corporate plan and 2008/09 budget

January 2008

2007/08 forecast

This chapter deals with our forecast for the current year, ending 31 March 2008.

new complaints

Our 2007/08 budget assumed that we would receive 80,000 new cases, a 15% decrease from the previous year.

Mortgage endowment complaints are likely to fall to under half the level expected, but this shortfall has been more than made up by the large number of complaints we received relating to charges for unauthorised bank overdrafts. Because of the test case in the High Court involving the OFT, complaints of this type are now on hold unless they involve financial difficulty or other considerations.

Our forecast is that we will receive 103,300 new complaints by the end of March 2008, 29% above the budget figure.

cases resolved

Our 2007/08 budget assumed that we would settle and close 106,500 cases. Our current forecast is that we will settle and close about 94,000 cases.

The shortfall is mainly due to lower than expected numbers of adjudicators available to close cases, and to lower productivity – caused partly by the increasing complexity of cases and partly as a result of implementing the restructuring of the service. There is significant uncertainty as to the levels of productivity in the later part of the year.

timeliness

Timeliness figures for 2007/08 are expected to be better than budgeted, assisted by the early settlement of a significant number of cases concerning overdraft charges.

unit cost

Our 2007/08 budget assumed that our unit cost (total costs excluding restructuring costs and financing charges, divided by the number of cases closures) would be £535. Our current forecast is a little higher at £571, reflecting the lower number of case closures.

opening work-in-progress*	actual 12 months 2006/07	actual 9 months 2007/08	forecast 12 months 2007/08	budget 12 months 2007/08
mortgage endowment cases	47,572	29,829	29,829	39,500
other cases	16,745	17,207	17,207	15,500
total	64,317	47,036	47,036	55,000

new cases	actual 12 months 2006/07	actual 9 months 2007/08	forecast 12 months 2007/08	budget 12 months 2007/08
mortgage endowment complaints	46,134	11,682	14,500	32,000
other cases	48,258	83,524	88,800	48,000
total	94,392	95,206	103,300	80,000

cases resolved	actual 12 months 2006/07	actual 9 months 2007/08	forecast 12 months 2007/08	budget 12 months 2007/08
mortgage endowment cases	63,877	24,124	31,000	54,000
other cases	47,796	53,837	63,000	52,500
total	111,673	77,961	94,000	106,500

closing work-in-progress**	actual 12 months 2006/07	actual 9 months 2007/08	forecast 12 months 2007/08	budget 12 months 2007/08
mortgage endowment cases	29,829	17,387	13,329	17,500
other cases	17,207	32,894	29,007	11,000
subtotal	47,036	50,281	42,336	28,500
overdraft charge cases on hold	0	14,000	14,000	0
total	47,036	64,281	56,336	28,500

work in hand (weeks)	actual 12 months 2006/07	actual 9 months 2007/08	forecast 12 months 2007/08	budget 12 months 2007/08
mortgage endowment cases	23.9	36.8	52.9	18.1
other cases	18.6	20.1	22.3	11.6
total	21.7	26.2	29.8	14.9

productivity	actual 12 months 2006/07	actual 9 months 2007/08	forecast 12 months 2007/08	budget 12 months 2007/08
mortgage endowment cases	4.5	2.6	2.8	4.7
other cases	3.6	5.3	4.5	4.0
total	4.1	4.0	3.7	4.3

% closed within 6 months	actual 12 months 2006/07	actual 9 months 2007/08	forecast 12 months 2007/08	budget 12 months 2007/08
mortgage endowment cases	44	39	35	45
other cases	81	86	85	80
total	61	72	70	60

	actual 12 months 2006/07	actual 9 months 2007/08	forecast 12 months 2007/08	budget 12 months 2007/08
unit cost	£484	n/a	£571	£535

*‘opening work-in-progress’ means the number of cases open at the beginning of the year

**‘closing work-in-progress’ means the number of cases open at the end of the year