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| Kids Company's 'special treatment meant other children lost out' | Kids Company's 'special treatment meant other children lost out' |
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| Vulnerable children across the country are likely to have lost out as a result of the government’s decision to treat Kids Company as a “special case”, a parliamentary report has found. | Vulnerable children across the country are likely to have lost out as a result of the government’s decision to treat Kids Company as a “special case”, a parliamentary report has found. |
| The influential House of Commons public accounts committee said it was “staggering” that the failed charity – described by one official as “a prime minister-favoured charity” and by the committee as “a favourite of successive ministers” – was given more than £40m of taxpayers’ cash over 13 years without ministers having any idea what they were getting for it. | The influential House of Commons public accounts committee said it was “staggering” that the failed charity – described by one official as “a prime minister-favoured charity” and by the committee as “a favourite of successive ministers” – was given more than £40m of taxpayers’ cash over 13 years without ministers having any idea what they were getting for it. |
| Related: The Guardian view on the fall of Kids Company: a social policy morality tale | Editorial | Related: The Guardian view on the fall of Kids Company: a social policy morality tale | Editorial |
| In a scathing report, the cross-party committee said it was very sceptical of the charity’s inflated claims of what it achieved, and said funding decisions were not based on evidence and did not follow correct procedures. | In a scathing report, the cross-party committee said it was very sceptical of the charity’s inflated claims of what it achieved, and said funding decisions were not based on evidence and did not follow correct procedures. |
| Issuing a demand for a fundamental review of government grants to charities, it warned: “This must never happen again.” | Issuing a demand for a fundamental review of government grants to charities, it warned: “This must never happen again.” |
| Central government funding to Kids Company was “far in excess of grants paid to other charities”, and there was an obvious unfairness in so much money going into an organisation operating for most of its life only in two south London boroughs at the expense of services for children elsewhere in the country, the report said. | Central government funding to Kids Company was “far in excess of grants paid to other charities”, and there was an obvious unfairness in so much money going into an organisation operating for most of its life only in two south London boroughs at the expense of services for children elsewhere in the country, the report said. |
| Founded by Camila Batmanghelidjh in 1996 to offer counselling, support and art therapy to disadvantaged youngsters in Lambeth and Southwark, Kids Company was widely praised for its innovative approach and received a total of at least £42m from central government and £4m from local authorities and lottery bodies. | Founded by Camila Batmanghelidjh in 1996 to offer counselling, support and art therapy to disadvantaged youngsters in Lambeth and Southwark, Kids Company was widely praised for its innovative approach and received a total of at least £42m from central government and £4m from local authorities and lottery bodies. |
| It folded on 5 August, six days after receiving a £3m grant in a final attempt to keep it afloat. Ministers overruled Whitehall officials who advised against this payment, which came shortly after a £4.3m lump sum in March. | |
| The report said that until this point, continued funding of the charity had never been seriously questioned, despite repeated warnings and concerns about Kids Company’s financial situation and the impact it was achieving. Instead, responsibility for the charity was passed around Whitehall departments “like a hot potato”. | |
| After Kids Company failed to win funding through competitive grant schemes in 2013, the government awarded money directly without competition. | After Kids Company failed to win funding through competitive grant schemes in 2013, the government awarded money directly without competition. |
| There was insufficient scrutiny of what the charity delivered, with the government relying heavily until 2013 on Kids Company’s own assessment of its performance, the report said. | There was insufficient scrutiny of what the charity delivered, with the government relying heavily until 2013 on Kids Company’s own assessment of its performance, the report said. |
| It was “particularly alarming” that the government carried on handing over money for years without the charity ever demonstrating that its methods could be applied elsewhere in the country. | It was “particularly alarming” that the government carried on handing over money for years without the charity ever demonstrating that its methods could be applied elsewhere in the country. |
| Senior officials with responsibility for ensuring value for money had not served taxpayers or children across the country well in failing to stand up to ministers and advise them against further grants in a process known as seeking ministerial direction, the report stated. The government failed to learn lessons from its experience of the charity until the end of its existence, it added. | |
| The committee chair, Labour MP Meg Hillier, said: “The case of Kids Company will anger many people. The lack of scrutiny over its funding was staggering. Fairness and value for money – fundamental values when considering public spending – appear to have been forgotten in repeated and ultimately doomed attempts to keep Kids Company afloat. Even after civil servants finally refused to agree additional funding, ministers ‘took a punt’.” | |
| Related: The civil service is ill-equipped to deal with a force like Kids Company | Related: The civil service is ill-equipped to deal with a force like Kids Company |
| The committee called for the government to review its grant-making processes, to establish a register of such payments and to improve monitoring and evaluation of organisations receiving public money. | The committee called for the government to review its grant-making processes, to establish a register of such payments and to improve monitoring and evaluation of organisations receiving public money. |
| Karl Wilding, director of public policy at the National Council for Voluntary Organisations, said: “This report will make extremely frustrating reading for the thousands of charities who have to submit highly detailed plans in order to have a hope of funding and who work very hard to produce honest and accurate assessments of the difference they make.” | Karl Wilding, director of public policy at the National Council for Voluntary Organisations, said: “This report will make extremely frustrating reading for the thousands of charities who have to submit highly detailed plans in order to have a hope of funding and who work very hard to produce honest and accurate assessments of the difference they make.” |
| A government spokesman said: “The government will consider the recommendations laid out in this report. The welfare of the young people continues to be our primary concern and we are now working closely with local authorities to make sure they have access to the services they require.” | A government spokesman said: “The government will consider the recommendations laid out in this report. The welfare of the young people continues to be our primary concern and we are now working closely with local authorities to make sure they have access to the services they require.” |