The High Court upheld the judicial review on two fronts:

<strong>1. Mischaracterisation of Trustee Oversight on Expenditure</strong>:
The Charity Commission’s report (at paragraph 45) gave the “extremely unfair” impression that financial support given to a group of service users known as the “Top 25” may have lacked proper justification. The court found this portrayal failed to reflect the conclusion that the trustees had, in fact, scrutinised this expenditure adequately, and was therefore irrational.

<strong>2. Criticism of Financial Reserves</strong>:
The report (at paragraph 51) suggested that the trustees’ decision to operate with low reserves was the reason Kids Company became insolvent. The court held that this was also irrational, having failed, for example, to acknowledge that even a (commonly adopted) three-month reserve fund would not have prevented the collapse. The Commission had not provided a satisfactory explanation for diverging from this finding.

All remaining grounds were dismissed.  This included dismissal of the claim that the Commission’s sole finding of mismanagement against the trustees (in relation to the late payment of debts) was irrational.  The court held that the finding of mismanagement was clearly one that was open to the Commission to make in its report.  The Commission has now amended the relevant paragraphs in its report (an updated version of which can be found <a href="https://www.gov.uk/government/publications/charity-inquiry-keeping-kids-company/charity-inquiry-keeping-kids-company">here</a>).