Kids Company: Watchdog's report 'extremely unfair' on charity
Part of a damning watchdog report into a collapsed children's charity was "extremely unfair", a High Court judge has ruled.In 2022, the Charity Commission published a report on the leadership of Kids Company, following its 2015 liquidation after financial mismanagement.The organisation supported vulnerable children and young people in London and Bristol and previously attracted celebrity backers including former Prime Minister Lord David Cameron and Coldplay.In a judgement on Tuesday, Mr Justice Sheldon said two paragraphs in the report were "irrational" but dismissed the rest of the challenge.
"The commission's observations… which give rise to the innuendo that the payments to the 'top 25' may not have been justified – are unbalanced and one-sided," Mr Justice Sheldon said."This is extremely unfair to the charity and the trustees."The fact that the report contains errors, and even a small number of irrational findings or observations, does not mean that the overall document is irrational," he concluded.The commission's report said the charity had operated a "high-risk business model" and that there was mismanagement in relation to late payments.Mr Justice Sheldon concluded: "I do not consider that the report, looked at as a whole, was irrational."The fact that the report contains errors, and even a small number of irrational findings or observations, does not mean that the overall document is irrational."
The charity's former clinical director Michael-Karim Kerman the legal challenge initiated by former chief executive, Camila Batmanghelidjh, before her death in early 2024, and he said the ruling "vindicated" the charity.Following the judgment, Mr Kerman said: "Since Kids Company's traumatic closure in August 2015 there has been a concerted attempt to denounce unfairly the charity and all who were touched by it."The iron path to justice has been an arduous struggle for the supporters of Kids Company, in their relentless struggle to imprint the truth."
'Made important errors'
In a statement following the ruling, the Charity Commission said the judgment upheld the finding of mismanagement of the charity's finances and rejected the claim of predetermination."While the court has dismissed the challenge on all but two grounds, and is clear that the overall findings of our report were not irrational," a spokesperson said."We acknowledge its finding that we made important errors in relation to two paragraphs of the report and will act to remedy this, the statement concluded."
What was Kids Company?
Founded in 1996 in south London, it provided practical, emotional and educational support to up to 36,000 deprived and vulnerable inner-city children and young people.In addition to direct services, it ran campaigns. It funded scientific research, external and legal action against public policy. And Kids Company grew rapidly - from £2.4m of annual expenditure in 2004 to £23m in 2013.When it closed, Kids Company said 11 centres in London and Bristol and an outreach project in Liverpool had shut their doors, and its work with more than 40 schools had ended.
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