Image
© Fiona Hanson/PADavid Cameron, with Kids Company founder, Camila Batmanghelidjh, and Labour’s Frank Field.
  • Camila Batmanghelidjh was forced to quit as chief executive last month
  • Whistleblowers claim children were given cash to spend on what they liked
  • The government has threatened to withhold a £3million grant to the charity
  • Critics claim the charity became a 'personality cult' around its founder
One of Britain's top charities is at risk of collapse after new details of financial chaos and unrest in the organisation emerged.

Secret plans have been drawn up to wind down Kids Company, sack most of its staff and launch a new streamlined organisation to help vulnerable children who rely on it. According to some sources, it could even be relaunched under a new name.

This newspaper has learned of concerns about Kids Company from whistleblowers, including employees and young people. They claim that cash was given to youngsters and spent on designer clothes, holidays, drink and drugs. The latest development in the controversy comes days after police launched an investigation into claims of sexual abuse by staff. Senior figures in the charity world believe it may be too late to save Kids Company. 'It is a financial mess and now there are serious allegations of misconduct,' said one. 'It is going to be hard to raise money for it and it is difficult to see a way forward.'

Camila Batmanghelidjh was forced to quit as its £90,000-a-year chief executive last month after the Government threatened to withhold a £3 million grant unless the charity's shambolic finances were sorted out. But she is resisting moves to make her cut all her ties with the charity. A well-placed insider said: 'Camila did a great job in setting it up but she has become a personality cult and that is no way to run a major organisation. It can only be saved if she goes - but she won't.'

The storm intensified last night after a Mail on Sunday investigation obtained leaked emails that show:
A Kids Company worker complained to Ms Batmanghelidjh in 2011 after a vulnerable young person told her a member of staff repeatedly visited them in bed at night and 'cuddled and hugged' them.

Commenting on the police investigation launched last week, Ms Batmanghelidjh told staff: 'We must be very significant that they're going after us in this way!'
The £3 million Government grant was paid to Kids Company last week, helping it to avoid the threat of bankruptcy - for the time being at least. Earlier in the week emergency plans were drawn up to close the charity and reopen it under a different name with a fraction of its current 600 staff. The aim was to draw a line under the controversy and make a fresh start. One source said: 'The closer you study its books and the way it is run, the worse it looks. The best outcome for the children who rely on it most may be to shut Kids Company altogether and start again.'

One employee said all staff working in Bristol had been told to delete their emails and gather all case files of young people ready for them to be taken to London. It has now come to light that one former worker emailed Ms Batmanghelidjh in March 2011 about a young person with a deeply troubled background living in Kids Company premises.

In the email Ms Batmanghelidjh was told that the young person was on the receiving end of unwanted physical contact from a Kids Company employee, who repeatedly visited the youth in bed late at night and early in the morning and 'hugged and cuddled' them. Ms Batmanghelidjh replied the next day saying the young person had told her a different story.

The
Mail on Sunday has been told the matter was quietly dropped. Another whistleblower said that a teenage girl was allegedly assaulted on Kids Company premises by a staff member, that police and social services were not informed, and that no action was taken.

Image
Ms Batmanghelidjh, pictured here with Prince Charles.
A Kids Company statement last week said: 'If we had been aware of sexual assaults taking place on our premises we would have reported these to the police.' In an email to staff last week, Ms Batmanghelidjh dismissed the investigation launched by police into sex abuse allegations as part of 'an organised campaign against us - it is a systemic construct.' She told staff not to speak to the media, adding: 'If you find out anything, please inform me.'

Several Kids Company employees have raised concerns about how the charity spends money. One said: 'They dish out money to the kids as though it is water. It is insulting and damages their lives.' Another said so-called 'favourite' young people were given cash. 'I'm talking about a four-figure sum. I know of one girl who was taken out and bought Ugg boots and an Apple Mac computer for Christmas, and a boy who was given a £400 jacket. It is not what donors give money to the charity for.'

Ms Batmanghelidjh's record has also come under scrutiny. In an interview with Glamour magazine in May, she said she started studying for a Master's degree in psychotherapy at Regent's University in London 'as their youngest ever Master's intake, aged 21.' She went on: 'I had a first-class degree from Warwick [University]... so they let me in.'

According to Companies House records she was born in Iran in January 1963, suggesting she began the MA in 1984. Yet at that time, according to a Warwick University spokesman, she was a drama undergraduate there, and that she left in 1985. A spokesman said she in fact began the MA in autumn 1986 - aged 23.
Ms Batmanghelidjh also told Glamour how her father, Fereydoon, a doctor held as a political prisoner in Iran after the 1979 revolution, escaped the country. She said: 'He'd skinned a sheep, used it as a coat, and swam across the sea.'

Ms Batmanghelidjh has been feted by many political leaders over the years. But officials working for the then Education Secretary Michael Gove were the first to signal concerns about Kids Company. When Mr Gove was asked to approve money for the charity, one of his officials investigated it and said it was a 'shambles'. But when the concerns were relayed to Downing Street, word came back that Kids Company should be left alone. The Treasury under Labour secretly wrote off a £700,000 Kids Company debt to the taxman in 2002 when it faced bankruptcy.

And Ms Batmanghelidjh played a key role in helping David Cameron to launch his Big Society campaign. She later received the CBE. When the Tories won the General Election in May, Kids Company faced bankruptcy unless the Government approved a £3 million grant.

Downing Street refused to pay unless the charity put its house in order. It led to Ms Batmanghelidjh being dropped as chief executive and moving to a 'clinician' role. It was designed partly to save her face. But some said it was also aimed at saving the face of all the politicians, celebrity donors and others who had backed her.

Some of those with an intimate knowledge of Kids Company say it is not like other charities. 'Camila dominates everything,' said one. 'It is not healthy. It's all about control and power. She thinks she can replace the welfare state. Kids Company treat young adults like babies.'

Kids Company has received about £40 million from successive governments. Public schools Marlborough and Sherborne have also given funds, as well as retail giant John Lewis. Pharmaceuticals firm AstraZeneca gave £225,000 in 2013.

The charity has also received large sums from the public - pensioner Joan Woolard gave £200,000 for it to buy food for children. She was later involved in a bitter war of words with Ms Batmanghelidjh after being told the money was spent on food vouchers, but not how the vouchers were used. Mrs Woolard now wants her money back. She said: 'I gave it to them in good faith but I have never been shown how it was spent.'

Kids Company last night denied plans had been drawn up to wind down the charity and denied staff had been told to delete emails and send files to its HQ. Kids Company has repeatedly denied that money was given to children in cash. In response to new allegations about claims of sexual abuse and wasteful spending, the spokesman repeated the statement issued after the police investigation was disclosed.

It said: 'We are fully co-operating and actively assisting the police with their investigation. 'We have robust policies and procedures in place to protect our clients and closely supervise and support staff to work safely with them, including reporting any criminal behaviour to the police. 'We have an exemplary record of keeping children and young people safe.'