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The UK Serious Fraud Office is investigating a hotel and conference centre in Birmingham built by Britain’s second largest trade union that has been valued at tens of millions of pounds below its construction cost.
There has been a long-running controversy over the valuation of the four-star venue called Aloft, which was commissioned by Unite the Union as a commercial venture, with 195 bedrooms and space for 1,200 conference guests.
The venue has been valued at just £29mn, despite Unite spending about £112mn of members’ money on the project, according to union officials. Originally Unite had expected the venue, which was completed in 2020, to cost £57mn.
Sharon Graham, after becoming Unite general secretary in 2021, ordered a probe into claims of financial irregularities at the hotel and conference centre.
Unite officials confirmed a BBC report that the case was “now with the Serious Fraud Office”, and said Graham would “leave no stone unturned in finding out if there was any financial wrongdoing”.
An SFO spokesperson said: “In line with long-established practice to avoid prejudice to law enforcement activity, we can neither confirm nor deny any investigation into this matter.”
Minutes of a meeting of Unite’s executive council from March 2023 confirmed the SFO probe had begun.
Unite general secretary Sharon Graham © Charlie Bibby/FT
Graham commissioned Martin Bowdery KC to lead an inquiry in 2022 into the escalating costs of the hotel and conference centre.
Previously Unite officials had said the increased costs were partly due to the addition of an extra floor, and because the hotel was upgraded from three to four stars, employed only unionised workers and sought to use building materials made in Britain where possible.
But Bowdery found evidence of suspected overcharging, according to union figures.
He also identified a missing £14mn, which does not feature in the project’s final accounts. Bowdery’s findings were passed to police.
Graham subsequently commissioned accounting firm Grant Thornton to investigate contracts awarded by Unite’s “affiliated services” wing, which offers help to members such as mortgages and financial and legal advice.
A report by Grant Thornton included a claim that one company was awarded a contract worth £100,000 a month for eight years, totalling nearly £10mn. The report’s findings were passed to police.
In 2022 South Wales police searched Unite’s London headquarters as part of a separate bribery, money-laundering and fraud investigation. Its investigation is still ongoing.
A Unite spokesperson said: “It is important to note that Sharon Graham has had to endure repeated attacks by those with much to lose since she launched these inquiries, from both inside and outside the union …
“We are also pursuing legal claims to recover money lost to the union and the general secretary has put safeguards in place to ensure that such things can never happen again.”