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update on our plan & budget for the year 2003/04

September 2003

  1. In January 2003 we published our plan & budget - a consultation document on our proposed budget and workload projections for the financial year 2003/04. Following feedback we received on the document - especially suggestions from the financial services industry about the number of new mortgage endowment complaints we needed to budget for during the year - we published an updated budget in April 2003. This showed revised figures for the financial year ahead.
  2. Because of the significant increase in the volume of complaints coming to the ombudsman service in recent months, we believe that a further update on our planning and budget figures is now necessary. This update gives an interim progress report on complaint numbers and our workload half way through the financial year. It shows a very substantial - and unexpected - upturn in the number of new cases that are now being referred to the ombudsman service. The figure is far higher than the number estimated at the beginning of the year, following our consultation with financial firms.
  3. In the spring of 2003, it was agreed that we should budget to receive 60,000 new complaints during the year 2003/04 - including 20,000 mortgage endowment cases. However, given the recent surge in complaints, we now estimate that we will receive 98,000 new complaints during the year. We expect 50,000 of these to be mortgage endowment-related.
  4. This means we are now planning to receive two and a half times as many mortgage endowment complaints as we originally expected. This revised estimate for the volume of complaints we now expect to receive in 2003/04 assumes a 58% increase on the number of complaints we received in 2002/03 (which, in turn, was a 44% increase on the number of complaints we received in 2001/02). We are now already receiving 2,000 new complaints every week (compared with 1,000 complaints a week, this time last year). Half of these are mortgage endowment complaints.
  5. We have already introduced a range of initiatives to deal with our rapidly increasing workload. This includes adopting new case-handling procedures, taking a more flexible approach to managing caseloads, recruiting new staff, and finding new ways of moving and re-allocating resources to deal with increasingly unpredictable flows of work.
  6. Over the next few weeks, we will be meeting our stakeholders - including the FSA and consumer and industry groups - to discuss in more detail the budgetary impact of our increased caseload and the operational ramifications, in terms of managing our workload as efficiently as possible. Following this further consultation exercise, we aim to publish more detailed figures in January about our revised plan and budget for the years 2003/04 and 2004/05.
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