Regulator critical of former trustees at Coventry City of Culture Trust

The Charity Commission has concluded its case into Coventry City of Culture Trust.

The Charity Commission found that the former trustees’ failure to maintain effective oversight of the charity’s finances amounted to misconduct and / or mismanagement.

This included inadequate budgeting and financial planning during the COVID‑19 pandemic, failure to scrutinise the charity’s financial sustainability, and failure to make the Commission aware of financial risks and the loss of key funding in a timely manner.

The Commission found no evidence of misuse of charitable funds or of payments to connected parties.

Coventry City of Culture Trust was set up to oversee Coventry’s bid to be UK City of Culture in 2021 and to run subsequent City of Culture events in 2022 and 2023. The charity has now been removed from the register of charities following liquidation.

In February 2023, the Commission was informed that the charity was no longer financially viable, and the trustees were planning to put the charity into administration.

The Commission was also informed that the charity had secured a loan of £1 million from Coventry City Council in October 2022, with the intention of using it to sustain the charity in future. Two trustees disagreed with this decision to obtain the loan and subsequently resigned.

The Commission opened a regulatory compliance case to gather more information and determine what, if any, regulatory action may be required.

The Commission then used powers available to it, under section 52(1)(b) of the Charities Act 2011, to obtain the charity’s bank statements.

Following its examination of the evidence, the Commission has determined that the charity may have been insolvent prior to entering into the loan with Coventry City Council, and there were doubts about the charity’s ability to repay the funds in full. This is due to the charity subsequently entering administration with a significant debt owed to Coventry City Council of just over £1.5 million.