Kids Company ‘given £46m public cash’

Posted by Warren Fyfe on October 29, 2015 in Warren Fyfe Site

Camila BatmanghelidjhImage copyright

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Kids Company’s founder Camila Batmanghelidjh has denied claims the charity was financially mismanaged

Collapsed charity Kids Company received at least £46m of public money despite repeated concerns about how it was run, the National Audit Office has found.

The charity lobbied the government for funding and warned of service closures if officials resisted, the NAO found.

Concerns about the charity’s cash flow and financial sustainability were raised as far back as 2002, it said.

Kids Company’s founder Camila Batmanghelidjh has denied claims the charity was financially mismanaged.

The Commons Public Accounts Committee, which is responsible for overseeing government spending, said there had been “little focus” on the charity’s achievements by government.

Kids Company, which helped vulnerable young people, closed in August – days after receiving a £3m government grant.

What went wrong at Kids Company?

‘Repeated concerns’

The NAO, an independent parliamentary body which audits government departments, launched its investigation after a £3m grant was awarded to the charity in June 2015 when ministers over-ruled official warnings from a senior Cabinet Office civil servant that it would not represent value for money.

It found Kids Company, which operated in London, Liverpool and Bristol, had received public funding for at least 15 years, with at least £42m provided in government grants, including £28m from the Department for Education (DfE) and its predecessors.

It also received about £2m from councils and £2m from the national lottery.

The report found concerns about the charity’s cash flow and financial sustainability were raised as far back as 2002.

But despite “repeatedly expressed concerns” from officials, the government “continued to respond to the charity’s requests for funding”.

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Supporters of the charity marched to Downing Street shortly after its closure

It said officials also noted that other organisations “appeared to offer better value for money”.

But briefings to ministers in 2002, 2005, 2007, 2010, 2012 and 2015 showed officials accepted Kids Company’s assertions that it would become insolvent without government grant funding, the report said.

Analysis – By Chris Cook, BBC Newsnight policy editor

The NAO, Parliament’s spending watchdog, reveals civil service worries about Kids Company were very longstanding.

The document will bolster concerns that the charity was, indeed, extremely poorly run: civil servants complained for more than a decade about its management under Camila Batmanghelidjh and Alan Yentob, the charity’s chairman from 2003 until it closed (he is also the BBC’s creative director).

The fundamental question that the NAO sought to address is why, given concern about the charity for more than a decade, Kids Company was able to raise more than £40m from government departments.

Read more from Chris

The NAO said it “observed a consistent pattern of behaviour” that when Kids Company came to the end of its grant term it would write to ministers and express fears of redundancies and the impact of service closures while expressing the same concerns in the media.

This meant that from 2013 it did not have to compete for grants, the NAO found.

Meg Hillier, chairwoman of the Public Accounts Committee, said: “It is unbelievable that over 13 years, taxpayers’ money has been given to Kids Company with little focus on what it was actually achieving for the children it was supporting.

“Government repeatedly raised concerns about Kids Company’s finances but little action was taken.

“Despite this, government gave it further grants – funded by the taxpayer.”

Ms Batmanghelidjh previously said Kids Company had become “a football for the media and the civil servants”.

Some people in government wanted the charity to “disappear” and there had been a “malicious discrediting campaign”, she added.

She told the BBC that Kids Company had been subjected to a “trial by media” based on “rumours and conjectures”.

Alan Yentob, chairman of Kids Company and the BBC’s creative director, has said suggestions of financial mismanagement were “complete rubbish”.

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Kids Company’s collapse meant the closure of 11 centres in London and Bristol

“We have had problems raising funds, and the demand has been increasing,” he said.

Civil servants responsible for some of the funding decisions will be called before the Public Accounts Committee on Monday.

The £3m from the government was paid to Kids Company on 30 July but on the same day officials learned the Metropolitan Police was investigating the charity over allegations of physical and sexual abuse.

The trustees closed Kids Company in August following the announcement of the police investigation, saying they were no longer confident they could secure future income.

On 3 August, the Cabinet Office terminated the grant agreement and requested repayment of £2.1m.

Article source: http://www.bbc.co.uk/news/uk-34661273#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa

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