Greater Manchester loan fund scrutinized by councillors
An investigation is underway into loans made by a fund managed by the Greater Manchester Combined Authority, including significant amounts to companies linked to Manchester City's owner, during Andy Burnham's tenure as mayor.
Councillors are investigating loans totaling over £1 billion issued from a fund managed by the Greater Manchester Combined Authority (GMCA) since 2015, a period that includes the time Andy Burnham served as Greater Manchester mayor. The scrutiny centers on the transparency of the loan approval process, with concerns raised about why certain property companies received funding.
The Greater Manchester Housing Investment Loan Fund (GMHILF) was established in 2015 with an initial £300 million government investment to support the construction of new homes across the region. Approximately 50 developers have collectively received more than £1 billion from the fund.
Among the recipients were three property companies ultimately controlled by Sheikh Mansour bin Zayed al Nahyan, the owner of Manchester City Football Club. These companies were granted loans totaling around £55 million. The decisions to approve these specific loans were made in 2017 during two meetings chaired by Andy Burnham, who was then the mayor of Greater Manchester. However, the GMCA stated that loan approvals were publicly decided by all members of the authority, not solely by the mayor.
John Leech, the chairman of the GMCA's Overview and Scrutiny Committee and the Liberal Democrat opposition leader on Manchester City Council, expressed concerns about the loan approval process. "We just want to be clear that there is a transparent rather than an opaque process," Leech said, noting that past approvals have been criticized as unclear regarding the reasoning behind successful versus unsuccessful bids.
Leech indicated that the committee aims to understand why companies perceived as successful, such as those linked to Abu Dhabi, needed to borrow public funds. He suggested this appeared inconsistent with the fund's original stated aims from 2015, which were to finance projects that might struggle to secure financing but were not unviable.
Renaker, a prominent Manchester property developer, has received the largest portion of the £1 billion lent from the fund. This developer has been involved in a legal dispute concerning £140 million in loans from the GMCA's fund, which a rival developer claimed were unfair subsidies. While an appeal court found no error in the GMCA's decision to grant these loans, the matter is subject to further appeal.
The Overview & Scrutiny Committee, responsible for reviewing the mayor and GMCA's activities, launched an inquiry into the loans earlier this year, with Leech now leading the work. The committee can investigate, demand answers, and challenge decisions, though it does not have the power to sanction the mayor. It may call witnesses, including the current Greater Manchester Mayor, Bev Craig, to provide evidence.
A spokesperson for the GMCA stated that the loans were issued at commercial rates and have facilitated the creation of 11,000 new homes and the regeneration of brownfield sites, with all funds being fully repaid with interest. The authority emphasized that the lending criteria adhere to government parameters and private sector due diligence standards.
Manchester Life, a joint venture between Manchester City Council and Abu Dhabi United Group, confirmed its involvement in three property developments partially financed by the GMCA loan fund. A spokesperson for Manchester Life noted that the loans were provided on commercial terms, have been fully repaid with interest, and were standard practice for property development funding.
Conservative shadow sports minister Louie French stated that Burnham faces "serious questions" regarding the loans and that "taxpayers deserve transparency over how this money was awarded."