Monday, February 1, 2016

Inaccurate, unbalanced and irresponsible

The former trustees of Kids Company, presumably still led as a group by Alan Yentob, have issued a press statement, condemning the report of the Commons Public Administration Select Committee on the collapse of the charity as "inaccurate, unbalanced and irresponsible". They claim the MPs "naively accepted allegations made in the media and by a small number of individuals, some with vested interests in damaging Kids Company". 

The report, at 60 odd pages, pulls together the written and oral evidence, with no new revelations. Here are the key passages for Yentob watchers.. 

13. Kids Company’s demand-led operating model - based on the doctrine that no child should be turned away - carried the constant risk that the charity would not be able to ensure that its commitments would be matched by its resources. The charity’s Trustees failed to address this risk. Instead, the Chief Executive and Trustees relied upon wishful thinking and false optimism and became inured to the precariousness of the charity’s financial situation.

68. A charity of Kids Company’s size and complexity requires a Board of Trustees that will demonstrate leadership, judgement and a willingness to challenge assumptions. There was a lack of relevant Trustee expertise in the field of youth services or psychotherapy, although we understand that attempts, albeit belated, were underway to recruit a Trustee with such experience in the run up to the charity’s collapse. The admiration that Kids Company’s Trustees had for Ms Batmanghelidjh’s apparent vision and fundraising capabilities led to a false confidence about other areas of the organisation. The Charity Commission’s guidance to Trustees warns that Trustees should not allow their judgement to be swayed by personal prejudices or dominant personalities, but this is what occurred in Kids Company. This resulted in Trustees suspending their usual critical faculties – particularly over Ms Batmanghelidjh’s insistence on the demand-led business model, her exercise of substantial discretionary spending powers, the effectiveness of internal controls, and the quality of clinical judgements and safeguarding procedures. The length of the Chief Executive and Chair’s tenures were not conducive to challenging the Chief Executive herself. There was a clear link between the failure to correct serious weaknesses in the organisation, and the failure to refresh its leadership. 

69. Mr Yentob denied historic failures in financial management and insisted that there were no questions about the financial resilience of Kids Company until 2014. Given the charity’s historic hand-to-mouth existence, its continual failure to build up reserves, significant periods on the brink of insolvency and its inability to meet its obligations to HMRC, this is an inaccurate and alarming interpretation. The evidence Mr Yentob gave to the Committee suggests a lack of proper attention to his duties as Chair of Trustees and a continuing inability to recognise those failures. With his fellow Trustees he was unwilling or unable to impose sufficient control. Together, they failed to exercise their proper function as Trustees. 

70. Mr Yentob acknowledges his poor judgement in respect of his position at the BBC during the summer of 2015. His actions were unwise at best, and deliberately intimidating at worst. He has since resigned his main position at the BBC but he still retains substantial responsibilities within the organisation and oversees substantial budgets. It is not within the remit of this Committee to comment on the governance of the BBC, but the proper governance of conflicts of interest and standards of behaviour – particularly amongst its senior executives – is a very serious matter for any reputable organisation. That a senior figure could act in this way and it could take so long for action to be taken reflects poorly on the BBC’s leadership.

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