Editorial: The subsidy of Kids Company looks like conscience money

The £42m of public funds revealed by the National Audit Office to have been paid to the charity helped ministers claim that an intractable social problem was being tackled, says Stephen Cook

Stephen Cook
Stephen Cook

In 15 of the 19 years since Kids Company was founded, some £42m of public funds were given to the charity to keep it afloat. Around 30 per cent of its income between 2002 and 2013 came from seven government departments, mainly the Department for Education. Each time it applied for money, officials expressed concern about its viability, but ministers overruled them after lobbying by chief executive Camila Batmanghelidjh and media stories about the threat to the work the charity did with vulnerable young people.

The full sorry narrative was laid out in this week’s report on Kids Company by the National Audit Office, the government’s spending watchdog. It does little to inspire confidence in our system of government, except for the fact that the NAO has the power to conduct and publish such inquiries - albeit belatedly in this case.

As early as 2005, according to the report, the conditions of a  £3.4m Treasury grant included the appointment of a manager at Kids Company to oversee its use. He left after four months, telling the DfE and the charity's trustees of his concerns about its management, governance and the way money was distributed to individuals. But nothing changed, and it was another 10 years before officials at the Cabinet Office finally plucked up the courage to require a formal ministerial direction to be published before another £3m was handed out.

That was the beginning of the end, sealed when the police, the day after the money was paid, announced an inquiry into possible sexual exploitation at Kids Company.

Much ink has already been spilt on the eccentric, unaccountable fiefdom Batmanghelidjh built up for herself. This report, by contrast, shines the spotlight directly on ministers of the Labour and coalition governments who came under her influence. Apparently the NAO did not interview ministers and the report does not name names - an unfortunate limitation of its modus operandi - but we can fill in those gaps for ourselves. The essential question raised is: why did they think this was a responsible and justifiable use of public money?

In the early days, there was a case for it. Here was a charity that appeared to have an approach that might help alleviate the intractable social problem of alienated inner city youth who were at risk of gang and gun crime and beyond the reach of other social institutions. It’s laudable to use public funds to try to get promising ideas such as this off the ground, but over the years it became glaringly apparent that Kids Company, for a variety of reasons, was badly run and never likely to be sustainable.

Somebody should have called a halt to the public subsidy years ago, but none of the ministers concerned had sufficient spine to declare that enough was enough and face down the rumpus that Batmanghelidjh would cause. The NAO report points out that there were other projects, equally as promising, that were starved of help while Kids Company got the lion’s share.

And was this not, at the end of the day, conscience money? For all her faults, Batmanghelidjh had her finger on one of the most worrying blemishes of our society. Politicians know that the statutory services they are now busy cutting back do little or nothing to reach a whole cohort of angry, alienated and potentially anti-social urban young people. The existence of Kids Company helped to get them off the hook.

Critics of their policies could be told that yes, there was a problem, but Camila and the voluntary sector were on the case – the big society in action, indeed. And if the price of keeping that particular show on the road was overriding the scruples of conscientious officials about sums of money that, in the grand scale of public expenditure, were chicken feed, then so be it. Such is realpolitik.

The next point of interest will be the results of the Charity Commission’s statutory inquiry into Kids Company. 

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