The budget - which analyses expected workload, financial resources and staffing - shows the continued impact of mortgage endowment complaints on the ombudsman service. Following an expected 28% annual increase in the total number of disputes resolved by the service in the current financial year (2005/06), the number is anticipated to rise again in the next financial year (2006/07) to a record 125,000 cases - with the volume of mortgage endowment complaints likely to peak during the year.
The average cost of resolving a dispute - the ombudsman service's unit cost - is estimated at £472 for 2006/07. This is in line with previous unit costs of £496 (for 2004/05) and £457 (forecast for 2005/06) - and compares with a unit cost of £753 in 2000/01. The full cost of staff recruited in recent years to deal with the increased volumes of complaints - together with planned capital expenditure on phone and IT systems - means that operating costs in 2006/07, at £58.9m, are forecast to be 10% higher than in 2005/06.
Following a five year period during which the number of complaints to the ombudsman service has increased more than fourfold and the service has almost tripled in size - as a result of the large volumes of mortgage endowment complaints - the corporate plan looks ahead to new challenges in the next three years. The plan sets out an agenda of planned improvements and activities, including:
the extension of the ombudsman service's remit to cover consumer credit complaints;
a review of how the costs of the ombudsman service are apportioned among financial firms;
enhancements to the internal quality-management system; and
a review of the arrangements through which we liaise, communicate and share information with firms, industry bodies and consumer groups.
The corporate plan & 2006/07 budget are on the ombudsman service website at:
http://www.financial-ombudsman.org.uk/publications/pb06/index.html
