The report by the Public Administration and Constitutional Affairs Committee (PACAC) said that there was ‘an extraordinary catalogue of failures at every level’, also citing Government, auditors, inspectors and regulators.
It also calls for change in the way that charities are regulated and funded.
Ministers had handed ‘tens of millions of pounds’ to the charity over successive Governments, despite lacking ‘robust evidence about the quality of the charity’s outcomes, value for money or governance’, it said.
Trustees had allowed the charity to end up in a financially precarious position and relied on ‘wishful thinking and false optimism’, despite repeated warnings from auditors, the report added.
Bernard Jenkin MP, chair of the committee, said there had been many ‘positive accounts of the valuable work Kids Company did’, which made ‘the board’s failure to ensure the charity’s sustainability all the more tragic’.
According to the report, the committee heard evidence from former employees that money was spent on holidays and spa days for a favoured group of young people referred to as ‘Camila’s kids’.
Trustees’ lack of experience of youth services meant that money was diverted from some projects and programmes that would have had a wider impact, it said.
The report also claims that the charity’s founder Camila Batmanghelidjh ‘appeared to captivate some of the most senior political figures in the land’ and that consequently decisions were made about Kids Company outside of the usual decision-making processes of Government departments.
On Friday (29 January) police dropped an investigation into abuse allegations at Kids Company after failing to find evidence of safeguarding failures or criminality.
Ms Batmanghelidjh has said that ‘malicious and untrue allegations’ of child abuse against the charity were orchestrated to fatally damage it and were directly responsible for its closure.
In written evidence to the PACAC inquiry sent to Mr Jenkin, Ms Batmanghelidjh wrote, ‘As chair of the committee you suggested that Kids Company is a failed charity because it went “bust”. We would not have gone “bust” if the unfounded sexual abuse allegations had not been strategically engineered just as we were restructuring.’
In a statement, the former trustees of Kids Company said, ‘For the committee to conclude that the trustees, auditors, care experts, inspectors, regulators and the government all failed “at every level” is astonishing.
‘Instead of basing its findings on a thorough investigation of the evidence, the committee has naively accepted allegations made in the media and by a small number of individuals, some with vested interests in damaging Kids Company and its much-praised model of loving care and practical support.
'Practically no weight has been given to the evidence presented to the committee by numerous witnesses who were closer to the work of the charity.’
William Shawcross, chairman of the Charity Commission, which is currently conducting its own inquiry into Kids Company, said, ‘I welcome this report which highlights the role of trustees, including the sharp focus on their charities’ finances. We have already updated our guidance, particularly on managing financial difficulties and setting appropriate levels of reserves.
‘We are raising awareness of our regulatory role with the public and will explore the committee’s other recommendations, including the ease with which people can make complaints. I am pleased that the committee acknowledges the need for adequate funding of the commission, necessary for us to fulfil our regulatory role.’
