A trade union has commissioned an independent inquiry into the cost of a new hotel and conference centre which was built by a well known Liverpool company.
Unite general secretary Sharon Graham said the union's new Aloft hotel and conference centre in Birmingham was now worth less than it cost to build.
The Flanagan Group, (TFG) a well known Liverpool company based on Sefton Street, was the primary contractor on the project.
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Earlier this year former Unite general secretary Len McCluskey confirmed that the total costs escalated from an estimate of £57m to £98m.
Ms Graham has now commissioned an independent inquiry into the cost of building the new hotel and conference centre.
Ms Graham said that a QC will lead the inquiry and that a law firm will review the cost of the project.
In a statement she said that Unite was facing a "significant loss" in relation to the project.
She said: “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.”
TFG was founded by brothers Julian and Paul Flanagan in 1991. The company began buying property in Liverpool city centre after the millennium, including New Zealand House.
According to information on the TFG website the company started work on the Unite scheme in August 2016.
TFG said they were involved in the project from its "inception" and carried out demolition and clearance work of the existing site.
A section of the statement read: "The Flanagan Group has worked in close partnership with Unite the Union to deliver the Union’s strategic objectives to renew and develop its property portfolio to serve its membership and staff.
"The Flanagan Group embraces and shares the values of Unite the Union in its undertakings, and is proud to have delivered projects through the UK on the Union’s behalf."
The ECHO approached TFG for comment on this story.
The Aloft hotel forms part of a wider conference and education centre project called The Eastside Rooms.
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