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Kids Company: MPs condemn 'catalogue of failures' which led to charity's collapse

Kids Company collapsed in 2015 after 19 years. Credit: PA Wire

MPs have condemned the "extraordinary catalogue of failures" which led to the collapse of the Kids Company charity in a damning report.

Kids Company, which supported deprived children in major UK cities, folded in August 2015 - days after it was handed a £3 million government grant in a last-ditch bid to keep it open.

The Commons Public Administration and Constitutional Affairs Committee (PACAC) has called for "radical change" in charity regulation to prevent a repeat.

The report comes just days after Scotland Yard dropped an investigation into reports of physical and sexual abuse linked to the failed charity.

Here's what we know.

  • No one spared in damning report
Camila Batmanghelidjh founded the charity in 1996. Credit: PA Wire

The charity, senior ministers, watchdogs and auditors are all heavily criticised.

Committee chairman Bernard Jenkin said there were failures of governance and control "at every level".

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.

Proper mechanisms must be put in place to allow dispassionate, transparent, accountable decisions to be made about charity funding and regulation in the future.

There must be a radical change in our approach to charity regulation at every level.

– Bernard Jenkin
  • Yentob savaged
Alan Yentob. Credit: PA Wire

Alan Yentob, the BBC's former creative director, was singled out for particular criticism for his role.

The report accused him of painting an "inaccurate and alarming" picture of financial troubles at the troubled charity, where he was chair of trustees.

MPs also said he failed in his duty to safeguard its work with vulnerable young people.

His alleged interventions over negative media reports were "unwise at best, and deliberately intimidating at worst", the report said.

"The evidence Mr Yentob gave to the committee suggests a lack of proper attention to his duties as chair of trustees and a continuing inability to recognise those failures.

The report also criticised the BBC itself for being too slow to address potential conflicts of interest.

The broadcaster denied the claim, insisting its coverage was "impartial" and it had "led the way" in reporting the story.

We note the findings of the Committee’s report - the Trust agrees that the BBC’s impartiality and management of conflicts of interests is critical, that’s why in December we asked the BBC to revisit their processes for managing conflicts for senior managers and we await that report.

– BBC spokesperson
  • £42 million from the government
Staff show emotion as they leave Kids Company for the final time. Credit: PA Wire

The charity received more than £42 million of government funding between 1996 and 2015, thanks in some part to its founder Camila Batmanghelidjh gaining "unique, privileged and significant access to senior ministers and prime minsters".

The report said it was "unacceptable" that ministers released funds "on the basis of little more than their relationship with a charismatic leader, small-scale studies and anecdotes, and no more than two visits made by Mr Letwin [Oliver Letwin, Conservative Cabinet office minister] more than 10 years previously".

  • Letwin defends grant decision
Oliver Letwin, the Cabinet office minister. Credit: PA Wire

Conservative minister Oliver Letwin, who granted £3 million to Kids Company before it collapsed despite opposition from civil service officials, said he stood by his decision to give the charity "one last chance".

As I said to the committee I believed it was the right thing to do to give this charity one last chance to restructure.

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.

– Oliver Letwin
  • Stricter controls needed

MPs have called for statutory regulation of charities with safeguarding responsibilities for children or vulnerable adults by an independent watchdog such as Ofsted or the Care Quality Commission.

Their report also calls for much 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 also said the Charity Commission needed to do far more to encourage people to report suspicions about mismanagement and be given extra resources and powers to launch earlier investigations.

  • Ex-Kids Company trustees hit back
Graffiti above the Kids Company sign in Bristol City centre. Credit: PA Wire

The committee was accused by the charity's former trustees of hiding behind parliamentary privilegeto present an "inaccurate, unbalanced and irresponsible" account.

They also said MPs had "naively accepted allegations made in the media and by a small number of individuals, some with vested interests in damaging Kids Company".

It is a regrettable feature of British democracy that the committee can use the curtain of parliamentary privilege to produce what is an irresponsible report, immune from the defamation claims that would inevitably follow without this privilege.

– Kids Company