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corporate plan and 2007/08 budget

January 2007

actions we will take in 2007/08 and beyond

Taking into account the factors outlined in the previous chapter, we propose a range of actions for the three years from 1 April 2007 to 31 March 2010. These include continuing many, and updating some, of the work streams described in the corporate plan published in January 2006.

The required actions fall largely into four broad themes: processes and systems; flexible resources; accountability; and serving justice. The actions will be delivered by a range of work both in 2007/08 and in the following two years.

processes and systems

Our objective is continuous improvement of our processes and systems, so that they remain capable of delivering a cost-effective redress service which meets ever-rising expectations.

The secure foundations provided by our original business processes and infrastructure helped us cope effectively with a rapidly increasing workload and a constantly changing mix of complaint types. But such processes and systems require regular evaluation and re-engineering if they are to remain capable of delivering a service that meets increasing expectations, while remaining cost-effective.

So we will undertake a range of actions to review and renew the effectiveness and efficiency of the processes we use to handle the enquiries and cases we receive, and the systems and infrastructure that underpin these processes.

We will continue to review and improve our enquiry-handling, case-handling and quality-assurance processes - in order to deliver an increasingly user-friendly, cost-effective and timely service, with quality outcomes for consumers and for businesses providing financial services.

In doing so, we will enhance the adaptability of our processes to a changing mix of complaint types. This will include exploring whether the most effective outcomes are likely to be delivered by solutions specifically tailored to some particular types of case or user. This work will build on initiatives already undertaken in relation to (for example) mortgage endowment cases, split-capital investment trust cases and cases involving those financial services businesses which seldom use the ombudsman service.

And we will proceed to the next phases of our medium-term programme for introducing new IT and telephony systems that will enhance flexibility and resilience. This includes extending document-imaging, so that we can continue our work even if an emergency prevents access to our files, and further protection against constantly developing external threats to the security of IT systems.

The new systems will be scalable in order to deal with fluctuations in volumes, and provide greater flexibility to cope with a widening range of activities. We aim to deliver the medium-term advances incrementally, without any adverse effect on current operations.

flexible resources

Our objective is to manage staff and other resources so as to provide an efficient and effective service, irrespective of future fluctuations in numbers and types of cases.

Uncertainties about short-term and longer-term fluctuations in workload, coupled with a need to contain costs, require us to: maintain maximum flexibility of resources; allocate those resources according to the particular priorities of the time; examine costs, and reduce them where practicable.

Our policies for recruiting and retaining staff will be kept under review. Appropriate budgetary provision will be required to ensure we remain competitive as an employer and can retain skilled and knowledgeable staff.

Building on the foundation of our recently-launched skills database, we will continue to enhance our systems for developing and training our staff. This will ensure we can retain the knowledge and expertise that our staff have built up, and enhance the ways in which we share and add to that knowledge. As the total number of staff declines through natural turnover, our aim is to increase flexibility through further increases in the proportion of staff possessing the technical skills to handle cases from more than one financial sector.

We will continue to develop our systems for: predicting future workloads; identifying trends; prioritising allocation of resources; and assuring the quality of the output. We aim to improve our service standards for most types of case, while maintaining, in the short term, a different set of service standards for mortgage endowment cases.

In due course, we will launch a study to consider what changes are likely in the world around us - both within the period to 2010 and beyond - including: general working and communication methods; the expectations of those who use our service; the profile of businesses providing financial services; the social profile of consumers; and the role of third parties such as claims-management companies.

These changes are likely to affect: the expectations of our users; the types of disputes we will be required to handle; and the working conditions we will need to offer in order to retain and recruit quality staff.

accountability

Our objective is to enhance dialogue with our stakeholders so that we remain responsive to their needs and to the public interest, while continuing to provide an impartial service.

It is fundamental that we remain independent and impartial in deciding cases. But it is also important to maintain dialogue with firms, consumers and other stakeholders in order to provide our service in a way that meets reasonable expectations.

