Cisco Systems (Nasdaq: CSCO) and Microsoft (Nasdaq: MSFT) are among technology companies that will open new offices in East London as the U.K. government pledged $81 million to revamp the startup hub known as the Silicon Roundabout.

The funds will go to refurbishing the neighborhood to the East of London’s old city, to create the “largest indoor civic space” in Europe to host classrooms and working space, the Tech City Investment Organization, a branch of the government’s trade and investment department, said in a statement today.

London has been working to attract technology jobs and investment to the city as the U.K. grapples with budget shortfalls and unemployment. Microsoft has committed to opening a technology development center which will employ young people as apprentices, Tech City said in the statement. Cisco will partner with University College London and DC Thomson, the Scottish publisher of the Beano comic series, to create a center that will host digital and media companies.

“The U.K. is in a global race, and I am determined that we as a government continue doing everything we can to equip the U.K. to compete and thrive,” Prime Minister David Cameron said in the statement. “As well as backing the businesses of today, we are creating an aspiration nation and also backing the innovative, high-growth businesses of the future.”

The British Chambers of Commerce cut its growth forecasts for 2013 and 2014 this week as George Osborne, chancellor of the exchequer, announced a fiscal plan that cut welfare spending and pensions of the wealthy. The unemployment rate in the U.K. for the three months ended in August was 7.9 percent, or 2.53 million jobless, according to the Office for National Statistics.

Cisco operates its second largest corporate campus outside of its California headquarters in Research Triangle Park, N.C.

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