| introduction |
|
6.1
|
Expenditure
for 2002/03, before financing costs, is expected to be £2.2m
above budget, mainly due to the additional staff and staff-related
costs. However, we expect our unit cost to be £544, compared
with the budgeted figure of £688.
|
|
6.2
|
The
budget for 2003/04 (before financing costs) of £32.5m is £2.8m
more than the forecast for 2002/03 – an increase of 9%. The
majority of this increase relates to the staff recruited in 2002/03
to service the increasing levels of complaints. We expect the unit
cost to be £551 – slightly higher than in 2002/03, in
which it was reduced abnormally by the exceptional level of closures.
The increase reflects:
- the
full-year effect of staff recruited in 2002/03;
- additional
staff in 2003/04;
- increased
funding for the final salary pension scheme; and
- the
additional 1% national insurance contributions.
|
|
6.3
|
IT
costs will increase as a result of the licences and equipment we
need to support the additional casework staff, and maintenance charges
on our software. The depreciation charge will increase by £0.5m,
due to our implementing the new unified case system in 2002/03.
This increase is equivalent to £6 on our unit cost.
|
| capital
expenditure |
|
6.4
|
Capital
expenditure of £1.4m is planned in 2003/04. This consists
of £0.3m to fit-out existing accommodation for the additional
staff, £0.4m for IT infrastructure, and £0.7m for IT
development.
|
| summary
of expenditure |
| 6.5
|
|
budget
2002/03
£m
|
forecast
2002/03
£m
|
budget
2003/04
£m
|
| staff
and staff-related costs |
19.7
|
21.1
|
22.9
|
| professional
fees |
0.5
|
0.6
|
0.4
|
| IT
costs |
0.8
|
0.9
|
1.3
|
| premises
and facilities |
3.5
|
4.0
|
4.2
|
| other
costs |
0.3
|
0.4
|
0.5
|
| depreciation |
2.7
|
2.7
|
3.2
|
| operating
costs |
27.5 |
29.7 |
32.5 |
| financing
costs |
0.7
|
0.4
|
0.6
|
| total
costs |
|
|
|
| case
closures |
40,000
|
54,500
|
59,000
|
| unit
cost |
£688
|
£544
|
£551
|
|
| unit
cost per case |
| 6.6
|
The
unit cost per case, analysed over the different parts of our business
process, is as follows:
|
actual
2001/02
£
|
forecast
2002/03
£
|
budget
2003/04
£
|
| case-handling
|
351
|
284
|
282
|
| |
|
|
|
| complaints
prevention |
|
|
|
| customer
contact division |
64
|
47
|
45
|
| external
liaison/publications |
22
|
18
|
18
|
| |
|
|
|
| other |
|
|
|
| administration
(incl board costs) |
86
|
70
|
76
|
| premises
and facilities |
95
|
76
|
75
|
| depreciation |
66
|
49
|
55
|
| |
|
|
|
| total
|
684
|
544
|
551
|
|
| headcount |
| 6.7 |
The
full time equivalent headcount is expected to increase to 550 by
the end of March 2004 as follows:
|
| |
|
budget
2002/03
|
forecast
2002/03
|
budget
2003/04
|
| casework
divisions |
298
|
353
|
383
|
| customer
contact division |
87
|
85
|
85
|
| external
liaison/publications |
16
|
17
|
18
|
| business
improvement |
9
|
9
|
9
|
| knowledge
management |
3
|
7
|
8
|
|
|
|
|
| subtotal |
115
|
118
|
120
|
|
|
|
|
| support
services |
45
|
45
|
47
|
|
|
|
|
| total |
458
|
516
|
550
|
|
| conclusion |
| 6.8 |
Although
our costs have increased above the rate of inflation, this is almost
wholly due to increased volumes of work. Our unit cost has fallen
dramatically, and we have met our three-year target of having a
unit cost that is materially lower than that of our predecessor
schemes.
|
compulsory jurisdiction