Charity watchdog opens statutory inquiry into City & Guilds’ sale of business arm | Business
The Charity Commission has launched a legal investigation into City & Guilds’ sale of its qualification awards business to a private company last year.
The announcement comes after the Guardian revealed last month how City & Guilds bosses were given multimillion-pound bonuses after the charity privatized its commercial arm.
The payments, understood to include a £1.7 million reward to chief executive Kirstie Donnelly and a £1.2 million reward to finance director Abid Ismail, were revealed following reports of how the privatized City & Guilds firm was also embarking on a £22 million cost-cutting drive and shrinking its UK workforce after the charity was sold by its owner to PeopleCert, an international certification company.
The presentation detailing the cost-cutting program appears to have been removed from the PeopleCert website after the Guardian published the plans.
As well as the bonuses, it is understood that Donnelly’s salary has also been given a £100,000 increase, which is now around £430,000. Ismail’s salary is also believed to have increased by 30%, to around £70,000 to £300,000.
The commission said its investigation would examine a range of issues, including “concerns raised in public reporting about the sale and bonuses given to executives”.
It will also examine “information provided to the commission by the charity in relation to the sale of the charity’s awarding, evaluation and educational work” as well as “the trustees’ decision to make the sale” plus “the information provided to them and taken into account in making that decision”.
In a statement, the commission said it “may expand the scope of its investigation if additional regulatory issues arise”, adding that it was “previously informed of the proposed sale by the charity and sought and received assurance about the trustees’ decision-making process, but the sale did not require regulatory approval from the commission”.
Founded in 1878 by the City of London and a group of 16 livery companies, the original institute developed a national system of technical training. qualifications and apprenticeships in fields ranging from manufacturing and mechanical engineering to hairdressing and horticulture. The organisation, which was awarded a royal charter by Queen Victoria in 1900, says it helps around 1.1 million people a year.
Chefs are among the famous graduates of the institution, which has a storied history. Jamie Oliver, Marcus Wareing and Gordon Ramsayand former England football manager Gareth Southgate, famous gardener Alan Titchmarsh and fashion designer Karen Millen.
The institute’s work was under the umbrella of a charity called City & Guilds London Institute (CGLI), which announced in the autumn that it was selling its education and awards operation City & Guilds (C&G). to PeopleCert.
Charity, provides grants to people in need of vocational trainingIt said the sale gave it a cash gain of between £180 million and £200 million, which was presented as providing a long-term future for the organization to pursue its philanthropic objectives, as well as providing increased opportunities and investment for its now private education business.
Trustees of charity CGLI said: “We accept the Charity Commission’s statutory investigation and are co-operating fully with their investigation. We are confident that all actions taken by the trustees are appropriate, transparent and consistent with our charitable purpose. We are committed to maintaining the public trust and will continue to act in the best interests of the charity and its beneficiaries.”
Private business City & Guilds Ltd previously said: “Any awards to employees are a matter for City & Guilds Ltd and will be guided by standard business practices to ensure critical expertise and experience is retained.”
