August 11, 2015

Kids' Company trustees were too cosy

We mentioned yesterday the role of the Kids' Company Trustees, pointing out that "Trustees are supposed to act like Non-Executive Directors". Yentob, we said, was obviously too close to the charity, having been chairman of the trustees for 18 years - far too long.

We concluded that there should be a maximum term for charity trustees of five years.

Today the FT writes one of its methodical editorials, focusing on the role of trustees at the charity, and Alan Yentob in particular, concluding
It is time Mr Yentob and his colleagues explained what they did, and did not do, in the case of Kids Company’s collapse.
But of course the collapse was only the end game. What did the trustees do, and not do, over the previous years?

In the light of events, how can we not conclude that Alan Yentob did not do his job? There's no reason to think he was financially corrupt, but he was negligent and morally corrupt for taking the role, keeping it for far too long, and not doing the job. He emerges as an advocate for the charity rather than a watchdog.

We commented yesterday on Richard Handover, Vice Chairman of the trustees:
The trustees included ex-WH Smith chief executive Richard Handover, who should surely have known what was required. He has sullied his record.
Just how badly sullied we can now start to see, thanks to the Daily Mail, which reports on Handover children employed by the charity - yes, not one, but two children. Daughter Sasha does not seem to worked there full time 9 to 5. Doubtless she enjoyed her fundraising exploits, but her efforts raised less than her salary.

A Kids' Company spokesman still sees nothing wrong in employing them.

Handover senior was a trustee for ten years. As a former boss of W H Smith he understood the principles of finance. Yet he connived at the charity continuing with inadequate reserves, despite successive years' accounts saying that the issue would be addressed. Meanwhile, the charity gave enjoyable employment to two of his three children.

Charities should be austere places to work. Trustees should be vigilant. Yentob - from high up in the the free-spending BBC - and Handover failed in their duties.

August 10, 2015

What do we know about Kids' Company?

The Kids' Company Organisation

Ms Batmanghelidjh blames Whitehall and the media for having to close amid claims that a potential donor of a further £3m pulled out, after it emerged police were also investigating the charity following allegations that concerns over alleged sex abuse faced by some of the children using the service had not been passed onto police.

The Government has also tried to withdraw the £3m grant meant for the restructuring of the struggling organisation after it emerged £800,000 of the money was being paid out to staff.

Paul Marshall of ARK Schools says he saw "a very charismatic chief executive but with an absence of financial control and basic management alongside her". He called the lack of management "a fundamental failing of the trustees". The trustees included ex-WH Smith chief executive Richard Handover, who should surely have known what was required. He has sullied his record.

From 2009 to 2013 the number of staff grew from 231 to 496. By the time it closed, the charity had 650 staff, of whom 140 were full-time 'key workers’ with a direct counselling and mentoring role.

The charity won a total of £37m in public funding. But it did not build up financial reserves.

Of Kids Company’s £23m budget, £15m went on staff costs in 2013, and £1.5m on food vouchers and cash for children using its services. Senior management also took pay increases over the past few years. In 2009 the employee with the highest salary was paid between £60,000 and £70,000. However, by 2013, the top-paid employee in the charity was receiving between £90,000 and £100,000, while another employee was paid between £70,000 and £80,000.

Two finance directors quit over failure to build up reserves despite funding rising by 75% in five years. Senior directors repeatedly warned trustees of the need to build up financial reserves or face going to the wall and annual accounts repeatedly warned of this problem.

The journalist Miles Goslett says the charity’s statistic of having 36,000 clients was inflated by including parents and school staff. Goslett concluded that it “now acts as a drain on well-meaning donations that might otherwise go to better causes”.

A former employee has claimed teenage girls were groomed for sex by older male clients they met at the charity's centres, which a girl who once used the organisation said 'spending money' given to youngsters was spent on drugs. Ms Batmanghelidjh said on Newsnight she was unaware of these claims (as she says she is unaware of other alleged problems at the charity).

Kids Company employed the expensive global law firm Withers to respond to journalists who didn’t resort to the usual fawning. Not an appropriate use for a charity's money.

The charity had an office in The City. Why?

Alan Yentob

Alan Yentob had been chairman of trustees for 18 years - far too long. Trustees are supposed to act like Non-Executive Directors. But he obviously was too close to the charity. There should be a maximum term for trustees of five years.

