Kids Company closes due to lack of funds

Charity's 11 centres shut and work with over 40 schools ceases with immediate effect due to inability to pay debts

Children’s charity Kids Company closed today, due to a lack of funds.

In a statement, the charity said that its 11 centres had shut and its outreach project in Liverpool and work with over 40 schools had ceased with immediate effect because of an inability to pay its debts.

In a statement, 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 [founder] Camila [Batmanghelidhj] and her team, some truly enlightened philanthropists and the government, we have not been able to continue.”

The statement came at the end of a day of increasingly feverish speculation about the fate of the charity.

In a story published yesterday, Buzzfeed News and BBC Newsnight reported that two government insiders had said that the charity would shut today after a £3 million government grant given to it last week was used to pay staff wages rather than used for restructuring as intended. It is understood that the government was trying to recover the £3 million.

“The end”

Camila Batmanghelidjh, the founder of the charity who agreed to step down as chief executive last month amid controversy surrounding its finances, then confirmed the closure this afternoon.

In an interview with the BBC radio show ‘The Report’ that is due to air tomorrow evening, she said: “By the time you broadcast, unfortunately the charity’s closed and we’ve had to abandon a lot of children.”

“That’s it, it’s the end of Kids Company and actually a bunch of rumour-mongering civil servants, ill-spirited ministers and the media, on the back of a range of rumours, put the nail in this organisation and shut it.”

“Media frenzy”

This morning, the embattled organisation, which is also being investigated for alleged criminal activity taking place on its premises, took to Facebook to attack the “media frenzy” surrounding it.

“Regrettably, some journalists have been paying our most disturbed young people for stories. This included an approach to a drug-addicted mum. The negative publicity that is generated as a result of rumours and irresponsible journalism will impact our fundraising and cause irreparable damage,” the statement said.

“Ultimately, maltreated children who have already paid a price for abuse of trust by adults, will yet again suffer. We are grateful to all those journalists who have given our children and young people a voice and upheld the truth. Our collective focus should be the welfare of children who have placed their trust in Kids Company.”

Profound sadness

In her formal statement on the closure, Batmanghelidjh 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.”

A petition to wind up Kids Company has now been issued and the charity will go into compulsory liquidation following a court hearing. The charity’s staff have been told not to report to work or contact clients.

Statutory services overwhelmed

In respect of the children and young people supported by the charity, its statement read: “We understand how difficult the loss of services and supportive relationships will be to our children, young people and families. We deeply regret that we are unable to continue and have tried to do everything in our power to maintain the organisation’s services. Statutory services are overwhelmed at present in the areas we work within. However we have no alternative other than to signpost clients to other charitable organisations and local authority services in their areas.”

In response to news of the closure, David Simmonds, of the Local Government Association, said: “When a charity such as Kids Company closes, and it has been providing services commissioned by a council, we will ensure that any vulnerable users are identified and supported appropriately.”

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7 Responses to Kids Company closes due to lack of funds

  1. Joy Stanley August 6, 2015 at 11:23 am #

    Something is hidden here, why accept a grant when you are bankrupt. Poor money management despite what appears to be excellent care for young people is unacceptable. The public money must be used wisely and well. So sad for the youngsters. How poorly informed is Central Government and how under financed are uour services to all the vulnerable again by Central Government. Cuts to the needy while cutting tax to the wealthy seems obscene to me

  2. Peter Teague August 6, 2015 at 11:28 am #

    Camila Batmanghelidjh
    Benevolence is open to exploitation so has to be budgeted for, like shoplifting at John Lewis etc. No slack for Kids Company.
    Another example of selective understanding by the powers that be.

  3. dfeb5e98-18e8-4af2-a19b-e4a5ed45483c August 6, 2015 at 1:46 pm #

    Sorry but as good a job as this organisation has done it was a car crash waiting to happen. I bet there are other organisations out there that would have jumped at the money Kids company has received.

    I suspect the charities commission are going to asking some very difficult questions over the next few weeks. Such as where was the money for the wind up of the organisation, ( ( a legal requirement ) I wonder if Camilla can answer that question

  4. Jeanette Copperman August 7, 2015 at 12:44 pm #

    The clips talking about how Kids Company was ‘family’ for some young people are powerful lets not forget that. I saw at first hand the incredible work done by Kids Company with young people who did not fit into the remit of other services and who were often labelled as ‘difficult’ and other services shunned or found their chaotic lifestyles too much to manage. I also saw the way that the continuity and support Kids company offered help some young people turn their lives around, kept parents and children together by offering practical and emotional support. Two things stand out for me – that they never abandoned a young person – that these young people had already been abandoned again and again and their wall in their Peckham office to the young people who had died from gang violence, young men who no one else was keen to deal with. Keeping a show like that on the road particularly in times of austerity is no mean feat – but where was the support from government? Surely it could have been restructured and more governance put in place if that was what was needed?

    It’s interesting that Kids company gets to close with immediate effect when they run out of money – not so the banks with their financial mismanagement affecting all of us.

  5. Ruth Cartwright August 7, 2015 at 3:02 pm #

    Some thoughts: I believe Kids’ Company did a lot of good work and the Government in fact saved money funding them rather than spending on good quality and preventive social work from the statutory agencies. I did find Ms Batmanghelidjh’s criticism of the whole of social work rather hard to take at times – many social workers would have loved the resources Kids’ Company had and would have loved to work with those children and families. As a trustee of a couple of charities I understand the wish to spend all available funding on the ever-increasing number of young people in need – many donors want this rather than to be told ‘your donation is being spent on building up reserves’ but I think there must always be enough money put by to pay staff and close the business should that be required. It was rather galling that at one time Camila was threatening to close every six months or so and more funding was always made available – not so for local authorities. Kids’ Company’ s inclusive and welcoming approach stood in stark contrast to the ‘problem families’ approach. There is always a danger when a charismatic and inspiring individual is also running the business and I think that is part of what went wrong here. I fear many of the children now abandoned will not be picked up by other agencies because of strict eligibility criteria engendered by cuts in funding.

  6. Blair McPherson August 12, 2015 at 1:37 pm #

    This head of the voluntary group, is a self appointed leader of the community and a vocal critic of the council. Others groups feel excluded, there are concerns about how the operation works, the autocratic management style and complaints of jobs for mates. Is the LA right to insist future funding is dependant on changes to the management committee, a new qualified treasure, posts advertised externally and a LA rep on the recruitment panel. Is the LA trying to buy off an influential critic or safe guarding public funds? These issues tend to arise more often in voluntary groups from black and ethnic minority communities the very groups that LAs have traditionally struggled to reach, is this an example of institutional racism or just a case of he who pays the pip calls the tune.

  7. Rodolfo Vidulich September 2, 2015 at 2:33 am #

    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. A statement on the charity s website said that it had contacted the NSPCC, Barnardo s and other local organisations in the hope that they could help take on Kids Company s clients.