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| PM defends giving Kids Company 'one more go' with £3m bailout | PM defends giving Kids Company 'one more go' with £3m bailout |
| (35 minutes later) | |
| David Cameron has defended the decision to give Kids Company “one more go” with a government bailout earlier this year, after auditors found the failed charity was given £42m over 15 years against advice from civil servants. | David Cameron has defended the decision to give Kids Company “one more go” with a government bailout earlier this year, after auditors found the failed charity was given £42m over 15 years against advice from civil servants. |
| The prime minister confirmed he had personally been involved in trying to keep Kids Company going, despite Whitehall raising doubts at least six times over the years about the charity’s value for money and financial management. | |
| The Cabinet Office authorised a final £3m bailout at the end of June, a little more than a month before Kids Company collapsed, the latest in a long line of emergency funding from successive governments. | |
| Former children’s minister Tim Loughton has blamed Downing Street for overruling officials in 2012, after the prime minister received a letter from the charity’s founder Camila Batmanghelidjh. | |
| Speaking at the end of a summit in Reykjavik, Cameron said he would have to check the details of that intervention by No 10 in 2012 but he thought it was worth trying to save the charity. | |
| Cameron added: “My role in this has always been to try to help keep that organisation going because it was doing very good and important work and so the government, at a series of stages – and I think the previous government too, before the coalition government – was confronted by difficult situations where this organisation doing this good work was finding it difficult to be financially viable and I always judged it was worth giving it one more go to try to get it to be financially viable. | |
| “In the end, sadly, that wasn’t possible so it has come to an end. What matters now is looking after the children that it used to look after. But I certainly think it was right to give Kids Company every chance of a sustainable, viable future. That’s why it had access to public money.” | “In the end, sadly, that wasn’t possible so it has come to an end. What matters now is looking after the children that it used to look after. But I certainly think it was right to give Kids Company every chance of a sustainable, viable future. That’s why it had access to public money.” |
| The National Audit Office (NAO) report indicated that Cameron, former education secretary Michael Gove, former home secretary David Blunkett, and former education secretary Ed Balls had all intervened to support Kids Company between 2002 and 2015, in some cases to prevent it from becoming insolvent. | |
| Kids Company was given relatively small sums in its early days, but the amounts began to ratchet up over the years, with most funding being handed over under the coalition. | Kids Company was given relatively small sums in its early days, but the amounts began to ratchet up over the years, with most funding being handed over under the coalition. |
| Blunkett’s department orchestrated less than £500,000 of grants in 2002-3 and the Treasury later approved a three-year grant of £3.4m in 2005. The scale of the central government bailouts appeared to increase when Balls and then children’s minister, Beverley Hughes, unveiled a three-year £12.7m funding package for the charity in 2008. | Blunkett’s department orchestrated less than £500,000 of grants in 2002-3 and the Treasury later approved a three-year grant of £3.4m in 2005. The scale of the central government bailouts appeared to increase when Balls and then children’s minister, Beverley Hughes, unveiled a three-year £12.7m funding package for the charity in 2008. |
| Related: Labour and Conservative ministers ignored repeated warnings over Kids Company | Related: Labour and Conservative ministers ignored repeated warnings over Kids Company |
| The coalition continued to fund Kids Company at a similar rate, including a £9m deal in 2013, an extra £4.5m in March 2015, and then an additional promise of £3m for restructuring in June 2015. Over the years, there were also a number of other grants from different departments and organisations such as the Big Lottery Fund as well. | |
| Earlier, Loughton, who was Cameron’s children’s minister from 2010 to 2012, said people would “have to ask No 10” why warnings about the effectiveness of Kids Company were ignored. | Earlier, Loughton, who was Cameron’s children’s minister from 2010 to 2012, said people would “have to ask No 10” why warnings about the effectiveness of Kids Company were ignored. |
