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Child Maintenance and Other Payments Bill

I thank the noble Lords for the amendment, which seeks to achieve three things: to prevent the commission charging fees until its services have been assessed as satisfactory; to limit the circumstances in which the commission may charge fees; and to prevent the commission charging a fee to a parent with care who applies to the commission for a maintenance calculation. I recognise the concerns that have been raised, and I am grateful for the opportunity to offer, I hope, some reassurance. I turn first to Amendment No. 51. The Government recognise the importance of ensuring that any fees charged do not dissuade vulnerable or low-income parents from applying to the commission in the first place. Indeed, that was made clear in the White Paper, A New System of Child Maintenance, which stated that, "““the clear burden of charging should fall on the non-resident parent and not the parent with care””." Charges could be incurred for a number of reasons. Most of these, such as penalties for late payment and enforcement measures, could fall only to the non-resident parent. However, there may be a few situations where allowing the commission to charge a fee to both the person with care and the non-resident parent could provide it with a valuable tool to help achieve its objectives. For example, where appropriate, it might be possible to envisage a small application fee, which might encourage both parents to consider whether a voluntary arrangement might be more effective for them. Such a fee is already the case in a number of child maintenance systems around the world and could be waived for those on benefits and low income. By way of reassurance, the details of any charging regime will be subject to the commission’s overarching objective, which is to maximise the number of effective maintenance arrangements in place. Any decision the commission makes about fees must be made within the context of that objective, and it will be as concerned as we are not to dissuade vulnerable parents applying to the statutory maintenance scheme. We also believe that it is important to recognise that the correct charging regime, properly designed and applied, could play a pivotal role in helping the commission to achieve this overarching objective; for instance, by incentivising non-resident parents to supply information to the commission, and to meet their parental responsibilities regularly and on time. In other words, charging could be an integral part of the new scheme rather than an add-on once the scheme is up and running. However, Amendment No. 53 would prevent the commission charging fees until its services have been assessed as satisfactory. We have said all along that it should be the commission who decides the details of any charging scheme. That will include when charging should start. We do not want to hamper the commission at this stage, by restricting how it is able to use this key part of its toolkit. Members of the Committee may find it reassuring that we do not intend any charges to be introduced until the launch of the new scheme in 2010 at the earliest. By that time we will have made a number of changes to the existing schemes, such as stronger enforcement powers. The success of those changes, together with the overall performance of the schemes will, of course, provide the context in which the commission will advise the Secretary of State on charging, and the context in which the Secretary of State will take decisions. Importantly, the business case for the reforms does not depend on any income from charging. Furthermore, the regulations required to introduce any charges will be subject to the affirmative procedure. Whether a service is ““satisfactory”” remains a subjective measure, but I am sure that the Committee will agree that in any assessment of the commission, a key performance indicator will be how successfully it is meeting its key objectives. I am sure that Parliament will have this, and the commission’s performance in mind when scrutinising the regulations, and will also ensure that any proposed charges meet the needs of the most vulnerable parents. I would like to touch briefly on Amendment No. 52. The amendment would remove subsection (3) from Clause 6, which highlights that the commission may charge fees not related to the actual cost of carrying out its functions. There is a simple reason for including such provision. Without it, based on Treasury definitions, it could be presumed that ““fees”” means a charge directly related to actual administration costs. However, as we have already discussed, fees will not be purely for cost recovery purposes. The fee structure could provide a key tool in incentivising parents to meet their responsibilities on time. To achieve this and, just as importantly, to ensure that fees are fair and transparent, the commission might want to charge, for example, a percentage of maintenance owed. Subsection (3) makes clear that such charges are within the scope of Clause 6. I hope that has been a sufficient explanation as to where we are in our thinking on fees. There will be opportunity in due course for affirmative regulations, but in any event it is not proposed to introduce any charges before 2010.