29.We asked the Accounting Officers what they had learned from the Kids Company experience. The Department for Education told us it had four key learning points: there had been too much one-off decision-making as opposed to looking at the entire story; the need to look at getting the balance right between self-reporting and external evaluation; on impact, to be able to answer questions about both outputs and outcomes - most of the Department’s monitoring had been of outputs, it is more difficult to measure outcomes but the Department needed to improve in future; and to improve record-keeping. The Department also said it would be addressing the wider question of how it works with the voluntary sector and how grants work. The then Accounting Officer for the Cabinet Office agreed with the Department’s learning points and also said that “evidence first, decision second is better than the other way round”.
30.The Cabinet Office’s then Accounting Officer commented that use of the Charities Act to step in and provide front-line services is unusual and should be treated with caution and “I think we should be less willing to use our general powers under the Charities Act to make uncompleted grants”. He also commented, on learning points, that he would be cautious about making funding commitments that involve more than one department, which can lead to people letting their guard down, and about charities that make multiple approaches to government, which can be hard to control. He also advised care over grants to charities which are funded by whip-rounds across departments, as people pay less attention when contributing small amounts to a larger overall figure. The Department said that, when dealing with grant applications, it tended to look at the grant in question, rather than wider questions about the organisation, and this was also a learning point.
31.We asked the then Accounting Officer whether, if Kids Company had not gone insolvent just after receiving its last £3 million, he thought the Cabinet Office would still be funding them. He commented that the model for funding would be a charity that was solvent, at arm’s length from government, and sustainable without hand-to-mouth government funding. “I think the model we are hoping for is that it would not be funded by government today, unless through a competitive process”.
Prepared 11 November 2015