Kids Company founder denies money mismanagement

She and the Kids Company’s chairman of trustees, Alan Yentob, faced the Commons Public Administration Committee where they were questioned about how taxpayers’ money was used.

Their appearance comes after an investigation by BBC’s Newsnight and BuzzFeed News uncovered documents raising concerns about the charity’s management dating back to 2002, which found issues were being raised with trustees and regulators over several years.

The charity closed down earlier this year amid controversy less than a week after receiving a £3 million government grant.

Batmanghelidjh, the founder of the now-defunct charity, said that all the payments made to the charity’s clients had been properly accounted for.

Giving evidence to MP’s, Ms Batmanghelidjh said that handouts weekly generally ranged from £10 to £200 in the case of families.

“It has turned into the notion that it was handed out willy-nilly. It wasn’t. It was accounted for,” she said.

A ‘malicious’ leak

Mr Yentob addressed the allegations of sexual misconduct leveled at the organisation, saying while they had not come from “anywhere near the Cabinet Office”, he believed the leak was malicious.

“It came from a source which obviously wanted to damage Kids Company,” he said.

He argued that once it became public the charity was under investigation, it became impossible for them to accept a series of donations lined up from private benefactors and they had to shut.

He also insisted that until late 2014, the charity’s finances had been in good shape.

“It came from a source which obviously wanted to damage Kids Company”

Challenged about a memorandum sent to the Cabinet Office warning that communities helped by Kids Company could descend into “savagery, looting and arson” if it closed, Mr Yentob said it was describing a “worst case scenario”.

Nevertheless, five days after it shut down, he said that a boy had been murdered, while there were stabbings and four suicide attempts as the “consequence of the absence of a place for these children to go”.

Position of influence

Ms Batmanghelidjh repeatedly accused the MPs of failing to understand the charity’s work which she said involved helping children and young people who had been failed by the state.

“The charity did not close because it was badly run. You are holding your evidence on the basis of the Daily Mail and a group of other media,” she said.

“You haven’t done the rigorous research in order to be able to determine that the charity and its structures were failing.”

The MPs in turn expressed frustration at her failure to answer their questions, accusing her of talking a “non-stop spiel of psychobabble”.

At one point she was warned by Tory MP Bernard Jenkin: “You are aware that it is a contempt of Parliament to mislead this committee and that is a very serious thing.”

Mr Yentob, who is also the BBC’s creative director, went on to deny claims he had sought to use his position to influence the corporation’s coverage of the problems of the charity.

He acknowledged however that when Ms Batmanghelidjh was interviewed on the Radio 4 Today programme, he had stood alongside the producer – a move which he accepted could have been seen as intimidating

“If it was intimidating, I regret it,” he conceded.

Shredding records

Batmanghelidjh rebuked claims that the company had instructed former staff to shred client records after the charity closed.

She said: “That is completely incorrect. We did not shred any client records and the records were all handed over to the official receiver.

“What we handed over were 18,000 hard copy files that contained family members in them.

“In addition we handed over a database of our most high risk cases which amounted to 15,933 individuals. And we handed over copies of 117 referral forms we did.

“Absolutely no records were shredded.”

She added that the 18,000 files now remained in secure storage.

‘They knew’

The pair responded to questions about the final £3m paid to the company contrary to advice of officials.

Both alleged that the Cabinet Office was aware that part of the funds would be used to pay staff’s salaries, despite the payment being made on conditions to the contrary.

Ms Batmanghelidjh responded: “Yes they did. They knew.”
Continuing, Ms Batmanghelidjh said the Cabinet Office accepted her flat as a surety in case she failed to raise the funds needed.

She said: “The deal was £3m from government, £3m from the philanthropists, and I was supposed to raise £8 million plus.

“I fell short by £350,000 and I put my flat up as a surety, which the Cabinet Office took.

“I had to submit the papers because they wanted absolute confirmation of the amounts of money that was being raised to see this deal through.

“I signed a letter saying that if I didn’t raise the remaining £350,000 that I would sell my flat and they could have the money.

“That’s how much rigour went into putting this package together.”