Independent Brexit impact analysis

Published: Thursday, 22nd November 2018

Birmingham City Council commissioned an independent report to give the best possible indication of what leaving the EU could mean for the city and region.

The analysis draws on representation from a range of stakeholders from the public sector, academic sector and businesses from across the West Midlands Combined Authority area.

Given the current uncertainty around the proposed withdrawal agreement, the report necessarily covers a range of scenarios and is by no means definitive.

The report highlights issues and concerns in the following key areas: trade; infrastructure and investment; ‘just in time’ impacts; employment; productivity and skills; business adaptability; EU funding; economic and financial; security; data sharing; public services.

Some key points from the report:

  • The effect on businesses, given that the region is more export-oriented than other parts of the country. Some 40% of regional merchandise exports are to EU destinations
  • The automotive sector is of particular concern for the region, given that only 40% of components are sourced locally, making it vulnerable to supply interruptions and delays
  • It is essential that the city and region has formal input into future trade negotiations in order to support the local economy
  • The loss of EU funding streams will be another loss to local government funding, with a major funding gap opening up immediately after leaving, unless a replacement aid fund is proposed
  • As an interim measure to offset the impact of losing EU funding, the Core Cities proposals for the Shared Prosperity Fund will need to be adopted in full to avoid a loss of delivery capacity
  • Regardless of the final form of disengagement, the impact on affordable housing, and the public sector workforce, shared services and the environment, are likely to be significant and profound. 

Cllr Brigid Jones, deputy leader of Birmingham City Council, said: “Local government has been subject to almost a decade of austerity and funding cuts, and Brexit adds a further layer of complexity and difficulty, exacerbated by uncertainty around the terms by which we will leave. It is therefore vital that government accelerates local devolution funding so we have some power to mitigate the impact.

“As responsible public authorities we are putting processes in place to prepare as best we can for the implications of a ‘no deal’ exit, working with regional stakeholders to develop resilience and contingency plans. This, of course, places yet another financial burden on already stretched local authority resources.

“Leaving the EU does not mean a withdrawal from open collaboration with cities and regions across Europe or the rest of the world. We have a strong track record of bringing in major investment from European and other global partners which has brought prosperity, growth and employment to the region and UK as a whole. Given the current level of uncertainty it is crucial that there is open dialogue between central government and city leaders, so there can be a collective effort to prepare the region and country appropriately.”

The summary and full report can be found here.

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