He secretly lobbied Treasury officials over the charity’s unpaid £700,000 employment tax bill. In the end, £589,000 of the debt was written off. Yet he had no concerns about the charity's finances!

Camila Batmanghelidjh

Her personal background is here.

The Charity Commission has launched a probe into allegations by former Kids Company employees that the charity helped bankroll a place for the teenage daughter of Jeton Cavolli, her personal driver (!), at Dauntsey’s School in Wiltshire. The school’s chairman of governors, Richard Handover, is also the vice-chairman of Kids Company’s board of trustees. A source who until recently worked at the charity said:
I can confirm that Ms Cavolli was registered as a client at Kids Company, and that Kids Company funds were spent supporting her while she was at school.
It is understood that the amount paid was a five-figure sum.

Mr Cavolli, 46, known as ‘Tony’, has been on the charity’s payroll for nearly two decades. He is believed to have been paid about £40,000 a year. Another ex-employee said:
I don’t think Tony was paid to do anything other than drive Camila’s car. She can’t drive and she never took public transport because she didn’t like to walk long distances.
The investigation was triggered last month after employees met the Commission to set out their concerns about whether the arrangement represented proper use of the charity’s money. Demonstrators marched from Camberwell to Downing Street. Ms Batmanghelidjh arrived in a black cab to offer words of thanks and support to the crowd.

Miss Batmanghelidjh said she needed several personal assistants because she has to dictate all her written communication:
I have very severe learning difficulties so I can’t use a computer and so I have to dictate everything. Consequently because I am working from around eight in the morning to about 11 or 12 at night, the PAs have to rotate. When I fundraise I write each letter personally – or I sign it personally, so everything I have to dictate. The reason I have several PAs is that, first, they share the morning and evening slots and, second, one of them has to be a clinical PA because I work therapeutically with children. Because fundraising is so difficult I also have to do a bit of work on a Saturday and a Sunday so the PAs share the Saturday and the Sunday slot as well.
Where else, we may ask, could someone with severe learning difficulties have a £90,000 salary and the services of a personal driver?

The government

Downing Street had been warned by civil servants and ministers before this year’s general election that funds designated for Kids Company would be better spent on other children’s charities, but were overruled by No 10. David Cameron has defended the move to offer Kids Company a £3m rescue package after the election, saying that it was right to give it “one last chance” - showing a cavalier and dictatorial disregard for taxpayers' money.

The Education Department had wanted to stop public funding, but were overruled by No. 10. Downing Street should not be making decisions about individual donations. Phil Frampton, of the White Flowers Campaign Group, an umbrella organisation for abuse survivors’ groups, said there was real resentment from other groups at the perceived special treatment towards Kids Company by successive governments.

Oliver Letwin expects that the Public Accounts Committee will carry out a wider inquiry into Kids Company.

The Labour party

Harriet Harman wrote to the Chancellor George Osborne last month urging him to provide a cash lifeline to save the charity after financial problems came to light.

Now Labour's hapless Lucy Powell (she organised Ed Miliband's election campaign) says this was the wrong thing to do. She said the National Audit Office should investigate why the Government continued to support the charity when it was in financial difficulty!

Well, that's going to happen anyway.

The Charities Commission

Despite the unfavourable publicity, the regulator seems to have been looking the other way until very recently. Repeated warnings in accounts about the lack of reserves appear to have gone unnoticed.

So who comes out of this well?

Nobody. It suggests that state sector couldn't organise a piss-up in a brewery.

July 23, 2015

Allister Heath writes the next Tory manifesto

The excellent Allister Heath suggests that Labour should re-invent itself as the consumers' party:
We are an aspirational, not especially ideological people who want to better ourselves, live well and help our families. We want to earn and consume more, own our homes, enjoy better health and look after our children; we profoundly dislike criminals and terrorists and wish to feel that we have control over the political decisions taken on our behalf.
He is talking here about British society. Is this still true of the angry majority of the Scottish electorate? Perhaps not, but it does describe the English electorate well.

This tendency to the individualistic, says Heath, has been accelerated by the digital revolution - as Douglas Carswell has been stressing for years.

But this change in Labour isn't going to happen any time soon. Their party workers and their union paymasters are heading in the opposite direction. They may be more interested in fighting for what they believe in than in winning power any time soon, but that's their privilege. As Benn used to say in the last century, voters will tire of the Tories in the end: keep the faith and - in the end - we will be elected with our left wing blueprint.

