Kids Company Government Funding: The Complete Record

Kids Company received at least £46 million of public funding between 2000 and its closure in August 2015, including at least £42 million from central government. The former charity’s short funding page described only one two-year award. This reconstruction follows the complete public-money record, explains why official totals differ and separates funded activity from evidence of lasting outcomes.

The numbers around Kids Company are often quoted as if they answer the same question. They do not. “£8 million over two years”, “£9 million in 2013–15”, “approximately £43 million since 2005” and “at least £46 million of public funding” cover different periods and components. This page reconciles them from the National Audit Office (NAO), departmental evidence, grant records and later regulatory and court findings.

The headline figures—and what each one includes

The NAO uses “at least” because records across a 15-year period were incomplete and because schools also commissioned services. Its £46 million is the broadest defensible public-sector total, not a precise lifetime income figure. Private donors, companies, trusts and fundraising events are outside that figure.

Public money was important, but not most 2013 income

For 2013, the NAO records Kids Company’s annual income as £23 million: central-government grants accounted for 20%, local-government income 3% and private donations 77%. That corrects two misleading simplifications at once. Kids Company was not wholly government-funded, but the timing and scale of its central grants were critical to its cash flow.

The former page said the charity raised more than £24 million a year from other sources and had more than 1,700 monthly funding sources. Those are organisational claims from a page archived in July 2015. They cannot be reconciled to the £23 million income recorded for 2013 without knowing the page’s year, whether “sources” meant transactions or donors, and whether “have to raise” described a target rather than actual income.

A funding timeline from 2000 to 2015

Why the 2008 and 2011 awards stand out

Kids Company won both awards through competitive programmes. The scale was exceptional. Its £12.7 million Youth Sector Development Fund award was about three times the award to any other pathfinder. Its £8.97 million VCS Transition Grant was more than twice the amount awarded to any other recipient, including national charities.

Scale alone does not show that an award was wrong. It does raise the bar for comparative reasoning, monitoring and evidence. The NAO said DfE held limited papers explaining why Kids Company received such a large share of the 2008 programme.

What changed in 2013

Kids Company submitted two bids to the successor National Prospectus programme: approximately £7.575 million over two years for safeguarding work and £1.463 million for a schools key-worker programme. Neither met the required quality standard; DfE said they did not fit national priorities or offer value for money.

Government did not simply end support. DfE prepared a public-interest case based on continuity, the perceived quality of work with young people not in education, employment or training, and potential damage to the government’s wider agenda if funding ended. It first provided a £1 million three-month extension while departments assembled a direct cross-government arrangement. From this point, the annual grants were not won in open competition.

What the old “£8 million plus £1 million” page got right

The former page said Kids Company was awarded £8 million across two years in April 2013, then an additional £1 million for summer residential programmes. The central arithmetic is supported, but the fuller record adds crucial detail.

1. The original agreement was £4 million a year for 2013/14 and 2014/15, assembled from the Department for Education, Department for Work & Pensions, Department for Communities and Local Government and Department of Health.
2. The additional £1 million was split between two financial years. Cabinet Office evidence says the 2013/14 part increased support for young people, while the 2014/15 part funded a summer residential and safeguarding programme.
3. The top-up was conditional. Its release was tied to a review of financial governance and controls. PKF Littlejohn conducted that review in early 2014; the Cabinet Office approved two £500,000 tranches after considering it.
4. Government paid £4.5 million in each financial year. Contribution schedules can show more money in one year than the grant actually paid because departments transferred funds into a cross-government pot and the temporary £1 million extension was included in that accounting.

The old page also listed intended outcomes: re-engagement in education and employment, personal development, reduced criminal involvement and substance misuse, and better access to food and clothing. These were policy aims. They should not be presented as measured achievements simply because they appeared under the words “key outcomes”.

What did government actually measure?

The 2013–15 agreement set quarterly delivery expectations. Examples included mentoring, homework clubs, sport or art, improvements to living conditions and material help such as clothing or bedding. A later DfE submission said the grant agreement specified 35,245 funded interventions over two years.

