Eastside Rooms – Uncovering hidden assets

It was announced last month that the Serious Fraud Office (SFO) is investigating the construction of a £112 million hotel and conference centre in Birmingham known as the Eastside Rooms.

Unite the union, which instigated an enquiry into the project in 2021, says it believes there was “serious financial wrongdoing” when it was run by then General Secretary, Len McCluskey.

The project was aiming to save money on hotel rooms and conference bills for Unite members through the construction of 195 bedrooms and conference facilities for 1,000 people, along with the provision of new union offices.

Mr McCluskey, who ran Unite between 2011 and 2021, described it as “a fantastic investment”.

However, from an initial estimate of £7 million, building costs ballooned to £57 million before construction even began and when the building was finally completed in 2020, the total cost had risen to £112 million.

When Sharon Graham succeeded Mr McCluskey in 2021, she commissioned a KC-led inquiry into the building of the hotel, which identified a missing £14 million, as well as the spiralling costs.

The missing money has been described as a “mystery” and does not feature in the project’s final accounts.

However, since her election, Ms Graham is said to have put safeguards in place to ensure that financial wrongdoing can never happen again.

A spokesman for Unite said in October that the inquiry into the costs of the hotel has been handed to the SFO and that reports by a firm of independent forensic accountants into the union’s affiliated services are currently part of an investigation by South Wales Police.

Roger Isaacs, National Technical Director of NIFA, said: “The instruction of independent forensic accountants is very telling. That said, the mere fact that the budget was exceeded significantly doesn’t necessarily imply that there has been any mismanagement never mind any fraud.

“On the other hand, it is difficult to understand how £14million can simply have gone ‘missing’ without having left an audit trail for investigators to follow and the involvement of the SFO suggests that at some level concerns must have been raised about potential impropriety”.

Sources: BBC News

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