The chair of the parliamentary committee that this week published the findings of its investigation into Kids Company has called for the Charity Commission to be given additional powers and funding to prevent similar situations arising in future.
In a debate in the House of Commons yesterday about the Public Administration and Constitutional Affairs Committee report on Whitehall’s relationship with the collapsed charity, Bernard Jenkin said the government should reverse cuts made to the commission’s budget in recent years "to enable it to carry out its statutory function".
It should also be given additional powers, further to those being granted through the charities bill that is awaiting royal assent, such as the ability to hold hearings and produce reports, and to make recommendations about charities.
"It really should not fall to a select committee of the house to produce reports on the activities of individual charities," he said.
Jenkin added that the hearings he suggested should be legally privileged so the commission could hear and receive evidence that could not be impugned by the courts.
"That would mean people with concerns about charities could go to the Charity Commission without the fear of losing their jobs, of reprisals or of being traduced in the press," he said. "The Charity Commission would be able to hold proper hearings and people could speak to it without fear or favour, as they do before select committees."
He told MPs that the Charity Commission had not engaged with Kids Company before 2015 because it had received very few complaints.
He said the regulator needed a higher profile so that it could attract complaints about charities people were concerned about, and the commission should be more proactive in responding to concerns raised in public about charities.
"In the case of high-risk charities with many employees and dependent beneficiaries, it should be equipped and funded to do more to provide scrutiny and, more importantly, advice and support to struggling trustees," Jenkin said.
He said the committee wanted the regulator to be able to recommend courses for charity trustees.
Jenkin said the government would need to work hard to "restore faith in the grant-giving system of Whitehall", given that the charity received more than £42m in grants from central government and had not had to compete for a grant since 2013.
Jenkin, who is the Conservative MP for Harwich and North Essex, said the government "lacked any objective assessment of Kids Company’s activities and outcomes, and the effectiveness of its governance".
The government must improve its capability so it was less reliant on external reviews when making assessments about charities, he said.
The PACAC report, published on Monday, said the charity closed because of an "extraordinary catalogue of failures", with the ultimate responsibility for its failure lying with the charity’s "negligent" trustees.