Greater Manchester 'to lose out on' £320m over Brexit

Chief Executive of Manchester City Council Sir Howard Bernstein announces the northwest results Image copyright Getty Images
Image caption Sir Howard Bernstein said "urgent work" was needed to look at possible implications of Brexit

Greater Manchester is set to miss out on £320m after the UK voted to leave the European Union (EU), a report leaked to the BBC has warned.

The report by Manchester City Council's chief executive said EU funding up to 2020 "would no longer be forthcoming".

Sir Howard Bernstein's briefing note was sent to council leaders on 30 June, a week after the Brexit vote.

HM Treasury said there would be "no immediate change" to EU programmes including the "Northern Powerhouse".

'Worst impacts'

Sir Howard warned there would be "significant implications" for work programmes and schemes that support small businesses.

Local high profile schemes to get the long-term sick back to work will need to be reviewed, the briefing note said.

Sir Howard said a plan was needed "to mitigate the worst impacts of withdrawal".

The UK voted to leave the EU by 52% to 48% in a referendum on 23 June.

Image caption The briefing note was sent to the leaders of the ten councils that make up the Greater Manchester Combined Authority

Greater Manchester was expecting to receive £176m of the European Regional Development Fund and £145m of the European Social Fund up to 2020.

This money had to be matched by a minimum of 50% non-EU funds, creating a programme of nearly £650m.

Sir Howard said there had been "significant delays" on agreement between the government and the EU and so only £36m of funding had been officially contracted for Greater Manchester.

After the referendum, the government promised verbally that existing EU funding contracts would be honoured but it "would not be signing any new" ones, he added.

Not allocating these funding contracts would lead to a shortfall of £285m, the note suggested.

Image copyright Reuters
Image caption The government said it has "ensured that EU funding is directed towards the UK's economic priorities"

Interim mayor for Greater Manchester, Tony Lloyd, urged the government to "replace funding" lost through Brexit.

"Greater Manchester did quite well out of the European funding streams in the past and now we have got to say, very directly, you now have to live up to the promises made during the referendum campaign," he said.

'Nervous' investors

A spokesperson for HM Treasury said: "The UK remains a member of the EU and that means there is no immediate change to EU programmes.

"The government has ensured that EU funding is directed towards the UK's economic priorities, like the Northern Powerhouse."

However, Sir Howard said Brexit had put future investment from North America at risk because investors were "very nervous at this point".

The report said initial conversations with local businesses suggested they were planning to "pause or hold investment actions" while they waited for the situation to stabilise.

Read more: The facts behind claims about our relationship with the EU

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