Methods Consulting received a £200,000 contract to validate quarterly reporting. It sampled records, checked spreadsheet structure and formulae, compared reported totals with targets and checked that report figures matched source spreadsheets. The NAO found no significant contemporaneous concern about the quality of those data and said Kids Company regularly reported exceeding its numerical targets.

Validation of outputs was not proof of outcomes

This distinction is the centre of the funding record:

• an intervention records an action, such as a mentoring session, meal, item of clothing or homework-club contact;
• an output target counts how many such actions were delivered;
• an outcome measure tests whether housing, health, learning, employment or safety improved;
• an impact estimate asks how much improvement resulted from the intervention rather than other causes.

The NAO said the quarterly reports counted interventions but did not measure the impact on outcomes because agreed impact measures were not in place at the start of the grant. Methods’ scope did not assess service quality. That does not mean activity had no value; it means the monitoring could verify delivery volume more confidently than lasting change or comparative value for money.

This aligns with the limitations in the Kids Company services and centres evidence record: qualitative research documented perceived value and the character of the model, but did not supply a controlled outcome evaluation.

The final £7.265 million in 2015

£4.265 million paid upfront in April

Five departments contributed to the 2015/16 grant: DfE, DWP and DCLG at £1 million each, the Department of Health at £765,000 and the Cabinet Office at £500,000. The grant included minimum activity expectations such as intensive support for 500 clients, clinical support for 400, a schools programme for 10,000, 3,000 meals a week and employment-readiness work for 150.

Instead of quarterly payments, the entire £4.265 million was paid in April to ease cash-flow pressure. Conditions required a move toward financial sustainability and implementation of value-for-money and impact measurement. Kids Company supplied an interim reporting-framework update in May but had not submitted a formal performance report before closing.

£3 million paid under ministerial direction in July

Kids Company requested another £3 million for restructuring in June, intended to be matched by £3 million from philanthropists. Cabinet Office officials advised against payment. Their reasons included unmet conditions from the April grant, low confidence in forecast income and concern about financial management and sustainability.

A ministerial direction is a formal instruction to an accounting officer to proceed after that official has objected on grounds such as regularity, propriety, feasibility or value for money. It does not mean the payment was unlawful. In this case, ministers directed payment because they judged restructuring could protect services and secure a sustainable future despite the accounting officer’s value-for-money concern.

The grant agreement was signed and £3 million paid on 30 July 2015. The charity closed on 5 August and filed for insolvency on 12 August. Cabinet Office evidence says it then terminated the grant and sought unspent money through the Official Receiver. Around 1,900 case records were passed to local authorities, and government provided £200,000 to support the transition.

How later official findings fit together

Later investigations asked different legal and policy questions. They should not be collapsed into one verdict.

National Audit Office, 2015

The NAO established the funding trail from government records. It found recurrent sustainability concerns, heavy reliance on self-assessment before 2013, unusually large awards and a shift to non-competitive grants. It explicitly did not assess Kids Company’s overall value for money, trustee effectiveness or service impact.

Parliamentary committees, 2016

The Public Accounts Committee criticised the lack of scrutiny, comparative fairness and value-for-money evidence in government funding decisions. PACAC criticised governance, financial resilience, leadership and evidence of effectiveness. These were parliamentary findings and lessons; they were not the judgment in the later director-disqualification trial.

High Court, 2021

After a ten-week trial, the High Court rejected the Official Receiver’s case seeking to disqualify the trustees. Mrs Justice Falk said no dishonesty, bad faith, inappropriate personal gain or other want of probity had been alleged, found no disqualification order warranted against the trustees, and held that Camila Batmanghelidjh was not a de facto director. The court also said it would not have disqualified her if that conclusion were wrong.

That judgment matters because some earlier commentary is written as if allegations of unfitness were established fact. It does not erase every cash-flow concern or convert output counts into outcome proof. It decides the particular disqualification case on the evidence and allegations before the court.

Charity Commission inquiry, 2022; revised 2025

The Commission recorded mismanagement in aspects of administration, including failures to pay some HMRC liabilities and workers on time, and said trustees should have acted sooner to strengthen financial stability. It also incorporated the High Court’s findings, recognised that the trustees’ expansion-versus-reserves decision fell within the range reasonably open to them, and noted that restructuring might have allowed continued operation absent the criminal investigations.

