Councillors open review of housing fund lending
A Greater Manchester fund that provided £55m to three companies ultimately controlled by Manchester City's Abu Dhabi owner will come under examination by local councillors. The overview and scrutiny committee of the Greater Manchester combined authority, chaired by Liberal Democrat councillor John Leech, intends to look at how loans were approved while Andy Burnham held the mayor's office.[S1][S2]
In 2017, £55m was lent to three property companies whose ultimate owner is Sheikh Mansour bin Zayed al-Nahyan, the UAE's vice-president and deputy prime minister. The funding came through a fund managed by the Greater Manchester combined authority and was meant to help pay for a big housing scheme, Manchester Life, promoted as a way to build 6,000 homes. According to the authority, the loans have been fully repaid, yet it has not disclosed the interest rate or said why a member of one of the world's wealthiest families was eligible for such support.[S1]
Questions over transparency and eligibility
Leech said the approval process had drawn criticism in the past for being very opaque, with observers unable to understand clearly why some applicants succeeded and others did not. He argued it was reasonable to ask why apparently thriving businesses would need to borrow public money through the scheme, noting that in the Abu Dhabi case access to funds elsewhere would not be expected to be a problem. In his view the process appears out of step with the aims set out when the fund began in 2015.[S1]
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The fund has distributed £1bn to 50 separate developers since 2015, according to Leech. A combined authority spokesperson said the body is assisting the committee with its inquiries, that the fund has produced 11,000 new homes and that it is generating development worth billions of pounds without cost to the taxpayer. The spokesperson added that lending decisions are taken publicly, that no viable scheme was ever rejected and that the fund is open to all developers, with criteria set by the government and shaped with outside financial specialists to match private-sector due diligence.[S1]
Pressure around the club and the mayor
The scrutiny comes after weeks of questions about the prime minister's ties to Manchester City's wealthy owners, following the club's admission that it overstated its income by £900m over nine years in breach of financial rules. Burnham, a former Greater Manchester mayor, was accused of backing the owners after that unprecedented breach, having called them a huge partner in building modern Manchester and said he would be really concerned to see them leave the sport.[S1]
It also came to light last week that Burnham had met the club's owners during hospitality at the Etihad Stadium only weeks before the loans were signed off. That meeting was later removed from public records and then reappeared, leading the prime minister to ask the combined authority to manually search his meetings to guarantee full transparency. Downing Street would not comment, and a separate report said Angela Rayner was accused of dodging scrutiny of the loans.[S1][S3]
