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corporate plan & 2006/07 budget - overview of budget

The first section of this document - the corporate plan - describes the context for our planning and budgeting over the next three years or so. The following section - 2006/07 budget - details:

  • how, in the current year (2005/06), we are meeting the forecasts we made in our plan & budget for the year (chapter 6 - 2005/06 forecast);
  • complaint trends and our expected workload for 2006/07, together with a forward look at an estimate for 2007/08 (chapter 7 - complaint trends); and
  • our proposed financial budget for 2006/07, for consultation (chapter 8 - 2006/07 budget and case fees).

2005/06 The number of new complaints referred to us - and our performance in handling cases - are both broadly as we forecast in our 2005/06 plan & budget, on which we consulted in January 2005.

2006/07 and 2007/08 In 2006/07 and 2007/08 we expect to see a gradual decline in the number of new mortgage endowment complaints referred to us, compared to the number we resolve. The number of mortgage endowment cases we resolve is forecast to peak in 2006/07, falling back only slightly in 2007/08. We expect the exceptionally high level of work-in-progress resulting from the growth of mortgage endowment complaints in 2003/04 and 2004/05 to have eroded significantly by March 2008. Other incoming complaints are forecast not to exceed the number resolved.

We expect the financial resources needed to handle our caseload in 2006/07 to increase. This reflects the full impact of the expansion that has been necessary over the past two years and of essential investment in our infrastructure. We anticipate that the number of cases to be resolved in 2007/08, after the peak in 2006/07, will then decline only to about the current level (2005/06).

2008/09 and beyond Looking further forward - to 2008/09 and beyond - becomes increasingly speculative, for the reasons outlined in chapter 2 - a demand-led service. Mortgage endowment complaints should have declined. Part at least of the proposed new consumer credit jurisdiction should have taken effect. The regulation of claims intermediaries should have begun. Underlying levels of banking, insurance and investment complaints referred to us are unlikely to change dramatically. But experience tells us that unexpected surges in the number of complaints about particular products can occur.

During 2006/07 we will continue to model the assumptions that affect the level of our work in the longer term, and to plan accordingly.