A group of MPs has criticised the UK government’s funding of the charity Kids Company and warned: “This situation must never occur again.”
In a report the Public Accounts Committee (PAC) said there was “insufficient scrutiny of what Kids Company was delivering” and “funding decisions were not based on evidence”.
The charity, which was set up in 1996 and provided care services to children mainly in two London boroughs, received £42 million from the government in grants until its closure in August 2015.
The report said it was “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”.
“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,” said the report.
The PAC said Kids Company, which was funded by the Department for Education until the Cabinet Office took over in 2013, received £7.3 million within a period of 16 weeks in the run-up to its closure.
Some £3 million was handed over on the direction of ministers, against the advice of civil servants who were concerned about value for money.
Meg Hillier, Labour MP and chairwoman of the PAC, said: “The case of Kids Company will anger many people. The charity was passed around Whitehall like a hot potato, with no one willing to call time on spending millions of tax pounds for uncertain outcomes.
“The lack of scrutiny over its funding was staggering. Fairness and value for money – fundamental values when considering public spending – appear to have been forgotten in repeated and ultimately doomed attempts to keep Kids Company afloat.
“Even after civil servants finally refused to agree additional funding, ministers took a punt. The final £3 million of public money was handed over just a week before Kids Company closed.
“The faith that things would improve when they didn’t was naïve. So many other charities did not get the same support and it is clear that Kids Company received special treatment – to the detriment of other deserving charities around the country.”