The government’s spending watchdog, the National Audit Office (NAO), has announced an investigation into the awarding of public money to the children’s charity Kids Company.
The charity, run by its high-profile founder Camila Batmanghelidjh, shut its doors in August amid concerns about its financial management. It received £3m in a government rescue package a week earlier, part of which was used to pay overdue staff wages.
Civil servants strongly opposed the emergency grant to Kids Company and told ministers they did not think it represented value for money. Cabinet Office ministers Oliver Letwin and Matthew Hancock authorised the grant in spite of the concerns.
The NAO said its investigation, likely to report in late November, would cover what government funding was received by Kids Company over at least 10 years, including from the Department of Education and the Cabinet Office, the government’s grounds for providing funding to the charity and how it monitored the grants. The charity received about £30m from the government since 2008.
The NAO’s inquiry is the fourth into Kids Company. The Commons public administration and constitutional affairs committee announced an inquiry into the collapse of the charity last week. Kids Company is also the subject of an investigation by the Charity Commission, and Scotland Yard is looking into allegations that drug-taking and sexual abuse took place on the charity’s premises.
A fifth inquiry, by the Commons public accounts committee, is likely once the NAO publishes its report. “We are pleased the NAO is compiling this report,” said a spokesman for the committee. “The committee looks forward to its findings and will investigate any areas of concern.”
The BBC reported the Cabinet Office had estimated the government would recover just £1.8m of the £3m grant.
The government had estimated it would need to find alternative support for an estimated 6,000 vulnerable children after the charity’s closure and said it would consider requests for extra funding to meet the needs of children previously supported by Kids Company.
A telephone helpline run by the office of the children’s commissioner, which was given to Kids Company users, has received just two phone calls in connection with its closure, the Times reported on Wednesday.
Labour MP Neil Coyle, whose Bermondsey and Old Southwark constituency has a former Kids Company centre, told the Guardian he had not heard from any constituents concerned about losing services, even though he also still serves as a councillor in the borough.
“I sought assurances from Oliver Letwin that Southwark council would get the funding for any additional longer-term services needed to deal with young people who were not in the system because of Kids Company’s closure, but we’ve yet to see any requests that it’s needed. That could be because there was already some overlap, or it could be because the numbers are not as many as Kids Company have said.”
Of the current inquiries, Coyle said it was likely the three Whitehall inquiries would come to “similar conclusions” and said it was the police investigation which should be prioritised.
