WORK has started on a £1.3m business centre for a former steel town.

The Innovation Centre, in Consett, County Durham, aims to help tackle a serious shortage of office space in Derwentside. It will be marketed at expanding technology businesses.

The centre will be built by Project Genesis Limited, for Derwentside Industrial Development Agency (DIDA). The site is next to DIDA's offices in Steel House, on the Ponds Court Business Park, part of the redevelopment of the former British Steel works.

DIDA chief executive Eddie Hutchinson said: "This type of high specification office space is badly needed in the area.

"We believe that it will prove very attractive to new ventures in technology-related sectors, including the growing number of university-based spin-out companies.

"One of the centre's major attractions is that clients will be able to set up without any fuss through an 'easy-in, easy-out' arrangement." The 7,500sq ft building will be completed in November and will have 16 office units ranging from 150sq ft to 600sq ft, all equipped with the latest telecommunications and broadband facilities.

It is expected that it will house 16 tenants, employing 35 people.

DIDA will provide business support services, along with secure parking and a shared reception area.

The development is being funded by DIDA, along with Single Programme funding from regional development agency One NorthEast, through the County Durham Sub Regional Partnership, and by the European Regional Development Fund.

"Derwentside has come a long way since the 1980s, but we must continue to do everything we can to encourage business growth," said Mr Hutchinson.

"This is a major investment for DIDA, but we have been aware for some time that Consett needed high quality office accommodation.

"We know that Derwentside is a great place to do business and has many benefits to offer young companies. We are delighted that the groundwork for the centre is now under way and are looking forward to our first tenants moving in by the end of the year."