City & Guilds privatisation sparks fees and bonus controversy

Published: 19 April 2026. The English Chronicle Desk. The English Chronicle Online

The privatisation of one of Britain’s most respected vocational education institutions has triggered a wave of controversy, raising serious questions about governance, executive pay, and the future direction of technical training in the UK. The sale of City & Guilds’ training and accreditation arm to private firm PeopleCert has not only disrupted long-standing relationships with training providers but also drawn the scrutiny of regulators amid revelations of steep fee hikes and multimillion-pound bonuses.

For many on the ground, the consequences of the deal were felt immediately. Electrician and training provider Charlie Butler recalls being blindsided when informed that the annual cost for maintaining accreditation would more than double. What had previously been a manageable expense of £2,000 per year surged to £5,000, while per-student charges rose sharply from £18 to £60. For a small, independent training business, the increases were not just unexpected but potentially unsustainable.

The explanation Butler received at the time was vague, framed simply as a consequence of “changes in the company.” Only later did he discover that the organisation behind his qualifications had undergone a fundamental transformation. The October 2025 deal, which saw the sale of the accreditation business for £166 million, marked a turning point in the history of an institution that had operated for nearly a century and a half under a charitable framework.

Founded in 1878, City & Guilds built its reputation as a cornerstone of British vocational education, offering qualifications across a wide range of trades and professions. Its legacy includes training generations of skilled workers, from engineers to chefs, and its qualifications have long been regarded as a benchmark of quality. The organisation operates under the umbrella of the City & Guilds London Institute, a charity that historically balanced commercial activity with a broader public mission.

The sale effectively split that identity in two. While the charity retained the proceeds and pledged to reinvest them into educational initiatives, the operational arm responsible for delivering qualifications became a private enterprise under PeopleCert. The shift has prompted concern among educators and industry insiders who fear that profit motives could overshadow the organisation’s traditional commitment to accessible learning.

Initially, the transition was presented as a strategic move designed to modernise the institution and secure its long-term future. Senior figures, including then chair Dame Ann Limb and chief executive Kirstie Donnelly, publicly celebrated the deal as a “landmark” achievement. They argued that the separation would allow the charity to expand its philanthropic work while enabling the business arm to innovate more rapidly in a competitive market.

However, that narrative began to unravel within weeks. Reports emerged of internal plans to reduce the UK workforce as part of a cost-cutting strategy, with savings expected to come largely from replacing domestic roles with lower-cost positions overseas. While such measures are common in the private sector, they struck a discordant note given City & Guilds’ heritage as a public-interest institution with deep roots in British industry.

The controversy deepened further with revelations about executive compensation. Shortly after the sale, it was disclosed that Donnelly and finance director Abid Ismail had received bonuses totalling nearly £3 million, alongside significant salary increases. Donnelly’s annual pay rose to approximately £430,000, while Ismail’s climbed to around £300,000. Overall, the remuneration of the top leadership team more than tripled following the transaction.

These disclosures sparked outrage among stakeholders, particularly given the timing. The executives had only recently transitioned into roles within the newly privatised entity, raising questions about the justification for such substantial rewards. Critics argued that the payments appeared disproportionate and potentially misaligned with the organisation’s stated mission.

The growing unease culminated in regulatory intervention. In January, the Charity Commission launched a statutory inquiry into the circumstances surrounding the sale and the associated bonus payments. The investigation is examining whether trustees acted appropriately and whether the charity’s assets were managed in line with its obligations.

In parallel, PeopleCert initiated its own internal review, leading to the temporary suspension of Donnelly and Ismail. What was initially described as a short-term measure extended over several weeks, before both executives ultimately departed the company without financial settlements. Legal representatives have since indicated that litigation may follow, suggesting that the fallout from the deal is far from over.

Amid the unfolding drama, fundamental questions remain unresolved. Chief among them is why the sale was deemed necessary in the first place. Financial records from the period leading up to the transaction do not indicate a crisis. The organisation reported an income of £174.8 million against expenditure of £182.4 million, a manageable deficit that some argue could have been addressed without resorting to privatisation.

There are also concerns about the decision-making process itself. Documents suggest that alternative strategies, including internal transformation plans, may not have been given equal consideration. Some insiders claim that trustees were presented with information that favoured a sale, though the charity maintains that multiple options were thoroughly evaluated over more than two years before a final decision was reached.

For training providers like Butler, the debate is not merely theoretical. The practical impact of rising fees and shifting priorities is already shaping business decisions. Faced with higher costs, some providers are exploring alternatives to City & Guilds, potentially weakening the organisation’s long-standing dominance in the sector.

The broader implications extend beyond individual businesses. Vocational education plays a critical role in addressing skills shortages and supporting economic growth. Any disruption to established systems of accreditation risks creating uncertainty at a time when demand for skilled labour is increasing. The challenge lies in balancing the need for innovation and investment with the preservation of trust and accessibility.

Community reactions within the education sector have been mixed. While some acknowledge the potential benefits of private investment, others worry that the ethos of public service that defined City & Guilds for generations may be eroded. The perception of excessive executive pay has only amplified these concerns, fuelling a sense that the organisation’s priorities may be shifting.

As the Charity Commission’s inquiry continues, its findings are likely to have significant implications not only for City & Guilds but for the governance of charitable institutions more broadly. The case highlights the complexities involved when organisations straddle the line between public mission and commercial activity, particularly in sectors as vital as education.

For now, the future of City & Guilds remains uncertain. The institution’s brand still carries considerable weight, but its recent transformation has introduced a level of instability that could take years to resolve. Whether it can reconcile its historic mission with its new commercial reality will depend on the outcomes of ongoing investigations and the actions taken in their wake.

In the meantime, stakeholders across the sector are watching closely. The decisions made in the coming months will not only shape the trajectory of a single organisation but may also influence how vocational education is structured and delivered in the UK for years to come.