Unite’s £100m Scandal: The Story so far

As the general secretary election is set to begin, we look to bring a clearer picture of how this huge cost came about, so members can make up their own minds

Unite the Union are continuing to face calls for an independent inquiry into why the cost of the union’s Birmingham hotel and conference centre development, which was originally supposed to be £7million, has now skyrocketed to £98milllion of members’ funds.

This means the cost of the project, which is being overseen by Howard Beckett, is equivalent to around £100 per member. As the general secretary election is set to begin, we look to bring a clearer picture of how this huge cost came about, so members can make up their own minds.

It has been widely reported that Unite hired a contractor that has now been embroiled in a police bribery and corruption investigation in Liverpool and that Unite’s current leadership has connections to individuals who have been arrested as part of the investigation.

To own and oversee the development, Unite set up Blackhorse HCC, a wholly owned subsidiary and then Blackhorse, which is entirely run by members of Unite’s Executive Council (EC), signed a franchise agreement for the hotel with a subsidiary of Marriott Group, an American multinational with a history of poor labour practices.

The construction contract for the development was awarded to The Flanagan Group, a Merseyside-based construction firm run by an associate of Len McCluskey, Paul Flanagan. Also awarded a contract, as the health and safety advisors for the project, were Safety Support Consultants (SSC), a firm owned by David Anderson, son of ex-Liverpool mayor Joe Anderson. David was arrested in connection with Operation Aloft, a police investigation into the dealings between developers and Liverpool City Council, along with Paul Flanagan. SSC are also named as having been awarded contracts in contravention of regulation in Liverpool’s Best Value Inspection Report, published in March. The report, which like the criminal investigation Operation Aloft focuses on the issue of Liverpool City Council’s procurement and development practices, led to the department of Housing and Local Government’s decision this month to bring commissioners into the city to ensure fair and correct practice. There is no suggestion of any criminal wrongdoing in the union’s dealings with either company or of a link between the investigation in Liverpool and the development.

It has been reported that Purple Apple Management, who Unite appointed as project manager, were given the role over a contractor proposed by Birmingham City Council; and that Unite were warned that Purple Apple did not have sufficient resources to handle a development of such a size but went ahead with appointing the company as project manager anyway.

Unite claimed in a statement on April 7 that the increases in the cost of the development were down to “multiple factors, of which the most significant was the cost of implementing a union protocol”. Yet this has led to further questions as to why these good employment practices have only been introduced into their cost estimates recently.

Len McCluskey said the development is “a reflection of this union’s sound management of its finances as an investment that will grow in value for our union”. Such a giant investment using members’ money would surely put pressure on profits being recuperated, which could explain the reported £18 cost of a breakfast at the hotel which will be operated under Marriott’s ‘Aloft’ brand. There is no known or suggested connection between Unite’s development being branded as Aloft and the Liverpool Police investigation of the same name.

Until an independent inquiry is established into the proper process of awarding contracts, best-value use of members’ money and the huge cost increases, Unite members will understandably feel that they are being kept in the dark on issues related to their union of which they know they should be appraised. Especially as Howard Beckett, who has recently been overseeing the project, is vying to take control of the union.

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