Latest Public Sector News


Whitehall should 'get council advice' when handing grants to charities

Whitehall must undertake a fundamental review of how it makes grants to the voluntary sector by seeking advice from local authorities working in affected areas, the Public Accounts Committee (PAC) has said.

After condemning central government for its participation in the demise of the Kids Company charity, the Commons committee found that Whitehall failed to act on important intelligence from councils.

The PAC report added: “The government failed to learn lessons from Kids Company until the end. Many government departments had a relationship with Kids Company, but there appears to have been no knowledge-sharing about the charity across government.”

The defunct charity had received substantial funding from the public purse, £4m of which came from council pockets and lottery bodies.

After the body fell in August, almost 2,000 case files were passed on to local authorities, with councils handed £200,000 from the Cabinet Office to support the transition of young people to other services.

The transfer of case files came just after an LGA warning that councils would have to help “pick up the pieces” after the children’s charity closed its doors.

Because of the charity’s local significance – given that it worked with 40 schools in London and Bristol – Whitehall should have looked to councils for advice to validate the value for money of its hefty grants.

As a result of its failure to do so, the committee recommended that the government radically overhaul the way it makes direct and non-competitive grants to charities, ensuring processes are fair and equitable.

And when a national charity is providing services with predominantly local characteristics, advice should be sought from local bodies working in that area, PAC said.

All of the intelligence gathered should then be inputted in a grants register so that Whitehall can easily identify charities receiving large sums of public money and share information on charities’ past performance.

Meg Hillier MP, PAC chair, said: “The case of Kids Company will anger many people. The charity was passed around Whitehall like a hot potato, with no one willing to call time on spending millions of tax pounds for uncertain outcomes.

“The lack of scrutiny over its funding was staggering. Fairness and value for money – fundamental values when considering public spending – appear to have been forgotten in repeated and ultimately doomed attempts to keep Kids Company afloat.

“Even after civil servants finally refused to agree additional funding, ministers ‘took a punt’. The final £3m of public money was handed over just a week before Kids Company closed. Payments during the charity’s final months alone totalled more than £7m.

“The faith that things would improve when they didn’t was naïve. So many other charities did not get the same support and it is clear that Kids Company received special treatment – to the detriment of other deserving charities around the country.”

The news of special treatment also comes just after a warning from the NPC think tank that smaller charities across all sectors will have to club together to bid for government grants as a result of upcoming cuts to council budgets.

(Top image c. Anthony Devlin/PA Images)


There are no comments. Why not be the first?

Add your comment

public sector executive tv

more videos >

last word

Prevention: Investing for the future

Prevention: Investing for the future

Rob Whiteman, CEO at the Chartered Institute of Public Finance (CIPFA), discusses the benefits of long-term preventative investment. Rising demand, reducing resource – this has been the r more > more last word articles >

public sector focus

View all News


Peter Kyle MP: It’s time to say thank you this Public Service Day

21/06/2019Peter Kyle MP: It’s time to say thank you this Public Service Day

Taking time to say thank you is one of the hidden pillars of a society. Bei... more >
How community-led initiatives can help save the housing shortage

19/06/2019How community-led initiatives can help save the housing shortage

Tom Chance, director at the National Community Land Trust Network, argues t... more >


Artificial intelligence: the devil is in the data

17/12/2018Artificial intelligence: the devil is in the data

It’s no secret that the public sector and its service providers need ... more >