Burnham facing fresh scrutiny as country's second-highest court hears his £140m loan deal for Manchester developers was 'obviously' unlawful

By INDERDEEP BAINS, CHIEF NEWS CORRESPONDENT Published: 18:27, 9 June 2026 | Updated: 18:27, 9 June 2026 Andy Burnham is facing fresh scrutiny as the country’s second-highest court hears claims his £140million loan deal with a Manchester developer was ‘obviously’ unlawful. The mayor granted the loans despite being made 'aware' of 'inconsistent' viability reports submitted by the developer, the Court of Appeal was told today. Reopening a long-running legal battle just days before the crucial Makerfield by-election, lawyers argued the Greater Manchester Combined Authority (GMCA) had failed to carry out its ‘proper due diligence’. The GMCA’s committee agreed to give up to £70.8m to Trinity Developments Manchester and up to £69.2m to New Jackson Contour Investments from its housing investment fund in March 2024. The committee is chaired by the mayor, Mr Burnham, who could launch a Labour leadership challenge if he returns to Parliament in the by-election next week. Last year, the GMCA won a court case over its decision to grant the loans at the Competition Appeal Tribunal (CAT) after being sued by city-centre landowner Aubrey Weis. He had argued that loaning so much of the housing investment fund’s money to the developer had ‘distorted’ the city’s housing market and ‘effectively frozen out’ competitors. Mr Weis was granted permission to challenge the tribunal's ruling at the Court of Appeal in October, with the two-day appeal opening today. Andy Burnham in Ashton-in-Makerfield today ahead of next week's by-election His lawyers said that the GMCA failed to do basic checks on the ‘creditworthiness’ of the owner of both companies, Daren Whitaker, who builds skyscrapers under the brand name Renaker. Joseph Barrett KC claimed that Mr Whitaker had been able to secure more favourable terms by submitting conflicting viability reports. He said he had initially claimed his projects were ‘so high risk’ they should be exempt from Manchester City Council’s (MCC) 20 per cent affordable housing obligations. ‘This was accepted by MCC, and Mr Whitaker was duly exempted from the onerous and costly affordable housing obligations that would otherwise apply,’ he said. But the developer later told the GMCA that his developments were low risk - and radically more profitable than previously stated - for the purpose of securing the loans at a ‘modest rate’. The KC said these inconsistencies were a ‘relevant consideration, and should have been taken into account’. When asked by the judges if there was any evidence that the authority was aware of conflicting reports at the time, the KC said Mr Burnham had personally been informed. ‘There is evidence that the mayor was aware, my lord, because a letter was written to him and we can provide that.' ‘In terms of the mayor himself, Mr Burnham, he was sent a letter,’ he said, but he added that it was unknown if he had read it. Mr Barrett earlier told the hearing: ‘No due diligence was ever conducted into Mr Whitaker’s liabilities or creditworthiness. ‘The consequence of that is that the loan was made on what was obviously an unlawful basis.' He added: ‘It cannot be right that a public authority is making a lending decision about up to £140million of public money, effectively relying on someone’s creditworthiness without having taken any information about their creditworthiness.’ The lawyer claimed the loans should be classed as ‘subsidies’ under the law and therefore the decision to grant them was unlawful as it gave the developer an economic advantage He said the loans came with a 5.65 per cent base interest rate, and an additional 1 per cent interest margin - which should have been 4 per cent. He said no information was given on how the final rates were agreed by GMCA or whether they were consistent with market rates. The barrister said that the tribunal’s decision that the GMCA acted lawfully contained ‘serious errors of law’, including wrongly relying on the authority’s explanation for the lower margin. The GMCA, which is opposing the appeal, claims that a ‘whole due diligence process’ was carried out before the loans were paid. In written submissions, Aidan Robertson KC said the tribunal made ‘no error of law’. He added: ‘The proposals for the loans had been developed by the authority’s experienced investment team and had been scrutinised by two committees established by the authority for this purpose. ‘Had they considered that the rates were not on market terms, they would have, of course, noted that. ‘The whole decision-making process is relevant to setting rates on commercial terms, rather than just taking the GMCA committee meeting in isolation as the appellant seeks to do.’ Mr Robertson also said that Renaker’s differing submissions on risks for affordable housing exemption purposes were ‘prepared based on different information for an independent process and quite separate purposes’. The hearing before Lord Justice Nugee, Lord Justice Zacaroli and Lord Justice Miles is due to conclude tomorrow. No comments have so far been submitted. Why not be the first to send us your thoughts, or debate this issue live on our message boards. By posting your comment you agree to our house rules. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook. You can choose on each post whether you would like it to be posted to Facebook. 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