Investigation Reveals Unauthorized Bonuses by City & Guilds Executives
An internal investigation into the £166 million sale of the City & Guilds vocational charity last year has found that the two most senior executives, Kirstie Donnelly and Abid Ismail, awarded themselves millions of pounds in bonuses without the authorisation or knowledge of their superiors.
The report details how Donnelly, the former chief executive of City & Guilds, and Ismail, the organisation’s finance chief,
“directly authorised and paid bonuses to themselves”totaling nearly £3 million combined. Additionally, the investigation uncovered that a further £2 million was distributed to other senior executives and 60 more junior colleagues through a scheme operated by the newly privatised company.
PeopleCert Statement on Bonus Payments
PeopleCert, the private company that acquired the City & Guilds vocational awards business in October, issued a statement on Monday addressing the issue. It stated that the bonuses and salary increases
“were in direct breach of [Donnelly’s and Ismail’s] duties and responsibilities as office holders and caused significant harm to the organisation’s reputation”.
The statement clarified that these payments were made without the knowledge of either PeopleCert or the former charity owner.
Regarding recovery efforts, PeopleCert declared:
“In the case of Kirstie Donnelly and Abid Ismail, we intend to take all action available to ensure the recovery of these amounts (£1.7m and £1.2m respectively) and will make appropriate referrals to the relevant authorities.”
Legal representatives for Donnelly and Ismail responded by asserting that their clients
“acted reasonably and honestly at all times”.
Background of City & Guilds
Founded in 1878 by the City of London and a consortium of 16 livery companies, the City & Guilds Institute originally developed a national system of technical education. Over time, it expanded to offer qualifications in diverse fields such as manufacturing, mechanical engineering, hairdressing, and horticulture.
Until its sale last year, the City & Guilds brand was held by the City & Guilds London Institute (CGLI), a charity that stated it would use the proceeds from the sale to continue its charitable activities, including providing educational support.
Following the sale, the newly private entity, City & Guilds Ltd, continued to operate by charging fees for services like accreditations and awards. Approximately 60% of its income was supported by stable government funding schemes.
Post-Sale Developments and Bonus Scheme
In December, it was revealed that the newly privatised City & Guilds business had initiated a bonus scheme after the sale. reported that Donnelly, who had transitioned from chief executive of the charity to the same role at the newly acquired City & Guilds, was among the directors who approved the scheme.
The bonuses were accompanied by significant salary increases for both executives. Donnelly received an additional £100,000 annually, raising her salary to approximately £430,000, while Ismail’s base salary increased by 30%, or about £70,000, to £300,000.
PeopleCert further commented:
“Whilst there was no evidence of wrongdoing on [the wider executive leadership team’s] part, we will also be requesting repayment of serving ELT members’ bonus payments in full.
All bonus payments made to the other 60 colleagues will be ratified by PeopleCert and no attempt will be made to recover the amounts, given the investigation’s conclusion that recipients were neither fully aware nor instrumental in the scheme.”
Charity Commission Inquiry and Suspensions
’s December reporting prompted the Charity Commission to launch a statutory inquiry into various issues at City & Guilds, including
“concerns relating to governance and financial management”.
One week later, Donnelly and Ismail were suspended
“pending the outcome of PeopleCert’s internal investigation”.
PeopleCert commissioned the internal investigation following these developments.
Legal Position of Donnelly and Ismail
Lawyers representing Donnelly and Ismail, who have indicated plans to challenge the allegations in court, stated:
“Our clients will present all their evidence to the courts in due course. That evidence overwhelmingly demonstrates that all bonus payments referenced in PeopleCert’s statement were approved, documented and implemented as part of the wider transaction process. It further shows that both the seller and the buyer, along with their advisers, were fully involved in the structuring and approval of the bonuses paid.”
