Renowned charity 'Kids Company' to close over financial concerns
Charity Kids Company is set to close - shortly after it received a £3 million grant from the Government.
The organisation works with 36,000 vulnerable children and young people, and officials, charities and councils have been in discussions preparing for the impact the closure could have.
The youth organisation has been hit by allegations of bad financial management, prompting its high profile founder Camila Batmanghelidjh to quit as chief executive.
Ministers agreed to give the extra cash to help restructure the charity despite objections from a senior civil servant who warned they did not think it would be "value for money".
Southwark Council, in south London, where many young people work with the charity, said: "We have been in discussions with the Department for Education and other local authorities, preparing for the closure of Kids Company.
"Although Southwark doesn't refer any children to the charity, some will have sought out their services. We are ready to support any vulnerable children and young people in the borough who are affected by the closure of Kids Company."
Mayor of London Boris Johnson said the priority must be to draw up a plan to ensure the vulnerable young people the charity works with do not slip through the net if it closes.
He told BBC Radio 4's Today programme: "It's a great shame that it doesn't seem to be working in the way that I think everybody who supports the idea would like.
"What I want to happen is to ensure that all the kids who've been receiving care and attention from Camila and her team will have some kind of safety net."
The high-profile charity has been shaken by claims it has not properly managed its finances.
It received the £3 million grant from the Cabinet Office last week after agreeing, on the orders of the Government, to make changes in its leadership, management and governance.
But Ms Batmanghelidjh emailed staff within the charity last week to say they would be paid using some of the grant money, according to the BBC.
The BBC reported that the Cabinet Office is making plans to claw back the grant because it believes conditions attached to the use of the money were not met.
It has emerged that senior civil servants and a former minister had raised "serious concerns" over the Government funding the charity has received.
Whitehall officials took the rare step of requiring a written, direct order from ministers before agreeing to the latest funding lifeline for Kids Company amid concerns about how it would be spent.
Cabinet Office Permanent Secretary Richard Heaton told ministers: "The experience that this department has of the charity's management and capacity gives me limited confidence that Kids Company will successfully implement the changes they describe in their new restructuring plans while meeting the stringent conditions set out in the proposed new grant.
"It is therefore my judgement that the proposed additional £3 million grant does not represent value for money, in terms of delivering the outcomes for which this department is funded by Parliament."
In their reply, Cabinet Office Ministers Oliver Letwin, the Chancellor of the Duchy of Lancaster, and Matthew Hancock said they are "very mindful of the inspirational work that Kids Company does" and decided to release the funding anyway.
Former children's minister Tim Loughton also said he had raised "serious concerns" over the charity's grant when he was in post.
The Tory MP told BBC Radio 4's Today programme: "When they came back to us to ask for more money assuming it was going to be carried on I raised serious concerns as did officials in the Department for Education and advised against paying the grant because I needed to see what value for money we were getting for the taxpayer and what the actual results were."
He said the charity does "great work" but said that when taxpayers' money is being used the Government needs to see "real and sustainable results and I was never convinced of that".
Acting Labour leader Harriet Harman, whose constituency of Camberwell and Peckham is served by Kids Company, demanded a plan to ensure the vulnerable youngsters the charity works with are cared for if it closes.
She said: "Whatever happens to Kids Company, these children and young people must be protected and supported. Such vulnerable young people must not suffer as a result of the breakdown of Government confidence in Kids Company.
"The Government must ensure that local authorities and voluntary organisations have the resources they need to make sure that the children and young people who are being supported by Kids Company will not be without that support if the charity closes.
"The Government must publish a full report showing what funding decisions they have made in regard to Kids Company, and on what basis."