corporate plan and 2010/11 budget
plans for 2010/11 and beyond
In the year ending 31 March 2011, we aim to:
- resolve even more cases;
- work towards eliminating waiting times;
- reduce our unit cost;
- freeze the total levy (paid by all financial businesses) at the same amount as in 2009/10; and
- freeze the amount of our case fee at the level that applied in 2009/10.
Our 2010/11 budget assumes:
- we will receive about 190,000 new cases;
- we will close 210,000 cases;
- the unit cost will reduce to £540; and
- operating costs will be £113.5 million, reflecting the increased workload.
In view of potential volatility in the number and type of new cases, the budget assumes that we will use our outsource partners to close around one third of the cases. We can adjust this proportion up or down if the number of new cases is significantly more or less than planned, though the premium involved in outsourcing would affect the financial outturn.
During 2010/11 we also plan to:
- meet the needs of our users by working in a way that combines efficiency with quality and customer service;
- begin to implement the recommendations from our business-process improvement project, to improve service, efficiency and cost effectiveness;
- enhance our organisational capabilities, in response to the increased size of our organisation - while maintaining the flexibility to scale both up and down in line with future demand;
- work collaboratively with other public bodies and with stakeholders in order to support the public interest and improve the availability of redress for consumers;
- assure our stakeholders of the effectiveness and value for money of what we do, including by commissioning a value-for-money study by the National Audit Office; and
- further improve the accessibility and transparency of our service, including preparation for the ombudsman service to come under the Freedom of Information Act.
meeting the operational challenge
A crucial aspect of our planning is forecasting the number of cases likely to be referred to us by consumers who are dissatisfied with the way a financial business has handled their complaint. Our objective is to ensure that the ombudsman service is capable of dealing in a cost-effective and timely way with changes in both the number and the types of cases referred to us.
The situation can alter rapidly as a result of many factors. These include the behaviour of financial businesses, the growing impact of proactive intervention by regulators, and increasing consumer activism (noting that data published by the financial services regulator suggests consumers currently pursue only about one in ten of complaints rejected by financial services businesses).
Annex A gives a breakdown of new cases by product for three scenarios: our central assumption of 190,000 new cases; a pessimistic assumption of 228,000 new cases; and an optimistic assumption of 165,000 new cases. These scenarios reflect discussions with the businesses likely to have the largest number of cases referred to us, as well as our own analysis of trends. We would particularly welcome views on the different scenarios.
Our plans for meeting the operational challenge presented by uncertainties in our workload include the following:
- We will continue to manage volatility in our caseload by using our two outsource partners. We intend to maintain our relationships with these partners to help us to scale up and down quickly in a response to a variety of scenarios.
- This includes using one of our outsource partners to handle all cases about mis-selling of PPI, because this is the area in which we foresee the greatest uncertainty about the number of new cases we will receive.
- On our central caseload assumption, we would not need to increase the in-house case-handling capacity that we have built up during 2009/10, and we would confine recruitment to replacing existing case-handlers who leave us and to filling any "capability gaps".
- Consolidating of our in-house capacity should help to deliver better productivity, as recently recruited case-handlers reach their potential and as more experienced case-handlers spend less time mentoring them.
- We will recruit more ombudsmen, including some on a part-time basis similar to that used for some judges, to help tackle the increasing numbers of cases where customers and financial businesses do not agree with the initial view set out by our adjudicator.
- We plan to resolve 20,000 more cases than we expect to receive, so that - if the number of new cases is within the range of our working assumptions - we will be able to bring waiting times down to a minimum.
- As we reduce waiting times, we will retrain and redeploy case-handling staff from one area of complaint to another, as required by any significant changes in the proportions of different types of incoming cases. This will have an increasing impact on productivity.
efficiency, quality and customer service
Our objective is to meet the needs of our users by working in a way that combines efficiency with quality and customer service - although the variable quality of complaint-handling by some financial businesses and claims-management companies has a significant impact on our productivity. Our plans include the following:
- We will introduce further efficiencies in our operating model - through measures already underway (such as improving the way we communicate our decisions) and through longer-term measures flowing from our business-process improvement project.
