Unite union bosses call in QC to probe scandal of £100m hotel

Unite union bosses call in QC to probe scandal of £100m hotel built on the orders of Len McCluskey

  • New general secretary of Unite, said the hotel is worth less than it cost to build
  • Sharon Graham succeeded former general secretary Len McCluskey in August
  • The hotel and conference centre was built on the orders of Mr McCluskey
  • The project has been dubbed Red Len’s Folly and was built amid cronyism claims 

The giant Unite union has commissioned an independent QC-led inquiry into a £100million hotel and conference centre built on the orders of former general secretary Len McCluskey.

Mr McCluskey’s successor as general secretary of the UK’s biggest union, Sharon Graham, yesterday revealed the complex was now worth less than the cost of building it.

The project – revealed by the Daily Mail last year – has been dubbed Red Len’s Folly and was built amid claims of cronyism.

The contract to construct the four-star complex in Birmingham was awarded to a building firm owned by Paul Flanagan, a friend of the union baron and fellow Liverpudlian.

But costs, funded by Unite’s 1.4 million members, spiralled from £35million to £57million before construction even started. The seven-storey building eventually cost £98million to complete.

The giant Unite union has commissioned an independent QC-led inquiry into a £100million hotel and conference centre built on the orders of former general secretary Len McCluskey. Pictured, the Birmingham Hotel and Conference Centre complex

Mr McCluskey’s (pictured) successor as general secretary of the UK’s biggest union, Sharon Graham, yesterday revealed the complex was now worth less than the cost of building it

Left-winger Mr McCluskey retired as general secretary in August, around the time it emerged that members will have to bankroll the project for at least another two years to stop it going bust.

Yesterday Miss Graham revealed the complex was now valued ‘considerably lower than the costs incurred in developing the site’.

She stressed: ‘This represents a potentially significant loss to Unite and has to be investigated.’

She said the union was commissioning an independent inquiry to ‘review the costs incurred and address the question of how and why this difference has arisen’.

‘These questions need to be answered in a timely fashion and in order to ensure transparency the outcome of the inquiry will be made public. I will also be doing everything possible to recover all monies due back to the union.’

She said an audit had given the completed project’s accounts a ‘clean bill of health’.

The hotel complex, which also includes new union offices and an education centre, was intended to save on hotel rooms and conference bills.

Local Labour MP Khalid Mahmood, a Unite member, said: ‘This is my fellow members’ subs which pay for schemes like this. I applaud the general secretary’s commitment to get to the bottom of what has gone on here and where the money has been wasted, if that proves to be the case.

‘But it is regrettable that the previous regime were not as transparent as the new general secretary seems to be.’

The hotel development’s key contract was awarded to Liverpool-based Flanagan Group. A health and safety contract was awarded to SSC, a firm owned by David Anderson, the son of former Liverpool mayor Joe Anderson.

Last year, it emerged Mr Flanagan and both Andersons had been arrested on suspicion of bribery as part of a corruption probe not linked to Unite. All three denied wrongdoing and were released under investigation.

There is no suggestion of any criminal wrongdoing in the union’s dealings with either company.

Mr McCluskey previously said the hotel’s costs rose because the union used contractors which paid national rates of pay. He cited other factors such as health and safety measures in response to the Grenfell tragedy.

In April he claimed the project was a ‘sensible investment of members’ money, resulting in a world-class facility that will return an income for our union for generations to come’. 

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