Manchester Council and Abu Dhabi Owners Face New Loan Scrutiny

A scrutiny committee at the Greater Manchester Combined Authority (GMCA) will investigate loans made to property companies controlled by the owners of Manchester City. The review focuses on funds distributed through the GMCA’s housing investment scheme while Andy Burnham served as mayor. Burnham, who is now Prime Minister, chaired two meetings that approved approximately 55 million pounds in loans to firms ultimately owned by Sheikh Mansour bin Zayed al Nahyan.

The investigation follows a guilty verdict in September. An independent commission found that Manchester City broke Premier League financial rules between 2009 and 2018. The club allegedly inflated sponsorship revenue to hide more than 830 million pounds in secret funding. The club has appealed the ruling, but the decision has intensified questions about the financial ties between the club’s owners and local government.

The relationship between the club and the city began in 2008. Abu Dhabi United Group (ADUG) purchased Manchester City in a 200 million pound deal. Six years later, ADUG formed a partnership with Manchester City Council known as Manchester Life. The joint venture planned to build 6,000 homes over a decade with up to 1 billion pounds in investment. To date, about 1,500 homes have been completed across nine sites. The project also included the redevelopment of the stadium area into the Etihad Campus and the construction of Co-op Live, the largest indoor arena in the UK.

Critics have questioned the value of these deals. A 2022 report by the University of Sheffield raised concerns about transparency and public value. Prof Adam Leaver, a co-author of the report, stated that commercial secrecy makes it difficult to determine if the council secured the best possible deal. He noted that it is not possible to know how much profit ADUG made compared to the council. The council says it has made just under 3 million pounds in super-profits so far and expects another payment soon.

Political leaders defend the partnership. Sir Richard Leese, who led the council when the deal was struck, argued that Abu Dhabi investment created value during a recession. He said development in Manchester had stopped after the 2008 financial crash and that the partnership kick-started projects in the Ancoats area. Bev Craig, the mayor of Greater Manchester, described the owners as a catalyst for regeneration. She recently said that if the club loses its appeal, it should face sanctions, but she noted that a football story should have stayed a football story.

Scrutiny increased after Burnham’s comments on the verdict. He said he would be really concerned if the owners sold the club and praised them as a huge partner in building modern Manchester. Downing Street later stated that Manchester City is not above the rules. Questions also emerged regarding hospitality dinners between Burnham and Manchester City chairman Khaldoon Al Mubarak in 2017 and 2018. Burnham told MPs he was happy for everything to be set out in full. The GMCA investigation into the loans will determine if public money was appropriately allocated to the developers.

The Greater Manchester Housing Investment Loan Fund lent more than 1 billion pounds to about 50 developers. Burnham chaired the meetings that approved the 55 million pounds in loans to firms owned by the club’s owner. The decisions were made by all members of the GMCA. There is no current suggestion of wrongdoing, but critics have asked why wealthy companies needed public borrowing. The committee will review the details of these transactions in the coming months.