The range of options for the future funding of our compulsory jurisdiction has been helpfully narrowed by the responses to a wide-ranging discussion paper on this topic, issued jointly by the ombudsman service and the FSA. Further work is required to analyse how these options would operate in various possible scenarios.

To allow sufficient time to complete this - and taking into account both associated system changes and the need to give FSA-regulated businesses ample advance notice - it will not be possible straight away to introduce significant changes in the way we are funded. So, later on in this document, we consult on our budget for 2007/08 in the usual way.

In the first half of 2007 the ombudsman service and the FSA aim to build on the responses to the discussion paper by producing a further paper - on the way forward. This will also have implications for the voluntary jurisdiction of the ombudsman service.

We will continue to work closely with the FSA as it moves towards implementing regulation that is more principles-based. And we will continue to explore ways of enhancing the predictability of our approach, through the information we publish about cases and outcomes in ways that are consistent with this more principles-based approach.

We will continue our regular consumer-satisfaction surveys, and support them with focused research on our accessibility to consumers. Other research will include a comprehensive rolling programme of quarterly reviews, to seek objective feedback from all types of financial services businesses, and a review of our existing liaison arrangements with different industry sectors.

In addition, we need to ensure that our service contributes to the wider public good, by helping to reduce the causes of complaints and to increase the resolution of complaints before they reach the ombudsman service. This work is underpinned by our range of external liaison activities.

As our 'smaller-businesses taskforce' concludes its work, we will establish a new 'accessibility taskforce'. This will review the accessibility and availability of our service to all consumers of financial services, whoever they are and whatever their backgrounds. It will take into account, among other things, the extension of our role into new areas of consumer credit with a different customer base.

As a public-service organisation, we have already committed ourselves to external scrutiny through a three-yearly independent review. The last review was in 2004, so we have started to prepare for a further external review during 2007. The external review will have two themes:

  • It will help to inform the work of our 'accessibility taskforce' - by considering, from an external perspective, whether the ombudsman service ought to do more in order to be visible and accessible to those it is designed to serve.
  • It will also consider whether the ombudsman service is making the most effective use of the information and experience derived from its dispute-resolution work, in order to add value for the benefit of industry, consumers and regulators.

serving justice

Our objective is to help secure wider public benefits by using our expertise and resources to help enhance and extend accessible and effective dispute-resolution.

As previously mentioned, the scope of the ombudsman service has been extended on a number of occasions, and further extensions are in prospect. We have replaced eleven stand-alone complaints-handling bodies with a single independent ombudsman service. Our remit has also been extended to sectors where there were previously no independent dispute-resolution bodies.

During 2007/08 we will start providing an independent dispute-resolution service for complaints involving:

  • advice on self-invested personal pensions;
  • sale and administration of home-reversion plans and Islamic home-purchase plans; and
  • most significantly, a wide range of consumer credit activities.

For some years we have covered complaints about loans and credit cards provided by
FSA-regulated businesses. 2007/08 will see us covering complaints about loans and credit cards provided by other businesses. We will also cover complaints about a range of businesses including store-card providers, hire companies, credit brokers, debt-adjusters, debt-counsellors, debt-collectors and credit reference agencies.

During 2008/09, when the scope of consumer-credit licensing is extended, our remit is likely to be widened again to cover complaints about both debt administration and credit information services.

The activities for which new redress schemes are proposed, and the way in which such schemes are delivered, are constantly developing. Some areas associated with financial services remain under review. And the government plans to introduce or encourage redress schemes in other areas.

For example, its proposals for a statutory scheme for complaints about legal services in England and Wales are based on the Financial Ombudsman Service model. And these proposals are paralleled by the Scottish Executive's intention to produce a similar scheme for complaints about legal services in Scotland.

Those involved in developing schemes such as these have already spent considerable time with us, investigating our processes and experience. We will need to continue to engage constructively with them, while maintaining our focus on existing work.

Nationally, we will continue to cooperate with our colleagues in the British and Irish Ombudsman Association. In Europe, we will continue to work with the European Commission and with our colleagues in the steering committee of FIN-NET, to provide a comprehensive network of redress for cross-border financial disputes in the developing European single-market.

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.