Oliver Letwin denies pledging £20m to Kids Company

The Government considered giving £20m a year to Kids Company as recently as March this year as the now defunct charity was struggling to survive. But the Cabinet Office minister, Oliver Letwin, has denied Camila Batmanghelidjh’s claim that he verbally promised to find her the money, saying there had been some kind of “misunderstanding on her part”.

A Whitehall source said a bid for that amount had been submitted by Ms Batmanghelidjh, the founder of the charity for troubled and vulnerable children, and revealed that officials had looked at various ways of providing the funding, including turning part of Kids Company into a free school.

Kids Company was controversially given a £3m grant by the Cabinet Office only days before it was forced to close because of a lack of money earlier this month. David Cameron defended this decision, saying it was “the right thing to do” to give the charity “one last chance … to continue its excellent work”.

The Whitehall source revealed that officials had considered giving Kids Company a much larger sum, £20m, by making it a “provider of government services”. This could potentially have involved creating a Kids Company free school, in addition to getting extra funding from the Government’s “Troubled Families” programme.

“This was explored – could they turn one branch [of Kids Company] into a free school?” the insider said. “There was never any offer, any promise; there was just a bid by Camila. As far as I understand it, it was a bid and we explored whether it [Kids Company] could become a provider of government services, in which case it could get the £20m that Camila said it needed.”

The source said it was decided that, “unfortunately”, Kids Company “just was not set up” in a way that would allow this to happen.

Ms Batmanghelidjh has presented a slightly different version of events, saying Mr Letwin was the one who suggested the figure of £20m during a meeting in July last year.

“He actually said it was ‘enough’ us being so hand-to-mouth, and that we were one of the best programmes in relation to dealing with this very difficult group of children and young people,” she said.

“Then he said, ‘What you really need is £20m’, and he said he was going to find it. Actually, I was shocked. The £20m didn’t come out of my mouth, it came out of his.”

Shortly after the meeting, she said she had sent a letter to Mr Letwin in which she mentioned that he had recognised the charity needed £20m a year during their meeting.

“If I had got it wrong, the private secretary for Oliver should have written back to me and said that ‘we never discussed £20m, you’ve got this wrong’,” she said.

“If I had come up with something that hadn’t been discussed, then my letter would have come across as outrageous.”

However, Mr Letwin told The Independent on Sunday: “It’s not the case that I have ever made any promise to give some huge sum of money to Kids Company. I think it probably arises from a misunderstanding on her part.