Serious Fraud Office Probes £112m Unite Hotel Complex Amid Allegations of Financial Misconduct

Investigation rumors swirl around £112m Unite hotel project

A spokesperson from the Serious Fraud Office stated to Sky News that they are "unable to confirm or deny any ongoing investigations related to this issue."

Senior political reporter @joncraig

Tuesday, October 22, 2024 11:39

Unite, the trade union, has informed Sky News that the Serious Fraud Office (SFO) will be looking into a contentious hotel and conference center in Birmingham, which has cost the union nearly £112 million.

The union, previously the largest financial supporter of the Labour Party, has expressed concerns about what it describes as "serious financial misconduct" under the leadership of Len McCluskey, a prominent supporter of Jeremy Corbyn, and his associates.

The construction of the hotel, which occurred while Mr. McCluskey served as general secretary from 2011 to 2021, also encompassed the creation of new union offices and aimed to reduce expenditures on hotel accommodations and conference expenses.

Originally projected to cost £7 million, the expense of the building soared to £57 million prior to the start of construction. By the time it was finished in 2020, the costs had escalated to a total of £112 million, according to information provided to Sky News by Unite.

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Following her succession of Mr. McCluskey as general secretary of Unite in 2021, Sharon Graham initiated an investigation into the project, appointing esteemed barrister and deputy high court judge Martin Bowdery KC to lead the inquiry.

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Following an appraisal by forensic accountants that estimated the value of the hotel, which features 195 rooms and a conference center capable of accommodating 1,000 attendees, at merely £29 million, she committed to recouping any funds due to the union.

A spokesperson from Unite informed Sky News about the SFO's participation, stating, "Since initiating independent KC-led investigations into the Birmingham hotel project along with further probes into the union's associated services, Sharon Graham has endured three years of appalling and dreadful attacks."

The spokesperson further stated, "our investigations have revealed what we consider to be significant financial misconduct under the former leadership of Len McCluskey."

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He added, "The investigation into the financial dealings of the Birmingham hotel, led by KC, has now been transferred to the Serious Fraud Office. Additionally, independent forensic examinations of the union’s affiliated services, supervised by Howard Beckett, are under scrutiny in an ongoing probe by the South Wales Police."

At present, our ability to comment is restricted because of ongoing police inquiries. However, we plan to release a preliminary statement regarding the conclusions of the investigations soon.

Ms. Graham has fulfilled her commitment to thoroughly investigate any misconduct that occurred before her term began.

Unite is actively seeking legal avenues to reclaim funds that were lost by the union, and the general secretary has implemented protective measures to prevent future occurrences.

A spokesperson from the Serious Fraud Office stated to Sky News, "Consistent with our longstanding policy to prevent any potential bias in our law enforcement efforts, we cannot confirm or deny the existence of any investigation regarding this issue."

We have reached out to Mr. McCluskey for his response.

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