Takeaways from the Kids Company Select Committee car-crash

While all and sundry are having their say over the lessons from the demise of Kids Company, anyone who saw the spectacle of former CEO, Camila Batmanghelidjh and Chair Alan Yentob ‘giving evidence’ (I use the term loosely) can’t help to have opinions.

So, at the risk of depressing Nick Temple by adding to the noise, here are my takeaways from the whole affair:

takeawaysignwebsite

  1. Two sides of the same coin

Camila’s charisma, passion and ‘JFDI’ attitude charmed successive Prime Ministers and hypnotised a large band of celebrity supporters. It is precisely the same characteristics which meant strong governance and effective management were neglected at Kids Company. They are, in effect two sides of the same coin and that is just Camila. What attracted so many to the charity also became its Achilles heel. 

  1. Charismatic leaders need good teams around them

Able deputies are essential to fill in the gaps that those with a tendency to focus on the big picture overlook. Detail does matter and whilst there are huge benefits of strategic thinking, you can’t forget the small stuff. You also need people that can challenge leaders when needed and stand up to them if required. A team of acolytes is not healthy for long term sustainability. 

  1. Governance matters

We overlook the importance of strong and effective governance at our peril. We’ve seen this in the private sector and in the charity sector.  The board of RBS was roundly criticised for not having a clue what the company was up to and the risk they were exposed to until it was far too late. Charity governance – like corporate governance and even democratic governance – is patchy. Some are excellent. Some are poor. We need more consistently higher quality governance. Ten years ago (a bygone era) charity governance was considered important and investment made in providing support. That investment – along with much funding for VCS infrastructure – has now gone and that cut comes with a price. 

  1. Kids Company aren’t typical but they aren’t unique

Some have been quick to point out that Kids Company are unusual – a maverick among the hundreds of thousands of charities out there. And indeed they are unusual. But I’d caution those so keen to this sort of thing would never happen elsewhere. Are we really sure that governance is so strong throughout the sector? I’m not saying it’s not, I’m saying I’m not sure. I’m not a betting man, but if pressed I’d probably say there is another Kids Company out there waiting to happen. Suggesting this is a unique, one off never to happen again set of circumstances could backfire terribly. 

  1. A little bit of contrition goes a long way

The self-important posturing and defensiveness of Batmanghelidjh’s and Yentob’s display was unseemly and appeared almost disdainful towards the MPs on the Select Committee. The exasperation of the Committee Chair, Bernard Jenkin was obvious, telling Batmanghelidjh to ‘hurry up’ and ‘stop talking’. Paul Flynn was even more robust, saying ‘we’ve had a lot of psychobabble…can you just answer the question’. Sometimes – and I’d say when appearing before a Select Committee is one of those times – it pays to be sincere, courteous and contrite. You’re not Rupert Murdoch and nor, would I suggest, should you want to be. 

  1. The sector must rebuild trust

Trust in charities has been damaged by a succession of scandals and exposés. I suspect any members of the general public watching these high profile charity sector representatives’ car-crash performance couldn’t help thinking ‘if this is the best you’ve got, what’s the rest of the sector is like?’

It might be unfair and untrue but the impression will have been made in some people’s minds. The die is cast and the sector needs to respond. In my view the response should not be simply to say ‘oh we’re not like that at all’, we need to listen harder take on board the concerns people have and be seen to act. 

  1. Government has been let off the hook

The performance of Kids Company’s senior leaders before MPs has completely deflected attention away from the actions of Prime Ministers (Blair and Brown both courted Camila before Cameron did), their Ministerial colleagues and Whitehall officials. No one should come out of this sorry affair with any credit, but the shocking spectacle of the Select Committee has shifted the focus almost entirely away from the Government. 

  1. Charity is about beneficiaries

The only reason we have charities is to help beneficiaries (normally – but not always – people). We shouldn’t forget that Kids Company did help a large number of extremely vulnerable young people and their families. We should never forget the children who are still in need and aren’t helped by the circus show playing out before our eyes.

Who wants a government funded fundraiser?

