In another free extract from my book ‘Where’s The Money Gone? The Battle For The Soul of English Football’, I look at how Manchester City helped Abu Dhabi interests become entwined with the local council in Manchester. Read Part One here.
Professor Adam Leaver meets me among the overpriced coffee shops and swanky apartment blocks of New Islington Marina.
Just a couple of decades earlier, this had been the decaying Cardroom Estate in inner city Ancoats. It was a byword for drug dealing and gang violence. Now there’s an artisan bakery, craft ale bars, former mills converted to live/work apartments. All very chi-chi.
The transformation, largely funded by Abu Dhabi riches, has been remarkable but Leaver, an accountancy expert at Sheffield University, is resolutely unimpressed. He doesn’t doubt that the area needed some TLC, but questions the methods by which the change has been achieved.
When Abu Dhabi took over City, this gritty inner city suburb was already slowly changing, thanks to a master plan drawn up by Manchester-based developer Urban Splash and architect Will Alsop. Their vision was to create ‘Mancsterdam’ – a canalside community combining social housing with a new generation of private buyers.
The project hit financial turbulence following the financial crash of 2008–10, creating an opening for Sheikh Mansour to step in and turbocharge what had, until that point, been a creeping gentrification. Abu Dhabi United Group – Manchester City’s owners – formed a partnership called Manchester Life with the City Council and embarked on a series of developments aimed at the rental market.
As the scheme progressed, the requirement for social housing was quietly dropped, so what was intended to be a mixed development quickly came to be seen as a yuppie enclave – and one that appeared to be highly lucrative for Abu Dhabi. Much of the heavy financial lifting had already been carried out by the taxpayer – just like the Etihad – with public funds used to prepare the land for development.
Once building got underway, Manchester Life’s complex ownership structure – which involved companies based in the tax haven of Jersey – made it difficult to follow the money.
Leaver and fellow academics at Sheffield compiled a report called ‘Manchester Offshored’ which highlighted how difficult it was to establish whether the public was getting a fair return. Leaver observed, “We don’t know how much rental profits are being generated from these properties. We don’t know how much profit is made from the sale of any of these properties. We don’t know about the value of the leaseholds and whether they increase as a result of the development that’s on the land that they have a lease on.
“None of these things is transparent, so when you’re trying to make a calculation as a citizen of Manchester, whether this was a good value for money deal, you can’t see what the profits are. You also can’t see how much is being returned to the council.”
It took Freedom of Information requests from a radio programme I worked on at the BBC to finally uncover that the local authority had, in fact, received £2.9 million from Manchester Life in the financial year 2023–24. This was the first time the council had received any rental income from the development – a full seven years after the apartments opened.
Sheikh Mansour’s companies, in contrast, had earned more than £39 million from Manchester Life since 2018. This income was conveniently cancelled out by ‘administration fees’, funnelled offshore, which meant the company paid only minimal corporation tax in the UK.
Manchester Life had bought the plots without a tendering process, for just £4.9 million, on 999-year leases. Professor Leaver argues that ‘the family silver’ was sold too cheaply.
Manchester City Council claims land prices were benchmarked against other comparable areas. They said there was zero market interest in the Ancoats site at the time of the sale and argue that it is now worth considerably more only because the Manchester Life development has been a success.
Rival developers, on the other hand, were upset by what they regarded as a ‘sweetheart deal’, and in Leaver’s analysis, the involvement of the Abu Dhabi United Group helped muzzle opposition to the project.
He believes local politicians were wary of challenging ADUG in case it dampened Emirati enthusiasm for the football club. Which elected representative, he asks, would risk hostility by speaking out against the owners of a local institution revered by thousands?
ADUG, for its part, insists it has no links to the government of Abu Dhabi, but Leaver argues that football was “a bridgehead into the political and economic life of the city”. “There appears to be a strategy of going into sporting assets first, and then spreading out into real estate investment. You invest all that money in the club. You build positive local support for your investments. You put yourself in the orbit of local politicians and other people of influence. And this helps to get deals done.”
The intertwining of politics, sport and broader economic leverage is evidenced by the progress of the two key figures in the local authority at the time of the Manchester Life negotiation. Former council leader Sir Richard Leese and chief executive Sir Howard Bernstein both became honorary presidents of Manchester City. Bernstein, who has now died, was also hired by the ADUG-owned City Football Group as strategic development advisor.
One of the big question marks about Manchester Life concerned the high rents, which priced out lower earners. According to the council’s own guidelines, one in five of the new apartments should have been categorised as ‘affordable’ – i.e. 20% below the local market rent. This is much needed in a city where 15,000 people are on the housing waiting list and homelessness is rife.
Yet in the event, there was zero affordable housing in the first two phases of Manchester Life, covering thousands of dwellings.
The developers secured exemptions on the basis that the scheme would not have been sufficiently profitable if this provision had been met.
Nor did the Council demand any ‘Section 106’ compensation which might have provided funding for cheaper housing elsewhere.
John Leech, an opposition Lib Dem councillor on Manchester’s Labour-dominated local authority accused the council of ‘social cleansing’. Andrew, a self-employed printer I met while working in a BBC documentary, had moved to an older flat in Ancoats in 2005, but had now been forced to move out after his landlord decided to refurbish his block and ramp up the rent. “There is not a single private apartment around here that’s affordable for anybody on a low income,” he complained. Ancoats has become very much a gentrified area. All the bars are ridiculously expensive. Manchester Council is basically seeing the pound signs of what they can get from investors and a lot of foreign investment. So rather than building a sense of Manchester community, which Manchester constantly brags about, it’s destroying it.”
An important part of the context here, though, is that central government cuts have hobbled the city. The introduction of austerity by the Conservatives after the Great Recession forced Manchester City Council to slash £443 million from its budget after 2010. For the city to grow, investment had to come from somewhere…
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