The government promised Kids Company £20m worth of funding last summer, 12 months before the charity went bust, its founder Camila Batmanghelidjh has alleged.



In an interview with the Guardian, Batmanghelidjh claims that Oliver Letwin, head of the Cabinet Office, verbally promised her £20m in July 2014 after she told him the charity was in danger of collapse due to a funding crisis.

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Batmanghelidjh said she wrote to Letwin on 14 July thanking him, but received no reply. In a statement, the Cabinet Office said it had no record of receiving a letter from the Kids Company founder and denied that any such money was promised.

Kids Company shut its doors at the start of August after the government pulled an annual grant of £5m following allegations of financial mismanagement at the charity, which had no funding reserves when it closed. The government had to find alternative support for 6,000 of the most vulnerable children in the fallout from the closure.

When news of the charity’s financial woes broke, Batmanghelidjh said she was leaving the helm, accusing the government of silencing her; the charity closed soon after. It then emerged that the government had given the charity £3m the week before, which it knew would be used to pay staff wages, the charity’s founder said.

In the interview, Batmanghelidjh alleges that in a conversation with Letwin in 2014 he told her that the situation of a chronic lack of funding could not continue. “He turns around and says, ‘You need some proper funding, you should have £20m, I’m going to find it’,” she told the Guardian. “My jaw dropped. I was so shocked by it that I then wrote to him confirming the conversation. They now deny the conversation. [But] at no point did he come back to me and say, ‘£20m is not what I promised’.”



She added: “If I’d made a mistake, wouldn’t somebody have got back to me and said, ‘You’re hallucinating’?”



Emails sent between Letwin and Batmanghelidjh towards the end of 2014 reveal that the Cabinet Office minister assured her – mentioning no figures – that he was close to a solution. Kids Company received £4.25m in April. Batmanghelidjh said the funding was welcome, but insufficient.



The Kids Company founder also alleges that the Cabinet Office has had to make extra funds available for local authorities to cope with the needs of at-risk children since the closure of the charity – which is proof, she attests, that the charity was filling a statutory void.



“It’s very interesting that the Cabinet Office is releasing extra money to local authorities to take our caseload,” she said. “Why couldn’t they have just given us that money? I wanted us to have reserves, you can see the trustees’ minutes.”

The charity’s former safeguarding manager, Mike Gee, detailed the difficulty in handing over cases to the local authority – it could not treat the ones without a significant mental health diagnosis, did not have the resources to help the ones who would not engage, and would not recognise young people who were undocumented migrants.



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According to the Cabinet Office, no extra funds have been provided, though it is talking to local authorities.



In a statement the Cabinet Office said it would consider requests for extra funding when they were presented to the government. “We have met with local authorities and charities, youth clubs and other organisations who know and work in the local community and are committed to working together to support young people with the services they need.

“We are now working closely with charities, social enterprises and other relevant organisations including London Youth on a range of immediate measures to signpost young people to other services in the local areas. Local authorities will also be reviewing the most high-risk cases on an individual basis to determine what support is required.”