Nor is our own new Labour constituency Labour MP in the consumerist mould. He proclaims his belief in Socialism (and is a former BBC reporter, so I believe him).

UKIP could of course take this consumerist approach. But UKIP's not sufficiently nimble, held back as it is by the limitations of its leader (sharply shown up in the last general election).

So who will become the consumerist party? If someone slips Allister Heath's piece into George Osborne's reading, look for this approach in a party manifesto at the next election.

The manifesto of the Conservative party.

July 13, 2015

Greece: it's NOT an EU coup

The latest episode in the Greek epic is regarded by many as a coup against Greece. A coup by the Germans or by the EU, depending on who the writer hates more.

The Germans (or perhaps the EU) don't respect democracy, it is said, because the Greeks voted No to austerity.

But Greece is just one democracy in the eurozone. The message from the shambolic referendum seemed to be: We want to stay in the eurozone, but No Austerity, Thanks, We're Greek.

A purposeful government would have put the referendum choice as: euro+austerity or no austerity and no euro. But the ragtag that is Syriza didn't win the election by offering Greeks an honest choice, and they weren't about to start now.

What were the other eurozone democracies to do? Throw more of their own taxpayers' money at the Greeks unconditionally because the Greek people had voted in favour of more fairy gold? Apologies to our own electorates, but Greece has had a referendum so we have to respect that. Until, of course, the rest of us have referenda, and then presumably ours will trump theirs - at least until they have another one.

Some cultural figures seem to argue that modern Greece should be cut more slack because ancient Greece was the cradle of democracy. Well, Athens, anyway. And if the argument is that modern Greece is therefore more deserving than (say) Slovakia, isn't that a decision for the demos in the lender countries, for the voters in those democracies, to make? It's pretty odd to argue that élites should give their taxpayers' money away in honour of the founding of democracy.

And it will be giving it away, not lending it. The taxpayers won't get their money back. Everyone knows that. So if the eurozone ministers are indeed going to bung more dosh at Greece, the very least they can do is to try to protect their own taxpayers as far as possible.

Note, by the way, that they are not faceless EU bureaucrats. These decisions are being taken by elected ministers, who have their own electorates to answer to.

This is not a coup. The Greek government always had a choice. They could take the rational route of leaving the euro and taking control of their own destiny (a big risk, that), or choose, as they have done, to head deeper into the blind alley of the eurozone.

Yes, the Greek government has chosen wrong. But they made the choice. So it is not a coup.

July 06, 2015

A Monday morning EU myth

One comfortable myth of the Out side is that all EU decisions are made by grey, unaccountable bureaucrats. This myth allows Out campaigners unlimited thoughtless railing.

But Eurozone ministers are not unaccountable bureaucrats. They have electorates too.

Directly and indirectly, those countries will have huge liabilities if Greece defaults - Barclays suggest Germany €94bn, France €72bn, The Netherlands €20bn. And who thinks Italy can afford a hit of €63bn, or Spain €48bn?

Some governments will strongly oppose debt write-offs for political reasons - such as Spain and Ireland. If they have been taking the pain, why shouldn't Greece? If Greece is forgiven debt, why didn't their governments achieve it? Finland opposes debt forgiveness in principle, while Slovakia points out that it is a poorer country than Greece, so why should it have to stump up at all? (Hint: read the Eurozone rules before you sign up.)

In all eurozone countries, ministers are aware of their electorates' disillusion. France and The Netherlands already have established anti-euro parties ready to pounce on any weakness - even Germany has the AfD now.

So which will play better with those voters and those governments - huge write-offs now, or lending a bit more?

July 02, 2015

Greece: corruption and amateurism

As Ambrose E-P stresses, this isn't an opinion piece, it's reporting.

The overall impression it leaves is that no one senior near the centre of Greek government understands the basics of how an economy functions.

But can their basic knowledge really be so poor? For sure, their left-wing politicians may, like left-wing politicians elsewhere, have been in the habit of only talking to other leftwingers. But even Greece probably has some worldly civil servants, and Varoufakis should certainly know this stuff.

iSo Is it ignorance? Is it merely incompetence? Or is it a plot?

One thing we can say: if the economy continues to run down, as seems inevitable, a Yes vote becomes increasingly likely.

What then? The IMF says Greece needs large-scale debt relief and €50bn of fresh funds over the next three years to give the economy time to recover.

