Manchester could get a Royal Opera House in what culture secretary Andy Burnham says could be the most significant development in British arts for a generation – but at a cost which is almost certainly out of reach for the foreseeable future, according to a report for ACE.

Covent Garden and Manchester City Council have proposed that the Palace Theatre could be rebuilt as a northern branch of the Royal Opera House.

Consultant Graham Marchant’s evaluation says that “potential exists for a huge step change in artistic provision for the region, the largest conurbation outside London - with 10 million people within an hour’s drive time of Central Manchester. Whether audiences will grow to the extent needed remains untested but such significant changes can lead to massive new audiences for the arts”. But it says that it would be likely to cost £100m to create, and revenue costs of at least £15m a year.