12 January 2012
The independent review into the Financial Ombudsman Service by the National Audit Office (NAO) has today been published in full.
The review follows a six months' assessment by the NAO of the efficiency of the ombudsman service's operations. It was commissioned by the board of the Financial Ombudsman Service - in line with its voluntary commitment to periodic independent reviews of the service. The review involved a team from the NAO having complete and open access to people, resources and information at the ombudsman service.
The NAO's review - Efficient handling of financial services complaints - contains an overview of the changing nature of financial services complaints and the impact this continues to have on the ombudsman service. It also examines how the service monitors its efficiency as part of its wider approach to "performance measurement" - especially in terms of managing its major "change programme", launched in 2010 to transform and modernise all aspects of its operations in the light of rapid and unpredictable growth in demand for its services.
On the key efficiency challenges facing the Financial Ombudsman Service, the NAO's review concludes that:
As part of its review, the NAO makes five specific recommendations - including more detailed work to assess how the current case-fee charging-structure affects the service's cash-flow and funding; and quantifying more precisely the impact of a range of variable factors on the service's "unit cost".
The chairman of the Financial Ombudsman Service, Sir Christopher Kelly, welcomed the review's findings and recommendations, saying:
Working with the NAO team over the last six months has given us an invaluable opportunity to challenge and test out every aspect of our extensive plans for developing an ombudsman service that's fit for the next decade. As the review concludes, the biggest challenge we face is in dealing with demand that's highly volatile and difficult to predict - while continuing to provide a service that's efficient and value for money, as well as responsive to the needs of our users and stakeholders.
We're currently consulting on how to gear up to be ready to deal with a further substantial increase in our workload next year - as a result of the rising volumes of payment protection insurance (PPI) complaints and the impact of the tough economic times on consumers and businesses alike. Faced with the challenge of resolving a quarter of a million cases next year - a ten-fold increase since we were set up in 2000 - we very much welcome the insight and rigour of this independent review of the efficient handling of financial services complaints.
The review published today by the NAO follows two previous independent reports commissioned and published by the board of the Financial Ombudsman Service - Lord Hunt of Wirral's report on the accessibility and openness of the ombudsman service (in 2008) and the report on the service's case-handling procedures and systems carried out by Bristol University's Personal Finance Research Centre (in 2004).
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