FOS publishes 2006/07 budget

Amanda Jarvis

January 13, 2006

The budget – which analyses expected workload, financial resources and staffing – shows the continued impact of mortgage endowment complaints on the ombudsman service. Following an expected 28% annual increase in the total number of disputes resolved by the service in the current financial year (2005/06), the number is anticipated to rise again in the next financial year (2006/07) to a record 125,000 cases – with the volume of mortgage endowment complaints likely to peak during the year.

The average cost of resolving a dispute – the ombudsman service's unit cost – is estimated at £472 for 2006/07. This is in line with previous unit costs of £496 (for 2004/05) and £457 (forecast for 2005/06) – and compares with a unit cost of £753 in 2000/01. The full cost of staff recruited in recent years to deal with the increased volumes of complaints – together with planned capital expenditure on phone and IT systems – means that operating costs in 2006/07, at £58.9m, are forecast to be 10% higher than in 2005/06.

Following a five year period during which the number of complaints to the ombudsman service has increased more than fourfold and the service has almost tripled in size – as a result of the large volumes of mortgage endowment complaints – the corporate plan looks ahead to new challenges in the next three years. The plan sets out an agenda of planned improvements and activities, including:

the extension of the ombudsman service's remit to cover consumer credit complaints;
a review of how the costs of the ombudsman service are apportioned among financial firms;
enhancements to the internal quality-management system; and
a review of the arrangements through which we liaise, communicate and share information with firms, industry bodies and consumer groups.

The corporate plan & 2006/07 budget are on the ombudsman service website at:

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