The Charity Commission has initiated a formal statutory inquiry into the circumstances surrounding the sale of the business arm of the long-standing educational charity, City & Guilds. The regulator is examining whether the trustees acted in the charity's best interests when they agreed to the £1.5 billion deal.
Scrutiny Over a Landmark Deal
The sale, which was completed in late 2025, saw the charity's commercial training and certification operations acquired by a private equity consortium. This left the original charity, now renamed the 1878 Foundation, as a grant-giving body with an endowment derived from the sale proceeds. The Commission confirmed it is investigating potential mismanagement in the administration of the charity by its trustees.
Central to the inquiry are concerns about whether the trustees fulfilled their legal duties. The Commission will assess if they protected the charity's assets and acted with sufficient care and diligence throughout the complex transaction. A key question is whether the sale price achieved represented the full market value of the highly profitable business, which had been built up over the charity's 145-year history.
Governance and Future Mission Under the Microscope
The inquiry will also scrutinise the future plans for the 1878 Foundation. The Commission stated it is looking into whether the trustees can ensure the new foundation's purposes are exclusively charitable and for the public benefit. There are broader questions about how the foundation's substantial new endowment will be used to further its historic mission of advancing skills and education.
The regulator first began engaging with the charity's trustees in October 2025, escalating its scrutiny to a formal inquiry in January 2026. This legal step provides the Commission with enhanced powers to gather evidence. The opening of an inquiry is not a finding of wrongdoing, but indicates the regulator has identified issues of serious concern that require investigation.
Implications and Next Steps
The outcome of this statutory inquiry could have significant repercussions. Depending on its findings, the Charity Commission has the authority to take remedial action, which could include issuing official guidance, removing trustees, or, in extreme cases, freezing charity assets. The probe places a spotlight on the governance of major charitable institutions with substantial commercial operations.
City & Guilds, founded in 1878, is a household name in vocational education, having awarded millions of qualifications in sectors from engineering to hospitality. The sale of its core business therefore represents a fundamental shift in its structure and operation. The charity watchdog's investigation will determine if this radical transformation was conducted with the rigour and transparency required by law.
