We must learn from the Kids Company report to better protect vulnerable children
As minister for children at the Department for Education I dealt with many charities doing extraordinary things for young people. At that time there were no fewer than 72,000 separate registered charities dealing with children and families. Trying to guide the sector into a more streamlined and effective force was a constant challenge.
Few of those charities received government money and most went about their business quietly and diligently without troubling headline writers. One notable exception was Kids Company. In August 2015, the high-profile charity collapsed and was put into compulsory liquidation. Its high profile chief executive Camila Batmanghelidjh went anything but quietly.
An inquiry by the Charity Commission opened in August 2015, followed by reports from the National Audit Office in October 2015; by the Public Administration and Constitutional Affairs Committee in November 2015; a disqualification order issued against the trustees and Chief Executive by the Official Receiver in 2017, later challenged in the High Court which subsequently cleared all involved last year.
This month the Charity Commission finally published the findings of its own inquiry, heavily constrained by the gushing vindication in the High Court judgement. Justice Falk concluded Batmanghelidjh and the trustees posed no risk to the public and that she herself “had a great deal of respect for the care and commitment they showed in highly challenging circumstances”.
However, the charity had burnt through at least £46m of public sector funding in its 17-year existence, coming cap in hand to the Government on at least seven occasions as well as begging HMRC to write off tax bills, and leaving £850,000 in back taxes when it folded.
Most controversially, a further £3m of taxpayers’ money was given to Kids Company by the Cabinet Office, just as it went under. That followed warnings from one of the high-profile trustees, Alan Yentob, that if the charity failed there was a “high risk of arson attacks on government buildings, …looting and rioting.” No such Armageddon came to pass. Therein lay the problem. This seemed a Wizard of Oz charity. No one really knew what went on behind the scenes and few people dared to question the magic of the not quite worldly giant figure who fronted it.
When determining how the rapidly shrinking largesse of public money was distributed to children’s charities by the DfE, providing data for outcomes was always a top criterion. Yet when I asked for details of the outcomes for the children helped by Kids Company and how many of them there were, I was told not to worry about the detail. On my visits to the project in South London I always seemed to arrive just after the children they were doing so much to help had left.
Camila had been the poster girl for David Cameron’s Big Society, appearing alongside him at the Cabinet table and on party conference platforms. Number Ten was at pains to remind us that she had prominent friends in the media. Indeed on at least one occasion those friends arrived at the DfE to tell me in person. No other major children’s charity I dealt with approached government the same way, and many were rightly resentful of the “privileged treatment” that Kids Company appeared to receive.
The Charity Commission found no evidence the trustees were dishonest or sought personal gain – nor were those allegations made in the High Court. However, the report highlighted that Kids Company operated under a “highly risky business model” with “mismanagement in the administration of the charity”.
Many of the scathing criticisms in the PACAC report to which I gave evidence have been taken on board – though the High Court ruling has precluded the Commission from imposing any meaningful penalties. The Charity Commission may have closed this sorry chapter on Kids Company, but it has not helped other longstanding legitimate children’s charities who rely on a different kind of magic to produce and evidence their outcomes for vulnerable children.
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