I beg to move amendment No. 3, in page 9, line 9, leave out 'prescribe' and insert 'recommend'.

With this we may take the following amendments: No. 4, in page 9, line 16, leave out 'prescribe' and insert 'recommend'.

No. 5, in page 9, line 18, at end insert—

'( ) Regulations under section 9 may prescribe the requirement for adoption agencies and local authorities to publish their fees.'.

I hope that I speak for all the Committee in saying that this is a much pleasanter Room in which to conduct our deliberations. It is lighter, warmer and, dare one say, a little more intimate, so that it is possible to hear what is happening on the other side of the Room.

Clause 11 relates to the fees that can be charged in relation to assessments made by adoption agencies and the provision of services under the Bill, most particularly with respect to

''the adoption of a child brought into the United Kingdom for the purpose of adoption''

''a Convention adoption, an overseas adoption or an adoption effected under the law of a country or territory outside the British Islands.''

My thoughts on the clause stem from a sympathy with some adopted parents about what they perceived to be high charges levied on them for such services. We heard evidence earlier in our proceedings of divergence in the charging regimes of various authorities and other bodies. It seemed to me that we needed to agree that there should be greater transparency.

Under the clause, regulations made under what will become section 9 ''may prescribe the fees'', which means that an all-embracing schedule of fees will be set centrally. I agree that people should know what fees they are to be charged, that those fees should be published, and that there should be no shocks for the users of the service. I agree that there should be no wide divergence between the fees charged by different providers of the relevant service. I am sure that all members of the Committee would agree that the fees charged for the services should not act as a barrier to

those who want to adopt children. However, I disagree with the concept in the Bill that somehow the Minister and his or her officials know best and will prescribe the level of the fees.

The Care Standards Act 2000 is quite a good guide for the type of procedure that we are considering. The explanatory notes to section 112 of that Act, which refers to charges for local authority welfare services, state that

''the powers of local authorities to charge for certain non-residential social services are to be treated as social services functions as defined in the Local Authority Social Services Act 1970 (''LASS ACT''). This will allow statutory guidance to be issued under section 7 of the LASS Act for charges for non-residential services. The need to produce statutory guidance follows the publication of the White Paper ''Modernising Social Services''. This recognised that the scale of variation in local authorities' home care charges was unacceptable'' and that the Audit Commission had highlighted the full extent of the variations. It is right that guidance should be issued by the Minister in such circumstances, and that the Minister should be able to recommend fees, but I do not believe that it is necessary that the Minister should prescribe what those fees should be.

The final sentence of the explanatory note to clause 11 on page 15 states that the charges

''will not include any element of profit.''

That means that, for every body concerned in charging fees, the Minister will be able to make the fine-tuned decision as to what an element of profit would be, and to ensure that the figure prescribed does not include it. I suspect that there is not an official or a Minister who would know intimately the exact cost structure of every agency involved in the procedure, enabling them to ensure that there would be no element of profit in a prescribed national fee. Under a prescribed national scale, we might end up with agencies either making a loss, or setting fees so high to avoid making a loss but making a profit and seeking in some way to hide it in order to ensure that they meet the conditions about not making a profit.

We should work towards the Minister recommending levels or ranges of levels of fees, and requiring, as proposed in amendment No. 5, those fees or scales to be published. That way, there would be no element of surprise to anyone coming to the adoption procedure; they would know their likely costs from the outset.

I am looking for transparency and an indication that we want not to prescribe the fees but to recommend scales within which they should operate. This is not a matter of the Minister knowing best, but of the user of the service—the potential adopter—needing to know the potential costs and that they will not constitute a barrier. The whole process should be open and transparent.

The clause amplifies the general regulation-making power in clause 9 for the charging and payment of fees by adoption agencies. Like the amendments, it covers two separate situations in which it is appropriate for the Government to be able to make regulations.

The hon. Gentleman tended to concentrate on the first aspect, which relates to the ability of adoption agencies to charge for prescribed activities surrounding intercountry adoption. The second relates to prescribing fees that may be paid by adoption agencies to other persons and organisations that provide facilities as part of the adoption service. The clause is therefore not about the charging of fees to individuals who enter the adoption system. I made it clear last week that the Government have no intention to charge domestic adopters for any part of the adoption service.

Judging by the hon. Gentleman's amendments, he seems to think it possible that regulations will not prescribe requirements. By their nature, regulations must prescribe requirements; they cannot simply set out recommendations, although recommendations may be included in guidance when the guidance does not have statutory underpinning.

