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Unite, Britain’s second-biggest trade union and the Labour party’s largest long-term donor, has failed to file its past two sets of annual accounts in the latest sign of its long-running financial and legal problems.
All UK unions are legally obliged to submit annual accounts for the previous calendar year by June 1 to the Certification Officer, an agency that ensures unions and employers’ associations comply with statutory functions and reports to the Department for Business and Trade. Failure to do so can lead to penalties.
Unite has not filed any accounts since it published its 2020 accounts two years ago, according to an analysis of the CO’s records.
The long delay has been caused by a controversy over the valuation of a four-star hotel and conference centre in Birmingham built by the union as a commercial venture under its previous leadership. The venue, “Aloft”, has 195 bedrooms and space for 1,200 conference guests.
The final bill for the project is expected to total about £117mn, according to union officials — some £31mn higher than its estimated value. Originally the union had expected the project to cost £57mn.
Sharon Graham, after becoming general secretary of Unite in August 2021, ordered two internal probes into claims of financial irregularities regarding the hotel and the union’s wider “affiliated services” wing, which offers services to members such as mortgages, financial advice and legal advice. The findings of both were passed to the police.
The union has given Labour almost £2mn in the past year despite a cooling of relations under Graham, and it remains an influential stakeholder in the party’s policy direction.
“The atmosphere around the general secretary’s office is that she is furious about all of this and is determined to slay the dragon once and for all,” said one ally of Graham.
Graham commissioned Martin Bowdery KC to lead the first inquiry in December last year to examine the soaring costs of the Birmingham venue.
Previously officials have said the higher total was partly because of the addition of an extra floor and because the hotel was upgraded from three stars to four-star plus, employed only unionised workers and sought to use building materials made in Britain where possible.
But Bowdery found evidence of suspected overcharging, according to senior figures at the union.
Graham also commissioned the audit firm Grant Thornton to look more widely at “affiliated services” bought by Unite through various contracts.
Unite handed police the findings of the Grant Thornton report, including a claim that one company was awarded a contract worth £100,000 a month for eight years, totalling nearly £10mn.
Unite told staff last year that it had cut ties with a supplier, “primarily due to the risk of committing an offence under the Proceeds of Crime”.
In January, South Wales police confirmed that a Unite employee was the subject of a criminal investigation into allegations of bribery, fraud, money-laundering and tax evasion.
The force said at the time that it was working with HM Revenue & Customs on a probe into the person and several companies. It said it was suspected that contracts for services were “awarded on behalf of Unite to companies controlled by other linked persons, in return for personal financial and other rewards”.
Unite said publication of its accounts had been delayed to allow for a “full re-audit” of the 2021 filings, to ensure nothing escaped proper scrutiny.
“Every invoice is being checked. A dedicated job is being carried out,” it said. “That 2021 audit has to include the final impairment of the asset value of the hotel and related matters.”
It said 2022 accounts were almost complete but could not be published before the 2021 filings had been finalised, adding: “The Certification Officer is fully aware and involved in all these related issues.”
The CO confirmed that Unite had not submitted its accounts but said it would “not be taking any enforcement action” because it knew why the union had yet to do so.
Unite added that the union could take legal action to address any financial discrepancies, noting: “Sharon has stated that anyone found responsible for malpractice will be held to account and legal action will be taken to get any money back that is due.”