Who's going to stump that up? Probably no one, while the country is being run by a government that's behaving like a bunch of amateurs.

P.S. Note to the Greeks:

Ignore cultural gurus saying we must support Greece because it founded democracy. Will all those who are direct descendants of the ancient Athenians please raise their hands?

As elected ministers from eurogroup countries poorer than you are pointing out, there is no Greek exceptionalism.

May 22, 2015

The EU "out" campaign

On balance, suggests The Commentator, as things stand the energy of the Out camp will trump the scaremongering of the In camp. When David Cameron returns empty-handed from Latvia, it suggests, the first decisive moves towards Brexit may have already begun.

But is this optimistic? At the moment we see 'Out' chatter dominated by three themes.
  1. Should Nigel Farage lead the Out campaign? This would be a very bad idea. First, because the tone should be sunny, inclusive, forward-looking optimism. Farage fails on all these counts.

    Second, because an Out verdict is not in Farage's personal interest. He wants to keep his grievance pulpit, along with his well paid job as an MEP. Getting the referendum he claimed to want is a blow to him. His best bet now is to make a mess of the Out case & then claim the referendum was conducted unfairly. Chip on the shoulder again. To make sure of losing, it's important to Farage that he has as prominent a role in the Out campaign as possible.
  2. Much more importantly, what should the exit strategy be? There have to be plausible exit plans in reserve, but they won't be the public's main focus. The campaign must accentuate positive, broad brush themes, and be optimistic, positive and inclusive. Every part of the 'Out' pitch must measure up against Dan Hannan's criteria here.
  3. For now, the 'In' campaign is setting the agenda, with media discussion focused on measures to discourage immigration from the rest of the EU. It is important to them to talk up issues where they think they might get concessions, and say nothing about areas they know they can't influence - especially if they are far more important!

    An early task of the 'Out' campaign is to pick areas of national life which would be better outside the EU. Yes, have a grid. Run an issue for a week initially, then move on to another one. There will be plenty. The fishing industry? Lower food prices? There are a lot of themes which the 'In' campaign will not want to see raised. So raise them. One at a time in a positive manner.

    For sure there must be rebuttal. But don't dance to the tune of the 'In' campaigners.
There is another way that the 'Out' campaign must go beyond rebuttal. This involves taking notice of what the 'In' campaign doesn't say. Has a new law or new regulation been forced on us by the EU? The 'In' campaign won't say so. The 'Out' campaign must. Is there a new story about overseas aid being wasted? Was it an EU programme? Say so.

Let these interventions come from one central point, so that the media get to know who to approach when a question occurs to them. Let's have a friendly, open-hearted campaign.

After all, 'Out' is the forward-looking policy.

April 29, 2015

UKIP needs to campaign better

UHIP wrote a good manifesto, but it's not making the most of it during the campaign.

  • UKIP is the only non-green party. Temperatures have been steady for the past eighteen years, yet the other parties still load extra energy costs on to people and businesses. India and China are opening more and more coal power stations, which will completely wipe out any effect that our small economy can have on global carbon dioxide.

    Ukip needs to bang the drum for a sane energy policy and free us from paying too much for energy.
  • Only UKIP believes in affordable government. Only UKIP would cancel the white elephant HS2 project. Governments must start living within the country's means.
  • UKIP must start putting numbers on the immigration problem in ways people can relate to, to shpw that this isn't a matter of prejudice, it's a question of numbers.

    Use the important facts highlighted by the Balanced Migration pressure group. Cool numbers trump innumerate passion.
  • Thus on housing: 65% of UK household growth from 1996 to 2014 was the direct consequence of international migration to the UK. That will have had a significant impact on the demand for housing. Between 2010 and 2014, households headed by persons born in the UK increased by 32,000 per year on average; households headed by persons born outside the UK by 115,000 or 78%. On present trends immigration will continue to be a major factor in housing demand. If you are going to raise housing in a debate, have these broad numbers to back up the argument.
UKIP has a distinctive manifesto. In this election it is arguably the only major right of centre party.

But in this campaign it is too often following the agendas of the other parties rather than emphasising its own proposals.

UKIP is showing signs of coming of age. Now it needs to focus its campaign on distinctively UKIP issues.

April 17, 2015

After the challengers' debate

The central expectation is that Labour will form the next government, not in coalition with the SNP, but with SNP support.