The Public Administration and Constitutional Select Committee questioning of Kids Company CEO, Camila Batmanghelidjh and Chair of Trustees, Alan Yentob was excruciating but compelling viewing. There are a large number of issues that were raised that deserve proper scrutiny and discussion – and I am sure they will get that attention. But one thing to have emerged from the questioning shocked and surprised me, even in the context of the circus that has been the Kids Company debacle. It was a brief comment made by Alan Yentob in response to questioning about Kids Company’s relationship with Government.

kids company

He said – as proof of the charity’s good relationship with government – that two civil servants had ‘sat in Kids Company for a year to help the charity find statutory funding’.

I’m intrigued and slightly surprised that the government decided to spend public money by placing its staff in a charity to help them raise money from, errrr, the government.

I would love to know who sanctioned that decision as it strikes me as a wholly inappropriate use of public funds and one which someone in government ought to be held accountable for.

I’m no expert but I also can’t help wondering whether this might breach EU laws on State Aid…but I might be wrong.

Where I am more certain is that a great many charities and community groups would love to have fundraisers offered by the government to come at work for them. Unfortunately they lack the ear of the Prime Minister and Ministers, they don’t have a senior BBC executive as their Chair and are not awash with a host of celebrity supporters.

I would love to know which department these fundraising civil servants came from – was it the Department for Education or the Cabinet Office, or somewhere else?

I’d also like to know who authorised their secondment?

Anyone who knows anything about this, I’d love to hear from you.

How a simple letter got people online – saving Essex Council £20,000 a year

Essex County Council, like most other councils, spend a lot of money processing paper. Some of that goes on administering Blue Badge permits that allow disabled drivers to park closer to where they’re going. With the continued pressure on public service budgets, it’s hardly surprising that they should want to look at whether they can reduce their costs and make the process cheaper and more efficient. An obvious way to do this is to get people to renew their permits (and do an array of other things) online rather than more expensive face-to-face or paper based administration.

So we set out to help them test, through a Randomised Controlled Trial, whether small changes to the Blue Badge renewal process could encourage channel shift – that is moving people from one channel (paper/face-to-face) to another (online).

The results showed it worked – passing standard tests of statistical significance.

Just by making small changes to the renewal letter that goes out to Blue Badge holders we managed to reduce the numbers of people that renewed by post by almost 20% (8.6 percentage points).  And because we used an RCT to test it, we can be confident that the difference can be attributed to the changes we made to the letter.

Blue Badge renewal by type

Blue Badge renewal by type

By simplifying the letter – stripping away anything we didn’t feel was absolutely necessary to include and making it clear to the reader precisely what they had to do – we made it more likely that people used the online renewal process.

Martha Lane-Fox, in her 2010 role as Digital Champion, looked at the costs (and savings) of government conducting business online, rather than face-to-face and paper. She estimated that the public sector would save £12 for every transaction conducted online rather than by post.

For Essex that figure would mean that this small change to the renewal letter will save them around £20,000 a year. Of course set against cuts of £50m this year it’s a drop in the ocean. But if every service or process were able to find similar efficiencies for a fraction of the costs of implementing them it would soon add up.

Simplification wasn’t the only effective way we found of reducing paper renewals. We also found that by telling people that renewing online saved the Council money and helped protect frontline services also encouraged channel shift. This small change in the renewal letter reduced paper renewals by over 18% (7.7 percentage points).

The RCT gave the Council strong evidence of what works, enabling them to adopt the simplified letter as their new standard renewal letter.  Since they did so, only 5 percent of renewals are done by post, with over half of all renewals now being done online (the remainder are done over the phone).

Post-trial renewals by type

Post-trial renewals by type

The trial has helped the Council move toward online renewals for blue badges and we hope it can act as a model for the more general transformation of services across the council.

Small things can make a big difference.

Read the full report on our online Blue Badge renewal trial.

Time flies…

LinkedIn tells me it’s been three years since I started working on the project management to set up the Archer Academy. It must be about four years then since a raggle-taggle group of parents first met to discuss how we could get our local schools and our local authority to address a chronic shortage of local comprehensive education.

We didn’t know each other, knew little about the finer workings of the education system and had no desire or intention of setting up a school.

Our hand was somewhat forced by the realisation that: a) no one was willing or able to give us what we wanted and b) that there was huge local support for a local school for local children.

We became reluctant free schoolers and the Archer Academy was born.

the archer academy

We’ve come a long way in a short space of time and it’s incredible to think that the school has become a feature of local life in East Finchley so quickly. It’s just there. Part of our community landscape.

