Unite calls special meeting over alleged overspend on £50m building project

Unite, Labour’s most generous backer, is organising a special meeting of its ruling body to discuss an alleged overspend on a multimillion pound construction project funded by the union.

The executive council will convene on Friday 29 January to discuss a seven-storey hotel and national conference centre in Birmingham funded by the union.

The contract to build the project was awarded to the Flanagan Group, a Liverpool company run by an associate of Len McCluskey, the union’s general secretary. Another contract on the project was given to a company owned by the son of Joe Anderson, Liverpool’s mayor.

The Flanagan Group is under investigation by Merseyside police in connection with Operation Aloft, an inquiry into the sale of council-owned land in Liverpool to developers. Paul Flanagan, head of the group, was arrested in September on suspicion of conspiracy to commit bribery. Anderson and his son David have also been arrested.

Following a report in the Times, the union vehemently denied any wrongdoing. It said there was no connection between the Merseyside investigation and the Birmingham project and that McCluskey had had nothing to do with the tendering process.

Executive members will expect to hear from McCluskey and other key officials about the building, which includes a 170-bedroom Marriott-branded hotel, a conference room, an education centre and regional offices for the union.

Reports in 2015 said the building would cost the union £35m, money it would recover by hiring out conference facilities and by holding its own conferences on the site in Birmingham Science Park, Aston.

According to the Times, in 2012 senior members of the union had been told that the total cost of the Birmingham development would be £7m, but that the total costs were now more than £50m.

A leaked email to executive members on Thursday said: “Following on from the statement circulated last weekend regarding the Birmingham project, a special meeting of the executive council has been convened for Friday 29th January commencing at 12 noon.”

Another email sent last week to executive members said a proposal to discuss the Birmingham project in March would be brought forward after the allegations in The Times.

McCluskey, who will step down next year, was one of the former Labour leader Jeremy Corbyn’s closest allies and has criticised Sir Keir Starmer over his decision to pay damages to ex-staffers who said the party had not dealt with antisemitism. Unite has cut its support to Labour since the decision.

Labour will be watching the leadership contest closely, with two candidates from the left, Howard Beckett and Steve Turner, expected to stand. Gerard Coyne, a Starmer supporter who narrowly lost to McCluskey in 2017, said this month that he would stand again.

Unite said the union was proud of the conference facility, which was a sensible investment for the future, and that there were “misrepresentative reports” relating to the general secretary’s election later this year.

“At every stage of this facility’s development there have been clear and consistent tendering requirements, with progress reported regularly to the union’s executive council,” Unite said. “Figures have been reported that are inaccurate and used without verification. The figure of £7m, for example, is a misunderstanding in one of the minutes of an executive council meeting.

“There is an attempt to create an impression of a connection between Unite and the criminal investigations taking place in the city of Liverpool on the basis of no evidence whatsoever. There is absolutely no link between the union or any of its officials with those investigations.”

It added: “Unite’s Birmingham complex is a world-class facility, built to the highest standards using unionised workers and it will help to regenerate a derelict area of England’s second city. Those who seek to misrepresent this project do so to advance their own agenda relating to the election for general secretary which will take place this year. They have an established disregard for the truth.

“Unite is focused solely on protecting its members during the current pandemic crisis. It does so effectively because its financial strength and democratic governance is second to none in the trade union movement.”