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20.07.16

Manchester employment programmes under threat following Brexit

The Work and Health programme in Manchester may not receive funding because of financial uncertainty from the UK’s vote to leave the European Union, the city’s council chief executive has said.

Sir Howard Bernstein’s report to the council executive’s meeting on 27 July sets out the first assessment of the impact of last month’s referendum result on England’s biggest devolved city.

Devolved bodies have raised concerns about how the loss of funding from the EU will affect development plans, although Manchester’s interim mayor Tony Lloyd promised that the city “will continue to transform and grow”, and has signed a partnership deal with Liverpool mayor Joe Anderson.

However, Sir Howard’s report provides the first warning that growth in Manchester may be affected by the referendum result.

It shows that Greater Manchester was due to receive a total of £145m from the European Social Fund (ESF) in 2014-20, including £8m to expand the Working Well programme, which is intended to help recipients of the Employment Support Allowance find work.

In addition, the ESF was due to provide £20m to support the Work and Health Programme, an employment programme for benefits claimants with disabilities and long-term health conditions that is due to be piloted across the country.

It also promised to provide further funding for training and employment support.

But Sir Howard’s report warns that these programmes are “in doubt” following the referendum result.

He says that although DCLG and DWP have both promised that existing contracts will be honoured, they will not sign new EU funding contracts at the present time.

The report notes that the future of the employment programmes is “of particular significance for the ambition to establish Manchester as a progressive and equitable city by expanding our programmes for people with complex and multiple problems, and by helping people to find work, stay in work and progress in work”.

Manchester has developed a widespread programme of services reforms, using its devolved powers, including a plan to integrate commissioning powers between the council and the city’s CCGs and social care reforms.

Greater Manchester was also planning to use transnational funding to support health and transport innovation. It may still be able to access those funds under the EU exit deal, as Norway has been able to, but the fate of the funds is unclear.

Tony Lloyd has invited new prime minister Theresa May to a meeting with Northern combined authority leaders in order to ensure that they can participate in EU negotiations.

Loss of confidence

The report also says that Greater Manchester may not now be able to access a planned £176m from the European Regional Development Fund (ERDF).

The funding may only be available until 2018, which may not give Manchester enough time to create and implement a meaningful fund, and the Northern Powerhouse Investment Fund may also be in a similar position.

Sir Howard says that development in Manchester may also suffer from a loss of confidence from investors, and says the city must reassure them that it is “open for business”, similar to the campaign in London.

He urges the council to continue investment in development projects, saying: “A clear way to provide that reassurance is to invest our own funding in key developments, giving those investors the confidence to continue with their plans, especially in relation to commercial property developments.”

However, the report also says that “urgent work” is required to investigate options to maximise levels of housing development and interest.

Greater Manchester is due to publish an assessment of the level of housing need in the region at the end of the month, but this could be affected by the referendum, with research suggesting share values among housing developers has fallen by 40-45% since the result.

Sir Howard also says that Manchester City Council will carry out an analysis of referendum results at ward level to understand social divisions in the city. He noted that the level of support for leaving the EU increases “almost in direct proportion with the distance from the centre”, whilst residents further from the city also have lower levels of income and educational attainment.

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