The boss of the UK’s largest trade union has ordered a QC-led inquiry into the spending of almost £100m of members’ money on a controversial hotel and conference centre.
Sharon Graham, the general secretary of the Unite union, made the decision after forensic accountants concluded the building’s value was “considerably lower” than its construction costs.
One union source told Sky News the gap amounted to “tens of millions of pounds”.
Ms Graham said: “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.”
Len McCluskey, Ms Graham’s predecessor as general secretary, presided over the project and is facing questions as to why the development’s main construction contract was awarded to a company owned by a friend.
When asked about the overspend by Sky News in September, Mr McCluskey said: “It’s a fantastic investment and you’re the only one who is interested in that anymore.”
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Today he tweeted that an inquiry was “sensible and will answer any questions”.
The project in Birmingham, which includes new union offices, was intended to save on hotel rooms and conference bills. Yet after an initial estimate of £7m, the building costs ballooned to £57m before construction even began.
Now complete, Unite has confirmed the total expenditure on the project is more than £98m.
The development’s key contract was awarded to Liverpool-based Flanagan Group, a firm run by McCluskey ally Paul Flanagan.
A health and safety contract was awarded to SSC, a company owned by David Anderson, the son of former Liverpool mayor Joe Anderson.
Mr Flanagan and both David and Joe Anderson have been arrested on suspicion of bribery as part of a Merseyside Police corruption investigation not linked to Unite.
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All three deny wrongdoing and have been released under investigation. There is no suggestion of any criminal wrongdoing in the union’s dealings with either company.
Earlier this year, Unite denied suggestions that the construction projects’ tendering process was not transparent and said Mr McCluskey played no part.
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