Kids Company has closed with immediate effect after the government withdrew funding amid concerns about its finances and governance and the start of a police probe into allegations of abuse.
Last week saw the closure of the British Association for Adoption and Fostering (BAAF).
Kids Company described itself as providing “practical, emotional and educational support to vulnerable inner-city children, young people and families”, serving some 36,000 people from 11 centres in London, Bristol and Liverpool.
LGA children and young people spokesman David Simmonds said: “Councils regularly work with charities and the voluntary sector to provide services to children and in situations when things go wrong, they will always be there to pick up the pieces.
“When a charity such as Kids Company closes, and it has been providing services commissioned by a council, we will ensure that any vulnerable users are identified and supported appropriately.”
Association of Directors of Children’s Services president Alison O’Sullivan said: “The Department for Education has been coordinating Kids Company, local authorities and other charities in preparation for the closure. The impact of this will vary across the areas where the charity operated.
“However all of the authorities where the Kids Company delivered services will be working hard to limit the impact of its closure on the vulnerable children, young people and communities who rely on its services.”
Kids Company had been a high-profile charity, enjoying the support of prime minister David Cameron and other senior government figures.
A Cabinet Office statement said: “The government has supported Kids Company over the last seven years to help it deliver services for vulnerable young people and so we are disappointed it has been unable to move to a sustainable financial position.
“The welfare of these young people continues to be our primary concern and we are now working closely with local authorities to make sure they have access to the services they require.”
Regulator the Charity Commission said it intervened in Kids Company on 9 July “regarding the concerns in the public domain about the charity’s funding, financial stability and proposed governance changes”.
A week later commission officials met former Kids Company employees to discuss “alleged inappropriate spending, breaches of financial controls and concerns about the viability of the organisation”.
At a meeting with Kids Company on 21 July, the commission ordered an immediate independent examination into the allegations.
The commission said the trustees, “fully cooperated with this, and had already prior to our engagement put in place changes to the governance, management of and existing financial controls within the charity. This work was still ongoing when the charity closed.”
Kids Company said in a statement it had “closed due to lack of funding”.
It said previous levels of funding had not been available this year and it had planned to restructure to operate on a lower turnover.
The charity said it had “sought funds to restructure from government and a group of philanthropic donors, but as a result of serious as yet unsubstantiated allegations against the charity, it was unable to meet its ongoing liabilities”.
Kid’s Company said it was “in close touch with the local authorities and other charities to help our children and young people access their services”
BAAF cited “significant changes and prevailing economic conditions” for its closure and has transferred most of its functions to the children’s charity Coram.
