Kids Company leaders to be questioned by MPs

Mr Yentob replied: “It’s a bad allegation to make against Kids Company – the Metropolitan Police certainly didn’t say that”. Kids Company then collapsed in August after taking £3m from the Cabinet Office. Interestingly, the committee is focusing its scrutiny on Yentob, and not Batmanghelidjh – who is essentially now a busted flush. He said there had been stabbings and four suicide attempts.

The two central figures in the Kids Company fiasco, Camila Batmanghelidjh and Alan Yentob, are being grilled by the Public Administration Committee this morning and it’s going very badly for both.

Former chief executive Camila Batmanghelidjh denied the accusation that her charity was “servicing clients where the need did not exist”.

But the committee’s chair Bernard Jenkin revealed that MPs had been told that “these incidents occurred because kids no longer had money to pay their drug pushers”.

The National Audit Office (NAO) inquiry is examining a £3 million taxpayer-funded grant handed by ministers to Kids Company earlier this year against the advice of a senior civil servant, as well as a further £4 million grant made shortly before the charity was shut down in August.

Claims of financial mismanagement were unfounded, she said, asking, “If we were so dysfunctional, why did the Government hand over £7 million worth of taxpayers’ money?”

Ms Batmanghelidjh insisted that the distribution of payments was supervised properly, saying: “Everything would go in an envelope for the individual child with a receipt on top”.

“Our bookkeeper at the time mistakenly recorded a few loans as donations”, she said.

‘When it would arrive at the end of the week at the street level centre the team inside that reception area would oversee the handing out of the envelope for which the client had to sign’.

The now defunct charity provided support to vulnerable young people.

Documents seen by BBC Newsnight and BuzzFeed News show the Pilgrim Trust, a charity which disburses about £2m a year, wrote to the Charity Commission in 2002 to raise concerns about Kids Company.

The charity’s trustees were also told nine years ago that its “weak finances” and “over-reliance” on founder Camila Batmanghelidjh could push it under.

The Pilgrim Trust had agreed in January 2001 to fund two employees for two years to work on a specific project at a cost of £30,000 per year but the relationship turned sour.

In 2006, another charity, New Philanthropy Capital (NPC), raised other concerns in a private report sent to Kids Company trustees.