But what sort of supporters would the SNP be? Not for them the discreet negotiations behind closed doors. There are two reasons why.

First, there is the personality of Alex Salmond, who looks likely to lead a large bloc of SNP MPs. His preference will be to strut and swagger and bully. That is what he does.

But there's also a strategic reason. The SNP will want to keep up a sense of grievance in Scotland against Westminster. So they can never say they are satisfied.

Ed Miliband will never be able to give them enough.

As a bonus for the SNP, this instability in government will make the English (who, let's remember, are the overwhelming majority and pay the bills) more likely to say to the Scots: A plague on you. For God's sake, go.

Lord Ashcroft's latest poll suggests Scottish Labour may be wiped out. But voting for the SNP in this general election will not come without consequences for Scotland.


Melanie McDonagh is upset that the debate "confirmed some unhelpful female stereotypes". More interestingly, she points out that none of these three women is English: an Australian leading a whacko party that's going to bomb in the polls; a Welsh woman leading a party which isn't very popular even in Wales; and a Scot openly determined to hold a Westminster government to ransom.

Stand by for the tail to wag the English dog. Nicola Sturgeon - like Margaret Thatcher, a conviction politician - will make sure that happens.


We saw Nicola Sturgeon's tactic for dealing with issues she doesn't want to discuss. She will start by saying that issue X (say, defence or immigration) is one of the prime duties of government.

She goes on that we can spend much less on defence, and increase the cuddly subsidies. Apparently then everyone will have a first rate education, and there will be no more "poor children" (however you measure that).

Similarly, she says there must be strict immigration controls, and then moves on to enforcing the "living wage". What were these strict controls she was advocating, David Dimbleby wondered. Answer came there none.

In general, the leaders wanted to push their own slogans rather than probe their competitors' offerings. That's why a good interviewer will always be more revealing. But they are few and far between.


Talking of immigration always brings one to Nigel Farage, who was not on sparkling form. Commentators have excused this by saying he wanted to appeal to his core vote by playing the underdog.

He tied the housing shortage to the levels of net immigration, which was unpopular with the audience. But if you want to carry this point you really do have to give broad brush numbers. Our Nigel couldn't be bothered. Lazy boy. He could have used the manifesto's phrase that it's a question of space not race. He didn't bother with that either.

He even said UKIP would prop up a Labour government if it offered a referendum on the EU. After all the work the new political generation in UKIP has put into their manifesto to move beyond the image of UKIP as a single issue party, Nigel can't move beyond what he's been saying for years.

He's starting to remind me of Jean Marie Le Pen. Of course he doesn't believe the Holocaust was a detail of history. But he can't keep up with the change that's taking place in his party.

It would be good to see several constituencies sending a UKIP MP to Westminster. But perhaps not South Thanet.

April 13, 2015

Whose life is it anyway?

Probing David Gauke on the Conservatives' purported reform of inheritance tax, Andrew Neil asked him: Why do more for well off kids, don't they have enough advantages already?

This question is built on an insidious mistake. There's an assumption that it is for the state to decide how much it is "right" for individuals to inherit - as if legacies were at the state's pleasure.

This is wrong. That money belongs to the people making the will - usually family. The family has first call on it. It is not for the state to say that the children have had enough advantages already, so the state is entitled to help itself to the legacy.

There may be arguments in favour of an inheritance tax. But this is not one of them.


Dan Hodges presents a sorry picture of the election "campaign" as just a series of manipulated stunts which keep senior politicians as far away from the people as possible.

Blame the media. As part of their coverage, they should show these safe, artificial stunts for what they are, and not connive with the politicians.


Suddenly - without any preparation - a political party announces that employees should have an extra three days' paid leave for volunteer work.

Businesses have to pay. And what will be the real value to a charity which gets a volunteer for three days? That three days, by the way, includes time for training and acclimatisation. And forget any work with children (CRB checks and all).

Will this have to be monitored? Will charities have to provide dockets to the businesses certifying that the employee has done their three days? Clue: in the case of a state sector employee, almost certainly yes.

Where would this policy fit in the political spectrum? It feels like something dreamed up by a Green, or someone at the squishier end of the Lib Dems.

But no, it is a proposal from the Conservatives. A step closer to 1984, with the state telling you more and more what you can and can't do.

Whatever happened to personal freedom to live your life as you want?

Which comes first, individuals or the state?