Incompetence and collapse: the Kids Company verdict

Camila and cameron cropped

​MPs deliver a damning verdict on failed charity Kids Company

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1st February 2016 by Graham Martin 0 Comments

A damning picture has been painted of failed charity Kids Company – an organisation beset by financial mismanagement and organisational incompetence.

These are some of the findings of an inquiry into the collapse of the charity last August by a committee of MPs.

The House of Commons Public Administration and Constitutional Affairs Committee (PACAC) found that it struggled with its finances, its client numbers made little sense, there was a culture of lavish spending and abuses of power.

MPs heard of "an extraordinary catalogue of failures of governance and control at every level – trustees, auditors, inspectors, regulators and government.”

Kids Company did do some valuable work, the committee heard, and it "inspired and motivated employees” – but this made its collapse all the more tragic, MPs said.

The most senior political figures in the land were captivated, by the force of the chief executive's personality

The charity supported vulnerable inner-city children and young people in London, Liverpool and Bristol.

Its collapse was triggered by a police investigation into allegations of physical and sexual abuse – something founder Camila Batmanghelidjh vehemently denied.

Last week, the Metropolitan Police said it had found no evidence of criminality.

This will provide little succour to Batmanghelidjh, who founded the charity in 1996 and who has claimed her organisation has been subjected to an establishment vendetta.

She was criticised by the PACAC inquiry over her running of affairs and the MPs said that even without the police investigation, Kids Company would have been unlikely to survive due to the financial negligence and an unwillingness to restructure.

Details surrounding the collapse include the claim that in November 2014, she turned away a donor who wanted to give significant support "to develop the charity's infrastructure" – at a time when it had a £4 million deficit.

However, the donor was rejected because it was felt they lacked "emotional authenticity" and was not "in a space" where they could "authentically think about what somebody else needs" and was "not ready to be genuinely philanthropic".

High profile trustees like Alan Yentob, former creative director of the BBC, were also criticised.

Trustees repeatedly ignored warnings about the organisation’s financial health, it was found.

The UK government, which handed over large sums of cash to Kids Company, including £3m days before it closed, was also criticised.

MPs said the charity "appeared to captivate some of the most senior political figures in the land, by the force of the chief executive's personality as much as by the spin and profile she generated for the charity.”

The committee also highlighted "extraordinary accounts of luxury items and holidays or spa days being lavished on a favoured group of clients, who were called “'Camila's kids”.

Batmanghelidjh, who founded the charity in 1996, has said the PACAC report was "a product of bias and rumour".

She said: “I can only have respect for reports that are based on as rigorous examination of the facts. I’m grateful the police did that and we were cleared. I’m sorry that the PACAC MPs didn’t.”