A recent internal investigation has uncovered that the two most senior executives at City & Guilds awarded themselves millions of pounds in bonuses without the knowledge or authorisation of their superiors. The report details how Kirstie Donnelly, the former chief executive, and Abid Ismail, the finance chief, directly authorised and paid themselves a combined sum of nearly GBP3 million following the GBP166 million sale of the vocational charity's awards business last year.
PeopleCert, the private company that acquired the City & Guilds vocational awards business in October, issued a statement on Monday asserting that these bonuses and accompanying salary increases were in 'direct breach' of Donnelly's and Ismail's duties. The company highlighted that these payments occurred without the knowledge of either PeopleCert or the former charity owner, City & Guilds London Institute (CGLI).
PeopleCert has indicated its intention to take all available action to ensure the recovery of these amounts, specifically GBP1.7 million from Kirstie Donnelly and GBP1.2 million from Abid Ismail. The company also confirmed it would make appropriate referrals to the relevant authorities. This decision follows initial reports in December that exposed the bonus scheme, prompting the Charity Commission to open a statutory inquiry into various issues at City & Guilds, including executive bonuses.
Beyond the top two executives, the investigation also found that an additional GBP2 million was paid to other senior executives and 60 more junior colleagues. While PeopleCert plans to request repayment of bonus payments from serving executive leadership team members, it will not seek to recover amounts paid to the 60 junior colleagues. This decision is based on the investigation's conclusion that these recipients were neither fully aware nor instrumental in the scheme.
The bonuses coincided with significant salary increases for Donnelly and Ismail. Donnelly's annual salary reportedly rose by GBP100,000 to approximately GBP430,000, while Ismail's base pay increased by around GBP70,000 to GBP300,000, a 30% jump. In total, the pay of the top six executives reportedly more than tripled after the deal. Lawyers for Donnelly and Ismail previously stated in April that they would be commencing litigation against City & Guilds Ltd and would not be commenting further.
The original City & Guilds Institute, founded in 1878, played a crucial role in developing a national system of technical education, offering qualifications across numerous fields. Until its sale, the brand operated under the umbrella of a charity, CGLI, which intended to use the financial windfall from the sale to continue its charitable works. Meanwhile, the newly privatised entity, City & Guilds Ltd, continues to charge fees for services, with approximately 60% of its income reportedly underpinned by stable government funding schemes.