Much of Stronger Towns Fund to be allocated to leave-voting towns in north of England and Midlands

Left-behind towns in England are to get a £1.6bn funding boost as part of a package of measures to win support for Theresa May’s Brexit deal among Labour MPs, who said the new cash would not buy their votes.

Labour MPs including Lisa Nandy and Gareth Snell who have signalled they might back May’s deal criticised the approach and said the cash would do little to tackle the effects of austerity.

The communities secretary, James Brokenshire, denied the money was a Brexit bribe and said it would be enough to have a “transformative” impact on areas that felt left behind.

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Speaking on BBC Radio 4’s Today programme on Monday, he refused to say how many towns would benefit, but pointed out that the cash would be allocated whatever happens in next week’s meaningful vote on the EU withdrawal bill.

“This funding is there regardless of the outcome … there is no conditionality,” he said. “This funding is there to see that towns grow … and we leave no part of our UK left behind.”

Brokenshire said the money would be available until 2026, which would equate to as little as £320m per year assuming that the funds take a year to allocate.

The prime minister said the Stronger Towns Fund, much of it allocated to the north of England and the Midlands, would go to areas that had not “shared the proceeds of growth”.

May, who is also expected to announce post-Brexit guarantees on workers’ and trade union rights in the coming days, said £1bn had been allocated already, of which more than half would go to the north of England, where places such as Wakefield, Doncaster and Wigan voted heavily for Brexit.

About £322m will go to towns in the Midlands, where the leave vote in places such as Stoke-on-Trent, Mansfield and Wolverhampton was high.

Nandy, the MP for Wigan and a former shadow minister, said towns such as hers had been “shamefully ignored for decades” and the new fund must represent the start of an overhaul in the government’s approach to investment.

“If it is a one-off payment designed to help the prime minister ahead of a key Brexit vote, it will fail and confirm to people in our towns that the government is not serious in its commitment to our communities,” she said.

Snell, the MP for Stoke-on-Trent Central, one of the MPs who has been negotiating with the government about new guarantees for workers, said the money for his region would not even cover the cuts made by his local council.

“Regardless of how much money the prime minister promises communities like the West Midlands, I will make up my mind on how I vote based on the terms of the deal,” he said. “There is no price on my vote. The West Midlands is getting £212m, which is a good starting point to address the problems we are facing but in context, that £212m for the whole region is less than the total amount that Stoke city council has had to cut from its budget in the last nine years because of austerity. So it is not a big windfall that will make everything right.”

No 10 said communities would be given some say about how to spend the money in their towns via local enterprise partnerships. The remaining £600m will be available through a bidding process to communities in any part of the country, a sweetener to Conservative MPs who had demanded their areas receive equal treatment.

Announcing the fund, May linked the new money directly to the leave votes from the towns it would benefit. “Communities across the country voted for Brexit as an expression of their desire to see change. That must be a change for the better, with more opportunity and greater control,” she said. “These towns have a glorious heritage, huge potential and, with the right help, a bright future ahead of them.”

Conservative MPs were disconcerted that the pledge had been linked to securing the votes of Labour MPs. Robert Halfon, the MP for Harlow, pushed the prime minister during PMQs last week for reassurance that towns such as his in Essex would be able to make the case for more funding.

“I welcome that £600m has been pledged to towns across UK – like Harlow –with significant disadvantage and deprivation,” he said. “It is vital that this fund is not seen as pork-barrel politics, but a way for all poorer communities to benefit post-Brexit.”

Brexiter MPs also expressed caution about the cash. Simon Clarke, the Conservative MP for Middlesbrough South and East Cleveland, who previously voted against May’s deal, said: “What this money won’t do is buy any votes in parliament. I am determined to deliver a proper Brexit, which means fixing the backstop, while all the local Labour MPs are unapologetically in denial about the need to leave the EU at all.”

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Labour and campaigners for a second referendum dismissed May’s announcement. The shadow chancellor, John McDonnell, said the fund “smacks of desperation from a government reduced to bribing MPs to vote for their damaging flagship Brexit legislation”.

He said towns were struggling because of “a decade of cuts, including to council funding, and a failure to invest in businesses and our communities”. Labour would establish a network of regional development banks to finance growth in smaller towns, he said. “No Brexit bribery. Stable investment where it’s most needed.”

Anna Soubry, part of the breakaway Independent Group, said it was “a desperate measure to buy votes” and compared it with the £1bn the DUP secured for Northern Ireland as part of its confidence and supply agreement.

“Now Theresa May is so desperate to get votes for a bad EU withdrawal agreement she is relying on the same old trick,” Soubry said. “Voters will not be fooled, especially those in areas which voted leave and are now demanding a people’s vote because they know whichever way you do it, Brexit will harm their futures.”

• This article was amended on 5 March 2019 to correct a sentence that implied Wakefield is a town – it is a city.