Third Sector 

Kids Company was 'fobbed off' by government at least 82 times, High Court hears

28 October 2020 by Stephen Delahunty

Lawyers acting on behalf of a group of the charity's former trustees have been cross-examining the Official Receiver

Defunct charity Kids Company was “fobbed off” by the government at least 82 times the High Court heard yesterday.

Representatives acting on behalf of former trustees of the charity, which collapsed in 2015, cross examined Anthony Hannon who worked in the Official Receiver's insolvency service.

Hannon had spent the previous day presenting the findings of his team’s investigation into the children’s charity.

The OR is seeking to secure disqualification from senior positions for periods of up to six years against seven trustees of the charity, plus Camila Batmanghelidjh, its founder and former chief executive.

In attempting to make the case that the charity had many supporters of means, both inside and outside of government, George Bompas QC of 4 Stone Buildings, acting on behalf of former trustees Richard Handover, Francesca Robinson and Alan Yentob, who chaired the charity for 18 years, referenced a finance committee meeting in January 2015.

There, he said, the charity had been assured by David Cameron’s government that it did not want Kids Company to close any services, although it was noted that the rhetoric did not often match the words.

Bompas asked: “Is it your criticism of the trustees that they’re woolly and optimistic or untruthful?”

“My criticism is that the company was in decline for a long time,” said Hannon.

He referenced the findings of his investigation, where he said that Alan Yentob talked about being fobbed off by the government over funding requests at least 82 times. 

Hannon questioned what indication there was that the 83rd request would be successful.

Bompas made the point that Kids Company did receive government money in the end.

“But not £20m, or anything like it,” replied Hannon.

Kids Company’s annual spend was over £20m a year when it collapsed.

Charity had “a number of significant backers”

Bompas highlighted that Kids Company was not just soliciting money from the government, but that it had a number of other significant backers, such as hedge fund manager Stuart Roden.

Roden had made a £1m donation in 2015, and made other loans and payments totalling more than £1m in the previous year.

This, Bompas asserted, showed how supportive the charity’s backers were.

Rupert Butler of Leverets, acting on behalf of Batmanghelidjh, asked Hannon if he thought the timing of safeguarding allegations made against the charity was a coincidence.

“The cynical might point out that the timing just before the £3m grant is there to try and bring the charity down,” said Butler.

Hannon said he wouldn’t go that far, but Butler asked him if he had considered the charity’s history and “attacks” by some parts of the media.

Hannon didn’t think the allegations were malicious. He described the suggestion that a civil servant in the Cabinet Office could have made the [safeguarding] allegation as “paranoia”.

Butler said that Batmanghelidjh had raised £164m in the last 20 years, which was described as a “phenomenal sum of money”.

Hannon had previously described the charity’s success in applying for competitive grants as “lamentable”, but Butler asked how you could access grant funding if you don’t always meet the criteria.

Hannon said: “If the Prime Minister wanted to hand over money then he would have.”

Butler also questioned the claim that Batmanghelidjh was “de facto director,” by highlighting the structure of the charity in a number of governing documents and committee meetings that made clear what her role was, and who she reported to.

Accrued payments 

Andrew Westwood of Maitland Chambers, who is representing former trustee Vincent O’Brien, focused on a number of accrued payments that the court heard the charity relied on for 20 per cent of its income.

One, a £200,000 donation from British rock band Coldplay had been donated in January 2014.

However, Hannon’s report suggested it had been accrued in 2013.

He conceded this had been incorrect, although later he said there were other examples where payments were made in April and May and accrued the previous year.

Westwood also pointed to a financial meeting in January 2015, where O’Brien suggested that accruals should only be made that met the right standards.

“Satisfying the auditors requirements is not the same is not the same as saying it meets the statutory requirements,” said Hannon.

He said he thought the trustees should have been following up more on the accounting of accrued payments.

Last week, the court heard Bompas describe some of the stories around the charity's expenditure as salacious and designed to create hysteria.

The ten-week trial continues.