Kids Company: Civil servants who approved funding 'were aware' David Cameron favoured charity

Whitehall officials who approved a multimillion- pound grant for Kids Company were “aware” the charity was favoured by David Cameron and ministers across government, but came under no political pressure in their handling of the troubled organisation, MPs have been told.

Appearing before the House of Commons Public Accounts Committee (PAC), senior civil servants from the Cabinet Office and the Department for Education both denied their decisions had been unduly influenced by politicians.

However, Richard Heaton, the former permanent secretary of the Cabinet Office, said ministers had taken the view that an eleventh hour emergency funding request from the charity in June was “a punt that was worth funding”. He said it was “entirely proper” for ministers to decide which charities to support.

The charity, which closed in August, received two major Government grants this year. A grant of £4.2m was made in April, but only six weeks later the charity made a further request for £3m.

Mr Heaton, who told ministers in June that, in his view, the second grant did not represent value for money for the taxpayer, said he had been “astonished” that the charity, founded by Camila Batmanghelidjh, had “apparently spent all our money” so quickly.

“We were, I have to say, startled, shocked and surprised for the charity to come to Government… and ask for more,” he told the Committee. “It was astonishing that the charity had apparently spent our money and was already requiring more emergency funding.”

Cabinet Office ministers Matthew Hancock and Oliver Letwin instructed that the second grant should go ahead after Mr Heaton invoked the rarely-used “ministerial direction” procedure, in which a civil servant seeks written instruction from a minister to act.

The charity closed after it was revealed police were investigating abuse claims. The charity’s former leaders say the claims are “unfounded”.

Kids Company had received high profile support from the Prime Minister, as well as other ministers across government, for its work with disadvantaged children.

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Mr Heaton acknowledged that the charity had “political appeal”, but described it as “not particularly good” or “particularly interested” in measuring the outcomes of its interventions with young people. However, he said that despite his concerns, he had made a “difficult” decision in March this year to approve £4.2m in Government funding for the charity, which had previously received similar amounts over an entire year.

Asked whether his decision not to invoke a ministerial direction at this stage was politically influenced he said: “I certainly came under no political pressure either to give or not to give a direction… I wasn’t unduly influenced by the politics. I was aware it was a Prime Ministerially favoured charity and that ministers across government favoured it. So I had to have robust grounds to seek a direction. I think I’m fairly robust and if I decided a direction was the right thing to do I would have done it.”

Both Mr Heaton, and Chris Wormald, the permanent secretary for the Department for Education, conceded lessons could be learned from the Government’s dealings with Kids Company.