan.

Well paid digital jobs are seen as a key growth area.