Kids Company: '£3m donation withdrawn amid police probe'

A donor withdrew a £3m offer to Kids Company after learning Scotland Yard's child abuse unit was investigating the charity, its founder has said.

Camila Batmanghelidjh told the BBC the cash had been designed to help it restructure amid government concerns about the way it was being run.

But the BBC has been told the donor did not withdraw their donation, which was pledged to match a government grant.

The charity closed after ministers said they wanted to recover their grant.

Ms Batmanghelidjh has blamed "rumour-mongering civil servants", ministers and the media for the closure. Trustees of the charity said on Wednesday it had closed because of a lack of funding.

'Gobsmacked'

The Cabinet Office said it was making plans to recover the grant because it believed the conditions attached to the use of the money had not been met.

But Ms Batmanghelidjh told BBC Radio 4's The Report that she was "gobsmacked" by the way its dealings with the government were being portrayed.

She said "huge discussions" had taken place with the Cabinet Office before Kids Company decided to use part of the £3m grant - believed to be £800,000 - to help pay its monthly wage bill.

"There's an email from our interim restructuring finance director to the Cabinet Office saying 'Where is this money, otherwise we can't pay the staff salaries?'," Ms Batmanghelidjh said.

"And there's no email coming back from the Cabinet Office saying this money is not for staff salaries."

Ms Batmanghelidjh said the philanthropist who offered £3m - an individual whose identity the BBC does not know - had panicked and withdrawn it after hearing of the police investigation.

But the BBC has since been told that the donor at no point withdrew the offer and remained ready to stand by the charity after news of the police investigation was disclosed.

It is also understood the trustees of Kids Company felt it would be wrong to accept any further funds considering the serious issues facing the charity.

The investigation by the Metropolitan Police's sexual offences, exploitation and child abuse command involves serious allegations that details of incidents involving young people who used the charity were not passed to police.

The charity said it always met its obligations to report crimes.

Who is Camila Batmanghelidjh?

Camila Batmanghelidjh was born into a wealthy family in Iran. She arrived in England aged 12 and started at the private Sherborne Girls school, in Dorset, speaking little English

• She gained a first-class degree from Warwick University and then trained as a psychotherapist in London

• She founded Kids Company in 1996 and has been its chief executive for 19 years

• She was listed among the UK's most powerful women by BBC Radio 4's Woman's Hour in 2013

Camila Batmanghelidjh profile

Q&A: What we know about Kids Company

Ministers had agreed to give Kids Company its grant on the condition that Ms Batmanghelidjh stepped down as part of the reorganisation, which would have seen her take up a new advocacy and clinical role.

Ms Batmanghelidjh told the BBC the philanthropist had refused to make the donation until the government grant had been paid "because otherwise it wouldn't have been viable".

She added that within 20 minutes of the government money being transferred, "the police call out of the blue to say that there's been allegations of sexual abuse related to Kids Company".

There were protests outside Kids Company offices after its closure was announced

"Within the hour this is all over the news that Kids Company is being investigated... the minute the philanthropist discovers that this is on the cards - they freak and then they don't put their money in, so then the deal breaks down."

Kids Company said its 11 street level centres in London and Bristol and an outreach project in Liverpool, all working with disadvantaged children, would be closing, and its work with more than 40 schools in London and Bristol would end.

It employs 650 staff and has received £37m in government grants since 2005.

'Disappointed'

Kathy Evans, chief executive of Children England, which represents charities working with children, said it was the "norm" for many charities in England to be under "very serious financial pressure".

She said local authorities and other charities were having to pick up the work done by charities that had closed.

"Local authorities have been cut year on year on year without anyone saying this is cutting child protection, cutting services for the most vulnerable," she added.

The Cabinet Office said: "The government has supported Kids Company... to help it deliver services for vulnerable young people and so we are disappointed it has been unable to move to a sustainable financial position.

"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."

After police announced their investigation on 30 July, Kids Company said its "first priority is the safety and security of all the children, young people and adults we support and protect".

It added: "The organisation operates robust policies and procedures that ensure all Kids Company's clients are protected and that staff work safely with clients at all times."

In a letter in The Times, the NSPCC said young people who had turned to Kids Company would feel they had been "left to fend for themselves" unless the focus turned to helping them.

The charity's chief executive, Peter Wanless, said: "Regardless of everything else, the priority for everyone now must be the welfare of these children and making sure that they are not forgotten."

You can hear the interview with Ms Batmanghelidjh on Radio 4's The Report at 20:00 BST on Thursday.