- Our processes already rely on a high degree of robust IT, but we will examine and implement further ways of using technology to improve the way in which we manage our workload and communicate with our users.
- We will continue to integrate our processes for complaint-handling, quality and customer service, so that our business-process improvement project can deliver both quality and customer service improvements as well as value-for-money objectives.
- Our immediate focus in quality and customer service is to work towards eliminating waiting times for users, without detracting from other aspects of quality. We will then focus on developing other areas of quality and customer service.
- We will continue to develop our quality-assurance framework - extending our risk-based auditing capabilities, improving and extending team audits, and enhancing our service review team so that it can help resolve potential problems earlier in the process.
- We will continue to engage with employees at all levels, ensuring that they are both involved and accountable, in order to maintain a culture of quality and customer service throughout the organisation.
enhancing organisational and management capabilities
We aim to enhance our organisational and management capabilities, in response to the increased size of our organisation - while maintaining the flexibility to scale both up or down in line with future demand. Our plans include the following:
- We will continue to enhance both our business-planning capacity and our risk-management capability.
- We will identify any "capability gaps" across the organisation and take steps to fill them, including through targeted recruitment. And we will develop improved succession-planning and leadership-development processes.
- We will further develop our induction, training and mentoring arrangements, to enable recently-recruited case-handlers to reach their potential quickly - while allowing experienced case-handlers to spend less time on training and mentoring new colleagues.
Our objective is to work collaboratively with other public bodies and with stakeholders to support the public interest - so far as the independent role given to us by Parliament allows - recognising that good outcomes can be achieved by a range of formal and informal means. Our plans include the following:
- We will continue to work with others to improve the availability of redress for consumers - and to identify ways in which we can work collaboratively in the public interest when our respective statutory roles overlap.
- This includes enhancing the existing processes for identifying new and emerging problems, giving regulators an opportunity to step in and put things right quickly, and supporting processes to improve the handling of so-called "mass claims" (such as in PPI) arising from past problems.
- We will continue to alert financial regulators to the comparatively small number of financial businesses that cause us significant concern, and to alert the Ministry of Justice where we have concerns about the methods of some claims-management companies that bring cases to us.
- We will engage firmly but constructively with the comparatively small number of financial businesses that account for the majority of our caseload, feeding back the lessons learned from our work in order to help reduce complaints.
- We will continue dialogue with industry and consumer stakeholders through our newly-restructured liaison groups, so that key issues involving the ombudsman service are discussed openly in a timely way.
- We will continue to work through FIN-NET - the EU Commission-sponsored network of European financial dispute-resolution bodies - to ensure the appropriate handling of cross-border complaints.
accounting for what we do
We aim to assure our stakeholders of the effectiveness and value for money of the service we provide. To that end our plans include the following:
- We will freeze the total levy and the amount of the case fee for 2010/11 at the levels which applied in 2009/10.
- We will encourage scrutiny of what we do through our continuing commitment to transparency and openness - by expanding further the extensive range of information and data we make available about our approach and the outcome of our work.
- This includes continuing to publish a full range of data about the complaints that we handle, including business-specific complaint data - on which we will work closely with the financial services regulator over its own publication plans.
- In particular, we will finalise a comprehensive "publication scheme" (in line with the Information Commissioner's guidance) in advance of becoming subject to the Freedom of Information Act, as proposed by the Ministry of Justice.
- Our independent public-interest board has asked the National Audit Office to conduct a value-for-money study - as part of our regular pattern of three-yearly external reviews.
The National Audit Office review is likely to start towards the end of 2010, and we would welcome views from our stakeholders now about particular aspects of efficiency and/or effectiveness that the review might focus on.