Former Cabinet Office permanent secretary Richard Heaton explains that when the department took responsibility for government funding for the charity, it was aware it was an "unusual charity" - in that it was "well-liked, politically", "well-connected" but had "controversial and unorthodox methods - with an "unusual" funding situation.

"We were really keen to make progress" on financial sustainability and governance, Mr Heaton says, to make sure Kids Company didn't become an "endless receiver" of government funds.

He says the £4m grant signed off in early 2015 was a "collective decision" taken in government based on achieving those criteria.

In hindsight was your funding criteria not as tough as it should have been, the DfE permanent secretary is asked. "That is a question with hindsight we might look at", Chris Wormald replies, but he adds that at the time there was a "very thorough process" in place.

He says the funding was "value for money" at the time, as the charity was carrying out "some highly innovative work with highly vulnerable people".

Pressed on Kids Company funding, Chris Wormald, Department for Education permanent secretary, says there was a "reasonable public interest case" to give Kids Company a grant, despite a failed bid. He says there was a ministerial wish to do this and tells MPs "it was not a case of funding a bid that failed". It was ,he adds, "not unusual" for the government to fund a charity directly rather than through a competitive process. 

Tim Reid
BBC Scotland Westminster Correspondent

Image source, PA

High-profile charity Kids Company closed amid a row about funding and with its performance and management under close scrutiny.

Its founder, Camila Batmanghelidjh, has said there was a "malicious discrediting campaign" against the charity, while Prime Minister David Cameron said he was "sad" it had closed.

Here's a rundown of what went wrong.

The National Audit Office found that collapsed charity Kids Company received at least £46m of public money despite repeated concerns about how it was run.

Asked whether the charity was given special treatment, Chris Wormald says it wasn't. But he says there were "learning points" about the government's dealings with the charity, which he indicates he'll touch on later.

Also rejecting the notion of special treatment, Richard Heaton says the fact ministers chose the charity is on public record.

The Commons Public Accounts Committee is hearing evidence from senior civil servants about charity Kids Company, which closed amid a row about funding and with its performance and management under close scrutiny.

Up before MPs are former Cabinet Office permanent secretary Richard Heaton and Chris Wormald, Department for Education permanent secretary.

The inquiry is drawing on a forthcoming National Audit Office (NAO) report on government funding of the charity.  

Meg Hillier, the Labour MP who heads the committee, starts by saying that Kids Company was "passed around Whitehall like a hot potato with tough decisions being avoided" and she wants to know whether civil servants did their job properly in assessing its viability.

House of Commons
Parliament

MPs now turn their attention to the government's Housing Bill - which is being debated at second reading in the Commons.

Communities and Local Government Minister Greg Clark sets out the bill's proposals on behalf of the government. 

He tells MPs homes are more than bricks and mortar, "they shape the lives of generation after generation".

He says successive governments have failed to build enough homes and argues that the government's intent is to increase the number of homes, insisting "that is our absolute objective".

Is the work and pensions secretary, Iain Duncan Smith, pleased that "sustained parliamentary and public pressure" has "forced" Chancellor George Osborne to reconsider his plans to cut tax credits, asks Labour MP David Winnick.

"Everything the chancellor proposes meets with my approval," responds Mr Duncan Smith to cheers from the Tory backbenches.

Work and Pensions Secretary Iain Duncan Smith says the campaign to leave the European Union "may yet carry the day".

Mr Duncan Smith, who was once an EU rebel against the Maastricht treaty, was responding to Tory backbencher Philip Davies. Mr Davies said the only way to restrict benefits for European migrants was to leave the EU.

The minister encouraged Mr Davies to make such "powerful arguments" when the UK holds its in-out referendum, adding:

Priti Patel, the employment minister , has said it would be "unlawful" to publish information on the number of suicides that have occurred after benefits have been reduced. The question was asked by Callum McCaig from the SNP.

The Daily Politics

The Investigatory Powers Bill is due before Parliament on Wednesday in a bid to update the law to allow police and security services to access communications data. 

It replaces the Communications Data Bill, dubbed the ‘snoopers charter' by critics, that failed through opposition from the Liberal Democrats in the coalition era.

Daily Politics reporter Ellie Price lacks the tools of James Bond, but took the mood box – an unscientific test with a plastic bin and balls - to see what voters decide when asked if privacy or security was the most important factor.

Norman Smith
Assistant political editor

Image source, PA

The Scottish Labour Party has been accused of "Alice in Wonderland" politics over its vote to scrap Trident.

The GMB union in Scotland said Scottish Labour needed to "get real" over the 40,000 defence jobs that would be at risk.

In a statement the union described the decision as "Alice in Wonderland politics promising pie in the sky alternative jobs for workers who are vital to our national security".

The GMB said it would not "play politics" with defence workers' jobs.

Meanwhile the Unite union played down the prospect of reversing its support for Trident in the wake of the Scottish vote.

Scottish members of Unite backed the motion to scrap Trident.

However a spokesman for Unite said the union's policy could only be altered at annual conference in the summer.

The Daily Politics

Clips of Labour's Jess Phillips and the Conservatives' Philip Davies debating equality days for men and women have been in the news for several days.

The pair continued their debate on the Daily Politics when they spoke to Jo Coburn about the merits of special days and debates for issues and services that affect each half of the population.