Unite - the hotel and the missing £14m

[Square Leg]

Grubby.
I hope they find it…

Also claims of bribery, money laundering and fraud.
Very grubby.

https://www.bbc.co.uk/news/articles/cn5z54236wgo

Edited by Square Leg on Monday 21st October 17:47

[biggles330d]

said:

Should have got the private sector to manage and deliver it.....

[bitchstewie]

Literally just came to post about this.

How the utter hell does that happen

[Vixpy1]

The problem is the SFO could'nt find Fraud in a normal office, let alone a serious one

[juice]

bhstewie said:

Literally just came to post about this.

How the utter hell does that happen

Unite's Executive Council met to discuss the new conference centre on January 29. At the meeting Mr McCluskey identified a number of factors that he said contributed to the £98m bill.

He said they were the use of contractors and sub-contractors that paid national pay rates and employed union members, rising costs within the construction industry

Then some general rhetoric about smears, mainstream media undermining the project etc etc

[hairykrishna]

Fourteen million? Bloody hell. I'm imagining somebody sat on the beach in front of his massive house in Costa Rica laughing his ass off as he reads this story and realises they've finally noticed.

[Hereward]

Ah, the classic line "...put safeguards in place to ensure that such things can never happen again".

[Mastodon2]

Union crooks on the take? I would never have thought they'd have been the type.

[ralphrj]

juice said:

bhstewie said:

Literally just came to post about this.

How the utter hell does that happen

Unite's Executive Council met to discuss the new conference centre on January 29. At the meeting Mr McCluskey identified a number of factors that he said contributed to the £98m bill.

He said they were the use of contractors and sub-contractors that paid national pay rates and employed union members, rising costs within the construction industry

Then some general rhetoric about smears, mainstream media undermining the project etc etc

The building was originally expected to cost £7m. The final bill was actually £112m.

[Miserablegit]

I think the union would have been happy with a loss of £14m- the real issue is the building which cost 112m is valued at £29m….

[dudleybloke]

A fantastic investment!

[pheonix478]

juice said:

...
He said they were the use of contractors and sub-contractors that paid national pay rates and employed union members, rising costs within the construction industry
...

Er well, you see there are costs and people who need to be paid and salaries, there are costs too that all add up and you have to employ people and that costs even more money, and those people also employ people adding more to the cost. There are lots of costs that go into building you see.

Is this real or an episode of yes minister?

I love how he inadvertently highlighted that using unionised labour had, at least in part, lead to the 1500% cost over run.

Edited by pheonix478 on Monday 21st October 19:22

[juice]

pheonix478 said:

Er well, you see there are costs and people who need to be paid and salaries, there are costs too that all add up and you have to employ people and that costs even more money, and those people also employ people adding more to the cost. There are lots of costs that go into building you see.

Is this real or an episode of yes minister?

I snipped that from a Liverpool echo page on the whole sorry debacle. Damn those workers wanting to be paid, it almost beggars belief.

[hairykrishna]

ralphrj said:

The building was originally expected to cost £7m. The final bill was actually £112m.

It sounds a bit like our university estates department.

[Chrisgr31]

Miserablegit said:

I think the union would have been happy with a loss of £14m- the real issue is the building which cost 112m is valued at £29m….

Cost doesnt equal value though. The question should be how much should it have cost to build this. Should it have cost £10 m, £20 m etc as thats where the issue is. The subsequent value of it is a red herring.

[vikingaero]

Did Unite get management consultants from the SNP?

[FMOB]

Now they know how the tax payer feels.

[wombleh]

Hereward said:

Ah, the classic line "...put safeguards in place to ensure that such things can never happen again".

Lessons will be learned.

[scenario8]

The sums involved here are extraordinary.

Expensive lessons…

[b0rk]

Chrisgr31 said:

Cost doesnt equal value though. The question should be how much should it have cost to build this. Should it have cost £10 m, £20 m etc as thats where the issue is. The subsequent value of it is a red herring.

Well I build these things for a living. Honestly a 180 bed hotel and 1000 seat conference centre of that size in that part of the country shouldn’t have cost £112m to construct. TBH it should have been possible to construct it for less than the current asset value of £29m.

If for very simple maths each bedroom should have cost £90k (PI, Travelodge, HbH, HEX and Moxy are less today btw) then that’s £16m plus the cost of the conference centre.

Hotels with a major operator signed up on long term lease are or should be a very solid investment. In this case Unite agreed a lease with Marriot for their aloft brand.

How the £80ish million vanished will I suspect be case of poor contract management and project controls by a poorly advised or inexperienced client rather than explicit fraud.
It’s not fraud if the subbie pulls your pants down because you as a client have rocks for brains. Maybe it’ll turn out there are some brown envelopes too but so far the SFO do not seem to have found these.