Written evidence from the Financial Ombudsman Service (FOS0001)

Background

The Financial Ombudsman Service was established by Parliament through the Financial Services and Markets Act 2000, bringing together ombudsman schemes that covered separate parts of financial services into a single scheme. The legislation provides for us to deliver quick and informal resolution to complaints from consumers about financial businesses. We decide what is fair and reasonable in the circumstances of each individual complaint. We deal with complaints about most financial matters – from payday loans and pet insurance, to pensions and investments – and our decisions are legally binding if they are accepted by the person making the complaint. We resolved a total of 336,381 complaints in 2016/17.

The chart in appendix A shows how the number and type of complaints that we have dealt with has changed over the years. As a demand-led organisation we’ve faced a number of challenges over the years – including responding to large-scale industry issues such as mortgage endowment mis-selling and, most significantly, payment protection insurance (PPI) mis-selling. From 2011, complaints about PPI began to rise sharply – at its peak in 2012/13 we were receiving almost 14,000 complaints a week, and PPI made up 74% of all complaints we received that year. By the end of December 2017 the total number of complaints we had received about PPI reached 1.8m. Two external events in particular have at times affected our ability to progress these – a 2011 legal challenge by the British Bankers’ Association to the Financial Services Authority’s guidance and the ombudsman service’s approach, and the Supreme Court’s 2014 judgment in the case of Plevin v Paragon Personal Finance. The Plevin judgment required further guidance from the FCA, which came into effect in August 2017.

Dealing with PPI complaints on such an unprecedented scale from 2010/11 onwards, without compromising on the quality of our work, meant we had to more than triple the size of the ombudsman service very quickly (from around 1,300 people) at a time when much of the public sector was reducing in size.

The introduction of the FCA’s PPI complaint deadline, which will come into effect in August 2019, means we are likely to see more complaints as the deadline approaches – but after the deadline we can expect to receive significantly fewer complaints about PPI. We’re preparing for a future where the number of complaints that we will be handling and the size of our organisation are likely to be smaller. Similarly, we need to ensure that our model is financially sustainable and sufficiently flexible post-PPI. We are currently preparing for the transfer of complaints about claims management companies, and stand ready to take on responsibility for handling complaints from larger SMEs if asked.

Financial services have changed considerably since we were established in 2000, especially the speed with which consumers are able to access some products and communicate with businesses. So expectations of a quick and informal service have evolved and our service needs to keep up with this change to make sure we’re meeting the needs of all our customers – consumers and financial businesses alike.

Our change programme

An example of why our service has needed to change is payday lending. For a product which is about meeting immediate need and where a loan can be arranged within a matter of minutes, it became clear that the existing complaints process was not ideal, because it required a consumer to complain to a business and then wait 8 weeks before we could get involved. So, in 2014, we trialled a new way of dealing with payday loan complaints. The trial involved a team seeing if they could help straight away – and they found that often they could, sometimes within a matter of hours. This was because the focus was less on following a formal process, and more on listening and trying to solve the problem.

Following the success of the payday loan trial, it became clear that the learning could be applied across much of our casework. So, we expanded the trial and ran pilots in 2015 to test different approaches to making a new model work, starting with the principle of intervening earlier to resolve complaints.

In 2016/17 we started to roll out this approach more widely. The vision behind this was informed by the successes and learning from our earlier trials and pilots and the positive feedback received from consumers and businesses, with the delivery of our ideas and thinking supported throughout by consultants from PwC. They provided programme management support in designing the trials and implementing the new model, as well as providing additional training for managers in performance management – see appendix B.

The key features of the service we are building are:                           

        resolving complaints at the earliest opportunity – doing more on the phone and online

        ombudsmen providing professional leadership at the heart of our casework teams, rather than at the end of the process

        case handlers able to respond to a wider range of problems

To support these changes we are also investing in our technology, including replacing our case management system and introducing a user portal – designed around customers, rather than process. We have developed new ways of sharing knowledge across the organisation. And we are continuing to work closely with businesses and consumer groups to help prevent complaints being referred to us in the first place.

Where we are now

Feedback from consumers and financial businesses has been positive. For example, we have worked with the Institute of Customer Service to ensure that we have independent customer satisfaction measures. Our 2017 customer satisfaction score was 74.9%, an increase of four percentage points on the previous year. We have also been able to resolve complaints much more quickly – appendix C shows the progress we have made since 2015 in resolving complaints within 90 days.

