Brexit may cost Northern Ireland economy £55m in future investments
Around £55m of critical funding for Northern Ireland could be lost after the brakes were put on a scheme in the wake of Brexit, the Belfast Telegraph can reveal.
The Northern Ireland Investment Fund was outlined in the Executive's Budget, with more than £55m set aside for the infrastructure scheme.
Now, in an email seen by the Belfast Telegraph from the Department of Finance, it says "uncertainty" and a "greater reluctance" by the European Investment Bank (EIB) means that it is now "reassessing possible delivery models".
The Department of Finance was advertising for a 'fund manager' to run the scheme, but that is now on hold.
And it's understood if the cash is not spent by the conclusion of this financial year - ending March 31 - it will have to be returned to the Treasury.
There is now a "clear risk of losing a lot of the funding" to Westminster, which is a "situation we cannot afford", according to John Armstrong, managing director of the Construction Employer Federation.
The programme was due to fund a range of key areas of infrastructure in Northern Ireland.
That included urban regeneration, energy, telecoms and social housing.
The email said: "There is much uncertainty and greater reluctance on behalf of the European Investment Bank in playing an active role in the delivery of, and co-investment into, the Fund in the post-EU referendum context.
"The department is therefore currently reassessing possible delivery models. As soon as this work has concluded, a decision on the fund manager procurement will be taken."
Another industry expert said it was a "pretty big setback".
It was initially due to get the backing and support of the European Investment Bank, but it is now reluctant to get involved in the wake of the EU vote.
"While to some extent understandable in the context of Brexit, this announcement is nonetheless extremely disappointing for a local construction industry facing seismic sustainability challenges and for the partnership approach between the public and private sectors that was proposed," Mr Armstrong said.
"The Investment Fund had, rightly, earmarked specific areas where we have specific infrastructure challenges, such as urban regeneration and housing."
He said questions must now "urgently be asked, and reassurance sought" about what happens next.
"It may well be that the UK Government will propose an infrastructure stimulus in the Autumn Statement but it would be unwise to wait for further detail on this while a significant pot of money remains at our immediate disposal. Given the length of time a procurement process for a fund manager would take, in addition to the completion of deals to get the finance flowing, there is a clear risk of losing a lot of this funding to the Treasury at the end of the financial year."
The Department of Finance did not respond when asked to comment.
Finance committee deputy chair, Claire Hanna, said: "We do not want to be in a position where we are returning money for much-needed capital investment, at a time when we are facing the loss of infrastructure funding from Europe.
"We have to hold on to every penny. Whether this is an early consequence of Brexit...it would appear uncertainty around the EIB has stalled the recruitment."