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.

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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.

Kids Company – Plus ça Change?

After weeks of silence, as the very public debate about Kids Company rumbled on, finally Chair of Trustees Alan Yentob has had his say, coming to the defence of the embattled CEO Camila Batmanghelidjh.

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It’s interesting that the headline in the Standard refers to Mr Yentob as a ‘top BBC executive’ rather than ‘Kids Company’s Chair of Trustees’. A BBC executive coming to the defence of a beleaguered charity chief executive is rather more intriguing than the charity’s own Chair standing up for the organisation, but anyway…

Mr Yentob is highly critical of civil servants who advised Ministers against providing continued funding to Kids Company and heaped praise on David Cameron and Oliver Letwin for ignoring their advice. Kids Company have now, it appears, been offered a £3m grant – on the condition of wholesale changes at the charity. And so Mr Yentob feels able to offer a defence of the Charity he has chaired for the last 18 years.

Clearly a compromise has been reached over the Cabinet Office’s demands that Ms Batmanghelidjh and Mr Yentob stand down. Both will stay on, but in different roles – Ms Batmanghelidjh will become President and Mr Yentob will relinquish the Chair but remain a trustee.

New trustees – most of them bankers and corporate financiers – have been drafted in and life carries on. What qualifies them to run the charity, other than their long term financial support for it, I’m not sure – but perhaps they have the skills and experience needed to steady the ship.

Interestingly Mr Yentob is adamant that no financial mismanagement occurred – which rather begs the question why pack the board full of men with finance backgrounds? However he does go on to rather admit mistakes were made in expanding the Charity away from their South London home into Bristol and other cities.

Over ambitious expansion that exposed the organisation to risk that led to cashflow shortages and financial difficulties. That sounds a lot like the sort of thing that was going on at RBS and all those banks that spectacularly imploded a few years ago. Sounds a lot like financial mismanagement to me…

And then there’s the accusations of tax irregularities. Mr Yentob is happy to admit to them, saying he is ‘proud’ to have lobbied Treasury Ministers on behalf of the charity asking them to waive their £700,000 tax bill. This was national insurance and income tax that was due on salaries and had been deducted. That tax ought to have been funding social care, transport, health, education and all the other public services that vulnerable people (among others) rely on – like the young people who use Kids Company. Mr Yentob defends his action by saying that ‘this was a charity doing incredible work that needed support’ as if that is a justification for not paying taxes. What a spectacularly naïve sentiment and how lovely to be able to make that sort of decision how taxpayers’ money should be spent.

I have no doubt that the actions of officials at the Cabinet Office – and Ministers – has been unhelpful, inappropriate and probably unethical, but Mr Yentob’s so called ‘defence’ does little to reassure me that Kids Company comes out of this sorry  ffair any better.

Kids Company funding spat….it’s complicated

The very public spat that’s been played out recently between the Government and Kids Company and its high profile chief executive, Camilla Batmanghelidjh, should not have come as a surprise to those within the not for profit sector.

There have been rumblings for a long time of the paucity of some of the charity’s governance and management and suggestions that their marketing rhetoric – ably led by their charismatic CEO – outstripped the reality. Many have bemoaned the ‘special treatment’ the charity has managed to extract from Ministers, no doubt fearful of coming under fire from the formidable Ms Batmanghelidjh and her impressive list of celebrity supporters.

But there are plenty of other charities whose bark is ‘better’ than their bite – organisations that are far better at selling themselves to funders than they are helping their beneficiaries. They rarely come under the sort of attack that Kids Company have found themselves subject to.

The reason for that should also not come as a surprise to those who have experienced working with this government – or the Conservatives that made up the Coalition: they are fully prepared to accept ‘collateral damage’ to stamp on those they want to get one over on. Dissent and challenge is not welcomed from those they fund. If young people suffer as a result of digging their heels in over Batmanghelidjh’s continued presence at the helm of Kids Company then so be it.

