Following the local elections in May 2014, the Labour Party held all 96 seats on Manchester City Council. It was a one-party state without any real opposition.
Sir Richard Leese, as the party leader, and Sir Howard Bernstein, the council’s powerful chief executive, had been running Manchester for almost two decades and were now in complete control.
It was that same year that the city council signed a controversial profit-sharing property deal with Abu Dhabi United Group (ADUG), the ultra-rich owners of Man City football club.
The deal is being looked upon with fresh eyes and some concern in light of the Premier League cheating scandal, after it emerged that the authority received less than £3m for building almost 1,800 homes under the agreement.
Because ADUG booked its profits offshore, the council can’t be sure that this definitely represents the full value they should have received.
The i Paper understands Manchester council’s new generation of leaders – including chief executive Tom Stannard, who joined in 2025, and Garry Bridges, who was elected Labour leader last month – are now “seeking assurances” over the 2014 agreement.
It is a reassessment that could lead to fresh questions for Andy Burnham, who has been criticised for his reaction to the Man City saga and alleged closeness to the club’s Abu Dhabi owners.
Manchester’s current leaders do not believe there was any foul play in previous dealings with Abu Dhabi, but The i Paper understands that there is an acceptance that some property agreements which were made under previous administrations would not be made now, and a desire to put some distance between the parties going forward.
A previous council report, published in July, had already discovered “weaknesses in documentation, monitoring and assurance, particularly around historic overage arrangements”.
The repositioning has been echoed by Bev Craig, Labour leader of Manchester City Council from 2021 until August this year when she replaced Burnham as Mayor of Greater Manchester.
When asked about deals with ADUG on BBC Radio Manchester last week, Craig stated that she “wasn’t around in the decision-making of the time” but praised the wider investment which has helped deliver new facilities to the city, including a library, leisure centre and sixth form college.
Craig said she has never seen any evidence of “wrongdoing” but added: “There are no live deals on the table with the GMCA [Greater Manchester Combined Authority] or Manchester City Council that take us into the future.
“I’m pretty assured in terms of what I’ve seen, but it isn’t something that’s relevant to the future.”
More awkward questions over Abu Dhabi links
Critics say Burnham’s judgement should be called further into question by the fact that his former colleagues in Manchester are now trying to distance themselves from the Abu Dhabi owners.
When first asked by the BBC about the consequences of Man City’s financial cheating, Burnham said he would be “concerned” if the owners walked away from the club, prompting accusations of political interference.
He later backtracked, insisting that “no one is above the rules” and that those found to have broken them should face “appropriate consequences”.
Man City strongly denies the findings of an independent commission, which said the club is guilty of more than 100 offences of breaching financial rules and has submitted an appeal.
But Burnham’s opponents have leapt on his initial comments.
Hannah Spencer, the Green Party MP for Gorton and Denton, told The i Paper that Burnham has “serious questions to answer about why he seems so keen to back Manchester City’s billionaire owners” and raised concerns about the deals for “luxury high-rises” that were approved under Burnham’s time as mayor.
Burnham has said he will publish all details of his dealings with Man City in his previous mayoral role.
Details of the council deal now under the spotlight
The 2014 property venture between ADUG and the council has become one of Manchester’s most successful developers.
Named Manchester Life, the company has built around 1,800 flats around Ancoats, a former industrial slum now often described as one of the “coolest neighbourhoods in the world”.
But critics say the council gave away land too cheaply to ADUG and didn’t get enough in return.
According to details of the deal shared with The i Paper, the council was not entitled to receive any “overage” payments – extra cash given to a landowner after the value of the property has increased – for more than 10 years.
A “collaboration agreement”, signed in 2015, also said that the council would not be paid until ADUG had recovered all its costs, plus an 8 per cent annual return on the first phase of the development, and 10 per cent on the second phase of development.
As such, Manchester council only received the first overage payment of £2.9m in the past two years. It is understood a second payment is currently being calculated.
Under the terms of the deal, Manchester council also agreed to give ADUG “first dibs” on buying up any public land within a defined area of the city – an arrangement which has been described as a “sweetheart deal”.
An internal review
The council did receive more than just the overage payments. At least £5.2m was generated from the land it sold to the joint venture and a further £17.6m has been raised in council tax income from Manchester Life properties.
However, it is understood that commentary on the deal in the fallout of the Man City cheating scandal has prompted the council’s leaders to carry out an internal review.
A source said that given the “current speculation” around Man City owners’ dealings with leaders in Manchester, the council’s current leadership is “seeking assurances” on deals made “before their time”.
Bernstein died in 2024 and Leese has come out in his defence of both the deal and Man City’s owners more generally, insisting the club will be proven innocent of breaching financial rules and that their investment was crucial to the regeneration of Manchester.
Both Bernstein and Leese accepted positions at Man City after stepping down from their council roles.
Leese, who is honorary president of Man City football club, has claimed that the 2014 ADUG deal was signed at a time when there was little interest in developing land in Ancoats.
Addressing the idea that land was given away too cheaply, he told the BBC: “The point is, the investment from Abu Dhabi is what created the value.
“That deal allowed development to be kick-started – particularly in the Ancoats area.
“All of this was documented and went through reports that went through the council’s due processes.
“I think it has been demonstrated that the deal was a good deal and a good deal for Manchester.”
A spokesperson for Manchester Life said: “We’re proud of what Manchester Life has achieved in Ancoats and New Islington. Established in 2014 in response to the city’s housing and regeneration priorities, Manchester Life brought long-term investment to an area where major residential developments had stalled, accelerating housing delivery and helping to restore market confidence.
“The model combined the council’s contribution of land at market value and strategic oversight with ADUG’s private investment and development expertise. ADUG provided all development equity and assumed the associated risks, while the council retained the opportunity to share in additional development value through overage arrangements.”