When electrician Charlie Butler was contacted by City & Guilds last autumn, he received a shock.

He had branched out to launch a new company schooling future sparkies in Essex, offering City & Guilds-affiliated courses and qualifications. When the representative from the training charity called, Butler was expecting a quick conversation about a small uptick in the annual fees.

Then came the jolt.

“[The City & Guilds agent] explained that the fees had gone from £2,000 a year to £5,000 a year. And the £18 a person was now £60 a person,” Butler recalled. “I said, ‘That’s ludicrous.’ His first comment was, ‘Well, everything goes up.’”

The justification for the fee rises – which Butler said would have been impossible to pass on to his students and so came straight from his profit – seemed peculiar.

“All I was told was that there were changes in the company and that’s it,” he said. “I later found out … that City & Guilds had been sold and a couple of people received rather large bonuses.”

The October 2025 sale of City & Guilds’ training and accreditations business to the private firm PeopleCert netted the charity £166m – but proved so controversial within the usually staid world of vocational education that the 148-year-old brand is shaking to this day.

Founded in 1878 by the City of London and a group of 16 livery companies, the original City & Guilds institute developed a national system of technical education, eventually offering qualifications and apprenticeships in fields ranging from manufacturing and mechanical engineering to hairdressing and horticulture.

It has enjoyed a storied history as a body acting in the public interest helping generations of workers to obtain new skills, with famous alumni including the chefs Jamie Oliver, Marcus Wareing and Gordon Ramsay, the former England football manager Gareth Southgate, as well as the celebrity gardener Alan Titchmarsh and the fashion designer Karen Millen.

While it charged fees for its accreditations to private training businesses such as Butler’s electricians’ school, about 60% of its income is “underpinned by stable government funding schemes” and the City & Guilds brand was owned under the umbrella of a charity, City & Guilds London Institute (CGLI).

The acquirer, PeopleCert, however, is a large private business, prompting fears that the UK’s most famous vocational training brand might start prioritising profit over learning.

Still, the first couple of months after the unveiling of the deal only seemed to produce positive headlines.

In an article in the trade publication FE Week – which was co-authored by C&G’s then chair, Dame Ann Limb, and chief executive, Kirstie Donnelly – the pair congratulated themselves on a “landmark deal” born from Limb’s “preoccupation” with leaving a lasting legacy and Donnelly’s “legendary capacity for innovation”.

CGLI would use its financial windfall to continue its charitable works such as providing funding to people in need of vocational training. Meanwhile, the newly privately owned business, City & Guilds Ltd, would charge its fees for services such as accreditations and awards. It all seemed so neat – only for the glossy official narrative to be challenged just before Christmas.

First, the Guardian reported on the existence of a presentation prepared for PeopleCert investors, which revealed plans for the now-private City & Guilds to shrink its UK workforce as part of a £22m cost-cutting drive. PeopleCert informed its backers of £13m of “personnel cost synergies” that would largely be achieved by replacing departing UK staff with cheaper overseas hires.

The language might have been uncontroversial for an audience of hard-nosed debt investors – but it jarred when talking about the future of a brand granted a royal charter by Queen Victoria in 1900.

A welder at work. CGLI sold its training and awards operation, City & Guilds, to PeopleCert. Photograph: Hill Street Studios/Getty Images

Matters got worse from there.

Limb – who had also been nominated for a peerage by Keir Starmer – admitted days later to the Sunday Times that she had made false claims about her academic qualifications.

The following day, the Guardian reported that Limb’s close ally Donnelly, who had by then switched from being the charity’s chief executive to take the same role in the newly privatised City & Guilds, was one of the directors awarded huge bonuses by the new company after the sale.

The payouts – £1.7m for Donnelly plus £1.2m to finance director Abid Ismail – came alongside sizeable salary increases for the pair, with Donnelly granted an extra £100,000 a year, lifting her salary to about £430,000. Ismail’s base pay also increased by 30%, rising by about £70,000 to £300,000. In total, the pay of the top six executives more than tripled after the deal.

There was a brief hiatus for Christmas and then, on 9 January, the Charity Commission opened a statutory inquiry into a range of issues at City & Guilds including “the sale and bonuses awarded to its executives”.

A week later Donnelly and Ismail were suspended “for a short period”, as City & Guilds’ new owner, PeopleCert, commissioned an internal investigation.

That “short period” stretched until early this month, when an industry blog called The Skills Agenda revealed that Donnelly and Ismail had left without “any financial settlement”. Lawyers acting for Donnelly and Ismail added: “As we will shortly be commencing litigation against City & Guilds Limited … neither we nor [Donnelly or Ismail] will be making any further comment.”

Still, the slightly breathless nature of that timeline distracts from two central questions that have never been answered completely convincingly. Why was City & Guilds sold in the first place? And why were such huge bonuses paid to executives by a company that had only employed them for weeks?

Certainly there are numerous people in the industry who believe some serious financial investment was required to modernise the City & Guilds training and awards business – and that the charity was not the best place for such a transformation. However, C&G’s accounts to 31 August 2025 hardly suggest this was an imperative: the body had a total income of £174.8m and total expenditure of £182.4m.

So were the large bonuses a potential motivator?

Before details of the bonuses emerged, the Guardian asked City & Guilds if any individuals had profited from the sale. The business responded: “All the gains from the sale were accrued to CGLI /City & Guilds Foundation, which now operates independently from City & Guilds Ltd.”

If that only seemed like part of the story, more was to emerge. Documents seen by the Guardian suggest there had been a competing proposal for the charity to retain the accreditation and awards business after a “transformation” plan which some allege was never seriously considered by C&G trustees as they were only provided with information “weighted” towards recommending a sale.

CGLI has said its trustees considered five options “to protect the future of the institution”, ranging from “doing nothing, to merger, borrowing funds, and sale”. Only after more than 30 months of studying alternatives did it sell, the charity said.

Meanwhile, further internal records set out how C&G trustees were asked about rewarding executives for selling the business with bonuses that appear remarkably similar to those eventually paid by the business. A spokesperson for the charity, CGLI, said: “These post-sale payments are solely a matter for the new C&G Ltd owners.” C&G Ltd said this was a question for CGLI.

All of which leaves many of those studying this case in a state of limbo – as they wait to see what the Charity Commission inquiry, and an expanded PeopleCert investigation, conclude.

But others have moved on, including Butler who has plans for his electricians’ training business that may no longer include City & Guilds, despite the company saying the price rises were agreed in its guise as a charity, before the deal went through.

“I’m hoping to push new courses forward, possibly walk away from City & Guilds and go to a different awarding body,” Butler said. “It’s a slightly higher level awarding body, but it’s cheaper.”