When I was chief executive of Urban Forum, our long-standing relationship with a number of government departments counted for little. We were firmly in the ‘awkward squad’ and so – through a highly subjective ‘assessment process’ deemed surplus to requirements and our funding cut. Prior to this – and for all their faults – the previous Labour administration had, to my mind, been more comfortable with dissent (without ever relishing it). I felt that I was being funded to speak out on behalf of our beneficiaries – not paid to be silenced.

Clearly something has snapped within government that they no longer feel able to work with the current CEO and Chair – Alan Yentob – but it is not appropriate for them to dictate changes of personnel at independent charities. It is, in part, our charities’ independence from the state that makes them the envy of the world. If government – or any funder for that matter – wishes to raise concerns about governance or delivery or anything else, that is their right. But they must recognise the boundaries of their influence. They can say they no longer wish to fund something because it is not delivering what it was supposed to.

‘We don’t like you so we’re not giving you money’ is no more appropriate as a way to administer public funds than the worst accusations Batmanghelidjh’s critics have levelled at her.

The very public spat has not done any favours to the reputation and trust of charities and the inevitable sensationalist reporting of the story doesn’t help. It is a complex picture where neither side comes out particularly well.

Poor governance is an issue in much of the charity sector and more could be done to strengthen it – in that respect it’s not very different to the private sector – but this government are particularly disinterested in supporting infrastructure. A major shift in the Coalition’s approach to charities from the previous Labour government was to scrap investment in major programmes aimed at strengthening governance (among other things).

Government Departments are often very poor funders. They don’t adhere to good practice of the kind set out in Julia Unwin’s Grant Making Tango (and cited by the Treasury in their review of the Third Sector). Playing vindictive games to oust or damage individuals is not just petty it is irresponsible – completely disregarding the trauma that will face countless children and young people.

I wasn’t sure whether or not to wade into this topic as it is complex and I am reluctant to criticise those who are doing good work – the risk is that others see this as an attack on ‘unaccountable’ charity, that erodes public trust. However I feel ultimately if we are to have a more intelligent debate about the role of the state as a funder and our expectations of charities, then we need to start flushing out some of these issues.

So, who is responsible for the Big Society Network’s wasted millions?

Former Big Society Network CEO, Steve Moore, posted the second in what he promises will be a ‘series’ of pieces about his reflections on the organisation’s brief existence.

Moore is to be applauded for sharing his views on BSN’s demise. Those involved in the failed charity have been remarkably quiet in recent months and his willingness to present his take on events is a welcome contribution to the debate.

However reading the post, I can’t help the feeling that it is a carefully crafted attempt to absolve himself of any responsibility for the shambles that BSN presided over and to clear the path for future activity. It’s not surprising that Moore would wish to put as much distance between himself and what happened, but it doesn’t help answer the questions that remain over what the hell went on at the Prime Minister’s favourite charity.

The succession of meetings that Moore reports took place are frankly neither here nor there. He is at pains to tell us that Steve Hilton, Nick Hurd and various other people never attended these meetings. Fine, but that cannot possibly ‘prove’ they – nor anyone else who didn’t attend these meetings – were not involved in decisions to fund BSN with millions of pounds. This is the main point that I, and numerous others, have been harping on about for the last few months and is definitely not addressed in Moore’s blog.

Who made the decisions to award millions of pounds to an organisation that failed repeatedly to deliver social impact with public funds? And why did public bodies bend over backwards to make these grants if it wasn’t due to Ministerial pressure?

Moore paints a picture of himself as an innocent bystander as the assembled flawed characters surrounding the Network row among themselves and fall out of love with the whole Big Society project. Al Gore’s cameo appearance in the story is frankly just baffling.

Moore clearly doesn’t intend to take any prisoners and gets things started with some pretty scathing views of Nat Wei, who he describes as having ‘no discernable charisma’ and ‘no one’s idea of a public advocate for a future Prime Minister’s big idea’Perhaps Lord Wei is no longer considered politically useful, and certainly his stock has fallen since he gave up the role as Big Society advisor to the PM.

Nesta, who pumped over £500,000 into BSN – under duress according to their trustee at the time, Liam Black – never raised any concerns over delivery or social impact. If that’s true it contradicts the findings of the NAO’s investigation into the affair and Geoff Mulgan’s internal investigation, both of which suggest under-performance issues were raised with BSN.

