PAC HEARING ON 2 NOVEMBER 2015 - CLOSURE OF KIDS COMPANY

Written Evidence from the Department for Education

Questions 8 and 22-24 (David Mowat):  Additional information on the cost of intervention

Mr Mowat asked about the ‘cost per intervention’ of the 2013 Kids Company grant and I said that I had not done that calculation.

I have now looked at the grant agreement signed by DfE with Kids Company in July 2013 at the start of the cross-government funded grant. That agreement sets out 35,245 specific funded interventions across the two year period at a cost to Government of £7 million.  As the Committee will know, the grant figure was subsequently increased by £1 million following transfer to the Cabinet Office and Kids Company also received £1 million from DfE between April and July 2013 as an extension of its previous grant agreement, giving a total grant for the 2013-15 period of £9 million.

This clearly changes the calculation quite considerably and, whilst interventions can and do vary in cost (and averages in such cases can be misleading), the average cost per intervention calculated in the way suggested at the hearing would therefore be between £200 and £300, not in the thousands.

The NAO report does not include the £6,000 figure mentioned at the hearing. It should be highlighted that Figure 8 of the report refers only to intensive interventions (one of three types of intervention included in the grant agreement) and it includes interventions delivered (and their associated targets) during the July-September 2014 quarter rather than across the whole grant period.

Question 17 (Chair): A list of charities funded in a non-competitive way – both grants and contracts

The Department for Education (DfE) has 292 live contracts recorded on its Contracts Register, of which 11 are with Voluntary and Community Sector (VCS) organisations.  4 were awarded as single tender contracts (including variations and extensions).

There are 328 live grants recorded on the Department’s Grant Register, of which 162 are with VCS organisations.  Of these, 23 have been direct awards/non-competitive discretionary awards.

Question 61and 62 (Karin Smyth): Was there any dialogue between Departments and the local authorities concerned about how (Kids Company) was operating on the ground?

There have been a number of instances throughout our engagement with Kids Company where we have discussed funding options for the charity with local authorities.  For example, under the Youth Sector Development Fund our managing agent (Ecotec) provided support and assistance to Kids Company with developing better relationships with core local authorities and identifying opportunities in other local authorities.

In 2010, Ministerial submissions refer to a programme of meetings with London Directors of Children’s Services to see whether they would individually or jointly commission Kids Company – these suggested that there was scope in the medium-term for increased commissioning of Kids Company by local authorities for services such as looked after children placements and alternative education, and by schools for services such as extended services and emotional and mental health services.

In 2011-12, the DfE secondee to Kids Company worked specifically on helping the charity to diversify its funding away from central government primarily through local authority commissions.  The secondee brokered meetings with management teams at a number of Local Authorities including Lambeth, Lewisham, Camden and Southwark.  She also assessed some of the barriers that Kids Company faced in winning bids to encourage them to secure a fit in a highly competitive funding environment and the need to deliver local authority services in a way that met requirements.

Question 65 (Chris Evans): How often have charities had tax debts written off by HMRC?  Why don’t we know what that amount is, and how many other charities have had tax debts written off in the past 10 years?

HMRC has asked me to pass on that it does not comment on the tax affairs of individual taxpayers.

Question 69 (Bridget Phillipson): What was the grant split between organisations operating at a national level and those operating at what you might call local or regional level?

It is difficult to provide a precise split for a number of reasons:

• Funding in 2011-13 was provided to a large number of organisations, some of which were nationally-based but undertaking work using their VCS grant at a local or regional level; and some of which were locally or regionally based. 
• In 2013-15, one key criteria was that grants should be able to demonstrate replicability beyond the local/regional level so very few grants were wholly focussed at a local or regional level. 

However, we have been able to identify some examples of grants provided under both the 2011-13 and 2013-15 VCS grants prospectuses which were, at least initially, operating at a local or regional level:

I would, however, caution against drawing any conclusions from these examples as to the proportion of funding spent on local/regional VCS organisations compared to national ones, for the reasons outlined above.

Question 123 (Chair): Was any money spent on that (free school) proposal?

I can confirm that no funding was provided to Kids Company either for its failed 2012 free school bid or its draft 2014 free school bid (which was not submitted).

Chris Wormald
Permanent Secretary
Department for Education

5 November 2015