Written evidence from ALAN YENTOB, Chair of the Trustees, Kids Company (KCI 05)

Public Administration and Constitutional Affairs Select Committee

Introduction

I thought it important to provide the Committee with a brief outline of events leading up to the closure of Kids Company while offering some context and background which will demonstrate how the Trustees executed their responsibilities in relation to governance, fundraising and financial controls. This had to be achieved while confronting growing numbers of children and young people in need or at risk, many of whom were not being served or even acknowledged by the statutory model or by the work of local authorities. I want to emphasise that I welcome this opportunity to answer your questions and to place on record my strong belief in the work that Kids Company has done in almost two decades.

My involvement

I was introduced to Kids Company by Comic Relief in the summer of 1997. It was founded by Camila Batmanghelidjh approximately a year earlier and housed underneath some railway arches in Camberwell. It began as a tiny organisation funded by Camila, who mortgaged her flat to make it possible. Despite initial resistance, within a very short period of time some 400 disturbed children and young people had made their way to the railway arches through word of mouth. Many had been sexually or physically abused and the majority were under

18. Children who had been failed or ignored by local authorities were telling each other that they had found in Kids Company an alternative home.

I visited the Arches in Southwark more and more frequently and was very moved by what I saw. It was a small operation – Camila has written about what it was like at the time. I was really impressed by its approach, which was so different from anybody else’s.

The whole ethos was non-judgmental and the young people felt listened to and accepted. They were treated as individuals but were obliged to become part of a community. The model was based on self-referral, which was in complete contrast to the statutory model which required, and still does, the child or young person to be referred by an adult or an institution.

Over the years I got more and more involved. Along with Peter Wheeler, a partner in Goldman Sachs, and Michael Jackson, the CEO of Channel Four, we began to frequent the Arches to support the innovative model of therapeutic care that Camila was pioneering.

Becoming Chair of Trustees

In the early years Kids Company’s income tended to come from charitable trusts and individual donors. But as demand for its services grew the lack of any ongoing statutory funding became a serious problem and I became more actively involved.

In 2002 Peter Wheeler and I, with the support of Peter de Haan and Michael Hastings, approached the Treasury with a request for help to address an outstanding debt to HMRC of

£700,000. Despite the recent allegations in the Mail on Sunday that I had sent a ‘secret letter’ to Dawn Primarolo, that letter was completely transparent. It was fortuitous that the quality of work that Kids Company demonstrated was admired and appreciated by senior figures in government, and consequently the Treasury agreed to defer £600,000 of the debt.

By early 2003 Peter Wheeler and I had joined the Board, and I had become Chair of the Trustees. The first government intervention came from the Home Office with a grant of approximately £350,000, which was secured through the intervention of Home Secretary David Blunkett and Louise Casey, who now runs the Troubled Families programme.

In due course, Kids Company came to the attention of Tony Blair and Gordon Brown, who could see that it was addressing challenges that were not being met elsewhere. Kids Company finally moved site to Kenbury Street in Lambeth and we negotiated a direct grant with the Labour Government which continued year- on-year until the Conservative/Lib Dem Coalition in 2010.

In April 2005 Kids Company received a three-year grant from the Treasury of approximately

£3.47m from the Invest to Save budget. This consisted of £1,147,000 in 2005, £1,176,750 in 2006, and £897,750 in 2007. The Treasury oversaw this grant.

1.     The work of Kids Company

Kids Company's model of service delivery was developed from listening to and learning from the children whose needs it met. The model recognised that society's most vulnerable children typically have complex and chronic problems driven by factors such as persistent poverty, neglect, physical and sexual abuse and, often, concomitant trauma, which in itself drives behaviours and patterns of thought likely to diminish the child's social and educational capacities.

The simplicity of Kids Company's approach belies its complexity. We developed the capacity to deliver robust and professional psychological, emotional and material support. We recruited and trained skilled and highly motivated individuals who vocationally formed stable attachment-based relationships with the children and young people. These relationships formed the heart of the service and together with the ability to alleviate the stress caused by adversity are responsible for the model’s effectiveness.

Self-referral

This is one of Kids Company’s most successful and effective principals. The very thing that works really well is one that has negated funding and ultimately weakened an organization whose model and clinical intellectual property should be valued and ring-fenced as a national asset.