We understand that working for an organisation which has grown rapidly, but is now changing the way in which it works and preparing to operate on a smaller scale in future, has caused significant uncertainty for our staff. So it has been important to understand what this has meant for individuals, in order to address it. In 2016 we engaged Facta consultants who conducted a significant programme of staff engagement focus groups, in order to inform a major staff survey which took place in May last year. Although the survey showed that staff are very committed, it confirmed some areas of particular concern. These are being tackled through a series of measures, including the launch of new staff policies, improving internal communications and increased visibility of senior managers.

All of this will help ensure we are able to deliver our vision of a lower cost and flexible service, able to keep up with changes in consumer expectations, technology and other challenges, now and in the future. We are currently consulting on our plans and budget for 2018/19, which contains further details, including the numbers of complaints we expect to see about PPI, banking, insurance, and short-term lending in the next financial year.

Appendix A

Appendix B

Our requirement was for consultants to work alongside our internal teams to help us establish and deliver a programme to achieve our strategic vision – in particular, we needed support around programme and project management. PwC were awarded the contract following a competitive process on the Crown Commercial Service’s ConsultancyONE framework. The process ensured that we selected the most suitable supplier based on their responses to the qualitative evaluation questions around their proposed approach and relevant experience – as well as being competitively priced to ensure we got value for money. Our change programme has taken place in four phases:

phase 1

We adopted an agile approach in phase 1, which began in June 2014. This involved testing ideas on a small scale to find out if they were what consumers and businesses wanted and needed. PwC supported our first trials – which were limited to our payday lending work. They also supported the articulation of our target operating model, as well as preparing for ADR regulations which would come into force in April 2015.

phase 2

Following the early trials in our payday lending work, we used our learning to explore whether we could apply the same approach to other parts of our casework. PwC provided programme management support as we piloted a new team from January 2015, set up with ombudsmen at the front of the process, leading case handlers and engaging directly with customers early on. The Board approved the new model in September 2015.

phase 3

Phase 3, from January 2016, involved the implementation of our new operating model. PwC provided programme management support for a number of work streams, including:

• people transition and  training – involving the recruitment for new roles and the development of our new career model
• knowledge and insight – making sure our people had access to the right knowledge, including development of our new ways of sharing that knowledge
• operational readiness – involving operational modelling, work allocation and updating our case handling processes
• internal and external engagement – getting our people and stakeholders ready for change
• technology – replacement of our case management system
• customer insight
• reviewing our support services
• equipping managers with additional performance management skills and resources.

phase 4

We’re currently in phase 4, which began in September 2017 – focusing on making our new structure as efficient and effective as it can be. The work streams include significant projects like the completion of our new case management system and user portal, as well as getting our people ready to use them.

Appendix C

% of cases dealt with within 90 days by product family (July 2015-July 2017)

Appendix D

The Committee has requested minutes of board meetings where significant organisation changes and staff surveys were discussed over the period in question, but at least for the past 5 years.

We publish minutes of our board meetings on our website.

This note captures extracts from these minutes which we consider relevant to significant organisation changes and staff surveys which the Committee has requested.

Minutes from 2010

Oct 10              Payment protection insurance              

              The decisions director presented his paper which contained developments following the FSA’s publication of its policy statement PS10/12 – the assessment and redress of payment protection insurance complaints.  He confirmed that, since writing the paper, the British Bankers’ Association had issued judicial review proceedings against both the FSA and the Service.  He added that all aspects of this development were being carefully considered and that the Service was taking advice from Counsel.

              The board noted the position and discussed a range of possible scenarios that might develop as a result of this action.  It was recognised that this was a fast moving situation to which the executive and other key staff were devoting a significant amount of time.  The board would be kept regularly informed of developments as they unfolded.  Appropriate decisions would be taken to the board but it was also recognised that some decisions might well need to be taken between board meetings. 

Nov 10              Resource strategy update             

              The operations director presented an update on developments since September.  He reminded the board that a different approach was being adopted for the management of the Service’s in-house and contingent resources.  The key objective was to ensure value for money in the use of contingent resource whilst retaining operational flexibility.

The operations director explained that the resource strategy work was one part of the broader operational change programme that included lean business process improvements and significant development of the Service’s IT capabilities.

              The operations director explained that the resource service provider model was being recommended because it supported the Service’s aims & values, allowed efficient workforce planning and provided control of performance management.  There would also be significant cost savings from not paying a premium for management and reduced reliance on contingent adjudication staff (from 30% to about 15%).

              The HR director explained the advantages in using this approach to recruitment which included less risk and lower costs.  Alan Cook and Julian Lee both confirmed that they had been closely involved in the development of the proposal which they fully supported.