Paul Twivy’s radical plans for Your Square Mile were ‘hated’ by Downing Street head honcho Steve Hilton – which Moore presents as evidence somehow, that BSN was not politically supported.

Hilton hated it, so then (naturally) the PM hated it. And Moore describes a wedge between Twivy’s vision and David Cameron’s.

Undeterred Twivy pursued the Your Square Mile project outside BSN – but taking with him a large grant from the Big Lottery Fund, just 48 hours after it was handed over to BSN. It might be considered unusual to award a grant to one organisation, only for it to be immediately transferred to another organisation – but perhaps that was what was planned all along. Either way, not a penny of that grant was spent by BSN according to Moore – so apparently BSN can’t be held responsible for the abject failure of that particular project.

There is plenty in the piece about why David Cameron, his Ministers and advisors and most of all Steve Moore, are not responsible for how £3m of public money was awarded and then frittered away.

So who is responsible if it’s not the politicians or those tasked with delivering these projects?

Perhaps it’s the funders – Nesta, Cabinet Office and the Big Lottery Fund?

But since they are all public bodies (or were at the time, in the case of Nesta) accountability still rests with government.

Perhaps we’ll never know. But one thing is for sure, this tale of political intrigue and missing millions is no clearer than it was before this post.

And if anyone knows why Al Gore at a coffee machine makes an appearance in the post I’d love to know, as I can’t for the life of me understand.

The ‘disappointing’ disappearance of £3m of Big Society funding

The National Audit Office’s second investigation into funding awarded to the Big Society Network, and its parent body the Society Network Foundation, was published last week. It is peppered with descriptions of Big Society Network’s activity by those who funded it as ‘disappointing’ ‘weak’ ‘concerns’ and ‘performed poorly’. And yet, despite all the disappointment those funders obviously felt the money continued to roll in. Over £3 million pounds of public money in total.

I don’t know about you, but if I see someone wasting £3 million pounds of public money ‘disappointing’ doesn’t even begin to describe it. I would be incandescent with rage. I would be fuming. Completely and utterly livid.

Disappointing?

What is disappointing is that those holding the purse strings on trust for all of us can be so blasé about such a scandalous waste of public money. That is certainly disappointing.

What is also disappointing is the lack of responsibility the Prime Minister is taking over this whole sorry affair.

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Consider the facts as the NAO present them:

The Prime Minister’s Office “asked the Minister for Civil Society to renew funding” – this after the Cabinet Office had withdrawn funding for one Big Society Network project and been judged to be performing poorly in its wider contribution to the Big Society. As a result BSN were awarded further funds.

Officials at the Cabinet Office advised that it “would not be appropriate to grant fund an organisation that is in financial difficulty or that is struggling to appropriately manage its financial affairs”.

When Society Network Foundation eventually filed their statutory accounts (several months late) they showed a deficit of £181,000. Clearly someone with the authority to do so decided to ignore the advice.

The Prime Minister’s Big Society advisor, Lord (Nat) Wei – and a founder of the Big Society Network, who had stood down as its Chair to take up his governmental role – had asked Nesta to fund BSN. Nesta was an Non Departmental Public Body at this time (now it is a charity) and reported to the Department for Business. Liam Black, who was a trustee of Nesta at the time, has stated very clearly that the request may not have come as a diktat in a written memo, but he still described it as being ‘forced’ to fund them.

The PM launched Big Society Network at Downing Street.

He has though been (un)surprisingly quiet on its fall from grace or his own role in the affair.

Steve Moore, the former CEO of the Big Society Network, has published his own take on the affair – having been somewhat quiet over recent months. He suggests Shadow Charities Minister Lisa Nandy and publications such as Civil Society News are wrong to focus on the role of the Prime Minister in decisions about funding for BSN. Moore suggests that their claims of the PM being involved are ‘absurd’ and concludes that “Politics may have contributed…more to the demise of Society Network Foundation than they ever did to its life”.

