Kids Company Closes After £3m Govt Bailout

Councils are preparing for an influx of vulnerable children after the closure of Kids Company - less than a week after it received a £3m grant from the Government.

The charity has helped 36,000 vulnerable children and young people - and officials, charities and councils have told Sky News they are "assessing" how to deal with the situation.

There were angry protests and tears outside the Camberwell HQ ahead of the closure at 7pm on Wednesday.

The organisation has been hit by allegations of bad financial management, prompting its high-profile founder Camila Batmanghelidjh to quit as chief executive.

Cabinet Office Ministers Oliver Letwin and Matthew Hancock agreed to give extra cash to help restructure the charity despite objections from a senior civil servant and former government minister Tim Loughton, who warned the £3m would not prove "value for money".

Sky's Sophy Ridge said there was a feeling in Westminster that David Cameron had been "mesmerised" by Ms Batmanghelidjh's "big personality" - and that is why Number 10 overruled objections from civil servants.

In an interview with BBC Radio 4, Ms Batmanghelidjh blamed "rumour-mongering civil servants" and "ill-spirited ministers" for forcing the charity to "abandon a lot of children".

The south London-based charity operates in Bristol and Liverpool as well as the capital.

Esther Keller, director of services for Kids Company in Bristol, said: "I feel terrible sadness for the children and young people we have been working with for the past three years in Bristol.

"They will be hungry, they will be desperate because no therapists will be helping with their emotional state. It's going to be devastating."

The charity offers a wide range of services, including housing, health, education and employment, for children who "struggle to survive" because their parents are facing mental or practical issues.

It has nine centres, two therapy houses and a performing arts programme in Liverpool.

Southwark Council in south London said: "We have been in discussions with the Department for Education and other local authorities, preparing for the closure of Kids Company.

"Although Southwark doesn't refer any children to the charity, some will have sought out their services. We are ready to support any vulnerable children and young people in the borough who are affected by the closure of Kids Company."

Government officials took the rare step of requiring a written, direct order from ministers before agreeing to the latest funding lifeline for Kids Company amid concerns about how it would be spent.

Cabinet Office Permanent Secretary Richard Heaton told ministers: "The experience that this department has of the charity's management and capacity gives me limited confidence that Kids Company will successfully implement the changes they describe in their new restructuring plans while meeting the stringent conditions set out in the proposed new grant.

"It is therefore my judgement that the proposed additional £3m grant does not represent value for money, in terms of delivering the outcomes for which this department is funded by Parliament."

It is being reported that the Cabinet Office is making plans to get back the grant, arguing that the conditions attached to the use of money was not met.

Interim Labour leader Harriet Harman said: "The Government must publish a full report showing what funding decisions they have made in regard to Kids Company, and on what basis."

A Government spokeswoman said: "The Government has supported Kids Company over the last seven years 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."