              The operations director proposed that governance arrangements should include:

-         regular review of the programme risk register and plan delivery by the audit committee

-         award of the final contract by the board

-         oversight of the programme delivery by the executive team to ensure it is on time, to budget and to ensure that the benefits are realised

              Subject to the pre-qualification questionnaire and invitation to tender documents being approved by Alan Cook and Julian Lee and the preparation of a clear audit trail, the board agreed that:

1. A procurement exercise should be undertaken to provide workforce planning services
2. The tender documents should be based on the resource service provider model.
3. The scope of the services should include permanent and contingent resource recruitment.
4. The board should take the final decision about the tender award, following recommendations from the tender panel.

The chairman thanked the operations director for his very clear paper.

Action              Led by the operations director, the executive will develop the programme in accordance with the timetable proposed in the paper.

Dec 10              Payment protection insurance             

The deputy decisions and legal director reported that the grounds for resisting the claim for an application for permission to claim judicial review by the BBA had been filed on time, on 10 December.  Witness statements from the decisions director and from the deputy decisions direction were filed at the same time.  The BBA had until 31 December 2010 to respond, after which the Service would have until 11 January 2011 to comment.  Consultations with Counsel and liaison with the FSA had been continuing.

An extract from ombudsman news issue 91 was circulated to the board which provided an update on the judicial review and the affect on complaints about PPI.  This confirmed that the volume of complaints was increasing but that some financial businesses were not responding substantively to complaints until the final legal outcome is known.  This had meant that fewer cases were being resolved.

The board expressed its appreciation to the staff involved for the substantial amount of work involved in preparing the grounds and witness statements.

              Action Copies of the grounds and witness statements will be circulated to members of the board, to be treated as confidential.

Minutes from 2011

Mar 11              Employee engagement survey             

The HR director presented the results of the Service’s participation in the ‘Sunday Times’ top 100 employers’ employee engagement survey.  She explained that this was the first time that the Service had taken part in this particular survey.  Although only 60% of staff needed to take part for it to be statistically accurate, all staff had been encouraged to participate so that everyone could express their views.  Although not accredited, the Service came close to being ‘one to watch’.

She went on to explain the action being taken as a result of the survey.  Team results had been published internally and managers were discussing the outcome with their teams.  Lessons were being learned from teams that had high engagement results to help less engaged teams become more motivated.  It was noted that the Service was committed to running the survey again in October/November so that the results could be benchmarked to track progress.

May 11              Payment protection insurance (PPI)             

              Following confirmation on 9 May by the British Bankers Association that it would not appeal against the High Court judgment handed down on 20 April, the board congratulated everyone involved in defending the action.  The decisions director also thanked the board for its support in withstanding the pressure that the Service had faced in the past three years. 

              The board noted the legal implications (which supported the approach taken by the Service) and the operational implications of the conclusion of the High Court action.  The legal director explained the aspects of the ombudsman’s jurisdiction and powers that had arisen during the case and the helpful clarification that had been provided.  These included the interpretation of ‘fair and reasonable’, confirmation that the FSA and ombudsman service were both correct in taking into account the FSA’s high level ‘principles’ in support of their decisions, support for the ombudsman’s approach to PPI cases, process & decision making and endorsement of root cause analysis principles applicable to firms.

              The CEO reported that plans were already being made to cope with the next phase but uncertainty remained about the behaviour of financial businesses.  The decisions director explained that, with over 100,000 cases to consider, the Service faced a considerable challenge.  Discussions were being held with the major banks, the FSA and claims management companies about managing these cases appropriately.  It was likely that some firms would decide to offer some form of automatic compensation to some groups of customers, whilst others would want a full investigation of each case.

              The board agreed that, as there was considerable uncertainty about the future volume of cases and reaction by financial businesses, the need for the special reserves, and separate accounting, remained.  It also endorsed the principle of protecting non-PPI complaint handling to ensure that the high volume of PPI cases did not have an adverse impact on general service standards. 

              Whilst endorsing the adoption of future proofing principles, the board noted that a short term solution may be needed at some stage.  It also agreed that the current proactive strategy should be maintained, ie to ensure that stakeholders all understood that it was very unlikely that complaints would all be resolved quickly.

Jun 11              Executive update

              The board noted the update from the executive and discussed the following issues:

              a)  Payment protection insurance (PPI) complaints

              The decisions director provided an update on the FSA’s temporary extension of time for some of the major banks to deal with PPI complaints.  He also explained the impact of the large volume of complaints on the Service’s operations and headcount.

Jul 11              2011/12 Q1 performance review             

              PPI casework

              The majority of the major banks were now settling the stock of cases with the service.  However, the board noted that even though most of the banks were cooperating with the service, it would still be some time before the cases in hand would be cleared.  

