Kids Company given £46m by government despite warnings over the way it was run, watchdog finds

Kids Company was shut down in August Credit: PA

At least £46 million of taxpayers' cash was handed to now-collapsed charity Kids Company - despite repeated concerns being raised by officials over the way it was run, the spending watchdog has found.

The charity relied on public money for its cash flow and would use guilt tactics to persuade ministers to continue handing it over, a report by the National Audit Office (NAO) found.

According to the report, whenever there was a possibility a grant might not be renewed, a "consistent pattern of behaviour" would emerge, with charity workers writing to ministers expressing "fears of redundancies and the impact of service closures", while begging for sympathy via the media.

The report revealed Kids Company received government funding for at least 15 years, including more than £42m in grants, of which £28m came from the Department for Education. Another £2m was stumped up by councils and £2m came from lottery money.

Kids Company was shut down in August Credit: PA
  • What happened to Kids Company?

The company was founded by Camila Batmanghelidjh in 1996 and registered as a charity in 1998.

On July 3, 2015, Ms Batmanghelidjh stepped down as head of the charity.

At the end of July, on the same day a £3m grant was paid by the Cabinet Office, police announced they were investigating allegations of physical and sexual abuse involving Kids Company.

Following the announcement, the trustees decided to close Kids Company.

On August 3, the Cabinet Office announced it was terminating the grant agreement and demanded the repayment of £2.1m. A short time later the charity closed and filed for insolvency.

Members of staff were emotional when they left Kids Company for the final time. Credit: PA
  • How much money was given to Kids Company and by who?

Between 2000 and August 2015, Kids Company received at least £46 million of public sector funding.

The single biggest government payment came between 2011 and 2013, when nearly £9 million was given to the charity by the Department for Education.

Five government departments contributed to the funding: Education, the Cabinet Office, Work and Pensions , Communities and Local Government and Health.

In addition to £41.8m of central government money, £4.6m came from ad hoc grants and local bodies.

£21.7m

given to Kids Company by the Department for Education between 2008/09 and 2012/13

£7.3m

given by the Government in 2015/16, the largest of any financial year

30%

of Kids Company's income came from the public sector from 2002 to 2013

  • What has the National Audit Office said about the way Kids Company was funded?

Public Accounts Committee chairwoman Meg Hillier said it was "unbelievable" that so much money was handed to the charity with "little focus on what it was actually achieving".

According to the report, there were three stages to funding requests. First, Kids Company would lobby the Government and voice its concerns to the press. After that, ministers would invariably ask officials to review funding options. Officials would then award the requested grants.

The NAO found that until 2013, the Government relied heavily on self-assessments by Kids Company as to what was required.

There were protests outside Downing Street after Kids Company closed. Credit: PA

The report acknowledged that during each funding round, the Government planned to work with the charity to "secure longer-term financial sustainability and reduce its dependence on central government". However, it concluded that it could find no evidence of the charity ever "reaching a position where it was sustainable and able to operate without government assistance".

The concerns raised by the Cabinet Office in 2015 were not new. Officials repeatedly expressed concerns about Kids Company, but the government continued to respond to the charity's requests for funding.

NAO report

Ms Hiller said the committee would be quizzing key government officials about their approach to Kids Company funding on Monday.