Today’s National Audit Office report into the collapse of Kids Company shines new light on the scandal. It shows that the charity received at least £46 million of public money during its 19 year existence despite repeated warnings from civil servants that funding it was unwise.
The report also shows that ministers thought they knew best, and that many senior politicians ignored the concerns being raised. These MPs happily approved of the public purse being dipped into at the request of the charity’s founder, Camila Batmanghelidjh, and her chairman of trustees, BBC executive Alan Yentob, while at the same time other charitable organisations were given far less. Whether the state should bankroll any charity is a moot point. But the Kids Company story shows what can go wrong when a government-sponsored charity is considered beyond reproach.
In February The Spectator published an article by me on Kids Company — it was the first article by the mainstream press questioning the way Kids Company was run. The article pointed out serious discrepancies in its claims about the number of people it helped each year – nowhere near the 36,000 it maintained – and the way it spent donations. I wrote it, having spent more than a year researching the charity, which was not averse to engaging lawyers to threaten journalists who scrutinised it.
I also discovered that in 2012, the then-education secretary Michael Gove had a row with No 10 over Kids Company’s funding. Gove was sceptical about the way the charity was operating; No 10 overruled him and made sure it received more money. Details of this skirmish did not feature in the NAO report, but it shows that not only civil servants had doubts Kids Company.
Cameron cannot escape blame for the Kids Company scandal. He is at the least guilty of being gullible, even if he wasn’t the only minister – Labour or Tory – to be duped. For, as the NAO report makes clear, Kids Company ran a highly effective lobbying operation to ensure the state gave it cash. Batmanghelidjh, who is prone to exaggeration, presented the worst few cases on her books to the government and left the impression there were thousands more like them.
If the charity didn’t get what it wanted from the government, it would offer sob stories to friendly newspapers claiming to be on the brink of closure. The tactic worked. In 2008, under Gordon Brown, it secured £12.7 million of funding over the next three years.
And today’s NAO report says that in 2013 the coalition government decided to continue funding the charity because of ‘the reputational damage to the government’s wider agenda (which would have an impact on delivery) if it withdrew funding.’
So, for PR reasons, Cameron’s government continued to hand out millions to Kids Company against advice. Of course, scores of charities operate on a very fine financial line, but only Kids Company had the rock star status and celebrity backing which meant that not funding it might turn into a PR disaster. Cameron’s wife, Samantha, was also a supporter of Kids Company, hosting receptions for the charity at Downing Street. Did Mrs Cameron tell her husband it was a deserving cause when Gove said otherwise?
We now know significant portions of Kids Company donations were spent in the most irresponsible way imaginable, including cash being given to vulnerable youths to fritter away as they chose, or on paying the rent and mortgage of a small group of adults for whom Batmanghelidjh had a soft spot. Some of these adults were well into their 30s. For them, Kids Company was essentially a private trust fund. The charity also thought nothing of spending £200,000 renting a grade II listed house with its own swimming pool in north London for several years. The pool was reportedly for Batmanghelidjh’s personal use.
The NAO is the first organisation to complete its investigation into Kids Company. Two select committees are still looking into it, as are the police and the Charity Commission. Only now is the truth emerging about this charity, years after officials tried to warn MPs they were making a mistake by giving it millions of pounds of taxpayers’ money. We must all hope that this situation does not arise again.