Inquiry launched into £98m union-owned conference and hotel complex
A union-owned hotel and conference centre that was only in April described as a “sensible investment” is the subject of a formal inquiry.
The Unite union has launched a QC-led inquiry after its hotel and conference centre on Birmingham Science Park Aston was found to be worth less than the £98m it cost.
The costs of the project rose from £7m to £98 and was presided over by former Unite general secretary Len McCluskey, who, in April of this year said in a letter to The Guardian that the facility was authorised by the union’s executive council and that he had “no dealings” with the awarding of contracts for the centre.
He added: “This 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. Far better that Unite builds its own facility than it continues to spend millions organising events at expensive commercially run premises.”
However, current Unite general secretary Sharon Graham said: “While the audit of the Birmingham hotel and conference centre gave the accounts a clean bill of health, a recent expert valuation has now estimated its value as being considerably lower than the costs incurred in developing the site. This represents a potentially significant loss to Unite and has to be investigated.
“I am therefore commissioning an independent inquiry to be led by a QC and supported by an external law firm in order 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.
“I expect the terms of reference and the arrangements for the scope of the inquiry to be agreed in January and I hope to be in a position to provide an update by the end of March. As it will be for the inquiry to establish the facts in this case we will not be giving out any further details that may prejudice the investigation.
“This inquiry is of course important but it will not detract from our absolute focus on the jobs, pay and conditions of our members.”
The developer of the building was Liverpool-based Flanagan Group, run by Paul Flanagan while the health and safety contract was given to SSC, a company owned by David Anderson, the son of former Liverpool mayor Joe Anderson.
Paul Flanagan and David and Joe and Anderson have been arrested on suspicion of bribery by Merseyside Police in an investigation unrelated to Unite.
Unite has strenuously denied any link between the arrests and the hotel and conference complex in Birmingham.
