Red Len hotel disaster that’s lost union £70m: Former Unite boss Len McCluskey is under pressure over £98m project for building valued at £30m
- Unite the union spent £98million on building a 170-room hotel near Birmingham
- Former boss Len McCluskey is under fire at costs going £70million over budget
- General secretary Sharon Graham ordered a QC-led inquiry into the building
- Mr McCluskey has told the Daily Mail that the inquiry will ‘answer all questions’
Former Unite boss Len McCluskey was under mounting pressure today to explain £70million losses his hard-Left union is facing on a hotel it built.
The group spent £98million on the controversial project in Birmingham, but two independent valuations have put its worth at less than £30million.
Sharon Graham, who was elected general secretary in August following Mr McCluskey’s departure, ordered a QC-led inquiry into the building in December.
Now it has emerged that last week she told a video call with Unite officials an initial valuation of the centre had come up with a figure of £27million.
A second valuation was then ordered, which put its worth at £29million.
The Birmingham Hotel and Conference Centre complex built by Unite at a cost of £98million, believed to be nearly £70million over budget
Former Unite boss Len McCluskey is under mounting pressure to explain the estimated £70million loss. Today he told the Daily Mail: ‘The inquiry will answer all questions’
The 170-room hotel and conference centre was built under the leadership of Mr McCluskey, who last year described it as a ‘sensible investment of members’ money, resulting in a world-class facility that will return an income for our union for generations to come’.
But one source from Unite said: ‘Sharon Graham feels like she has been handed an unholy mess and now she needs to find out where the £70million shortfall has gone.
‘She is a new broom who owes nothing to the old regime.’
Founder of Left-wing group Momentum Jon Lansman said: ‘Even before more details emerge, it is surely inescapable that this terrible loss arises in part through inadequate scrutiny and a failure of governance. It must be put right without delay. ’
Last week, Unite General Secretary Sharon Graham told a video conference that a valuation of the hotel had come up with a figure of just £27 million, later revised to £29million
Those on the call regarding the hotel valuations were left ‘shocked’ by the low figures, a source told the HuffPost UK website.
A spokesman for Unite did not deny the valuations were accurate. The inquiry was launched after it emerged the hotel’s costs – previously estimated at £57million – had soared to £98million.
Unite currently pays £1million to Labour as an affiliation fee, plus thousands more in political donations, making it the party’s largest funder.
This evening, Mr McCluskey told the Daily Mail: ‘The inquiry will answer all questions.’
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