  .                 The operations director and the legal director also touched on the operational and planning challenges that lay ahead given the uncertainties about the likely volumes of new cases that the service might expect to receive.  The board acknowledged the difficulties in this regard, noting that the constructive relations with the banks at senior level would mean that the service would at least be able to have a discussion with them about what they were planning to receive.

Jul 11              Resource service provider             

The operations director introduced a paper outlining the recommendation of the tender evaluation panel for the award of a contract for a new recruitment and resource service provider.

The operations director reminded the board of the strategy agreed by the board in November 2010 to move to a different model for managing permanent and contingent staff.  This strategy sought to retain the vital operational flexibility that contingent staff gave the service, but by integrating contingent staff into the organisation and allowing for alignment with the service’s values and ways of working.  By seeking to find a partner to provide both its permanent and contingent staff, the service would also be able to benefit from more integrated resource planning, economies of scales and achieve better value for money.

The board noted the approach taken through the procurement process and that it was in line with the governance arrangements agreed with the board in November 2010.  The operations director laid out the outcome of the technical and commercial evaluation, and noted that the preferred provider had ranked 1st on the technical evaluation and 2nd on the commercial evaluation – leading to an overall combined ranking of 1st. 

The operations director acknowledged the considerable support and guidance that

Julian Lee (and Alan Cook before his departure) had given the internal project team.  The board noted that the service had also undertaken a comprehensive assessment of the operational risks involved and had employed appropriate mitigation strategies, in particular, in relation to the transition from its current provider to its new supplier. These risks had now largely been eliminated, which was a major success of the programme.

The operations director confirmed that detailed implementation planning was now underway including securing the appropriate resource to manage the relationship.

The board expressed its thanks for the competent way in which the whole project had been run, across both the procurement exercise and the transition management.  The board confirmed it was satisfied that the recommendation followed a robust and rigorous assessment and tender process.  The board approved the recommendation of the tender evaluation panel and agreed that notice of the outcome of the tender process could be communicated to all bidders.

Dec 11              Update on PPI planning              

              At its November meeting, the Board had agreed the approach the Service was proposing to take to increase its capacity to handle higher numbers of PPI cases and the challenges uncertain and volatile volumes presented. 

              The decisions director confirmed that a number of key commitments had been approved by the Project Steering Group (which two Board members attended as critical friends), including:

• accommodation;
• project management support work; and
• the operational approach.

Dec 11               2012/13 Plan & Budget             

The Board had been asked at its November meeting to agree the broad parameters and assumptions underlying the Service’s plans and budget for 2012/13.  The Service had prepared its plans in the light of stakeholder views that demand for the Service next year was likely to be higher than original plans had estimated and that it should prepare for an increase in non-PPI complaints as well as a significant increase in PPI complaints. 

Stakeholder feedback had suggested that the additional capacity required to manage an increasing PPI workload should be funded by adjusting the case fee arrangements, rather than making changes to the levy – and that, as far as possible, the costs should be allocated to those who had been responsible for PPI misselling.  The Service proposed therefore to introduce a supplementary PPI case fee of £350 from 1 April 2012, payable on ‘conversion’ of each new PPI case (after the first 25 cases).

The Board noted that, with the exception of those cases subject to the supplementary fee, the Service proposed to retain the existing case fee and general levy for the new financial year (2012/13).

The Board noted that the FSA Board had since approved the basis upon which the Service intended to consult and, subject to one or two amendments to provide some clarity on certain aspects of the paper, the Board approved the 2012/13 plan and budget consultation document for publication in January. 

Dec 11              NAO efficiency review                                         

The Board had a long established commitment to periodic independent reviews of the Service.  The review by the NAO was the third such review – and followed Lord Hunt’s review on the Service’s accessibility and transparency in 2008.

The Board agreed that the third review would involve NAO looking at our efficiency – reflecting a number of stakeholder views that such a review should be conducted.   The proposals for reforming financial services regulation also included a provision for the ombudsman service to be subject to NAO going forward.

The Board had agreed with the NAO that the detail of its report and the recommendations it had made would be subject to a full review by the audit committee after its publication. 

In the meantime, the Board confirmed receipt of the report and agreed that it should be published in January.  The Board noted that overall the report reflected positively on the Service and how it had coped with year-on-year increases to its volumes and how it had managed its major “change programme” to meet this demand.  The report recognised the significant operational challenges the Service faced in terms of volatile demand and the impact that this had, including in relation to the drivers of the costs of settling disputes and the Service’s funding model.

The Board also noted the cooperative way in which the Service and the NAO had worked together during the course of the NAO’s review.   

The NAO and the ombudsman service would provide a copy of the report to the Treasury Select Committee shortly before publication.

