National Audit Office to launch inquiry into the failure of Kids Company

The spending watchdog's investigation will turn the spotlight on the government's approach to funding the charity

National Audit Office
National Audit Office

The National Audit Office has announced that it will carry out an inquiry into the closure of Kids Company.

The spending watchdog becomes the latest body in recent weeks to open an inquiry into the charity, which closed on 5 August because of a lack of funding, after the Charity Commission and the Public Administration and Constitutional Affairs Committee also announced investigations.

The NAO said its inquiry would examine the government’s grounds for providing funding to the charity and how the grants were monitored by government.

A spokesman for the NAO said it was not yet clear how long the inquiry would take but he expected a report to be published before Christmas. He said that MPs on the Public Accounts Committee might then decide to hold a hearing into the matter, as they do in the majority of other such cases.

Kids Company received about £43m from successive governments between 2005 and its closure. Cabinet Office ministers decided to award a grant of £3m to Kids Company just weeks before it closed despite warnings from the department’s permanent secretary that the charity would be unlikely to meet the government’s conditions for the funding.

The Charity Commission announced on 21 August that it had opened a statutory inquiry into the charity, which would address concerns about the "administration, governance and financial management of the charity and identify wider lessons for other charities and trustees".

The PACAC said last week that it would carry out an inquiry into the charity’s closure and its relationship with successive UK governments.

A statement from the committee last week said there were "serious questions about the financial management and leadership of the charity and the degree of sustained and substantial support it had received from government ministers".

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