A balanced account can therefore hold several facts at once: many young people received valued support; public money funded extensive activity; government monitoring was stronger after 2013 but remained output-heavy; liquidity and sustainability were recurrent risks; parliamentary committees were deeply critical; and the High Court did not find the defended trustees unfit.

What funders and charities can learn from the record

Use one funding ledger with one definition for every total

Commitments, departmental contributions, cash payments, extensions and top-ups must be recorded separately. Every public total should state its period, funding bodies, whether it is awarded or paid, and whether local or lottery money is included. That would have prevented much of the later £8m/£9m/£43m/£46m confusion.

Design the outcome framework before the money starts

Counting thousands of interventions can show reach and workload, but it cannot retrospectively create baselines or comparison measures. A grant should define the population, desired change, measurement intervals, attribution limits and data-quality process before delivery.

Test sustainability independently from service quality

A service may be valued and still carry an unmanageable liquidity risk. A charity may have weak reserves while a particular intervention helps people. Funders need a service-evidence review and a financial-resilience review, rather than allowing one to stand in for the other.

State the opportunity cost of a direct award

The 2013 public-interest case considered continuity and reputation but, according to the NAO, did not compare the value or opportunity cost of continued funding. A modern direct award should explain why it is preferable to a competition, local commissioning, transitional support or funding several alternative providers.

Plan continuity around people, not only the grantee

If a provider supports people with complex needs, grant conditions should include a funded continuity plan, current referral information, data-sharing basis and named receiving services. Transferring around 1,900 cases after closure shows why this cannot wait until insolvency.

For the human and operational context behind these sums, use the Kids Company Archive, including the campaign record and year-by-year newsletter reconstructions.

Questions about Kids Company’s government funding

How much public funding did Kids Company receive?

The National Audit Office identified at least £46 million between 2000 and 2015: at least £42 million from central government, around £2 million from local government and £2 million from lottery bodies. The total excludes private donations and is a minimum because historical public records were incomplete.

Why do some sources say £43 million?

Cabinet Office evidence gave a rounded departmental schedule of approximately £43 million, principally central-government support. The NAO’s broader £46 million minimum adds local-authority and lottery funding and reconstructs central grants across a slightly wider evidence base.

Was the 2013–15 grant £8 million or £9 million?

It began as a two-year £8 million cross-government agreement and was topped up by £1 million for extra support, including a 2014 summer residential and safeguarding programme. Government therefore paid £9 million across 2013/14 and 2014/15.

Was the 2013 funding competitively awarded?

No. Kids Company’s bids to the competitive National Prospectus programme were unsuccessful. DfE then made a public-interest case for continuity funding and arranged a direct cross-government grant. Direct charity grants were legally available, but the NAO and parliamentary committees questioned the evidence and comparative value behind the decisions.

Did Kids Company meet its grant targets?

It regularly reported exceeding numerical intervention targets, and Methods Consulting validated reporting and spreadsheet data without significant contemporaneous data-quality concerns. Those checks did not assess service quality or prove long-term participant outcomes.

What is a ministerial direction?

It is a formal instruction from a minister to proceed when a departmental accounting officer has raised an objection under public-money rules. The July 2015 direction followed an official conclusion that the £3 million restructuring grant was unlikely to represent value for money.

How much did Kids Company receive immediately before closing?

It received £4.265 million upfront in April 2015 and a further £3 million on 30 July, a total of £7.265 million in about 16 weeks. It closed on 5 August 2015.

Did the government prove that Kids Company’s services worked?

No single government evaluation proved overall impact. Monitoring became more systematic after 2013 and verified reported activity, while commissioned and academic work offered qualitative evidence. The NAO and committees still identified a gap between intervention counts and robust outcome or value-for-money evidence.

Were Kids Company’s trustees found unfit?

No. The High Court rejected the Official Receiver’s defended disqualification case in 2021 and said no order was warranted against the trustees. The court’s decision is distinct from earlier parliamentary criticisms and later Charity Commission findings about aspects of financial management.