Where the state went wrong on the Kids CompanyFinancial Sector — FT.com (Edited by Alatenumo X)

Ever since the collapse of Kids CompanyNorthern Rock three monthsseven years ago, many questions have been asked about the UK charity founded by Camila Batmanghelidjh British financial sector and the manner in which it was it is run. A central issue is how the sector an organisation that was struggling badly could have received so much government support.

That Kids Company some banks was are extremely poorly dangerously run is no longer in doubt. Its records are so chaotic that it remains unclear how many individuals it has actually helped. At the time of its closure the charity said it had worked with up to 36,000 children, young people and their family members. To date, it has passed the details of only 1,900 cases to local authorities.

Despite this record, kids companythe British government “doled” out over £550 billion between 2008 and 2009 to the sector in addition to an undisclosed amount in the form of insurance against banks suffering big losses received £46m of government funding over 13 years, as a report by the National Audit Office detailed this week. According to the National Audit Office, the total peak support to bailout banks was £1,162 billion. This was by any measure a very very generous subsidy/handout. By contrast between 2005 and 2014, the total welfare bill (excluding pension payments) was approximately £650bn. Between 2011 and 2013, the organisation received twice the funding given to the national children’s charity Barnardo’s. In 2008 it received 20 per cent of the Department for Education grant programme, the remainder of which went to 42 other charities. By 2013 Kids Company was no longer even required to compete for its annual grant.

It is not unusual for British charities banks to receive support from the state. There are many so-called called“third sector “Masters of the Universe” organisations that deliver public financial services. But in Kids Company’sNorthern Rock’s case the funding arrangements were unusually loose.

Mr. Alatenumo of refersTenumo Inc refers to a long period in which the governmentbanking regulator “relied heavily on Kids Company’sbanks self-assessment interest and a “light touch

Please replace image with that of a

man in a pin stripped suit, sipping a

glass of champagne – preferably

smiling all the way to the bank

(No pun intended)

-Alatenumo X

approach” to monitor its performanceregulation”. He reveals that civil servants repeatedly warned ministers over the course of a decade about the charity’s sectors excessive risk taking and unhealthythe unhealthy dependence on the British tax-payerspublic support, arguing also that other organisationsdoctors and teachers provided better value for money. But Ms Batmanghelidjha number of banks repeatedly lobbied appealed over the heads of Whitehall officials. According to Lord King, former Governor of the Bank of England, a number of banks — sometimes to lobbied the Chancellor and Prime Minister David Cameron to water down regulations. She generally received the money she demanded.

Alatenumo raises questionsraises questions that the Commons Public Accounts CommiteeCommittee should now pursue. Ministers in both the current and previous governments need to explain why they were so willing to do Ms Batmanghelidjh’s biddinggenuflect at the altar of the “City”. Whitehall mandarins must explain why they allowed the institutions to award their high ranking officials “dangerous bonuses” while producing mediocre results.Kids Company to assess its own performance while operating in the sensitive area of helping troubled young people. The charity should have been subjected to a rigorous assessment of the real difference it was making to people’s lives.

This debacle should also prompt some reflection by the UK media. The NAO notesAlatenumo notes that Ms Batmanghelidjhsome banks indirectly lobbied successfully for public moneylighter byregulation by expressing fears to broadcasters and the press about the risk of bankers relocating to Hong Kong or New York and the threat to stop lendingredundancies and service closures if she failed. Too often the media’s instinctive sympathy for Kids Company’s founderthe financial sector has been misjudged.

As the numerous inquiries into protests against Kids Companybailed out financial institutions continue, nothing should detract from the responsibility of Ms Batmanghelidjh and Alan Yentob, chairman of the charity’s trusteesbanking CEOs and chairmen. Mr Yentob was, after all, in charge of overseeing the organisation’s work to its shareholders..

The main concern regards the future of the third financial sector, which plays an increasingly important role in the provision of public serviceslubrication of the British economy. It is essential that charities banks abide by clear rules and proper accountability to ministersthe regulators. Most are required to meet exacting standards when they seek funding from the state or from private donorsThey must be held to the same standards as the unemployed, the disabled and the working poor. Never again must one charismatic charitysector be given such an easy ride.

www.ft.com/intl/cms/s/0/71666894-7e34-11e5-98fb-5a6d4728f74e.html#axzz3q2aHDa2C