Almost £10m of public funds spent on failed case against former Kids Company chiefs

The unsuccessful disqualification proceedings against the founder and former trustees of the defunct charity Kids Company cost the public purse almost £10m, new figures show.

In a written parliamentary question last year, the non-affiliated peer Baroness Hoey asked the government to confirm how much public money was spent by the Official Receiver on the High Court case against Kids Company.

The OR was attempting to bring disqualification proceedings against Camila Batmanghelidjh, the charity’s founder and former chief executive, and seven former trustees after the collapse of Kids Company in 2015.

But the High Court rejected the claims in February, and in the summer it emerged that the case had cost the public purse at least £8m.

The response to Hoey’s question from the Conservative peer Lord Callanan reveals total legal costs paid by the OR have totalled more than £9.5m.

This was made up of defendants’ legal costs of £8.2m, plus external legal costs incurred by the OR of £1.3m. A further £8,612 was spent on “data hosting costs”, the answer says.

In a further question, Hoey asked the government whether any Kids Company defendants had received any public money to contest the case.

But the Conservative peer Lord Parkinson responded by saying the government had “no record of any such payments to Kids Company’s former trustees or chief executives”.

She also asked when the Charity Commission would publish its report detailing its inquiry into Kids Company, which was opened in 2015 but has been delayed by the High Court proceedings.

Parkinson said: “Owing to the Official Receiver’s investigation, aspects of the commission’s inquiry were placed on hold pending the outcome of the subsequent High Court proceedings. The High Court issued its detailed judgement on 12 February 2021. The commission intends to publish its inquiry report as soon as possible.”

He also said: “The commission’s published guidance CC46 sets out some of the factors that determine the length of a statutory inquiry. These can include, for example, the complexity of the issues involved, and the involvement of other regulators and/or statutory agencies.

“In the case of Kids Company, separate High Court proceedings under the Company Directors Disqualification Act have been a factor.

“As well as having a direct impact on the charity, its beneficiaries, staff and supporters, the collapse of Kids Company had a wider effect on public confidence in charities, so it is important that lessons are learned for the future.”

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