Spending watchdog to probe Kids Company grant

The high-profile charity regularly hosted events featuring leading politicians

The awarding of public money to the now-defunct charity Kids Company is to be investigated by spending watchdog the National Audit Office.

The charity, led by Camila Batmanghelidjh, closed last month days after it received a £3m public grant.

The money was given to the charity despite advice it "was not likely to be value for money", the NAO said.

It said it would investigate the grounds for awarding money and how grants were monitored.

The NAO - which is due to report its findings in the autumn - will also look at other government funding the charity received over the past decade.

The charity is already the subject of a statutory investigation by the Charity Commission and an inquiry by the House of Commons Public Administration and Constitutional Affairs Committee.

'Long-term viability'

The £3m government grant had been intended for a "transformation and downsizing plan" that would support the charity as it reformed.

The Cabinet Office's lead official, Richard Heaton, wrote to ministers on 26 June asking for a "ministerial direction" before making the payment.

He said he thought the grant would be poor value for money and sought written confirmation that they wanted him to go ahead anyway.

Ministers Matthew Hancock and Oliver Letwin said the funding should be given after leadership changes, as the charity had a "realistic prospect of long-term viability".

'Unsubstantiated allegations'

Prime Minister David Cameron has also defended the grant, saying it had been right to give Kids Company "one last chance".

Shortly after the money was awarded, the charity - which relied on individual donations and government grants - said it was shutting its doors due to a lack of funding.

It said a financial crisis had been caused by the number of children "pouring through our doors" for help, and by "as yet unsubstantiated allegations" - which it claimed stopped donors giving money.

Those allegations included concerns over the safeguarding of young people.