This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.theguardian.com/uk-news/2015/nov/13/kids-companys-special-treatment-other-children-lost-out

The article has changed 4 times. There is an RSS feed of changes available.

Version 1 Version 2
Kids Company's 'special treatment meant other children lost out' Kids Company's 'special treatment meant other children lost out'
(about 1 hour later)
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. Tens of millions of pounds of government grants were awarded to the children’s charity Kids Company over two decades without any proper assessment of whether it achieved value for money, a committee of MPs has claimed.
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 | EditorialRelated: 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 Commons public accounts committee (PAC) said Kids Company was treated as “a special case” by Whitehall officials, who had failed to stand up to pressure from ministers who were determined to provide support for the charity.
Issuing a demand for a fundamental review of government grants to charities, it warned: “This must never happen again.” Despite warnings over several years about the charity’s precarious finances, and doubts over the effectiveness of repeated investment, the PAC said officials “never seriously questioned, let alone stopped” funding for Kids Company until weeks before it went bust.
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. Civil servants passed responsibility for Kids Company around between departments “like a hot potato”, the report says. “It is staggering that the government has given over £40m to Kids Company over the past 13 years and still has no idea what it was getting for taxpayers’ money.
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.
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.
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 CompanyRelated: 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. “Kids Company was the favourite of successive ministers but accounting officers [senior civil servants running Whitehall departments] have to make decisions, sometimes under pressure, to safeguard taxpayer’s money; in funding Kids Company for so long they have not served taxpayers across the country well.”
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.” Ministers were not cross-examined by the committee because it concentrates on how money is spent, rather than policy decisions.
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.” The report is the latest to emerge from a series of ongoing official investigations into the circumstances surrounding the collapse in August of Kids Company, the child protection charity set up by Camila Batmanghelidjh in 1996.
The charity, which was championed by succession of senior Labour and Conservative politicians, including the prime minister David Cameron, is also the subject of inquiries by the Commons public administration committee and the Charity Commission as well as an Metropolitan police investigation into criminal allegations involving sexual abuse.
A statement by former trustees of Kids Company said they were “bemused and angered” by the ferocity of the report’s criticisms. It said the committee had failed to take evidence from anybody directly associated with Kids Company and had drawn “highly selectively” from the National Audit Office (NAO) report.
The 18-page PAC report was completed in little over a week and after a single oral evidence hearing, in which two senior civil servants, Richard Heaton, formerly permanent secretary in the Cabinet Office, and Chris Wormald, permanent secretary in the Department for Education, were questioned about the basis on which Kids Company received funding.
That hearing followed an NAO report in October, completed in just six weeks, which found that ministers brushed aside civil servants’ concerns about the charity’s finances on at least six occasions since 2002. However, it found no evidence that ministers or officials had acted illegally or inappropriately. The NAO did not assess whether Kids Company provided value for money.
However, the select committee concluded there had been insufficient scrutiny of what Kids Company delivered in return for the £42m of public investment it received from successive governments over 15 years.
Although senior civil servants insisted Kids Company did innovative work and provided value for money, and subjected the charity to regular audit, the committee said it was sceptical of “the charity’s inflated claims about what it achieved”.
By treating Kids Company as “a special case” the government in effect kept the charity afloat at the expense of other charities that work with vulnerable children, the report claims.