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Clause 60 - Funding of ombudsman scheme

Part of Consumer Credit Bill – in a Public Bill Committee at 5:30 pm on 28th June 2005.

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Photo of Charles Hendry Charles Hendry Shadow Minister (Higher Education and Intellectual Property), Deputy Chair, Conservative Party 5:30 pm, 28th June 2005

I am grateful to the Minister for that explanation. I draw his attention to proposed new section 234A(9), which states:

''As soon as practicable after the end of—

(a) each financial year of the scheme operator, or

(b) if the OFT and the scheme operator agree that this paragraph is to apply instead of paragraph (a) for the time being, each period agreed by them, the scheme operator must pay to the OFT an amount representing the extent to which collection costs are covered in accordance with subsection (2) by the total amount of the contributions paid by the OFT to it during the year or (as the case may be) the agreed period.''

I take it that that means that the OFT should be reimbursed by the ombudsman for its costs. What happens with trading standards departments? As we heard earlier, they will be carrying out some of that work on behalf of the OFT. Will they be eligible to have their costs covered for work that they have done for the OFT? In that regard, subsection (10) of the proposed new section would appear to be a difficulty, because it states:

''Amounts received by the OFT from the scheme operator are to be retained by it for the purpose of meeting its costs.''

That suggests that the OFT would not be able to pass on funds to trading standards departments. Will they be covered for the costs that they incur? Will subsection (10) allow money passed to the OFT to be passed on to trading standards departments to reflect the work that they have done?