We’ve protected a community asset from development – ensuring that it will benefit local people in perpetuity rather than being turned into houses or flats. Creating fantastic new sport and recreation facilities that in just a few weeks local people will be able to use. I can’t wait for my first game of football on our new pitch!the Archer

And my eldest child will start school in September too – along with 149 other children from our local primary schools.

Regardless of controversy and debate about free schools – and I remain sceptical about the policy overall – I am proud of what we have achieved in establishing the Archer Academy. I have no doubt that is has helped to address unmet need in local educational provision that thousands of children will benefit from over the years ahead. But more than that, it has strengthened our community and generated significant social value.

Connections have been made within the community – bridging and bonding – which did not exist before. High quality sport and leisure facilities have been created which are open for community use outside of school hours and in numerous ways the school community – our students, parents, staff and governors – are contributing to local community life. Whether it’s collecting clothes for local refugees, or performing at the East Finchley Festival. We are working in partnership with numerous local businesses, charities and community groups – special mentions here for the ever wonderful GLH and Dan & De Carlo’s – to, in the words of D&D’s Danny Gates “…create one big family within the local community.”

local schools for local kids

Three years. It feels like a lifetime. Time flies…

The actions of a few do not mean the charity sector is rotten

I blogged yesterday about what I perceive to be a growing neo-liberal attack on the charity sector. Then I read an article by Michael White on the Guardian Society blog calling for increased charity regulation, reform of Britain’s ‘ramshackle charity laws’, ‘mergers of tiny bodies’ and a cull of charities, among other things.

Clearly it is not just libertarians that believe something is rotten in the charity sector.

There are of course legitimate questions arising from the recent collapse of Kids Company and before that the expose of some very unethical practice going on in big charity fundraising. But it’s worth bearing a few things in mind as we seek answers to the important questions surrounding these events:

There are hundreds of thousands of charities and smaller community groups that do amazing work supporting the vulnerable and most marginalised in society. They do so, in the main, because of state or market failure – picking up the pieces of an inability or unwillingness of others to help those in need.

The vast majority of these are small, local organisations that operate on a shoestring – with turnover below £20,000 – and are run by volunteers who give their time freely to help others. They are not – despite the sweeping generalisations of commentators – awash with lavishly paid executives or frittering buckets of taxpayers’ cash. They are delivering essential support to those in need for a pittance. Having supported grass roots community groups for 20 years – much of it as a grant maker – I can say with some confidence that you would be hard pressed to find a better example of value for money than in Britain’s community sector.

The questionable practices of a tiny number of large high profile charities should not be allowed to taint the entire voluntary and community sector.

Next let’s take the issue of mergers and consolidation. Since 2010 there have been huge pressures on the not for profit sector which was the first place many public bodies looked to cut their budgets in the face of central government austerity measures. That resulted in numerous closures, mergers – where they made sense, though shotgun weddings are generally a bad place to start – strategic alliances and consolidation. I myself saw the start of a slow and painful decline of the organisation I was running, Urban Forum, which was wound up last year.

The diversity of Britain’s not for profit sector is something that is rightly admired by the rest of the world. The US may have its culture of philanthropy – and UK efforts to replicate it have had only modest success – but that has developed in the absence of a welfare state and social inequality that anyone concerned with social justice would find abhorrent. We have a vast array of small, local community groups and charities that reflects the complex social mix which makes Britain great.

Should it really matter if a group running on a few thousand pounds in one neighbourhood is doing similar work to another group in another neighbourhood? Whatever their similarities they are also doing something different – and that is working in their own neighbourhood for their own community.

In fact I think one of the lessons to be learned from Kids Company is that the desirability of growth and expansion – a mantra that has sadly been appropriated from the private sector – can have disastrous consequences. Expanding from their South London base to Bristol and Liverpool increased the charity’s exposure to risks, but it also ran the risk of disconnecting the organisation from its beneficiaries. Any perception that small local groups are inefficiently duplicating services and support disregards the added value that a connection with a place brings. Merger should be approached with extreme caution.

