Coventry City of Culture Trust found to have mismanaged finances

The trust that ran the UK City of Culture in 2021 in Coventry has been criticised by the Charity Commission for its “failure to maintain effective oversight of the charity’s finances”.

The commission, in a statement released in 4 September, said that this “amounted to misconduct and/or mismanagement” and “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”.

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 was removed from the register of charities following its liquidation in 2023.

The commission accepted that the charity was adversely affected by the Covid-19 pandemic, which negatively impacted on footfall and event ticket sales. While this does not fully explain the financial collapse of the charity, it was a significant contributing factor, the commission said.

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

Tracey Rollock, the head of regulatory compliance at the Charity Commission, said: “Many will rightly feel frustration and disappointment about the way in which the legacy of Coventry’s time as City of Culture was managed by the charity.

“We are critical of the trustees for their failure to effectively oversee the charity’s finances, notably the decision, late in the day, to secure a loan which the charity was unable to repay. Trustees are stewards of their charity’s money – in this case public money – and in this case, the trustees’ stewardship fell short.

“We accept that the Covid-19 pandemic had a detrimental impact on the charity, and it is important to be clear that we found no evidence of misuse of charitable funds for personal gain. But our findings in this case are serious, and should serve as a reminder to other trustees of the vital importance of financial diligence and care.”

The Charity Commission was told that the charity was no longer financially viable in February 2023, and that the trustees were planning to put the charity into administration.

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

The commission opened a regulatory compliance case to gather more information and determine whether any regulatory action was required.

Following its examination, the commission 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 going into administration with a significant debt owed to the council of just over £1.5m.

The Charity Commission’s criticism of the trust comes as the competition continues to find the 2029 UK City of Culture.

Nine locations were longlisted in March – Blackpool, Inverness-Highland, Ipswich, Middlesbrough, Milton Keynes, Portsmouth, Sheffield, Swindon and Wrexham.

The shortlist is due to be announced this autumn with the winner revealed in December or early January next year.

For the first time, there will be a cash prize of £10m for the UK City of Culture winner to help it deliver its cultural programme. 

The initiative is overseen by the Department for Digital, Culture, Media and Sport (DCMS). A DCMS web page on the City of Culture initiative says: “The 2029 UK City of Culture competition follows the success of previous winning cities: Bradford 2025, Coventry 2021, Hull in 2017 and Derry-Londonderry in 2013.”