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corporate plan & 2006/07 budget - 2005/06 forecast

This chapter deals with the current year - 2005/06. By the end of March 2006 we expect the overall position to be very close to the figures we forecast in our budget for the year.

new complaints Our 2005/06 budget assumed we would receive 115,000 new cases - a 4% increase on the previous year. This reflected a small increase in complaints about mortgage endowments and other products, as well as the extension of our remit to cover mortgage and general insurance intermediaries. Our current forecast is that we will receive 70,000 mortgage endowment cases and 45,000 other cases, in line with the budget. Mortgage endowment complaint numbers appear to be stabilising for the time being. Investment complaints have reduced (partly reflecting improved stock markets and also a tailing off of ‘splits’ complaints). This reduction has been offset by a general increase in banking and insurance cases.

cases resolved Our 2005/06 budget assumed we would resolve and close 116,000 cases. Our current forecast is that we will resolve and close 116,000 cases, in line with our budget. This represents a 28% increase on the previous year, reflecting the investment we have made in increasing our productive capacity - in particular by recruiting additional adjudicators.

productivity Our 2005/06 budget assumed that productivity would fall marginally, as many cases became more complex and were vigorously contested by the parties. Our current forecast is in line with the budget.

timeliness In framing our budget for 2005/06 we decided that - because of the nature and scale of the issues involved - we would set different standards of service for mortgage endowment cases than for other cases. This is reflected in the forecast in the table below.

As explained in the next chapter - complaint trends - we expect to reduce the number of outstanding cases. But timeliness is currently measured when cases are closed. So closing some older cases, particularly in complex areas such as ‘splits’ and Equitable Life, will sometimes make our overall timeliness look worse.

unit cost Our 2005/06 budget assumed that our unit cost (total costs, less financing, divided by the number of cases resolved) would fall to £456. Our current forecast is in line with the budget.

actual 12 months 2004/05

actual 9 months 2005/06

forecast 12 months 2005/06

budget 12 months 2005/06

opening work-in-progress*

mortgage endowment complaints

26,056

46,924

46,924

44,056

other complaints

20,645

19,832

19,832

17,645

total

46,701

66,756

66,756

61,701

new complaints

mortgage endowment complaints

69,737

50,108

70,000

70,000

other complaints

41,226

32,122

45,000

45,000

total

110,963

82,230

115,000

115,000

cases resolved

mortgage endowment complaints

48,869

51,457

69,000

69,000

other complaints

42,039

34,490

47,000

47,000

total

90,908

85,947

116,000

116,000

closing work-in-progress**

mortgage endowment complaints

46,924

45,575

47,924

45,056

other complaints

19,832

17,464

17,832

15,645

total

66,756

63,039

65,756

60,701

work in hand (weeks)

mortgage endowment complaints

31.2

34.1

36.6

34.0

other complaints

24.3

18.9

17.3

17.3

total

30.7

28.1

27.8

27.0

productivity

mortgage endowment complaints

6.1

5.4

5.3

5.3

other complaints

3.4

3.4

3.4

3.4

total

4.4

4.3

4.3

4.3

closed within 6 months

mortgage endowment complaints

55%

50%

40%

20%

other complaints

72%

73%

70%

80%

total

64%

59%

50%

45%

unit cost

£496

n/a

£457

£456

* 'opening work-in-progress' means the number of cases open at the beginning of the year

** 'closing work-in-progress' means the number of cases open at the end of the year