Minutes from 2012

Jan 12              Executive update

c)       Staff Survey

The Board congratulated the Service on achieving ‘ones to watch’ accreditation in the ‘Sunday Times 100 Best Companies’ survey, noting that the Service’s results had improved across all categories.

Jan 12              Update on PPI planning             

The Board confirmed at its December meeting that it continued to be assured that the Service’s proposals for increasing its capacity to deal with the PPI work it expected to receive remained right.  The Board would be updated again at its January Board and the Project Steering Group would continue to have close oversight of the detail in the meantime.

The Project Steering Group, which included Board members, Julian Lee and Alan Jenkins, as critical friends, met the day before the Board. Julian Lee and Alan Jenkins confirmed to the Board that they had received the necessary assurances and were happy that the proposed approach being taken towards PPI case-handling was right.  The project management support for the project was also now in place, and would be tracking the scoping and design work as it developed and monitoring the interdependencies across the piece.    

The Board agreed that it was unlikely that the volumes anticipated would fall away altogether or even come close to doing so – and that forecasts for PPI volumes remained very high.  The Board was further reassured to know that the desire to deliver quality outcomes to customers was core to the Service’s modelling of the approach.  The Service was doing more work to map the ‘customer experience’ within PPI case handling, and to explore ways of improving the service offered.  The executive team explained that its goal was to apply its innovations and approach to PPI case-work to other areas of its business, as appropriate.

The Board confirmed its endorsement of the Service’s proposed approach to handling PPI cases, noted the progress made to date and acknowledged that significant challenges remained as the Service geared itself up to deal with the work it expected to receive.  A further update on progress would be provided to the Board in February.

Feb 12              Executive update

a)       Staff survey

Emphasis was being placed by the executive team on harnessing the positive outcomes from the staff survey results and much effort was being put into maximising staff engagement.  

Feb 12              Update on PPI planning             

The January Board meeting had endorsed the Service’s proposed operational approach for dealing with the significant volumes of PPI cases expected over the next two to three years.  Progress on building the capacity to deal with high volumes of cases and on designing the operational approach was being overseen by a Project Steering Group, which included the project’s ‘critical friends’, Board members, JL and AJ.  

TB updated the Board on the current analysis of the expected workload, how its planning was progressing and provided an overview of the formal programme plan.  CW went on to provide an overview of the operational approach that was being developed.  

                            While recognising that significant challenges remained, including in relation to the wider environment outside of the Service’s control, the Board remained convinced that the  proposed approach to handling PPI cases remained right in the light of the expected volumes of cases.  They noted that the project management oversight of the interdependencies between the different aspects of the planning work provided further assurance about the deliverability of the plans.        

Mar 12              Executive update

b)       Accommodation

The fit-out of the accommodation to house the Service’s increased PPI handling capacity was well advanced.  The HR & OD teams had moved in at the beginning of the week and the Board expressed their thanks to those leading the work and their teams for their hard work and commitment in reaching this milestone. 

c)       Staff engagement

The Service recognised the need to do everything possible to retain and motivate its staff, especially as so many were new.  Board members could add real value to the Service’s existing efforts towards this end. 

Mar 12              Update on PPI planning              

The Board noted that satisfactory progress was being made on the Service’s plans to build capacity to deal with the PPI volumes it was expecting to receive.

Detailed oversight was being maintained by the Project Steering Group, which included the project’s ‘critical friends’, board members, JL and AJ.  Some of the planning assumptions and other of the detail would be picked up in the 2012/13 plan, budget and fees’ item later in the agenda.  NM suggested that it would therefore be helpful if the Board instead had a discussion about some of the wider strategic issues which would help inform its thinking about the Service’s longer term strategic vision more broadly. 

TB took the Board through a presentation given the previous day to senior staff to bring them up to speed on the planning for PPI work and to get senior leaders thinking about how to engage their teams, including thinking about the future and the potential implications for future working.

The Board agreed that the prospects were positive for learning from the Service’s operational response to PPI and some of the new ways of working it would be piloting.  In thinking about the Service’s position in 10 to 20 years’ time, it would be important to think about the wider consumer advocacy and redress context in which the Service would be operating, including the technological environment.

The board would be taking a strategic view of the Service’s longer term position and the environment within it might be operating at its away days in September. 

