A £3m taxpayer-funded grant to the troubled charity Kids Company is to be investigated by MPs, who said there were serious questions to be answered about the government’s relationship with the organisation.
The Commons public administration and constitutional affairs committee said it was an issue of particular concern that the emergency money was given against the advice of the Cabinet Office’s top civil servant, who requested an unusual “ministerial direction” before granting the money. Ministers Oliver Letwin and Matthew Hancock authorised the grant despite the warning.
The committee said it would examine the “seriousness with which ministers regarded Civil Service advice on its continued support for Kids Company”.
Kids Company closed in early August amid allegations of financial mismanagement. It is already the subject of an investigation by the Charity Commission and a Scotland Yard inquiry into allegations that drug-taking and sexual abuse took place on its premises.
The committee said it would begin hearings next month and would examine whether the charity “benefited from unfair advantages in the level of Government support it attracted”.
The financial management of Kids Company, in particular its failure “despite repeated concerns” to build up sufficient reserves, will also be examined, as will the oversight role of the Charity Commission.
The charity’s founder and chief executive Camila Batmanghelidjh agreed to stand aside from her position in order to secure the £3m emergency restructuring grant, intended for a “transformation and downsizing plan”, but part of which was spent on overdue staff wages.
After announcing the charity’s closure, Batmanghelidjh blamed “rumour-mongering civil servants”, government ministers and the media for having “put the nail” in its coffin.
The BBC reported the Cabinet Office’s estimate that the government would recover just £1.8m of the £3m grant.
The government has had to find alternative support for an estimated 6,000 vulnerable children after the charity’s closure. The Cabinet Office said it would consider requests for extra funding to meet the needs of children previously supported by Kids Company if and when they were presented to the government.
