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forecast volumes and "case mix" for 2011/2012

in this chapter:

  • We set out the levels of demand we expect to deal with in the next financial year (2011/2012) - in terms of the range of numbers of enquiries and new cases, and the "case mix" involved.
  • We use our plans for 2011/2012 (as set out in chapter 3) as a guide to how we will handle the case volumes and "case mix" we are forecasting.

case volumes in 2011/2012

Recent events reinforce the lessons of the past decade - that our workload is inherently difficult to forecast with any degree of certainty. A wide range of external factors can affect the volumes we receive and the mix of the cases we see.

These factors include the standards of complaints handling by businesses, the extent of any regulatory action, the economic climate, and the behaviour of consumers. Sudden large surges in complaints about the same product or topic ("mass claims") also have a very substantial impact on our workload. Mass claims are usually driven by internet campaigns, claims-management companies and publicity in the media.

For example, over the last ten years we have seen significant volumes of complaints involving mortgage endowments, dual variable-rate mortgages, split-capital investment trusts, "precipice" bonds, credit-card default charges and unauthorised-overdraft charges.

In planning for the future, we need to accept that the uncertainty surrounding these factors is likely to remain a permanent feature - which we have to build into our operational and financial planning. In view of the difficulty in forecasting case numbers with any accuracy, we are therefore focusing on strengthening our operational capability to respond quickly and effectively to changeable demand levels.

However, forecasting future case volumes and trends remains essential - given the costs and time-scales that are inevitably involved in increasing, or reducing, our operational capacity. We are therefore keen to hear the views of our stakeholders on our likely workload in the 2011/2012 financial year - in terms of total volumes and trends by financial product or sector.

expected enquiries in 2011/2012

Our front-line customer-contact division is the first point of contact for customers with problems and complaints. We can sort out around 80% of these enquiries without needing to take on the matter as a formal case.

We do this by explaining the formal procedures that financial businesses have to follow - and confirming the details of the person consumers should complain to at a business, if they have not already done this. We also give consumers the facts and information they need, to be able to resolve problems themselves at the earliest stage possible.

We expect the volume of front-line enquiries we will receive next year to stay broadly in line with current levels. However, this area of our operation is particularly sensitive to the impact of internet campaigns, media coverage and promotional activity by claims-management companies. These can all result in raised consumer awareness of specific issues - and substantial surges of enquiries.

front-line consumer enquiries actual 2009/10 forecast 2010/11 budget 2011/12
phone calls 448,140 450,000 400,000 to 600,000
written enquiries 476,995 480,000 400,000 to 600,000
total 925,095 930,000 800,000 to 1,200,000

expected number of new cases in 2011/2012

Subject to feedback from stakeholders as part of this consultation, we propose to work on the assumption that the base number of new cases we will receive in 2011/2012 (other than PPI cases) is likely to be the same as our forecast for the current year (2010/2011) - 105,000 cases plus or minus 15%.

Given the operational uncertainties arising out of the British Bankers Association's judicial review of PPI-related matters, it is difficult to forecast the volumes of PPI cases we will receive in 2011/2012. However, at this stage we propose to plan on the assumption that we will receive around 60,000 PPI cases (plus or minus 20%) in the next financial year.

new cases actual 2009/10 forecast 2010/11 budget 2011/12
banking 65,371 61,300 51,000 to 69,000
insurance (not including PPI) 19,838 20,500 17,600 to 23,800
investment 22,278 16,400 13,400 to 18,200
consumer credit 6,329 7,800 7,200 to 9,800
PPI (payment protection insurance) 49,196 68,000 48,000 to 72,000
total 163,012 174,000 137,000 to 193,000

expected number of resolved cases in 2011/2012

Our plans to improve the time it takes us to resolve cases should mean that we are able to settle around 15,000 more cases in 2011/2012 than we expect to receive. This is on the assumption that the challenges to dealing with PPI cases do not increase the numbers of cases we have in hand at the end of the 2010/2011 financial year.

The table below shows the range of numbers for the cases we expect to resolve in the 2011/2012 financial year.

cases resolved actual 2009/10 forecast 2010/11 budget 2011/12
banking 80,793 67,500 52,500 to 70,500
insurance (not including PPI) 20,687 18,500 18,600 to 24,800
investment 24,229 18,000 13,700 to 18,500
consumer credit 5,297 7,000 7,200 to 10,200
PPI (payment protection insurance) 35,315 69,000 60,000 to 84,000
total 166,321 180,000 152,000 to 208,000