A lack of transparency over how charities raise and spend their money that some have complained of is underpinned by one of the most heavily regulated statutory frameworks we have in this country. Charities are required not just to comply with company law but also with a separate, additional set of regulations set out by the charity commission. The Charity SORP (Statement of Recommended Practice) sets out very precisely how charities must report on their financial activity – and places a very high administrative burden on charities. I remember some years ago the Treasurer of the charity I ran, who was an experienced insolvency practitioner at a very large accountancy firm, expressed amazement at what was required – saying it was ‘more work than a million pound company’. If it’s not working for people then it should be changed, but don’t blame the charities that are already complying with some of the strictest regulation any corporate bodies face.

There is a need for proportionality in regulation – and this already happens to an extent with a threshold for increased statutory reporting of financial accounts. However, if there is an argument for greater regulation and administrative burden being placed on charities (and I remain unconvinced) then it should be highly targeted.

Sweeping generalisations attacking the charity sector do not help the poorest and most vulnerable that rely on their support.

The advocates for austerity now have charities in their sights

Recent scandals engulfing large fundraising charities dubious ethics and the collapse of Kids Company following the withdrawal of government funds have put the charity sector in the spotlight. However, things have quickly moved on from the legitimate questions around these affairs to more fundamental – and unwarranted – questioning of charity and charities.

the battle lines have been drawn

Take this Petition calling on the government to end funding for all charities. https://petition.parliament.uk/petitions/105732

No matter that it has only 300-odd signatures, the fact is someone thinks this.

The proposer’s thinking (I use the term loosely) is elaborated in this post on the Libertarian Home website. Let’s start with this for an opening gambit:

“If a “charity” receives public funding, it’s not a charity, it’s quango.  That may just be semantics…”

Excuse me? Semantics? Hello!!!!

I have sat on quangos and I have run charities and they are very different. There are similarities in that the principles of good governance and standards in public life apply equally to both, but one is answerable to a Minister, the other (notwithstanding the need to operate within the regulatory requirements) should be accountable to its beneficiaries.

Now it’s not clear whether the author is talking about grants and contracts. But even if we assume that it’s just grants, the receipt of government funds does not turn an independent organisation into an agent of the state. Does that apply principle apply equally to subsidies given to private sector companies to run railways, or for research and development grants or a whole host of other purposes?

And the argument is even more absurd if you take in funding awarded for contracts. Are the many private sector companies that thrive off the back of public sector contracts merely ‘quangos’ too? I don’t hear that argument too often, even from libertarians.

Successive governments have pushed the delivery of public services by charities and social enterprises for many years. For nearly 20 years the mantra from Whitehall has been: grants bad, contracts good. Charities should not rely on handouts, but should earn their income by delivering services.

That’s fine….to an extent. I certainly have no opposition to charities being more entrepreneurial. But the implicit suggestion here that charities are ‘dependent on the state’ is just neo-liberal claptrap.

Now the charity sector is seen as fair game for the ideologues intent on cutting back the state to unfathomable levels, that would have ever more dire consequences on the most vulnerable.

I believe that with confidence imbued from a Conservative general election victory the government’s real puppets are now attacking the charity sector, emboldened by the spotlight shone on Kids Company.

We’ve seen these ideas before from the likes of the IEA and other free market zealots and they were utter nonsense then. They haven’t improved with age.

trust in professionsSo there is something quite galling to see journalists lining up to criticise charities over how the conduct themselves. I am not for one second suggesting that charities should not be subject to scrutiny – far from it, I welcome the highest levels of accountability and transparency – but some of the criticism now being directed at the sector is as unwarranted as it is hypocritical.

Research conducted by Ipsos MORI shows that only around one in five of us trust journalists and Government Ministers to tell the truth.

trust in charities

Charities on the other hand have much greater levels of public trust and confidence – only doctors and the police are more trusted professions. As the figure (left) shows only 12% of the public think that charities cannot be trusted.

So when it comes to trust. There’s simply no contest.

That is not an argument against scrutiny of charities or their practice, but it does rather fly in the face of much of the rabid attack that seems to be a growing part of the current political and media discourse.

Some charity sector leaders have been defending Kids Company and the growing number of attacks on the charity sector. But fewer than I would have expected and less vociferously than I would have imagined. Perhaps they do not yet feel that their interests and values are – yet – in the firing line. But it is my firmly held believe that this is the beginning of a major offensive against charity and charities.

The battle lines are being drawn.