Amendment No. 3 would prevent the appropriate Minister from setting out in regulations the fees that may be charged and paid by adoption agencies to the persons that provided adoption services. The powers in subsection (1) relate to the second aspect that I described and could be used to make regulations to change the inter-agency fee system, for example. That fee is a payment made by an adoption agency to another adoption agency that has recruited an adoptive family on its behalf and covers the cost of recruiting and assessing that family. The Government believe that the inter-agency fee system operates well, but we have promised to keep it under review. The power will enable us to make any changes to the system that we consider necessary after consultation with those involved. The amendment would prevent us from taking action if it became necessary.

Amendment No. 4 would provide that regulations might not prescribe the fees that local authorities may charge for intercountry adoption services; it would enable those regulations only to make recommendations. I have explained why it is inappropriate for regulations simply to make recommendations. It may help the hon. Gentleman if I describe what we intend to prescribe.

We do not intend to prescribe specific fee levels. We may prescribe that local authorities can charge fees for intercountry adoption in the first place, and specify the services that local authorities may charge for, such as assessing adopters, obtaining medical reports and police checks and preparing post-placement reports for the child's country of origin. We have no intention to set or recommend any particular fee level under the regulations.

Under current legislation, all agencies are bound to charge only reasonable fees; that will continue under the new provisions. Adoption agencies may not make a profit, but each adoption agency will have slightly different costs which they should be able to reflect in the fee charged so as to recoup their costs. As the hon. Gentleman suggested, a nationally set or recommended fee might result in some agencies

receiving more money than they need, while others, which are not able to cover their costs, are discouraged from assessing intercountry adopters. However, those engaged in intercountry adoption must have some certainty about what adoption agencies can and cannot charge for. That is what we intend to establish through the regulations.

Under amendment No. 5, the regulations would require local authorities to publish their fees. I have some sympathy with the sentiment behind the amendment, but I think it unnecessary. On the whole, fees charged by adoption agencies to adopters, prospective adopters and other adoption agencies are already in the public domain. The level of fees charged between adoption agencies is announced annually by the Consortium of Voluntary Adoption Agencies, is agreed between the agencies, and is set at £14,931. The inter-agency fee charged by local authorities is agreed by the National Joint Council for Local Government and is set at £10,539. Information on those fees is clearly already in the public domain.

The intercountry adoption guide issued by the Department in April makes it clear that all adoption agencies charging fees to adopters and prospective adopters for intercountry adoption should clearly state what the fee will be before the process starts. The guide offers advice on the type of costs that should and should not be included, and encourages adoption agencies to consider charging fees in instalments. Agencies are also encouraged to provide applicants with a written statement detailing what is included in the fee to achieve transparency, which, as the hon. Gentleman said, is important in the circumstances. It is a requirement under current legislation and under clauses 91 and 92 of the Bill that adoption agencies may not derive a profit from that or any other work.

The powers in clause 9 are sufficiently flexible to enable the appropriate Minister through regulations to require adoption agencies to publish their fees or make them known to prospective adopters at the start of the assessment process. We believe that the system works well, but would be willing to consider whether that element was necessary if we received further evidence during consultation on the regulations.

Given those reassurances and explanations about the provisions and their intention, I hope that the hon. Gentleman will feel able to withdraw the amendment.

I am slightly reassured by the Minister's comments, but remain unhappy with the word ''prescribe''. I accept that regulations must do something, but a better term might be that they give ''statutory guidance'' to adoption agencies and local authorities.

I tabled the amendments and rehearsed the arguments in Committee because of the evidence of the wide divergence in fees charged by local authorities for services relating to intercountry adoption, especially home studies. I am pleased to hear that wide consultation will take place and that when regulations are drafted account will be taken of some of my arguments. The Minister suggested that if others made

the same points about the level and transparency of fees, the regulations would take account of them. In view of those assurances, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Welcome back to the Chair, Mrs. Roe.

It would be useful if, before we let the clause go, the Committee were to put on record some of the comments of adoption agencies and other interested organisations that are worried about fees. There is some confusion about the fees for different services, whether for cross-boundary adoptions in this country, or intercountry adoptions, and whether they are the fees of adoption agencies. The Minister was right about our discussion in Committee last week, in which I raised the disparities between local authority charges for home studies. They range from zero to more than £4,000, in the case of one authority, and of a London agency that is contracted by local authorities.

I have a good deal of sympathy with the amendments that my hon. Friend the Member for North Dorset (Mr. Walter) tabled. Transparency in fees is essential. It would have been better had the Government at least introduced a fee-capping system. We know about the discrepancies in the costs of services in different parts of the country, but questions remain. The Minister said rightly that local authorities and adoption agencies should not be able to profit from various services, but with such wide discrepancies between fees, a loss leader must be assumed. It is hard to take that on board.