The detriment to Kids Company of sticking with what works for vulnerable children rather than what attracts funding comes at a time when Ofsted has reported that more than three quarters of local authorities inspected are not providing a good standard of children’s social care. It was reported that only 10 of 43 children’s services inspected in 2013-14 were delivering good quality care.

While many local authorities have struggled to meet the social care needs of vulnerable children, Kids Company, backed and encouraged by the government, grew to become a successful parallel provider of child protection and support services for children and young people desperate for help.

Independent evaluations

From very early on, the work of Kids Company began to be noticed and was the subject of many independent evaluations, some quotes from which are below:

‘Kids Company is pioneering a radically new approach to tackling social inclusion. The model is so powerful in its central philosophy and practice that the view could be taken that it merits more than a mention in the annals of social care.’ ‘In an ideal world every neighbourhood should have a Kids Company.’ Independent report commissioned by Youth Justice Board

‘Kids Company is a sophisticated and complex organisation which is working ‘on the edge’ with young people at risk. The integration of therapeutic and youth work approaches is innovative and has the potential for a much wider application in youth work with alienated and challenging young people.’ Southwark Education Report

‘There is considerable evidence that Kids Company is achieving results with an extremely challenging target group. These results are all the more striking when one considers the number of agencies that have tried and failed to engage some of these young people and the enormous needs that they present on arrival.’ Home Office Report

Kids Company’s value to the wider community in Lambeth soon became apparent. In July 2007, Camila received the letter below from the Metropolitan Police, praising the organisation’s contribution to crime prevention in the area and suggesting the creation of a crime prevention facility which could operate outside daytime hours.

Three months before Kids Company’s closure, another letter was received from the Metropolitan Police in Lambeth. This letter acknowledged the exceptional contribution that Camila and Kids Company have made in the area, including providing trauma awareness training to the Police, and refers to the collaborative creation of a Violence Recovery Unit, to which young people and also frontline police officers might turn for help in recovering from violence and trauma. This letter is copied below.

On 12 May 2015 Ofsted1 focused on the child protection services in the London Borough of Lambeth, home of Kids Company’s most challenged crisis centre, Kenbury. The report found that:

A failure of leadership has resulted in the deterioration of almost all safeguarding services and services for looked after children and their families in Lambeth from when they were last inspected by Ofsted in 2012.

The Lambeth Ofsted report paints a picture of an organisation in disarray. The report describes how changes in management and social work staff at all levels in recent years have resulted in a lack of continuity, poor engagement with some service users and reduced standards of social work provision and management oversight.

It also describes:

Poor practice not being challenged and children’s needs being unmet. Achievements, stats and stories

Kids Company has been independently evaluated every year since it began. In 2008, on the basis of the excellent outcomes and achievements that were consistently achieved with children and young people, Kids Company was selected by the Department for Children, Schools and Families to become one of six ‘Pathfinder’ organisations and received £12.7m to enhance and disseminate our model of best practice and innovation. This three-year grant enabled Kids Company to provide intensive therapeutic, social work and educational services to 400 medium- to high-risk children and young people aged 12-25 with complex needs, and to develop and implement a unique case data collection and monitoring system

named Aurora. Within the three year we exceeded all the milestones set and this achievement was described in the subsequent government audit as outstanding.

For an understanding of the challenges faced by our keyworkers, I think you would find it valuable to read the testimony from a former member of staff, which is attached.2

The growth of Kids Company

The quandary for Kids Company was that although the organisation did not fit well with the statutory funding model as it currently exists, the clients’ needs most definitely did.

Much has been made of the apparent sudden growth of Kids Company, with people suggesting that money should have been set aside for reserves. The growth can be misleading because often it was not 'free money' which could be set aside as it was given as

1 London Borough of Lambeth. Inspection of services for children in need of help and protection, children looked after and care leavers, and, Review of the effectiveness of the local Safeguarding Children Board. 12 May 2015

restricted funding. All of our government grants required us to work with new groups of children and young people, when we still needed to fund ongoing work and an increasing demand with those clients already in our care.

