This is the second year in which we have consulted on our plan and budget. As before, we are keen to hear from all those with an interest in the cost and efficiency of our service.
In the current year we have had to absorb the full impact of the endowment mortgage complaints generated by the flood of re-projection letters that investment firms have sent to their customers.
The coming year looks to be an uncertain one. HM Treasury's announcement - in December 2001 - that the Financial Services Authority (FSA) will regulate mortgage and insurance intermediaries, means that this area of complaint work will eventually come into our Compulsory Jurisdiction. It is still unclear whether, until then, it can be brought into the Voluntary Jurisdiction in the coming year. But whenever it comes, we can expect substantial increases in the volume of work.
In the short-term, next year's mortgage endowment re-projection letters could increase our workload. On the other hand, there are hopeful signs of a decrease in underlying complaint numbers. We aim to respond flexibly to any major alteration in the volumes of complaints we receive, but it is also important that we maintain a stable organisation.
When, in April 2000, we took over the administration of the schemes we inherited, the average unit cost per case had been £730 in the previous year - 1999/2000. We had immediately to invest substantial sums in the new organisation and the unit cost in 2000/01 rose to £753. Our aim was to bring down the unit cost to the level we had inherited - or below if possible. In the current year, we expect the unit cost to have reduced to £688. Of course, some of that reduction is attributable to the increased volume of complaints. But even if there is a flattening of complaint numbers, we hope to reduce the unit cost in real terms - by absorbing staffing cost increases and inflation - and by keeping the unit cost at the same level as in the current year - £688.
Our budget will require approval from the FSA, and we will report to the FSA on the response to this consultation when we seek final approval.