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The Charity Commission has opened a statutory inquiry into City & Guilds’ sale of its qualification awards business to a private company last year.
The announcement has been made after the Guardian revealed last month how City & Guilds bosses were handed million-pound bonuses after the charity privatised its business arm.
The payments – which are understood to include a £1.7m award for the chief executive, Kirstie Donnelly, and £1.2m to the finance director, Abid Ismail – emerged after reports of how the privatised City & Guilds business has also embarked on a £22m cost-cutting drive and is shrinking its UK workforce after being sold by its charity owner to PeopleCert, an international certification company.
The presentation detailing the cost-cutting programme appears to have been removed from the PeopleCert website after the Guardian published the plans.
Alongside the bonuses, Donnelly is also understood to have been granted a £100,000 increase to her salary, which now stands at about £430,000. Ismail’s salary is also believed to have been increased by 30%, rising by about £70,000 to £300,000.
The commission said its inquiry will examine a range of issues including “concerns raised in public reporting relating to the sale and bonuses awarded to its executives”.
It will also review “information provided by the charity to the commission regarding the sale of the awarding, assessment, and training businesses of the charity”, as well as “the trustees’ decision-making regarding the sale” plus “information that they were provided with and considered when making this decision”.
In its statement the commission said it “may extend the scope of the inquiry if additional regulatory issues emerge”, adding that it had previously been “made aware of the proposed sale by the charity, and had sought and received assurances about the trustees’ decision-making, but the sale did not require the commission’s regulatory consent”.
Founded in 1878 by the City of London and a group of 16 livery companies, the original institute developed a national system of technical education, offering qualifications and apprenticeships in fields ranging from manufacturing and mechanical engineering to hairdressing and horticulture. It was awarded a royal charter by Queen Victoria in 1900, and the body says it helps about 1.1 million people a year.
It has enjoyed a storied history, and the body’s famous alumni include the chefs Jamie Oliver, Marcus Wareing and Gordon Ramsay, as well as the former England football manager Gareth Southgate, the celebrity gardener Alan Titchmarsh and the fashion designer Karen Millen.
The institute’s business was owned under the umbrella of a charity, City & Guilds London Institute (CGLI), which announced in the autumn that it was selling its training and awards operation, City & Guilds (C&G), to PeopleCert.
The charity, which provides grants to people in need of vocational training, said the sale gave it a cash windfall of between £180m and £200m, which was presented as ensuring the long-term future of the institution to pursue its charitable objectives, as well as providing increased opportunities and investment for the now-private training business.
The trustees of the charity, CGLI, said: “We acknowledge the Charity Commission’s statutory inquiry and are cooperating fully with their investigation. We remain confident that all actions taken by the trustees have been proper, transparent, and in line with our charitable purpose. We are committed to maintaining public trust and will continue to act in the best interests of the charity and its beneficiaries.”
The private business arm, City & Guilds Ltd, has previously said: “Any awards to employees are a matter for City & Guilds Ltd and are guided by standard commercial practice to ensure critical expertise and experience is retained.”