Apr 12              Update on PPI planning              

TB updated the Board on the progress being made on plans to build its capacity to deal with the expected PPI volumes.  Most notably the first intake of new case-assessors had started their training and induction programme on 23 April  

Detailed oversight was being maintained by the Project Steering Group, which included the project’s ‘critical friends’, JL and AJ.  The Steering Group had met on 19 April and had agreed with the latest analysis which raised the risk that volumes could be higher than forecast.  Subject to the Board’s approval, the Steering Group had concluded that the Service should seek to increase the number of case-assessors that it was planning to recruit and that it would be prudent to do so at a rate sufficient to meet the higher volumes and keep up with expected levels of staff turnover.  The Steering Group was confident that the additional headcount would not require any extension to accommodation for the time-being. 

The Board agreed that it would be prudent to plan for higher volumes than forecast originally and for a consequent increase in headcount.  The Board would be kept updated as the planning work progressed, and at relevant points when decisions were required from them.  

In concluding the update, TB advised the Board that focus was now turning to the next steps, after the initial operational phase had begun. 

The Board confirmed its assurance about the programme’s progress, the planning assumptions and the focus on the next steps.  They acknowledged the significant progress that had been made over a short period of time and commended the executive and the teams involved for the achievements to date.

May 12              PPI planning update and case-assessor visit             

TB updated the Board on the progress in building the PPI capacity: highlights included:

• the completion of training for the first tranche of case-assessors;
• the first day of ‘live’ operations on 21 May; and
• on the same day, the second intake of case-assessors. 

Following the start of operations, the Board took the opportunity to see the ‘live’ working environment and get a sense of the culture and feel among the teams.  Their tour included listening to calls, seeing the case-handling process and meeting the teams. 

In a brief discussion after the tour, Board members commented particularly on the strong learning environment, clear evidence that staff were living the values and were highly motivated and the high morale throughout the team.  They recorded their recognition of the scale of the achievement - an extraordinary amount had been achieved in a short amount of time and the determination to deliver had been evident throughout.

Sep 12              PPI planning                

              PPI dominated the current caseload, and an analysis of the external environment suggested that it would continue to be the dominant feature for a number of years yet. There was every indication too that the incoming volume of complaints would further increase over the medium term; as a consequence, existing and projected case-load levels were uncomfortably high.    

PPI volumes would be central to setting the 2013/14 plan and budget, the process for which was just beginning. The Board took a clear view that the ombudsman service had to respond to these volume pressures and add significantly to the Service’s capacity.  There were constraints to the speed at which this could be achieved, not least given the expansion that had already taken place to respond to PPI.  Realistically, the pace of any further increase in scale meant that no approach would see quick resolutions for the many thousands of people who, unable to settle matters with the business who had sold them PPI, would bring their case to the ombudsman.

The Board would consider the challenge presented by the huge uncertainties surrounding PPI, and how the ombudsman should respond, at its October Board.  It would do so in the light of a detailed analysis of the operational options, and the implications for the budget for next year.

action

• the executive to prepare analysis for October Board.

Oct 12              PPI planning               

At its away day meeting in September, the Board had considered how the ombudsman service should respond to the analysis which showed incoming volumes of PPI complaints increasing yet further.  It had agreed that the service would have to add significantly to its capacity, and asked the executive team to prepare an analysis of the operational options for doing so.

The Board agreed that timeliness and cost would be two of the most critical factors in assessing the feasibility of the options, together with the over-arching need to preserve reasoned decision-making – which lay at the heart of the ombudsman’s role. A detailed option appraisal had been prepared and reviewed by an independent external party and by Board ‘critical friends’, JL and AJ, before being put to the Board.

Reviewing the option appraisal led the Board to conclude that the ombudsman service should further build its capacity in line with its current approach to meet the significant increase in PPI demand to date. In doing so, the service’s recruitment approach should positively impact the local employment market by continuing to offer local employment opportunities and explore employment initiatives in partnership with relevant organisations.

action

         next steps analysis of operational approach, and medium to longer term implications against expected volumes, to come back to the December Board.

Dec 12              Service development plans             

                            In their discussions since October on the plans for the coming year, the Board had agreed that the Ombudsman would need to add significantly to its capacity to respond to the likely continuing dominance of its PPI caseload. The anticipated volumes and early planning on the operational response were reflected in the draft 2013/14 plan and budget, due to be published for consultation in January 2013.

.

                            A detailed analysis and plan for the Ombudsman’s expansion needs and operational response would come to the February Board. The Board agreed that in the meantime, the existing arrangements for any decisions on accommodation to be be delegated to the Chairman and PPI programme ‘critical friends’, Board members, JL and AJ, should continue.

                            Alongside the service development plans for PPI, the Ombudsman would also continue to look at organisational and service development more generally, to remain flexible and responsive to the types of cases coming to it and to changing customer needs.

              The Board agreed that these two workstreams were so clearly interdependent that it made sense to extend the PPI programme Board’s oversight to include service development more broadly.      

