Len McCluskey enjoyed private jet travel and football tickets from a firm which allegedly overcharged his union millions on a controversial building project, a report found.
The probe, ordered by his replacement as Unite general secretary, concluded Liverpool-based firm the Flanagan Group was appointed to build the hotel and conference venue in Birmingham ‘with no competitive tendering process, and despite having a history of poor performance, delays, cost overruns’ and alleged incompetence on previous contracts.
It also found Mr McCluskey ‘signed the contracts, overruled Unite staff who raised questions about the firm, and overruled lawyers who advised against’ the contracts.
His predecessor Sharon Graham tonight admitted: ‘Money left our union when it should not have. And other money that should have come into the union did not.’
Mr McCluskey, nicknamed ‘Red Len’, was one of the most powerful men in the industry and was a close ally of former Labour leader Jeremy Corbyn before quitting the trade union in 2021.
He had been an enthusiastic supporter of the Unite hotel project, which intended to be a financial investment for union members.
But it ran massively over budget – indeed, the report found Unite paid roughly triple the actual value of the Birmingham Hotel Development.
In fact, the union – which represents more than a million workers across the UK – forked out at least £110 million for the project, despite being valued at only £37.5 million.
Unite’s former chief Len McCluskey is at the centre of a report into the union’s hotel and conference centre in Birmingham – which came in massively over budget
The project – which includes a 170-bedroom Marriott-branded hotel, a conference room, an education centre and regional offices for Unite – has now reportedlycost well over £110 million, despite being valued at roughly one-third of that
The contract to build it was awarded to the Flanagan Group, whose bosses McCluskey described as his ‘good friends’, the report found.
Scrutiny of Unite emails subsequently showed the firm arranged and paid for tickets to matches including to the Champions League finals in 2018 and 2019, as well as matchday hospitality Liverpool home matches against Premier League rivals including Manchester City and Arsenal.
McCluskey also received flights, including at least one private jet flight, to their Champions League final success against Tottenham in Madrid in 2019.
It also identified a £500,000 payment to the firm without an explanation – something the report described as ‘very unusual’.
The report found emails also show how Flanagan Group bosses ‘sought to leverage their relationship with Len McCluskey (and Len McCluskey’s own political connections) to assist with their business dealings.’
Ms Graham said the situation was summed up by unforgettable examples of egregious spending, including paying £1.3 million to ‘drill holes in walls’ that should have cost just £90,000.
She said: ‘Of course, incompetency isn’t a crime. Nor is lending money. But how could this eye-watering overcharging happen not once, but on multiple occasions?’
The report found ‘potential wrongdoing by a few was enabled by what Unite’s auditors called a pervasive fraud environment.’
Sharon Graham, Mr McCluskey’s successor at Unite, ordered the report into what happened
The report found Mr McCluskey ‘signed the contracts, overruled Unite staff who raised questions about the firm, and overruled lawyers who advised against’ the contracts
Unite has more than one million members
Mr McCluskey told the report investigators that the Birmingham project was not his ‘brainchild’, and ‘the view that Unite’s monies were best invested in property was generally endorsed by other individuals’ he spoke to.
He said he signed the contract without seeing the legal advice raising concerns, and was ‘totally unaware of the escalating costs of the project, he had no visibility of them, and hardly ever’ spoke to the Flanagan Group.
The Serious Fraud Office and the police are now investigating, including a possible criminal investigation into bribery, fraud and money laundering.
This does not include Unite or any current member of its staff.
The Flanagan Group declined to comment tonight.