The Children's Society and the Adoption Forum have raised the issue. The Adoption Forum has pointed out that the fees local authorities must pay each other in respect of approved adopters across boundaries average about £16,000 and can be as much as £25,000 per child. As we have discussed, much of the total is the result of buying services in kind, rather than handing over a blank cheque or a sort of dowry, but there are big discrepancies. The other day, my hon. Friend the Member for Canterbury (Mr. Brazier) recounted the horrendous case of a London borough that seems to have dumped a child on the local authority in his constituency, with apparently no compulsion on that London borough to stump up for on-going support services—only for the bus fare.

It has been suggested that the problem with the fees charged is that they can act as a brake on local authorities' sending children for adoption out of area. In the past—to a degree, it will be so in future—the first choice has always been to try to find a child an adoptive family in the locality. There are good reasons for doing that, which include keeping the child in a familiar environment, perhaps near to other siblings. However, in other cases, the need to take the child as far as possible from a violent household and abusive

parents who are still on the scene makes it far preferable that a cross-boundary adoptive family be found.

The Children's Society has raised the concern that

''local authorities seem to believe that they can always make placements more cheaply''— than adoption agencies—

''but are not able to calculate the actual unit cost, which must include premises, utilities, training, supervision and management costs.''

What grasp does the Department have of the actual cost of placements? Local authorities have not been forthcoming about figures, so it is difficult to judge whether there is an element of profit and to make comparisons with the costs of services provided by voluntary adoption agencies. It is worth noting that such agencies provide a valuable service and that, in effect, they subsidise adoption services to the tune of £3.5 million a year—a sum derived mainly from charitable donations and fundraising. We must retain those agencies if we are to maintain choice for prospective adopters and the ability of children and young people to choose the best placement for them.

I strongly endorse my hon. Friend's argument, but does he accept that his case is even stronger than he has suggested? For years, many of us have called for a larger role for voluntary organisations at the expense of some of the least effective local authorities; absurdly, however, voluntary organisations write to us saying, ''Please stop asking for that. We are overburdened already and are finances are tight.'' They struggle to do what they are already doing, although we all know that they do it far better than the bulk of—not all—local authorities.

That is absolutely right. We all agree that voluntary adoption agencies provide an essential service. The adoption system will be enhanced by the Bill, and although some the clauses are complicated, they are rightly so. However, we must ensure that we do not throw out the baby with the bath water. Voluntary adoption agencies must be able to get on with their job and increase their capacities if they are to play a vital role in increasing capacity overall, which is what the Government and we are keen to achieve. My plea to the Minister is to be mindful of the fact that these are, by and large, charitable organisations that work with voluntary contributions and many volunteers. We must support their work, not hinder it. We must be aware of the financial implications of the provisions we make.

The Children's Society raises another interesting concern, stating:

''Anecdotally we have evidence that families are not being considered for children because the local authority does not have the budget for interagency fees. There are even instances of placements being abandoned during introductions because the local authority refused to find the interagency fee. This is hardly child centred practice. If the National Adoption Register is to work effectively the issue of interagency fees must be addressed before it is fully operational.''

My understanding of the new national adoption register is that a local authority that does not take a child who has been available for adoption for three weeks is obliged to put him on the register so that an

adoptive family may be found outside the area. I hope that we shall debate the clauses that deal with setting up the register, although given the rigours of our timetable, we might not. However, I do want to know how monitoring will be carried out, given that we have no sophisticated device for tracking children through the adoption system.

Who will make sure that children are put on the register at the prescribed time to enhance their chance of adoption—especially if a local authority that is, among other things, financially strapped is reluctant to stump up as much as £25,000 to place a child with an adoptive family in another local authority area? Those worries are echoed by other organisations and in a briefing note from Barnardo's.

I raise those concerns, of which the Minister must be aware, because I hope that when drawing up regulations and prescribing fees she will be mindful of the absolute necessity of making sure that voluntary adoption agencies are given every aid to get on with their job. We need to be convinced about the disparity between the fees charged by the different authorities, and we need an assurance that the level of fees charged will not act as a brake on local authorities—many of which have strapped social services budgets—using all their resources at the earliest possible opportunity to secure an out-of-area placement if that is in the best interests of the child. Furthering the child's interests is essentially why we are here.

I fully endorse my hon. Friend's arguments. The Government's intention is clearly to introduce fairness into the charging structure, and no one has spoken against that today. However, it is important to appreciate the differences between voluntary organisations and local authorities.

Many local authorities have a more solid base and constitution and better forward funding than voluntary organisations and charities. The latter often have more brittle leadership; unlike local authorities, they are not uniform among themselves, and they often have different overheads structures and operate with various degrees of efficiency. One of the impacts of the clause may well be that voluntary organisations will have to put their house in order and improve their internal efficiency to achieve uniform charging structures. However, we would not want the provisions to be the cause of the destruction of the charitable part of the system.

Will the Minister consider carefully the charging structures, as my hon. Friend suggests? Will she consider other associated matters, such as the notification period for the new charges? If a new structure is to be put in place, voluntary organisations should have a long period in which to consider not only how to apply the charges, but what internal changes may be needed, before the changes come into effect.