Dec 12              Any other business

Staff survey

Ombudsman staff had recently taken part in the Sunday Times 'Best Companies to Work For' survey.  Although the organisation had yet to receive notification of its overall place compared to other organisations, it had received its own results which indicated a highly engaged workforce who enjoyed their work, recognised the investments being made and the value in which they were held. The headline results highlighted high engagement in a number of areas, including ‘overall leadership’, ‘giving something back’, and ‘personal growth’.

The results were particularly pleasing for a customer-facing organisation such as the Ombudsman, in terms of the positive impact an engaged and motivated workforce had on the quality of customer service provided. The Board commended the Service on the results which reflected its commitment to its staff and its customers.     

Minutes from 2013

Mar 13              Executive update

Sunday Times 'Best Companies to Work For' survey. 

The service was congratulated on achieving 25th place in the ‘not for profit’ category, a remarkable achievement which reflected a highly engaged workforce who enjoyed their work, and who appreciated the value in which they were held.

May 13              PPI – lessons from the first year and looking ahead                 

The plans on which the ombudsman service had consulted for 2012/2013, were based on it receiving around 165,000 new PPI cases, and an anticipated need to build capacity to deal with the high volumes and to ensure that service standards were the best that it could deliver.  Most people who responded to the ombudsman’s public consultation in January 2012 thought that the assumptions and plans were reasonable.

To build this new capacity, the ombudsman service launched a major change programme  which included:

• significant recruitment (an additional 922 permanent staff were recruited and trained during the year, and additional temporary staff were taken on – doubling the size of the ombudsman service);
• huge investment in training and development – so that new case handling staff could be trained to handle PPI complaints quickly but effectively
• the introduction of different ways of working – including working electronically, and giving consumers early indications of the likely success of their case.  

In the event, the number of PPI cases received dramatically exceeded those assumptions and by the end of the year the ombudsman had received 378,699 PPI disputes – a 140% increase on the previous year.

Resolving disputes is inherently labour intensive. Every case needs to be assessed on its own merits, and the work requires trained staff.  Although over 900 new staff were taken on for PPI work in 2012/13, they needed extensive training and supervision before they could resolve people’s cases to the required high standards of quality – so staff were not able to resolve cases immediately.  Added to which, the dramatic increase in the volume of new complaints and enquiries meant that many of the additional staff had to be diverted to focus on processing the higher volumes of new cases coming in – rather than on assessing the merits of existing cases.

While it was commendable that over half a million PPI related calls were answered during the year, over 120,000 assessments were issued and over 100,000 cases were resolved, inevitably, stock levels built up in year and consumers and businesses would  have to wait much longer than planned, in many cases 1-2 years, before their case could be assessed.   

For the coming year, all the indications currently were that the high volume of PPI cases were set to continue. The FCA’s approach to PPI was a complaint-led one – and at the end of 2012/13, FCA published data suggested that only a little over 10% of all people sold PPI policies had complained so far. In response to this, the ombudsman consulted on plans that assumed it would continue to receive around 5,000 new PPI cases each week for 2013/14, and that it would need to scale up its resources still further to continue to handle this volume of cases. Over 2013/14, it therefore planned to add an additional 1,000 staff to its PPI operation, recruiting them though on 3 year contracts to enable it to manage staffing levels downwards if necessary in the event that PPI volumes eventually subside.

The last year had taught the ombudsman service a great deal about managing workload levels far in excess of plans, and the lessons learned would be taken forward as the service prepared to deal with the challenges of another high volume year. However, overall the Board concluded that this change programme had been managed very well, and that it had achieved its overall goals.

The Board acknowledged the huge effort that everyone across the service had made to help meet the challenges presented by higher than planned PPI demand and the successes that had been achieved, despite those demands.

Jun 13              Developing the service              

As a largely demand-led service, the ombudsman had, over the years, responded and adapted to changes in the space it occupied, as appropriate.  The most notable and recent example  had been its response to the unprecedented demand in payment protection insurance, which had necessitated a considerable increase in resource, and a harmonisation of PPI operations into a single-focus unit with new ways of working.   .

But major change elsewhere over the last ten years, including to the regulation and structure of retail financial services, as well wider changes in society more generally, also had implications for the ombudsman service and other areas of its work.

In financial services in particular, tougher economic conditions meant that people were feeling financial losses  more keenly and a more confident consumer voice meant that they were prepared to put up with less and to be vocal in their demands that things be put right and recompense paid where due. Innovation in products and services and their delivery meant that similar change was expected elsewhere. As new approaches and technologies became the norm, service providers everywhere needed to respond to customer need and expectation to keep up. 

