Government ploughed millions into Kids Company despite concerns
Thursday, October 29, 2015
Collapsed charity Kids Company received at least £42 million from the Government despite repeated concerns about the way it was being run, an official spending watchdog has found.
An investigation carried out by the National Audit Office (NAO) into the Government’s funding of Kids Company, which closed in August, reveals that despite ‘repeatedly expressed concerns’ from officials about the charity’s future cashflows and poor financial management as far back as 2002, the Government continued to respond to the charity’s requests for funding.
Former bosses at the charity, which was founded by Camila Batmanghedlidjh in 1996, have denied it was financially mismanaged.
Officials accepted assertions from Kids Company, which provided support to vulnerable families in London and Bristol, that it would become insolvent without Government grant funding.
According to the NAO, an independent body that audits government departments, over a period of at least 15 years, Kids Company received around £42m in central government grants, £2m from councils and £2m of lottery money.
In 2011, Kids Company received more money from the Department for Education than any other charity.
The NAO also reveals that up until 2013 the Government relied on Kids Company’s self-assessments to monitor its performance.
Its investigation follows the award of £3 million to the charity in July 2015 after ministers overruled warnings from the Cabinet Office that it would not represent value for money.
On the same day, officials learnt that the Metropolitan Police was investigating the charity over allegations of physical and sexual abuse.
Reports suggest ministers wanted to recover the £3m grant because the conditions attached to the use of the money had not been met.
The following month (August), the charity’s trustees announced the closure of Kids Company, resulting in the loss of 650 jobs.
In response Ms Batmanghedlidjh told the BBC that an 'extremely distorted picture' of the charity was being painted.
She added, 'The state gave Kids Company money to do the job it couldn't do. It wasn't doing the charity a favour.'
A Government spokesperson said, 'Since 2002, successive Governments have provided financial assistance to the charity to help it deliver services for vulnerable young people. The welfare of the young people has always and continues to be our top priority, and we will continue to work with local authorities, charities and youth clubs in Lambeth, Southwark, Camden and Bristol to support young people with the services they need.'