The Charity Commission has opened a statutory inquiry into training charity City and Guilds’ sale of its multi-million-pound business arm.

The regulator has confirmed that the sale by City and Guilds of London Institute (CGLI) of its awards and training operation to a private company in October last year is being looked at.

It said that the inquiry had been launched to “examine new information that has been reported in relation to the sale” to PeopleCert.

Under investigation will be information that had been provided to the regulator by the charity regarding the sale of its awards, assessment and training businesses to the firm.

This follows “concerns raised in public reporting relating to the sale and bonuses awarded to its executives”.

Trustee decision making regarding the sale and the charity entering into a “coexistence agreement” with the new company will also be probed.

In a statement the charity said that sale took place as “trustees’ first priority has been to ensure that the CGLI has the funds to continue its skills and social impact work at the size and scale needed today and for future generations”.

It said: “After thorough review, trustees concluded that to achieve this, significant and timely intervention was needed to protect the charity from the instability of political cycles, policy reform and competitive pressures, all of which have an impact on the charity’s income and its ability to continue its charitable objectives.

It added that “with the pace of technology and AI advancement outstripping the charity’s ability to fund at the scale needed to meet learner demand, it was clear that looking ahead, the charity would lose the tech race, both in funding and in delivering high quality programmes to support vocational and technical skills in an increasingly competitive and global market”.

“In response, the trustees considered a range of strategic options, including maintaining the status quo, borrowing to fund charitable activity, and sale,” continues its statement.

“They concluded that responsibly divesting the commercial awarding organisation and skills training business was the most effective way to protect the organisation’s long-term health, secure its mission for future generations, and support continued investment in awarding and training.

“A formal, competitive sales process was therefore undertaken with a number of organisations making bids.”

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