Hmmmm…

Certainly the questions surrounding the Big Society Network have become political, but I would suggest things became politicised the day David Cameron chose to personally launch it at No.10, having appointed one of its founders as his Big Society Advisor and giving him a Peerage.

BSN’s CEO at the time, Paul Twivy, is quoted in the No. 10 official press release as saying:

“The Big Society network will be an independently-funded and run voice of the citizen, enabler of the citizen and partner to government.”

That description sounds rather ridiculous in hindsight.

At its launch, the Prime Minister said BSN would be “an organisation that brings all the elements of the Big Society together”. Ironically in light of its demise, I suspect that statement might be something that even Big Society’s fiercest critics might find themselves agreeing with.

Charity Commission critical of Big Society Network trustees

The Charity Commission recently published the report on its investigation into the Big Society Network charity, Society Network Foundation. You may remember (how could you forget if you read this blog!?) that that investigation arose over questions asked about the Charity’s actions over funding received from the Cabinet Office and suggestions of impropriety of payments made to trustees.

Their report won’t take long to read…and I suspect it took about the same time to carry out the investigation. In summary it says that the payments to a trustee were made prior to the charity becoming operational and that they ceased when the charity started properly running.

This is interesting as of course the Big Society Network was set up some time before the Society Network Foundation was established as a charity. BSN was set up as a for-profit venture. Only latterly (perhaps in order to access funds only available to charities?) was SNF established and, I believe, BSN then became a wholly owned subsidiary of the new charity.

So whilst the Charity Commission are undoubtedly correct in their assessment, the payments probably do not pre-date the operations of BSN. Of course the actions of a private company are beyond the remit of the Charity Commission and there is nothing illegal with payments being made to company directors in this way…but it doesn’t feel quite right to me, even if it is legal.

The second matter the Commission investigated was whether the SNF trustees inappropriately used restricted funding (that is money which is given for a specific purpose and cannot be used for anything else). This relates to a Cabinet Office grant which was awarded to support their failed ‘Get In’ project which never saw the light of day. The allegation was that SFN’s trustees allowed this money to be used for ‘general purposes’, rather than spending it on the project. On this matter the Charity Commission say that they can’t tell whether the Cabinet Office agreed to this money being used in this way, though they do note that the Cabinet Office ‘takes a different view’ of the matter. The Cabinet Office have said they are seeking to recoup a whopping 1.5% of the money they gave to SNF for the project.

In a classic piece of fence-sitting the Commission conclude that this is a matter between the Cabinet Office and SFN which ‘lies outside our jurisdiction’. In a blog post a few weeks ago I suggested that we should expect:

“…a continuation of the ‘he said….she said’ mud-slinging between the former allies as they seek to absolve themselves of any blame.”

Sadly it seems that the Charity Commission were unwilling to referee the mud-fight.

I’m not a lawyer, but it does occur to me that the burden of proof should rest with the party claiming that something changed. There’s clearly evidence that the grant was made as ‘restricted funds’. But there is no evidence to show that this was changed. SNF say that the agreement was provided verbally.
The Charity Commission do criticise the trustees over spending the money on general purposes with only verbal authority. But I am surprised that a lack of evidence that the Cabinet Office agreed to the change has not led the Charity Commission to conclude that SNF had breached charity law.

Since the Society Network Foundation Charity is now being wound up the Charity Commission concluded that it wasn’t worth pursuing the matter any further.

However, one thing occurs to me…There is a test that is supposed to be applied to people who run or work for charities which was introduced under the Finance Act 2010. The ‘fit and proper persons test’ is supposed to prevent ‘fraudulent or sham charities’. Are there not questions to be asked about the suitability of the people involved in this affair over whether they are ‘fit and proper persons’?

Just a thought…

Big Society scandal made simple

As the National Audit Office (NAO) launches a second investigation into government funding of the Big Society Network, I decided to offer up a simple guide to what’s what and who’s who in the rise and fall and fall again of David Cameron’s ‘big idea’…

David Cameron launches ‘the Big Society’ as his ‘big idea’ in the run-up to the 2010 General Election. Communities will be given the opportunity to step up and realise their ambitions for their areas. Met by general bemusement and confusion by the general public, commentators and policy geeks offer up their own views on what it means. My own take, at the time, was to describe it as ‘something old, something new, something borrowed, something blue’. The jury remains out over whether Big Society is anything more than a way to bring about massive cuts to public services.

