Kids Company announces immediate closure

05 Aug 2015 News

Kids Company has this evening announced that it has closed with immediate effect, with the likely loss of around 650 jobs.

Kids Company has this evening announced that it has closed with immediate effect, with the likely loss of around 650 jobs.

The charity said it could not secure enough additional funding to keep going, despite recently being awarded a £3m restructuring grant from the Cabinet Office.

In a statement shortly after 7pm the charity’s trustees said: “It is with the greatest sadness and reluctance that we have reached the decision to close Kids Company.

"We have been forced to do so because collectively, despite the extraordinary efforts of Camila and her team, some truly enlightened philanthropists and the government, we have not been able to continue.”

An announcement on its website said that the charity could not pay its debts as they fall due and will be placed in “compulsory liquidation” shortly.

All of its services in London, Liverpool and Bristol have been closed and the charity is working with local authorities and other charities to direct its users elsewhere. It operated 11 centres and works with 40 schools.

According to its latest set of accounts, for the year ending December 2013, Kids Company had an income of £23m and its net assets were £1.7m, most of which was property.

Last month the Cabinet Office awarded the charity a £3m grant against the advice of its lead civil servant, Richard Heaton, who wrote to ministers seeking “ministerial direction” before making the grant.

Oliver Letwin, Chancellor of the Duchy of Lancaster and the most senior politician in the Cabinet Office, personally overruled Heaton. Letwin has been a long-term supporter of the charity, signing himself up as an official backer of its See the Child. Change the System campaign.

The National Audit Office and the Public Accounts Committee are both now likely to investigate the circumstances around the grant.

A statement on the charity's website said that “serious as yet unsubstantiated allegations against the charity” were the reason it was unable to raise the funds it needed.  

Earlier this year the Spectator magazine accused it of being a “drain on donations”. Last month BBC Newsnight and Buzzfeed revealed the government had withheld the £3m restructuring grant unless Camila Batmanghelidjh resigned as chief executive. Last week it was revealed that the charity was being investigated by Metropolitan Police officers specialising in sexual offences and child abuse.

Camila Batmanghelidjh, the founder and chief executive of Kids Company said: “We have been forced to close Kids Company which we do with profound sadness. Our children, staff, and volunteers supported by trustees and extraordinarily generous donors, have over the last 19 years helped create an inspirational community committed to recovery and love.

“The catastrophic abandonment of children who are suffering is a testimony to our collective moral failing. I hope one day the childhood maltreatment wound, that is so deeply hurting this country, will heal. I apologise to all the courageous and dignified young people who have touched our hearts and made us brave.

“We want you to know that the hope we shared together cannot be negated and will serve to strengthen our resolve to never be silenced when your truth needs to be told. To the staff of Kids Company, you are a gift. For everything we have learnt, I am deeply grateful.”

A government spokeswoman said: "The government has supported Kids Company over the last seven years to help it deliver services for vulnerable young people and so we are disappointed it has been unable to move to a sustainable financial position. The welfare of these young people continues to be our primary concern and we are now working closely with local authorities to make sure they have access to the services they require."

Read Civil Society News' summary of the events so far here.

Update: 6 August Charity Commission statement

The Charity Commission, which had previously said it was looking into concerns about the charity, issued a statement saying it would continue to work with the trustees and whoever is appointed as the administrator.

It met with trustees at the end of July.

The Commission said: "At that meeting we insisted on a number of steps being taken, including that, under the oversight of the Commission, the charity instigate an immediate independent examination into the specific allegations made.

 “The trustees fully cooperated with this, and had already prior to our engagement put in place changes to the governance, management of and existing financial controls within the charity.

 “This work was still ongoing when the charity closed. Although the charity is closing our regulatory engagement continues and we will be making immediate contact with the receiver when appointed.”

Read David Ainsworth's analysis of what went wrong at Kids Company here.   

This story has been updated to reflect new figures for current Kids Company staff numbers.

 

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