The Cabinet Office has launched a "detailed review" of how it makes non-competitive grants to charities after the Kids Company case, according to Rob Wilson, the Minister for Civil Society.
Wilson was responding to a written parliamentary question from John Spellar, the Labour MP for Warley, asking what assessment the Cabinet Office had made of the effectiveness of financial controls and reporting systems for charities after the closure of the charity.
Kids Company shut abruptly in the summer having received more than £42m of central government funds since 2002.
This included a £3m grant made by Cabinet Office ministers just days before the charity closed down despite warnings from civil servants that Kids Company was unlikely to be able to comply with the conditions of the funding.
In response to Spellar’s question, Wilson said: "In the light of the events surrounding Kids Company, the Cabinet Office has launched a detailed review of how it makes grants under Section 70 of the Charities Act.
"The review is considering the criteria used to assess risk and is developing a proposal for a new and more rigorous approval process. The review will also take into account recommendations made by the Public Administration and Constitutional Affairs Committee and the Public Accounts Committee."
In November, the Public Accounts Committee called on the government to carry out a fundamental review of how it makes non-competitive grants to charities and establish a register of such awards.
A spokeswoman for the Cabinet Office confirmed that her department and the Department for Education were carrying out reviews, but was unable to comment further at this stage.