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corporate plan and 2007/08 budget

January 2007

complaint trends

enquiries

Enquiries to our 'front-line' customer contact division, by telephone and in writing, have been reducing during the year.

  actual
2005/06
budget
2006/07
forecast
2006/07
budget
2007/08
phone calls to our enquiry line 359,131 370,000 320,000 290,000
written enquiries 313,842 320,000 270,000 240,000
total 672,973 690,000 590,000 530,000

Our customer contact division is resolving an average of 160 complaints per week that would otherwise have gone on to be 'full-blown' cases and incurred a case fee.

new cases

The total number of new cases is beginning to fall and this is expected to continue through 2007/08. This reduction is mainly due to mortgage endowment complaints becoming
time-barred.

types of complaint actual
2005/06
budget
2006/07
forecast
2006/07
budget
2007/08
endowments linked to mortgages 69,149 60,000 60,000 32,000
pensions 4,053 4,000 4,000 4,000
single premium investment bonds 4,541 3,500 4,000 3,500
other investments 7,201 7,000 7,000 6,500
banking and loans 11,082 10,500 12,000 13,000
mortgages 3,942 4,000 4,500 4,500
insurance 12,955 13,500 13,500 14,500
consumer credit 0 0 0 2,000
contingency   2,500    
total 112,923 105,000 105,000 80,000

As explained previously, because of the nature and scale of the complaints received about mortgage endowments, we treat them as a separate category and set different service levels for them.

mortgage endowment cases

We have assumed that the number of new cases about mortgage endowments will reduce significantly in 2007/08, mainly as a result of the time limits set by the FSA for bringing complaints. There are considerable uncertainties about the future pattern of these cases.

We expect to reach a point when an increasing number of disputes about time bars will overtake a reducing number of disputes about the merits of cases - but it is not possible to predict when, or how quickly, this will happen.

It is unclear how many cases where there is a dispute about time bars will result in the firm having to pay a case fee. As we have explained in ombudsman news, our regular newsletter, if it is apparent (with full evidence) that the complaint is time-barred at the time we receive it, no case fee will generally be payable. Our working assumption is that we will receive approximately 12,000 such time-barred mortgage endowment complaints in 2007/08.

These 12,000 or so complaints will represent a substantial block of work to be processed. However, for budget purposes they will not be recorded as 'closed cases' but will instead be treated as non-chargeable 'enquiries'. This is consistent with the way in which we usually record complaints that are resolved in our customer contact division. It is also consistent with the presentation of budget figures for previous years.

Excluding these 12,000 complaints, we expect the number of new mortgage endowment cases to fall from about 60,000 in 2006/07 to about 32,000 in 2007/08. We plan to close 54,000 mortgage endowment cases, though the rate at which we resolve and close these cases will slow over the year as the number of adjudicators reduces. Over the year, we expect the number of mortgage endowment cases in progress to more than halve - from about 40,000 in April 2007 to about 18,000 by March 2008.

other cases

We are assuming an increase in banking complaints - partly as a result of the media focus on disputes about bank charges - and a smaller increase in general insurance complaints. We expect investment complaints to continue at the current level while market conditions remain broadly favourable.

Our new consumer credit jurisdiction comes into force in April 2007. But it will relate only to complaints about events after that date, so we expect only about 2,000 cases in the first year. Overall, we expect the number of new cases, other than mortgage endowment cases, to rise to 48,000 in 2007/08.

We aim to close 52,500 cases (compared to 47,300 this year), with an improvement in both productivity and timeliness. For example, by the end of the budget year we aim to be closing half of the cases within 3 months.

workload plans

opening work-in-progress actual
2005/06
forecast
2006/07
budget
2007/08
mortgage endowment cases 49,608 48,000 39,500
other cases 22,701 17,800 15,500
total 72,309 65,800 55,000
new cases actual
2005/06
forecast
2006/07
budget
2007/08
mortgage endowment cases 69,149 60,000 32,000
other cases 43,774 45,000 48,000
total 112,923 105,000 80,000
cases resolved actual
2005/06
forecast
2006/07
budget
2007/08
mortgage endowment cases 70,757 68,500 54,000
other cases 48,675 47,300 52,500
total 119,432 115,800 106,500
closing work-in-progress actual
2005/06
forecast
2006/07
budget
2007/08
mortgage endowment cases 48,000 39,500 17,500
other cases 17,800 15,500 11,000
total 65,800 55,000 28,500
work in hand (weeks) actual
2005/06
forecast
2006/07
budget
2007/08
mortgage endowment cases 32.5 30.0 18.1
other cases 20.3 17.0 11.6
total 28.4 24.7 14.9
productivity actual
2005/06
forecast
2006/07
budget
2007/08
mortgage endowment cases 5.6 5.1 4.7
other cases 3.5 3.5 4.0
total 4.5 4.3 4.3
% closed within 3 months actual
2005/06
forecast
2006/07
budget
2007/08
mortgage endowment cases 20 20 20
other cases 43 50 50
total 32 35 35
% closed within 6 months actual
2005/06
forecast
2006/07
budget
2007/08
mortgage endowment cases 45 45 45
other cases 74 80 80
total 59 60 60
% closed within 9 months actual
2005/06
forecast
2006/07
budget
2007/08
mortgage endowment cases 65 70 70
other cases 84 85 85
total 75 75 75
% closed within 12 months actual
2005/06
forecast
2006/07
budget
2007/08
mortgage endowment cases 80 80 80
other cases 89 90 90
total 85 85 85
image of plan and budget 2007

For printed copies of this or any of our publications, email Aniko Rostagni in our communications team or phone her on 020 7964 0092.