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corporate plan & 2006/07 budget - complaint trends

enquiries

Enquiries to our ‘front-line’ customer contact division, by phone and in writing, have increased significantly during the year. We have maintained our service standards by making use of resource planning software and by recruiting additional staff.

actual 2004/05
budget 2005/06
forecast 2005/06
budget 2006/07
phone calls to our enquiry line
330,000
340,000
365,000
370,000
written enquiries
285,000
275,000
317,000
320,000
total
615,000
615,000
682,000
690,000

Our customer contact division plays an important role in the early resolution of complaints. At present it is resolving an average of more than 200 complaints per week at this earliest stage. These would otherwise have gone on to be ‘full-blown’ cases and to incur a case fee. Many of these are mortgage endowment complaints and we aim to increase still further the number of mortgage endowment complaints we resolve at this early stage.

new cases

For the reasons outlined in chapter 2 - a demand-led service - forecasting complaint numbers is an inexact science. The total number of new cases is comparatively stable at present and we expect this to continue through 2006/07. We would welcome any comments on our working assumptions.

types of complaint

actual 2004/05
forecast 2005/06
budget 2006/07
estimate 2007/08

endowments linked to mortgages

69,737

70,000

60,000

40,000

pensions

4,696

5,000

4,000

4,000

single premium investment bonds

6,281

5,000

3,500

3,000

other investments

8,274

7,500

7,000

7,500

banking and loans

7,490

9,500

10,500

10,500

mortgages

3,001

4,000

4,000

4,000

insurance

11,484

14,000

13,500

13,500

contingency

-

-

2,500

5,000

total

110,963

115,000

105,000

87,500

As explained in last year’s budget consultation, because of the nature and scale of the complaints we receive about mortgage endowments, we treat them as a separate category and set different service standards for them.

mortgage endowment cases

We have assumed that the number of cases about mortgage endowments will reduce slightly in 2006/07, mainly because of an increase in the proportion of complaints that are obviously time-barred. However there is still the possibility of a surge of cases from consumers whose cases are about to be time-barred.

Following regulatory action by the FSA, we have seen a reduction in the number of mortgage endowment cases brought to us involving larger firms. However, an increase in the number of cases involving smaller firms has resulted in the overall number of mortgage endowment cases reaching us remaining largely the same. This has an effect on productivity, as there can be economies of scale in dealing with batches of complaints from larger firms.

Currently, the number of cases about mortgage endowments that we resolve and close in a week matches the number of cases we receive. On the basis of our current assumptions about new mortgage endowment cases in 2006/07, we expect during that year to resolve and close more cases than we receive. This should lead to a steady reduction of work-in-progress.

other cases We have assumed that cases about other products and services are likely to continue at about the current level. Within the total, the proportion of investment cases has reduced - although the complexity of some of the products involved has increased and the proportion of banking and insurance cases has grown.

The number of cases we resolve and close each week already routinely exceeds the number of cases we receive. We expect the overall reduction in work-in-progress to continue.

workload plans

actual 2004/05
forecast 2005/06
budget 2006/07
estimate 2007/08

opening work-in-progress

mortgage endowment complaints

26,056

46,924

47,924

31,924

other complaints

20,645

19,832

17,832

13,832

total

46,701

66,756

65,756

45,756

new complaints

mortgage endowment complaints

69,737

70,000

60,000

40,000

other complaints

41,226

45,000

45,000

47,500

total

110,963

115,000

105,000

87,500

cases resolved

mortgage endowment complaints

48,869

69,000

76,000

58,500

other complaints

42,039

47,000

49,000

48,000

total

90,908

116,000

125,000

106,500

closing work-in-progress

mortgage endowment complaints

46,924

47,924

31,924

13,424

other complaints

19,832

17,832

13,832

13,332

total

66,756

65,756

45,756

26,756

work in hand (weeks)

mortgage endowment complaints

31.2

36.6

22.5

12.7

other complaints

24.3

17.3

14.2

14.2

total

30.7

27.8

19.2

13.4

productivity

mortgage endowment complaints

6.1

5.3

5.2

5.0

other complaints

3.4

3.4

3.5

3.7

total

4.4

4.3

4.4

4.3

closed within 3 months

mortgage endowment complaints

20%

15%

20%

other complaints

42%

35%

45%

total

32%

25%

30%

45%

closed within 6 months

mortgage endowment complaints

55%

40%

45%

other complaints

72%

70%

80%

total

64%

50%

60%

75%

closed within 9 months

mortgage endowment complaints

75%

65%

70%

other complaints

82%

85%

85%

total

80%

75%

80%

90%

closed within 12 months

mortgage endowment complaints

92%

80%

90%

other complaints

88%

90%

90%

total

90%

85%

90%

95%