To not understand the 'kids company' closure

[LunchpackOfNotreDame]

The news is saying the government fully supported the charity and handed over £3million to them, yet on the news tonight the protesters were blaming Cameron.

I thought it was financial irregularities that created the issues?

I don't think it was the salaries that caused concern. I have heard mention of abuse of taxi accounts and rental of flats using KC funds.

From the ft:

www.ft.com/cms/s/0/d7f11604-3c62-11e5-bbd1-b37bc06f590c.html#ixzz3i6qSzP3e
"Despite this largesse, it seems Kids Company still operated on a financial knife-edge. In 2013, the last year for which accounts were filed, the charity reported reserves of just £434,282 against annual costs of £21.6m. In a section detailing risks, it admitted: “Our business model is to spend money according to need, which is consistently growing. We aspire to build up our reserves when circumstances allow.”
The charity’s auditors in 2013, Kingston Smith, signed off the charity as a going concern. They declined to answer questions on their auditing of Kids Company accounts on Thursday."

What happened to the 2014 accounts? With a Dec YE, wouldn't we expect them to be published by now?

Accounts due 9 months after year end so end of September.

The Charity Commission requires accounts to be published 10 months after YE merrymouse, that's the deadline. However,IME, if all's well, they're usually published earlier.

I agree that whatever the good work done, regardless of issues over accountability and demonstrable outcomes and value for money, or allegations criminal activity on site, the way it's shut down is indefensible. I'm involved as a volunteer with a tiny charity and you always always hold reserves, plan your funding stream and ask "what will we do if the LA pull the plug? What other funding is available? how long can we last? What is plan B?" And maybe the LA funding is so dominant and irreplaceable that Plan B has to be "orderly transfer of responsibilities and files over a period of 6 weeks to alternative care providers (who will have huge waiting lists) then close the doors" but you still have to have it.

And in this case the government grant is far from the majority of their funding. If 15% of your funding disappearing causes you to have to shut the doors immediately then something is badly wrong.

No truck with the kneejerk "Government are out to get them" response either. Cameron has been severely embarrassed by the whole affair and would far rather they'd kept running.

However I would defend the size of the payroll. And CB is right that it's more difficult to get donors to fund day to day staff wages rather than flashy buildings and one off projects even though the daily stuff is what's actually needed. People on other threads got cross about the fact that 75% of the income went on staff wages, but what else should they be spending it on? The nature of the charity is that they employ staff to work with children - it's not like they're building wells or distributing medicine.

I agree, the wages weren't extortionate, provided those 600 (or whatever) staff were actually doing valuable work with the numbers of children they claim to have been reaching, which seems to be dubious.

I would argue a CEO should have been appointed on more than the £90k CB was getting, so that the role was done properly by someone who could "manage" her, so that the charity benefited for all her undoubted talent and commitment, but was properly run too.

Sorry 10 months if end of September!

Atleast CM is answering questions. Seems to have been silence from Alan Yentob and government ministers. If their stated policy was to spend everything and not have reserves, they were bound to reach this point eventually.

It has been clearly established that CM is a charismatic driven person with few concerns about accountability or financial constraints - but what about everyone else?

Actually Alan Yentob was on C4 claiming no financial mismanagement...

Actually Alan Yentob was on C4 claiming no financial mismanagement...

He'll be shitting himself. AFAIK trustees are also directors if the charity is also a company. And directors are financially liable for debts etc if there was mismanagement.

It's difficult to argue no financial mismanagement when you've had to close with no notice because you've run out of money. Kudos for at least attempting to pull off that argument

I agree about the wages. Large 3rd sector organisations do need experienced CEOs to oversee them, and that needs a reasonable wage to attract them from the private sector. The same goes for advertising budgets. But you need to be able to prove the worth of that spending. CB has been a very important voice in advocating for disadvantaged young people and their families but running an organisation this size was clearly beyond her.

I'm not sure I'd trust any of the figures coming out of KC at the moment. Some of them are obviously inaccurate, which makes me wonder about the rest.

I read a really interesting article yesterday by Miles Goslett, the journalist that broke the story in The Spectator on some of the background to the original story. He had tried to get 2 national papers and a magazine to do it, all turned down the piece. One of the papers did so after receiving a letter from City lawyers. Since it broke it turns out that he wasn't the only one trying to do the story, lots of journos were but all were being spiked.

How I blew the whistle on Kids Company

Something about the charity has never sat right with me, but I can't quite put my finger on why. I certainly never liked the amount of airtime CB got on national TV or in the papers when so many charities doing similar work don't get a look in.

Its now obvious that there were significant financial irregularities in the way it was being run and I would not be surprised that investigations show that fraud was taking place.

What is ducking appalling is that there should be no need of any charities to look after so many vulnerable children in our society. That is the job of government ffs

Everyone's anger, disappointment and blame is misdirected

I would like to hear what the plans is, to support those children that were being supported by KC? Who is going to do that?

completely agree. I'd rather these celebrities giving money to Kids company paid more tax so the money could be distributed to all children needing it throughout the UK. Someone said earlier that the charity got half the mental health budget for children and adolescents in Scotland. Looking at their website the charity seems concentrated in 3 centres in England doing art therapy and drama.
I'd far rather that huge amount of money went on reducing waiting lists for children needing psychiatric assessments and trained psychologists for severe emotional disturbances. There's a place for drama and painting but £20 million seems excessive especially when only 3 centres benefit.
If the government in the UK (hope it was English money as it only benefited kids in England) have 3 million to spare they should have given it to mental health services for children. The waiting lists are huge.

It's not always that simple marmalade. In many cases KC were an outsourced provider of government services eg play provision or counselling work within schools, under contracts with the Local Authority or paid for by an academy trust or by direct Central Government grant. There's a huge political debate about whether this stuff should only be done by government bodies or whether it's ok for it to be outsourced to other providers (NFP or commercial). But if the work is being done by a charity under a contract to a government body and paid for by the government then it's not really fair to say that the charity is picking up the pieces for children abandoned by the state. In some other cases KC were doing privately funded work off their own bat, and there your point is valid.

It seems astounding that the pm felt able to give kids company a second chance when £3million was never going to enable them to stay open, yet other services are being cut back.

I really want the MPs who authorised this to explain exactly how the £3 million was going to enable restructuring when KC couldn't pay next month's bills.

You TOTALLY misunderstand the children that KC work with, and their issues, if you think its all 'drama and art' Rebecca

There is a huge focus on art and drama on their website.

Sure sweet but who is going to offer those services now it's not kc?

These kids largely are not going to access or cooperate with CAMHS or social services

It does amaze me that so much money was thrown at this charity which helped really quite a tiny section of people when compared to many many people in need all over the country outside London. I heard one person complaining what will they do without the free childcare. Welcome to the real world.

What annoys me, is that it is still clearly a case of who you know. Where I live a small charity that works with young people involved in crime, has closed down. The Council withdrew their small grant because of a lack of money, even though the Senior Council Officers all openly said that the charity had proven it stopped young people committing crime, them get their life and helped back on track.
It did this on a very small grant.