A year before its closure Kids Company had some 650 staff made up of consultant psychiatrists, psychotherapists, psychologists, social workers, occupational therapists, nurses, teachers, youth workers, arts and sports workers, voluntary doctors and dentists, accountants, human resources specialists, fundraisers, clinical auditors and key workers. Kids Company services were delivered across some 59 different sites, including 48 schools, where students accessed therapeutic provisions, and 11 mixed delivery street level centres across London, Bristol and Liverpool. At different points these numbers vary as new schools would come on.

As a general rule, the most high-risk groups and individuals we worked with required more intensive interventions and more direct funding, while the least high-risk groups could be supported primarily through volunteering and pro bono services.

Some 500 clinical trainees from respected educational centres from across the country did clinical placements with Kids Company in the fields of social work, psychotherapy, psychology, occupational therapy, nursing, dentistry and teaching, amongst others. Their placements were monitored externally by their universities. Between 10, 000 and 11,000 volunteers in any given year contributed to the organisation and approximately 270 city companies partnered in support of Kids Company’s children.

During this period Kids Company experienced an increase in children and families who were absolutely destitute and had nowhere to stay, and came to our organisation pleading for food and shelter. There were many individuals who were sometimes born in Britain but had no legal paperwork, or were trafficked as children or had mothers who had no status. We couldn't address all their needs but we provided them with food and tried to stabilise their status through our legal team to submit appropriate applications to the Home Office. Many of these mothers had been cheated by local solicitors who had taken their money but were abusing them, or had never submitted their applications or followed them through. The majority of these women had been badly abused themselves. Their parenting of their children was negatively impacted by the stress they were experiencing and the children were showing signs of malnutrition. Many of these women survived through prostitution, or were raped or repeatedly assaulted because the perpetrators knew that the women   couldn't turn to the police because of their undefined status. Our mental health teams spent all their time trying to stabilise this group who were experiencing chronic adversity. We provided this support because the mental health of their children depended upon it.

During these years the levels of risk on the streets had also increased. Post the riots of 2011 young people had become even more despondent. We were witnessing very disturbing perversions in terms of sexual assaults, but also random mindless knife and gun crime perpetrated by young people against each other, and by adults against the young. As a

2 Testimony of former keyworker of Kids Company

result, Kids Company nurses and key workers did home visits and dressed wounds. The increase in gang violence had already prompted the police to ask us to open late into the evenings, so we had an evening club from 7pm – 10pm which the older and most high risk group attended regularly. This meant that globally throughout the day we had to increase

security to deal with random attacks. One such attack was carried out by a young person with a firearm who shot randomly. At the time Lord Michael Hastings was at the site and witnessed the incident. The police were alerted and the situation was managed. We had a good cordial working relationship with the police and, specifically, with borough commanders at the time with whom we communicated regarding risk management.

The other concern that was hugely impacting our young people was that fact that they were addicted to a range of substances, which they used to self-medicate. The drug charity Mainliners carried out a piece of research at Kids Company. Over 90% of the children and young people they interviewed described being introduced to drugs by immediate family as opposed to socially. Indeed these findings pointed to intergenerational substance misuse, with children as young as nine taking up drug use. Babies were being given drugs to stop them from crying. The only drug rehabilitation programme for children in the country, with 12 beds, had shut, so we were funding a range of alternative providers to get children and young people off drugs, as well as using our own substance misuse workers and therapists.

Young people arrived at Kids Company who had not been to school for year and who needed holistic intervention so that they could become economically independent. The fact that they were severely traumatised meant that local colleges couldn't cope with them, so we had to create our own educational programme to simultaneously give them basic numeracy and literacy whilst stretching them creatively and intellectually. The Urban Academy was created to meet this level of divergent need, and from there many young people went into employment and further education. In fact, under the Lottery grant, 73% of those not in education or employment had returned to the mainstream. Many of our young people went on to university as we negotiated for the universities to provide them with the right level of support alongside our staff.

