Councils are ‘picking up the pieces’ following the closure of charity Kids Company with fears tens of thousands of vulnerable young people could be affected.

The Department for Education was yesterday working closely with councils to manage the impact of the charity’s closure, which comes after ongoing financial concerns at the organisation.

Kids Company – founded by campaigner Camila Batmanghelidjh – ran 11 street level centres in London and Bristol and an outreach programme in Liverpool, all of which have been shut down. Its work with over 40 schools across the country has also been terminated.

The charity warned that such services ‘impact on tens of thousands of vulnerable children, young people and families’, of which many ‘depend on the charity for practical and emotional support’.

Cllr David Simmonds of the Local Government Association said councils would ‘always be there to pick up the pieces’ when ‘things go wrong’ with charities and voluntary groups.

‘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,’ he added.

Alison O’Sullivan, president of the Association of Directors of Children’s Services, said the impact of the charity’s closure would ‘vary across the areas where the charity operated’ but all affected town halls would be ‘working hard to limit the impact of its closure on the vulnerable children, young people and communities who rely on its services’.

Lambeth Council in 2013 paid Kids Company £193,000 to run a children’s club and adventure playground over three years. It said the council would re-open these services ‘as soon as possible’ to ensure ‘children and parents who rely on them are not adversely affected’.

Southwark Council was working with the Government ahead of the charity’s closure last night and said it was ‘ready to support any vulnerable children and young people in the borough who are affectted’.

Representative body London Councils also affirmed local authorities would have ‘contingency plans in place for these eventualities’.

A government spokesperson 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.’

Confirming the closure, Batmanghelidjh said: ‘The catastrophic abandonment of children who are suffering is a testimony to our collective moral failing. I hope one day the childhood maltreatment wound, that is so deeply hurting this country, will heal.’