Jacqui Smith: Opposition Members have made some interesting but slightly contradictory points. They seemed to be arguing both for capping the fees and for ensuring that inter-agency fees are sufficient to support the important work done by the adoption agencies. I shall go through the points raised.

The Adoption Forum might have suggested in its evidence that the Government should consider capping the cost of home studies for people from abroad who are looking to adopt. When we debated the intercountry provisions a week or two ago, I spelled out what regulations the Government intend to make on the types of cost that it would be appropriate to recoup in relation to intercountry adoption. I also made clear that a nationally set fee would not be appropriate, given that agencies' costs for making assessments for intercountry adoption will vary from case to case. It is important that individuals should know what can and cannot be charged for, and that they should know in advance what the costs are likely to be. It should be transparent that no profit is being made, and there should be a clear understanding about fees.

The Minister talks about transparency and not making a profit, but a local authority has the incentive in the case of adoptions from care of an extremely expensive child leaving its books. There is no such incentive on fees. She must know that a large proportion of the cost of social work is in overheads; profit is an intangible concept. There is no incentive, without Government regulation, for local authorities to keep their fees to a reasonable level. Indeed, they have every incentive to fill some of the gaps in their budgets by charging high fees for such work.

That is why it is important, as I have said, that the regulations stipulate what can and cannot be charged for in relation to intercountry adoption. We must recognise that it is not unreasonable for local authorities to prioritise—by not charging people for domestic adoption—the important adoptions out of care. Intercountry adoption is important too; it plays a valuable role. However, the financial decisions made by local authorities in assessing those people involved in intercountry adoption are different from those that they make for domestic adopters of children out of care.

The hon. Member for East Worthing and Shoreham (Tim Loughton) made the point about cross-boundary adoptive placements, and the concern raised by the case cited last week by the hon. Member for Canterbury. We made it clear last week that we shall make regulations under clause 4(7)(i) to prescribe the funding arrangements for the provision of adoption support services where a child is placed with an adoptive family living in a different local authority area. The requirement that all adoption agencies provide adoption support services will help to overcome the difficulties that have occurred when children have been placed under local authorities that do not have appropriate arrangements for adoption support.

The hon. Gentleman's third point related to inter-agency fees. There was a slight contradiction—

I am sorry to keep interrupting the Minister, but she cited a specific constituency example that I had given. Will she confirm that she is not suggesting that an authority such as Kent, which receives large numbers of children from London agencies, should end up picking up the bill when a child has been adopted from a London authority without some cash transfer?

That was precisely what I said we needed to consider in making regulations on adoption and post-adoption support. In order to ensure that we achieve what we want to achieve, we must where necessary promote adoptions across local authorities.

That brings me to the important point about inter-agency fees. Part of the incentive to recruit adopters is in the level of inter-agency fees. A local authority that recruits adopters can benefit through the inter-agency fee system. Kent could do so. However, there is a difficulty with that, particularly in relation to voluntary adoption agencies—and I agree with the hon. Member for Huntingdon (Mr. Djanogly) about their importance. The agency fee is an important source of income for voluntary adoption agencies. Despite the fact that some have argued that inter-agency fees should now be abolished, in the course of consultation on the performance and innovation unit report there was a strong response to the effect that the system of inter-agency fees should remain. I return to my previous point about the levels of inter-agency fees. Hon. Members might have noted that the inter-agency fee charged by local authorities is £10,539, but that charged by voluntary adoption agencies is £14,931. That reflects some of the concerns expressed by Opposition Members about the lack of ability to cover any overheads that adoption agencies may have.

We believe, for the reasons that I have suggested, that the inter-agency fee system operated by adoption agencies that recruit adoptive families should continue. However, we have promised to keep that system under review, and the powers in clause 11 will enable us to make any changes to the system that we consider necessary. The introduction and development of the register may well, at some point in future, cause us to consider whether there are other appropriate ways to deliver some of the incentives and objectives of the current inter-agency fee system.

The hon. Member for East Worthing and Shoreham made a point about resources. The payment of an inter-agency fee secures for the local authority the adoption of a looked-after child. To that extent, it may well bring long-term savings for that local authority. That is important, and the Government intend to encourage local authorities to recognise the long-term financial benefits—apart from the very important benefits to the child—of quickly using whichever adoptive families may be available, regardless of inter-agency fees. The payment of an inter-agency fee in the short term may well bring long-term financial benefits. That should be reflected in authorities' accounting and financial systems.

I think that I have answered the questions raised by hon. Gentlemen and explained the intentions behind the powers in the clause. On that basis, I ask the Committee to agree that the clause stand part of the Bill.

Question put and agreed to.

Clause 11 ordered to stand part of the Bill.