COLLAPSED charity Kids Company “conceptualised” almost £600,000 in taxes, MPs in the Public Administration and Constitutional Affairs Committee have heard.
In a somewhat baffling three-hour hearing, the charity’s former CEO Camila Batmanghelidjh said, in response to a question from Labour MP Kate Hoey, that a £580,000 tax bill in 2003 had been “conceptualised”.
The move, she said, was seen as a “contribution to ensure the survival of Kids Company” after David Blunkett had intervened with the Treasury in order to waive the PAYE bill.
“Southwark wanted to evict us from the railway arches, and at the time we were responsible for 400 of the most vulnerable children for whom there was no other provision. That’s why the government intervened – because it recognised we were providing what should be statutory services,” Batmanghelidjh said.
Payments to clients in 2014 of “£75,000, £59,000, £50,000, £20,000 and many more” were also queried by Hoey, with an allegation that some of that cash went toward covering their mortgages.
Batmanghelidjh confirmed that in one case a client’s mortgage had been paid by the charity, while it was also revealed clients overseas had also received payments.
Both Batmanghelidjh and charity trustee and senior BBC executive Alan Yentob cited “many clean audits” as evidence the charity had been well-run.
“For 19 years the charity has been audited by government and we have had clean audits every year since 2002,” Batmanghelidjh said.
Since its collapse, the charity has faced repeated criticism over its failure to build up reserves.
In 2012, it held around £1.33m in reserves, but by the beginning of 2015 it had dwindled to £400,000, something Yentob claimed was due to its increasingly limited funding.
“The problem with restricted funding is that the people who give it don’t want it left in the bank not being used,” Yentob told MPs. He added the charity had explored the sale of £1.7m in property it owned, but those efforts had not borne fruit.