So far the fall-out from Kids Company’s collapse has mainly focused on the organisation itself. Attention has been concentrated on why it closed its doors so quickly, why a final grant was given by government against the advice of its experts and why trustees seemed so slow to act when questions about its governance were raised.
Now, with the publication of the National Audit Office’s (NAO) inquiry report, an even more worrying picture of the wider ramifications of Kids Company’s demise emerges. Remember, this is an organisation that, according to the NAO report, received £42m of state funding, mostly from the Department for Education and its predecessors. In 2008, Kids Company received 20% of such state funding; 42 other charities shared the rest.
Anyone working in the child care or child protection field knows that over recent years accelerating cuts in funding for statutory services, as well as for third-sector organisations, have left both in a parlous state. Small community-based, black and minority ethnic and user-led voluntary organisations have been particularly vulnerable although, in my experience, it is these organisations that tend to be most innovative and most valued by service users. Charities like these could have benefited from some of the funding Kids Company received.
The NAO report also raises concerns about the scale of state funds granted to Kids Company without it having to compete for them. In an age of formalised contracting and commissioning, such a lack of transparency, equity and justice is hugely problematic. And it questions whether the best organisation to deliver the service won.
Whatever good work Kids Company did with the marginalised children and young people it sought to support, is now likely to be lost in the kind of crude political reaction we can expect to follow in the wake of its highly visible failure. But its collapse is also likely to add to the poor press that charities have recently been receiving and damage them further. Concerns about aggressive “chuggers”, charities targeting older and insecure donors through cold calling and incessant junk mail, have eaten into the strong UK tradition of commitment to charitable giving and respect for big-name charities.
This is compounded by the increasingly complex relationships between third-sector organisations and the direct provision of services, as cuts in statutory provision have increased, both in the name of austerity and neoliberal ideology. David Cameron and Michael Gove, both strong supporters of Kids Company, have both also been constant critics of statutory social work. So was Camila Batmanghelidjh, chief executive of Kids Company – she was keen to outsource child protection work from local authorities, which she frequently condemned.
The NAO report is a helpful reminder that simplistic ideology and reliable, cost-effective policy and services make poor bedfellows. Ultimately, the goal of all third-sector organisations must be to support the rights and needs of their intended beneficiaries. Sadly this report adds to concerns that failures over funding and governance in Kids Company reflected an organisation that had enormous skill in knowing which buttons to press to gain funding and visibility, but may have lost sight at leadership level and of the day-to-day rights and needs of those it was set up in good faith to serve.
There is a lesson here for all charities and indeed for all sectors providing public services for heavily disadvantaged people. They must come first. Their voices must shape policy and practice. They are entitled to good governance, as is already implicit in the guidance of the Charity Commission.
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