The Wolverhampton-based organisation, Kids in Communication, teaches broadcasting skills to children. KiC had a contract with Staffordshire LSC to deliver basic skills to young people in South Staffordshire, the terms of which it was struggling to meet due to the late payment of fees by the LSC, said the NCVO. Following a reporting issue, which was deemed to be a breach of contract, the LSC issued legal proceedings.

KiC ended up settling out of court with the LSC to the tune of £50,000. NCVO has said that the legal action was disproportionate and has caused untold damage to the organisation and individuals involved. The NCVO has also said that the LSC broke the Compact, and that there were serious implications for other voluntary and community organisations that may want to contract with LSC, or other government agencies in future.