Civil servants were embedded in Kids Company for a year in bid to restore charity's finances

Government assigned two civil servants in troubled charity between 2011-2012

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Two civil servants were embedded in the troubled charity Kids Company for more than a year, it has emerged, as fresh allegations were thrown at the Government by the charity’s founder Camilla Batmanghelidjh.

Kids Company was forced to close earlier this week after allegations of financial mismanagement. It faced claims that it misspent millions of pounds of donations, including some of the £37m it has received from the taxpayer over the last 10 years.

The Financial Times reported that the Government assigned two civil servants to work in Kids Company’s financial team after evidence that the growing demand for the charity’s services was outstripping its resources.

The two civil servants, named by the newspaper as Deborah Lonnon and Alison Culshaw, were placed at the company from mid-2011 to mid-2012 in a bid to restore the organisation’s finances back to a more sustainable footing.

The Cabinet Office did not say whether the two government staffers had raised concerns over financial impropriety during the year they spent at the charity.

It comes as The Independent revealed that a multimillionaire Tory donor was involved in the campaign to persuade ministers to give a £3m grant to Kids Company, which was against the advice of civil servants.

James Lupton, who is the Conservatives’ co-treasurer and donated more than £1m to the party last year, is understood to have met with ministers on behalf of the charity as its financial woes deepened.

In the latest round of blows to be exchanged, Ms Batmanghelidjh said claims that ministers were unaware that the £3m grant to Kids Company was partly used for salaries were “not true”.

The Prime Minister with Camila Batmanghelidjh, the founder of the charity 'Kids Company', in 2010

She was responding to reports that the Government’s decision to plug funding for the charity was triggered by the charity using government grants to pay staff.

She said: "I have in my possession an email exchange between us and the Government where they were fully aware we were waiting for their money to come for the salary to be paid.

"This £3 million was part of a repackaging grant so we would have to shrink Kids Company in order to make it sustainable. It is very disingenuous to claim they did not know."

Ms Batmanghelidjh claimed Cabinet minister Oliver Letwin had told her he would find £20 million for Kids Company.

She said: "Because I had warned everyone we would not be able to fundraise anymore because we had been charity of the year for practically every bank, we basically ran out of people we could go to."

Ms Batmanghelidjh also said she felt she was under attack because she was not a typical executive.

"Because I don't wear a suit and I don't carry a briefcase, I haven't sort of bought into the corporate packaging," she said.

"People assume, because I'm a woman and I work with children, that then I don't understand figures and I can't organise systems. Actually, if you really think about it, I organised with my team and we raised £163.4 million.

"That requires quite a lot of work and last year it came from 7,000 different sources. Administratively we must be pretty good to get that amount of money in."