Inquiry into £98m cost of new Unite union base
AN INQUIRY is to be held into a new hotel and conference centre in Birmingham after it emerged its value was “considerably lower” than what it cost to build.
The Eastside Rooms, which is owned and run by trade union Unite, opened earlier this year but the escalating development costs meant the final bill was almost double that of the original budget.
The facility, off Jennens Road, near Aston University, has a 195-bedroom Marriott ‘Aloft’ hotel, 23 meeting and event rooms, a ballroom for use by both Unite and external clients and a regional office for the union’s West Midlands team.
But now Sharon Graham, who was elected as the union’s general secretary in August, has announced there will be a QC-led inquiry into the spiralling costs of the scheme.
In February, the union said the cost was “slightly over” £98 million, against an original budget of
£57 million. The Eastside Rooms, which was granted planning permission in 2015, sits in an emerging knowledge quarter in the city, counting Aston University, Birmingham City University and tech campus Innovation Birmingham among its neighbours while HS2 is just a short walk away.
Ms Graham said in a statement: “While the audit of the Birmingham hotel and conference centre gave the accounts a clean bill of health, a recent expert valuation has now estimated its value as being considerably lower than the costs incurred in developing the site.
“This represents a potentially significant loss to Unite and has to be investigated. I am therefore commissioning an independent inquiry to be led by a QC and supported by an external law firm in order to review the costs incurred and address the question of how and why this difference has arisen.
“These questions need to be answered in a timely fashion and, in order to ensure transparency, the outcome of the inquiry will be made public. I will also be doing everything possible to recover all monies due back to the union.
“I expect the terms of reference and the arrangements for the scope of the inquiry to be agreed in January and I hope to be in a position to provide an update by the end of March.
“As it will be for the inquiry to establish the facts in this case, we will not be giving out any further details that may prejudice the investigation.
“This inquiry is of course important but it will not detract from our absolute focus on the jobs, pay and conditions of our members.”