Kids Company had a policy of not turning away or terminating care for young people if they still needed it. This was important both in terms of the child we were supporting and also for the children who were looking on and taking note of how we treated their peers. The fact that we were unrelenting in the face of adversity and challenges was precisely the reason why young people trusted us and self-referred. The inability of statutory agencies to honour their responsibilities because they were under-resourced compounded our problem, and our focus became one of maintaining clinical and social safety while we worked with government to achieve a resolution. It is important to realise that Kids Company maintained its services because it was continually being promised proper statutory funding after each exceptional grant we received. However, despite everyone's best efforts this did not materialise and as a result some of the most vulnerable children, young people and families were left devastated.

When we moved into Bristol to educate a group of children their social care issues were so significant that we had to spend extra money addressing child mental health and child protection concerns, otherwise the children would not have stabilised. On one home visit of a severely disturbed, frequently-excluded boy aged 10, the Kids Company keyworker found in a cupboard the paedophile who was abusing him. As a result of our work alongside police we collaboratively helped a girl aged 13 to give evidence against a paedophile group who had been abusing a large number of girls. Our worker had to live in hiding with this child and a police officer as well as help her through the court process. It was an honour for us to help this young girl, but actually no statutory services would pay for it. Therefore, our appearance of growth without generating reserves is a product of complex drivers with sometimes opposing moral dilemmas.

From 2008 to 2013 income grew from £11.2m to £23.1m:

•    The major growth was in donations, which more than doubled from £7.7m to

£14.8m over the period.

•    Significant growth was also generated from corporate activities and the activities of Kidsco Enterprises, increasing fivefold from £395,838 to £2,131,088 over the period.
•    Funding from government and local authorities remained relatively flat through this period, increasing from £3.7m in 2008 to £4.4m in 2009, and then staying at that level until reaching £4.7m in 2013.

By 2013 the proportion of turnover funded by government and local authorities had shrunk from 33% in 2008 to 23% in 2013. So the growth in turnover was achieved not through government funding but through fundraising and other activities.

Kids Company in numbers

There has been much discussion about numbers. The Kids Company numbers were audited frequently by statutory auditors and, in respect of specific grant awards, clean audit reports were always issued. The essence of Kids Company’s success was not a singular service but multiple interventions across a range of services and settings. In order to ensure there is no overlap, as any member may receive multiple services, the numbers of those receiving help were separated in to categories that do not overlap, and identified in detail the services they may receive within a year.

In 2014, Kids Company’s services reached approximately 36,000 children, young people and caregivers each year.

         19,000 young people per year were supported by our school’s programme

10,736 were supported with personalised support; 7,224 received one-to-one therapeutic support, such as counselling, psychosocial therapy, speech and language therapy, occupational therapy ; 900 received therapeutic group-based support programmes; 9,557 accessed activity-based support groups; 8,224 were supported by our ‘whole of school well- being programmes’ within. These included open access remedial homework clubs, open access support groups and clubs, talk-time drop-in counselling sessions, physical activity and educational activity days.

         9,700 young people per year were supported by our street level centres and therapeutic surgeries

8,605 young people were intensively supported by our street level centres, accessing hot, healthy meals, one-to-one therapy, anti-gang programmes, work readiness support, alternative education, homework help, school holiday programmes and residential, help with housing, material poverty alleviation support, mentoring and confidence building programmes.

1,100 additional young people per year accessed our drop-in play service and fun days, which included support for young mothers and hot, healthy meals. These were run by social workers, nurses and therapists as well as play workers.

         7,200 parents, family members or caregivers were supported

Through our ‘whole of child’ model of support, for each of the 6,404 young people under 21 we supported in our centres, at least one parent, family member or caregiver was also supported.

Supporting families was key to helping kids, so we also supported: 490 family members with the provision of therapy; 1,010 with weekly food vouchers; 75 with emergency food parcels per week; 469 with our high-risk emergency advice and support service; 188 with home improvements; 1,519 with high quality, free therapeutic child care provisions; 2,000 with Christmas holiday support; 800 family members with support through our schools programme; 800 with holiday resilience packs, including food and resources; 561 with family therapy, social work support or other personal interventions.

Kids Company also supported schools. We provided training, support and advice to teachers, as well as running inset days to support teaching staff. We also provided direct, on- to-one therapy for 96 teachers in crisis. In any one year, there were approximately 90 Kids Company clients at and qualifying at university.