| “Basically, it went over our head at the Department for Education. As was the characteristic of Camila Batmanghelidjh, she wrote the ‘Dear David’ letter and went straight to No 10,” he told the BBC. | “Basically, it went over our head at the Department for Education. As was the characteristic of Camila Batmanghelidjh, she wrote the ‘Dear David’ letter and went straight to No 10,” he told the BBC. |
| “There’s always this subplot of: ‘There is going to be terrible publicity on this … it’s not going to reflect well on the government and all these kids’.” | |
| Loughton said Kids Company would “mesmerise” people in positions of power to “pay up or else”. | Loughton said Kids Company would “mesmerise” people in positions of power to “pay up or else”. |
| “You have to ask No 10 as to why final approval went through, and it has been in the hands of the Cabinet Office after my time at the Department for Education,” he said. | “You have to ask No 10 as to why final approval went through, and it has been in the hands of the Cabinet Office after my time at the Department for Education,” he said. |
| Downing Street said it did not recognise Loughton’s characterisation of events, adding that ministers in successive governments approved financing for Kids Company based on the evidence in front of them that the charity was helping vulnerable children. | Downing Street said it did not recognise Loughton’s characterisation of events, adding that ministers in successive governments approved financing for Kids Company based on the evidence in front of them that the charity was helping vulnerable children. |
| Batmanghelidjh said an “extremely distorted picture” of the charity was being painted and its supporters were too scared to defend it because of a “media frenzy and biased reporting”. | Batmanghelidjh said an “extremely distorted picture” of the charity was being painted and its supporters were too scared to defend it because of a “media frenzy and biased reporting”. |
| Related: Camila Batmanghelidjh: ‘I’m actually quite rigorous. I’m just not wearing a suit’ | Related: Camila Batmanghelidjh: ‘I’m actually quite rigorous. I’m just not wearing a suit’ |
| The NAO report found that civil servants repeatedly warned ministers that providing financial support to Kids Company carried risks because of the charity’s persistently fragile finances. But they were overruled, the NAO reported – though there was no evidence that ministers acted inappropriately or beyond their powers. | The NAO report found that civil servants repeatedly warned ministers that providing financial support to Kids Company carried risks because of the charity’s persistently fragile finances. But they were overruled, the NAO reported – though there was no evidence that ministers acted inappropriately or beyond their powers. |
| Kids Company went bankrupt in August 2015, five days after it had agreed a £3m rescue package with the government, following reports of a police investigation into allegations of abuse of children on its property. | Kids Company went bankrupt in August 2015, five days after it had agreed a £3m rescue package with the government, following reports of a police investigation into allegations of abuse of children on its property. |
| The charity had provided services for thousands of children with complex mental health issues who were involved in gang and gun crime or suffering from neglect or destitution in south London, Bristol and Liverpool. | The charity had provided services for thousands of children with complex mental health issues who were involved in gang and gun crime or suffering from neglect or destitution in south London, Bristol and Liverpool. |
| Questions about the charity’s management and governance were raised at a stormy session of the Commons public administration committee this month. MPs disputed Kids Company’s claims that it provided services to 36,000 children, young adults and their families. | Questions about the charity’s management and governance were raised at a stormy session of the Commons public administration committee this month. MPs disputed Kids Company’s claims that it provided services to 36,000 children, young adults and their families. |
| Despite officials’ fears, the NAO report also noted there was widespread agreement in government that the charity provided valuable and innovative services for thousands of disadvantaged youngsters who were often invisible to mainstream services. | Despite officials’ fears, the NAO report also noted there was widespread agreement in government that the charity provided valuable and innovative services for thousands of disadvantaged youngsters who were often invisible to mainstream services. |
| “Up until June 2015 the government continued to fund Kids Company on the basis that it would be a major blow to the young people who benefited from its services if it were to close down,” the report says. | “Up until June 2015 the government continued to fund Kids Company on the basis that it would be a major blow to the young people who benefited from its services if it were to close down,” the report says. |