It was “unbelievable” that the money was handed over to Kids Company with “little focus on what it was actually achieving”, Public Accounts Committee chairwoman Meg Hillier said.
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From reading the NAO’s report it appears that the charity and successive central government departments found themselves trapped in a vicious cycle.
However the NAO say they relied on self-assessments and progress reports from Kids Company.
“They provided us with a few monitoring information, with a couple of reports”.
Gove was sceptical about the way the charity was operating; No 10 overruled him and made sure it received more money. The charity had already received a grant of £4.3 million for 2015-16.
The 39-page report has other fascinating revelations about the charity.
The money was paid on July 30, but the same day officials learned that the Metropolitan Police was investigating the charity over allegations of physical and sexual abuse.
The following month (August), the charity’s trustees announced the closure of Kids Company, resulting in the loss of 650 jobs.
The NAO, an independent body which audits government departments, found that despite “repeatedly expressed concerns” from officials, the government “continued to respond to the charity’s requests for funding”.
The government was fully aware that without its funding, Kids Company would have had severe issues with cash flow, and the report mentions that government funding was given to the charity “to keep it afloat financially”. It was at this stage that officials first raised concerns about setting a “dangerous precedent” and that “other organisations were more effective”. “Briefings to ministers in 2002, 2005, 2007, 2010, 2012 and 2015 show that officials accepted Kids Company’s assertions that it would become insolvent without government grant funding”, the NAO found. Considering that Kids Company only operated in London and Bristol, this is pretty fantastic.
The figure of 1,900 children is well below the number the charity claimed it supported.
The NAO ” observed a consistent pattern of behaviour each time Kids Company approached the end of a grant term”.
What went wrong at Kids Company?
It had not had to compete for its annual grant since 2013.
Do Kids Company’s sums add up?
There has always been a feeling with in the charity sector that Kids Company was getting special treatment from the government, largely down to its charismatic founder and friends in high places.
The first big central government grant came from the Home Office in 2002.
Evidence would have demonstrated Kids Company’s “exceptional clinical and financial value as well as its rigorous accountability”, had it not been “lost” by the Department for Education, Ms Batmanghelidjh said.
In a report published today, the spending watchdog also said that Kids Company, which mainly supported children and families in inner city areas of London and Bristol, had received larger grants than any other charities from the Department for Education.
Over the course of five years between 2008 and 2013, the Department of Education gave Kids Company grants totalling £21.7 million ($US33.1 million), an average of more than £4.5 million ($US6.9 million) per year.
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“I was constantly asking for the performance indicators, the data, to see if it was having the effect we were promised”.
