Lessons to learn from the Kids Company saga

The case raises many concerns about the role, competency and accountability of charity trustees

 

Kids Company, the high profile children’s charity, finally closed its doors yesterday, amid claim and counter-claim aired in the media about its work. When the dust settles on this case, I believe important questions must be addressed about the accountability and management of charities.

The charity, founded by Camila Batmanghelidjh, began its work in 1996 in Camberwell, south London. It provided a range of support for extremely vulnerable children who included runaways, the neglected, and children permanently excluded from school.

The support offered to each child depended on their individual needs, but included intensive psychotherapy, family therapy, advice, hot meals and alternative learning opportunities. Importantly, it had a policy of never turning a child away.

Since it started the charity has raised over £160 million. The charismatic Batmanghelidjh has been very skilled at raising money, whether it is small donations from individuals, private philanthropy from wealthy donors and companies, or central and local government funding. This success enabled the expansion of Kids Company, with new offices in London, Bristol and Liverpool. In April 2013 it received £9 million of government funding, to cover two years of work until March 2015.

There is no doubt that Kids Company has made a big difference to the lives of some very vulnerable children. But so have Barnardos, the Children’s Society, Trussell Trust foodbanks and many, many more low-profile children’s charities whose names are less familiar.

We can ask the question about whether better-managed charities might have spent £160 million with better long-term outcomes for children. There is also no doubt that Kids Company has diverted funds – both statutory grants and private donations – from other children’s charities.

The concerns that have been raised about Kids Company are not recent, and date back at least ten years. Mostly they relate to financial propriety and the claims-making of Camila Batmanghelidjh. In 2007 a civil servant asked me to comment on the numbers of children the charity alleged it was supporting. I felt the numbers used were logistically improbable and were not backed up with other evidence, such as other administrative data, case studies or research reports on the nature of their client base.

I was also told at this time that Gordon Brown and his team of special advisers had over-ruled civil service concerns about Kids Company.

Batmanghelidjh’s cause was also taken up by the Tories, with Cameron’s famous ‘hug a hoodie’ speech making extensive reference to Kids Company. Long-standing civil service concerns about the charity continued to be over-ruled by Number 10. A Cabinet Office review of Kids Company undertaken in 2014 came to nothing.

In February 2015 decisions about Department for Education grants to scores of children’s charities were delayed because of a dispute between Number 10 and civil servants over the Kids Company grant (Kids Company won this battle). Around the same time the Spectator magazine aired its concerns about the charity.

Despite receiving a substantial grant from the government, poor financial management meant that the charity was already near to closing by this spring. Batmanghelidjh then tried to obtain further government funding, using the threat of closure. After weeks of negotiation a deal was struck in late June 2015. Kids Company  was to receive a one-off package £3 million funding, conditional on Batmanghelidjh and chairman Alan Yentob stepping aside and a complete restructure.

But again it seems that civil service concerns were over-ruled by ministers: a letter by Richard Heaton, permanent secretary at the Cabinet Office, is quite uncompromising. But new allegations about sexual abuse led to the withdrawal of a large private donation, the eventual loss of Cabinet Office funding, and eventually forced the charity to close.

I believe that lessons need to be learned from the whole saga. We need to interrogate the claims-making of charities and not blindly accept them. Yesterday, Batmanghelidjh stated that 6,000 children would be abandoned if Kids Company closed, children she said have been ‘raped, attacked and have no relatives.’ For all their failings we do have statutory social services in the UK, who protect the most vulnerable children.

If Batmanghelidjh’s assertion was true, it would represent the largest and most shocking failure of social services, ever.

In awarding grants to Kids Company, ministers have continually over-ruled civil servants, not just since 2010, but before this. I would hope that both the Public Accounts Select Committee and the Education Select Committee take up this issue.

The case of Kids Company also raises many concerns about the role, competency and accountability of charity trustees. They lead their charity and have overall responsibility for how they are run. Trustees can and do sack chief executives – it has happened at two of my workplaces. They also sign off the accounts and provide financial oversight.

I find it surprising that Kids Company trustees allowed the charity to run for so long on a hand-to-mouth basis with little or no financial reserves. With more and more public services delivered by third sector organisations, including charities, charity trustees must be competent enough to provide oversight and be accountable for public monies they spend. This issue must also be considered by parliament.

Jill Rutter writes in a personal capacity and is a contributing editor to Left Foot Forward.

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