Ministers failed taxpayers over Kids Company support

MPS want radical changes to avoid any repeat of the 'extraordinary catalogue of failures of governance and control' that led to the collapse of Kids Company.
The founder of Kids Company, Camila Batmanghelidjh.   Pic: Dominic Lipinski/PA WireThe founder of Kids Company, Camila Batmanghelidjh.   Pic: Dominic Lipinski/PA Wire
The founder of Kids Company, Camila Batmanghelidjh. Pic: Dominic Lipinski/PA Wire

The widely-praised outfit supporting disadvantaged youngsters folded amid a storm of controversy last August - just days after receiving a £3m Government grant in a final bid to keep it afloat.

In the latest of a string of scathing assessments of the fiasco, the Commons public administration and constitutional affairs committee, found trustees, ministers, watchdogs and auditors all played a part.

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Their report comes just days after a Scotland Yard investigation into reports of physical and sexual abuse linked to Kids Company - which helped precipitate the collapse - was dropped after detectives found no evidence of criminality.

Among wide-ranging changes backed by the MPs is statutory regulation of charities with safeguarding responsibilities for children or vulnerable adults by an independent watchdog, such as the Care Quality Commission.

The report calls for stricter controls on “unorthodox” payments to favoured causes by ministers, including a ban on handing cash to charities under investigation and removing responsibility from the Cabinet Office.

It was “astounding” that the Government did not acknowledge the need for a robust examination of the charity until 2015 and represented a failure of ministerial responsibility to spend taxpayers’ money responsibly, it said.

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And it demanded the Charity Commission do more to encourage people to report suspicions about mismanagement and be given extra resources and powers to launch earlier investigations into good causes.

The charity received over £42m of Whitehall funding between 1996-2015, thanks to its founder Camila Batmanghelidjh winning “unique, privileged and significant access to senior ministers and prime minsters”.

Committee chairman Bernard Jenkin said: “In the course of this inquiry the Committee has heard what can only be described as an extraordinary catalogue of failures of governance and control at every level: trustees, auditors, inspectors, regulators and government.

“Despite lacking robust evidence about the quality of the charity’s outcomes, value for money or governance, Kids Company attracted high profile support from senior ministers throughout successive governments.”

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He said proper mechanisms must be put in place to allow “dispassionate, transparent, accountable decisions” to be made about charity funding and regulation.

Cabinet Office minister Oliver Letwin, who was criticised by the committee for releasing £3m in defiance of officials, stood by the decision but said procedures were being reviewed.

“We will of course pay careful attention to this report and in light of what we now know about Kids Company we will be reviewing our grant-giving process,” Mr Letwin said.

In a statement, the former trustees of Kids Company said the report was “inaccurate, unbalanced and irresponsible” and would “interfere with the proper functioning” of an investigation being undertaken by the Commission.

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