Big Society Network (a for-profit company) is established as an independent organisation with the aim of realising the Government’s Big Society aims. BSN’s independence doesn’t prevent the Prime Minister hosting their launch. The Society Network Foundation is set up as a charity and the parent body of the BSN.

Ministers and their advisors, such as Big Society ambassador, Nat Wei (who is soon made a Lord for his trouble) go into overdrive with public bodies and funders to ‘encourage’ them to put money into the ‘independent’ organisation. An offer that’s simply ‘too good to refuse’ a number of funders including the Big Lottery Fund, the Cabinet Office and Nesta oblige with grants of more than £2m.

Despite the huge investment to an organisation with no track record of doing anything, Big Society Network’s flagship project – Your Square Mile – fails short of the 1 million volunteers they said they would recruit, by some 999,936.

Prompted by questions from the Shadow Charities Minister, Gareth Thomas MP and constant murmurings within the not for profit sector, the National Audit Office launch an investigation into whether grants made by the Big Lottery Fund (BIG) and the Cabinet Office breached their own rules and procedures.

They find that although procedures had been followed (though one wonders whether these procedures were actually fit for purpose) the Cabinet Office had interfered in the administration of the Social Action Fund that it had out-sourced to Social Investment Business (SIB). The Cabinet Office had instructed SIB to ‘look again’ at the BSN’s funding proposal – until they got the ‘right answer’ – and even changed the eligibility criteria, to make sure they weren’t excluded.

Clearly advocating the Samuel Beckett school of grant making – Try again, fail again, fail better. BIG managed to completely overlook the fact that BSN had failed spectacularly to deliver on the first project they had funded, and unperturbed they decided to award them another grant.

Both the Cabinet Office and BIG deny any wrong-doing and remain bullish in defending their actions.

In response to my blog on the NAO report, former Nesta trustee Liam Black announced on twitter that they had been ‘forced’ to fund the Big Society Network. Nesta deny any wrong doing (are you sensing a pattern here?)…but there’s no disputing the money they put in.

New Shadow Charities Minister Lisa Nandy continues to ask questions and presses the government over the affair and the national press picks up the story (offering up an ‘exclusive’ which stretches the term somewhat, since the story had been covered not just by me, but by Civil Society magazine and others…but hey ho). The Charity Commission confirms that they are looking into the dealings of the Society Network Foundation.

The government announces that they are seeking to recoup £34,000 of funds given to Big Society Network – that’s less than 1.5% of the money they’d been given! Questions are asked whether this grand gesture is more than a not-so-subtle diversion from their own role in the affair.

The trustees of Society Network Foundation issue a statement on their website defending themselves over accusations of impropriety. Two weeks later they decide to throw in the towel and trustees initiate proceedings to wind up the beleaguered charity.

Nesta chief executive Geoff Mulgan (who was not at the organisation at the time of their awards to BSN) launches an investigation into their own conduct in the affair. His report makes clear that Government Ministers and Special Advisors did ask Nesta to support BSN but found no evidence that they were ‘forced’ to do so. But he does acknowledge that “NESTA clearly did not want to antagonise a recently elected government by refusing any involvement in projects linked to its flagship Big Society programme”. You can interpret that as you like.

Later, after Geoff had joined Nesta as CEO, the Big Society Network came knocking again. This time they were not given any money.

The NAO announces that they are launching a second inquiry into the affair to see whether the issues they found in their first investigation were indicative of wider systemic failures.

Meanwhile Ministers remain quiet on the subject. David Cameron appears to have lost the appetite for talking about his big idea (despite former Tory speech writer Danny Kruger’s suggestion he should ‘start proclaiming’ about it again).

And that is the story of the rise and fall and fall again of the Big Society and its leading advocates.