Select committee inquiry

Closure of Kids Company inquiry

Closed

Public Accounts Committee · Opened 26 October 2015 · Closed 12 May 2016

Inquiry on parliament.uk ↗

What the inquiry looked at

“Kids Company was founded in 1996 and provided support to deprived inner city children in London, Bristol and Liverpool. The charity was funded through private donations as well as grants from government. For at least 10 years Kids Company received funding from central government, including from the Department for Education and the Cabinet Office. In its last set of published accounts, for 2013, 23% of its income came from central and local government. In June 2015 the Cabinet Office’s Permanent Secretary received a Ministerial Direction to award a grant to Kids Company of £3 million, despite his advice that the grant was not likely to be value for money. A grant of £4 million had also been made to the charity for 2015-16. On 5 August 2015, Kids Company closed as insolvent. This short inquiry examines the funding that Kids Company received from government and management of that funding, and the lessons government can learn in its use of taxpayers’ money to support the third sector.”

The committee's words, from the inquiry page on parliament.uk ↗.

What it found

In the committee's words, from the summary of 8th Report - The Government’s funding of Kids Company ↗

It is staggering that the government has given over £40 million to Kids Company over the past 13 years and still has no idea what it was getting for taxpayers’ money. It was not part of this inquiry to assess the outcomes of Kids Company’s work. We object to the obvious unfairness of central government directly funding a charity which operated in only two London boroughs for most of its existence, with around £4 million a year, at the expense of other charities and young people across the country. Despite repeated warnings and concerns about Kids Company’s financial situation and the impact it was achieving, funding to the charity continued and was never seriously questioned, let alone stopped. Instead responsibilities were passed between departments like a hot potato. All the warning signs of a failed and expensive experiment had long been there but it was not until June 2015 that officials finally stood up to ministers, said enough was enough, and sought ministerial direction before providing more money. By then it was too late. Kids Company was a favourite of successive ministers but Accounting Officers have to make decisions, sometimes under pressure, to safeguard taxpayers’ money: in funding Kids Company for so long they have not served taxpayers or children across the country well.

What the government said

No government response is linked to this report.

How the inquiry ran

Each dot is a dated item listed on this page, from the inquiry's opening on 26 October 2015 to its close on 12 May 2016.

  1. Oral evidence 2 Nov 2015
  2. Report 13 Nov 2015

What it recommended

The committee's recommendations are not listed here yet. Read them in 8th Report - The Government’s funding of Kids Company ↗ on parliament.uk.

Evidence

Oral evidence sessions 1