Red Len McCluskey’s £100m hotel needs yet more money: Venue built by Unite trade union will go bust unless more members’ cash is ploughed in, bosses warn
- Unite spent millions on the hotel and conference centre in Birmingham
- Members will be on the hook for its running costs for at least two years
- The latest revelation will intensify calls for an inquiry into how the cost of building the centre spiralled from an estimated £7 million to £98 million
A £100 million hotel built by Len McCluskey’s trade union will go bust unless more members’ money is shovelled into the project, bosses have warned.
Unite has spent the vast sum building the accommodation and conference centre – which has been dubbed ‘Red Len’s Folly’ by critics – in Birmingham.
But now it has emerged that its members will be on the hook for its running costs for at least two years.
Published accounts for Blackhorse, the company set up by Unite to oversee the project, reveal a deal has been done to keep ploughing in union funds.
The documents, signed by Unite general secretary Mr McCluskey, state: ‘The ability of the company to continue in operational existence for the foreseeable future is totally dependent on the ongoing support of the union.
it has emerged that Unite members will be on the hook for the running costs of the £100 million building for at least two years.
‘The company has entered into a funding agreement with the union who have provided equity and a further loan facility.’
Unite members have until today to post their ballots in the contest to replace Mr McCluskey, who retires as general secretary this month.
The latest revelation will intensify calls for an inquiry into how the cost of the hotel spiralled from £7 million to £98 million.
Earlier this year, Unite defended the project by claiming it would produce ‘huge amounts of income in revenue’ and ‘save the union millions a year alone in conference costs’.
It has claimed the initial estimate for the hotel project was too low and rose after it was decided to add an extra floor and upgrade the establishment from a three-star rating to four.
It has also cited its determination to ensure employment practices on the site were up to its standards as another reason for the escalation in costs.
Unite members have until today to post their ballots in the contest to replace Mr McCluskey (pictured) who retires as general secretary this month.
In a promotional video for members in April, Mr McCluskey declared: ‘Today our Birmingham centre is ready to welcome you… I hope you will be as proud of it as I am.
‘It’s a fantastic centre. Welcome to the best, your Birmingham conference, education and hotel facility.’
Gerard Coyne, one of the candidates to replace Mr McCluskey has denounced the spending on the hotel.
Launching his campaign, the former Unite regional organiser said: ‘Unite members and reps are crying out for change, not more of the same.
‘Unite has spent nearly £100million building a hotel and conference centre in Birmingham. That’s a clear example of the wrong priorities and the wrong approach.
‘I will use the union’s resources and energy to empower our workplace reps and support our members through the troubled times to come – not to play political games or waste their hard-earned money.’
Gerard Coyne (pictured), one of the candidates to replace Mr McCluskey has denounced the spending on the hotel.
Mr Coyne was narrowly defeated by Mr McCluskey, who has been general secretary since 2010, in a bitter battle for the Unite leadership in 2017.
This time, Mr McCluskey has endorsed rival candidate Steve Turner, who is currently assistant general secretary of the union.
Ballots for the contest have to be posted by today with the result to be announced on August 26.
Mr McCluskey is preparing to publish a memoir on his decade in charge of the union next month. He will use the book to confirm he is in a relationship with Karie Murphy, who was Jeremy Corbyn’s chief-of-staff.
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