2.     Governance

I took responsibility in 2003 for recruiting an appropriately qualified group of new Trustees and took a lead role in supporting the fundraising initiatives which were very much driven by Camila. All the Trustees contributed generously with their time, talents and money during their tenure. I contributed, over the years, close to a quarter of a million pounds.

The Board of Trustees

I chaired a highly qualified Board with a range of skills appropriate to the challenges facing an organisation like Kids Company. The Board of eight Trustees was comprised as follows:

Chair - Alan Yentob, Creative Director BBC

Deputy Chair - Richard Handover, previously Chairman and CEO of WH Smith

Vince O’Brien, Director of Montagu Private Equity and a former Chairman of the British Venture Capital Association (BVCA)

Francesca Robinson, Executive Chairman of PSD Group, responsible for strategy and leadership. (Annual turnover £30m and 400 staff.) She led a successful management buyout in 2010

Jane Tyler, senior lawyer and partner in Macfarlane’s law firm

Erica Bolton, founding partner/Director, Bolton & Quinn, international PR consultancy Andrew Webster, formally Vice President with responsibility for human resources at Astrazeneca

Sunetra Atkinson, philanthropist. Spent several days a month working pro bono for Kids Company, organising and funding the warehouse that stored and distributed donated goods for the Poverty Busting Programme

NB: Vince O’Brien retired from the Board in March 2015

Operational Controls

The responsibilities of the main Board included overseeing the processes and procedures for expenditure and overhead. The Trustees implemented strict financial controls, including authorisation processes and expenditure limits. All expenditure above £5,000 had to be approved by a Trustee. The Board considered and approved all major expenses as a matter of routine whenever full Board meetings took place. Camila Batmanghelidjh attended these meetings, where she would present the clinical case for major expenditure.

Cash flow

Cash flow was the major consideration at many of the Trustee meetings. There were seasonal fluctuations in income, particularly in the summer months where fundraising was particularly challenging. Camila’s track record in fundraising was remarkable. She always delivered income as she forecast and had done so consistently for very many years.

However, we have to acknowledge that in the last 18 months of Kids Company’s operations the combination of increasing need and donor fatigue as well as adverse press destabilised the organisation and eroded Camila’s fundraising capacity.

Committees

The Trustee Board met formally at least 6 times a year, with many additional subcommittee meetings.

The sub committees were:

Finance Committee

The Chair of the Finance Committee was Vince O’Brien, with Richard Handover, Jane Tyler and Francesca Robinson. They met at least 10 times a year. This was very rigorous because of the financial challenges and cash flow issues faced by Kids Company. This committee reported directly to me and in due course to the full Board. It was the most significant part of the agenda for the full Trustee Board.

The key objective of the Finance Committee and Board of Trustees was to scrutinise Camila’s fundraising estimates on a regular basis with an overview at the beginning of the year which was revised and reviewed continuously. With only a moderate proportion of our funding provided by government and therefore clearly forecastable, there was continual dialogue with both foundations and individuals to ensure that monies were received in a timely fashion.

Attached is a detailed document outlining and commenting on Kids Company’s accounting controls including reserves, cash flow challenges, income growth and expenses. It is a thorough document which reflects the strengths of the organisation while acknowledging an unpredictable cash flow and the challenge of building adequate reserves.

At the end of each financial year, the government would commission an independent audit of Kids Company’s finances and governance, while Methods, and prior to that Ecotec, were required by the government to provide a quarterly validation report.

Along with the Finance Committee, the Audit Committee would oversee/collate independent audits, both clinical and financial. There were quarterly reports commissioned by government via Methods and Ecotec. For example, Kids Company’s Q2 report published on 10 March 2015 in relation to the grant offer letter issued to Kids Company by the Department of Education on 1 July 2013 remarks in the Executive Summary, “We are wholly satisfied that Kids Company Q2 Report is an accurate representation of the data collected by key workers in each of the centres where children and young adults are being actively supported…a key finding of the Q2 report is that all targets set in the grant offer documents have been met or exceeded”. (For observation, already submitted are three recent Validation Reports dated the October 2014, 10 March 2015, 6 October 2015.)

Governance Sub-Committee

This also met regularly, chaired by Jane Tyler. Its duties included the recruitment of new Trustees, which was led by Andrew Webster and Francesca Robinson with my support.