On July 27, 2011 the UK Research Council awarded a £5.9m grant to the “digital city exchange” programme of Imperial College. According to the press release, the funds are to be used to establish a new research center focusing on “smart cities” technologies. 
A multidisciplinary team, involving businesses, public administrations and academia, is being put in place to use the city of London as a test bed for emerging smart cities hardware, software and processes. The article in the Financial Times very perceptively puts the focus on the following statements issued by spokesperson, David Gann, the head of the innovation and entrepreneurship group at Imperial College.
"New sensors and real-world monitoring can be combined with “cloud computing” to bring greater efficiency and new services to cities. For instance, data about peak traffic periods and local sensors could be used to avoid congestion for supermarket deliveries.
“London, with all its economic and social diversity, will be a very good place to launch some of these capabilities into new cities around the world and create new jobs and growth. The act of invention is at the point of consumption.”
Another article about the grant emphasizes, as did the press release, more of an urban planning angle.
It's very exciting to have this center establishing itself, although the size of the grant does not seem in line with the ambitions and objectives as they are described, and there should be others of its kind connecting to it as well.