There was every sign that this fast-paced change would continue. If the ombudsman service was to remain relevant and able to fulfil its function (which included helping to maintain trust and confidence in financial services), it needed to continue to look for efficiencies in the way that it worked and develop further to meet customer need and be accessible to everyone who wanted its help. 

But the service on its own could not achieve the development and improvement that were required:  much depended on effective working with the financial services industry and with relevant regulators.  Business behaviour and regulatory interest both played a major part in what came to the ombudsman, and the work and resources required to deal with it.   The ombudsman would, therefore, continue to engage with stakeholders on developing its operating model and staying fit for purpose in the future.

Nov 13              Executive update

                            staff survey

              The Board was pleased to note the high response rate to the recent staff survey, up on last year’s.  A good response meant that the ombudsman service would get a good understanding of what staff thought about working at the service and their degree of engagement with the organisational values and priorities. The executive would then be able to focus on those areas where staff thought more should be done.

Nov 13              Developing a service for the future              

The ombudsman was continuing its programme of work to look for efficiencies in the way that it did things and develop further to meet customer needs and be accessible to everyone who wanted its help.  A focus on continual improvement would help ensure the ombudsman service remained relevant and able to fulfil its function (which included helping to maintain trust and confidence in financial services). 

              As part of this, the Board had commissioned an independent review looking at future changes in the ombudsman’s operating environment and society more broadly, to help inform how it could continue to deliver a service valued by all. While the organisation would continue to look for ways to improve what it did, and how it did it, the Board agreed that the prospect of, or need for, any more fundamental transformative change would need to be informed by the outputs from the independent review.     

              action

-          Executive and Board to meet informally in January 2014 (ahead of the executive bringing a service development update to the February Board). The initial outputs from the independent review work to be fed into the discussions.

Minutes from 2014

Feb 14                2014/15 budget and strategic overview              

Managing the PPI caseload

Managing the PPI caseload would be a multi-year challenge, and while it continued to dominate operational planning, it would remain a key area of strategic focus for the Board, both as part of the annual budget setting process and on an ongoing basis. 

Earlier in the budget planning cycle, the Board had heard how, over time, there were likely to be fewer straightforward and quicker to resolve cases, and the existing stock would contain an increasing proportion of more complex, more difficult to resolve cases. The implications included a growing need to up-skill the capabilities of case-handlers, as well as a need to be flexible and responsive enough to adapt the operational  approach, to take account of the size and nature of the caseload and the level of customer service being provided.

The Board reviewed the latest analysis of the caseload size and its ageing profile over the next financial year, tested against a number of scenarios, including a broad range of new case volumes and resolution levels. The analysis bore out the assumptions about increasing case complexity. The Board agreed an approach which balanced the need to get answers out to consumers who had been waiting the longest, with an imperative to tackle the more complex cases which had not been resolved at the earlier stages. 

While it understood that this would require modest levels of recruitment to maintain current staffing levels and to increase ombudsman capacity, the Board continued to take the view established at its November meeting the previous year, that further mass recruitment was not currently necessary. It did agree though, that the possibility of further recruitment in future should not be ruled out. It would want to continue to test staffing-level assumptions as part of its ongoing oversight of the overall strategy.

Feb 14              Service development              

                            The ombudsman service was continuing to refine its thinking on the shape and pace of its service development and improvement programme. The focus of attention, at least initially, was on defining clearly the ombudsman service’s role, the business it was in and the environment in which it operated.  This phase of the work was being informed by reference to the ombudsman’s statutory remit and other external factors, such as the consumer and industry landscape and wider societal and political developments more generally. The Board commissioned independent review, looking at future changes in the ombudsman’s operating environment and society more broadly, would also help inform the thinking here, both in the shorter and the longer term. 

              The findings from the independent review were due to be presented to the March Board. Thereafter, the Board would continue to be involved as the programme of work developed, including on the next phase and the more detailed plans for how the service might develop and change, and the initiatives and innovations under consideration. The Board acknowledged that service development and improvement were essential to the ombudsman staying relevant and able to meet consumer need. However, it accepted too that ambitions here would need to take account of the operational challenges in PPI, and that it would have an eye to both service improvement and PPI case management as part of its strategic oversight role.

Mar 14              Engagement and retention             

A number of internal assessments, together with results from the ombudsman’s participation in the Best Companies’ Sunday Times top100 surveys, showed that the ombudsman service continued to enjoy high retention, a strong sense of cultural values and high motivation and engagement amongst its staff. These were all qualities that were important to an employer, but equally so to a customer-facing organisation whose ability to deliver the best customer service depended on having an engaged workforce, motivated by doing the right thing.

The ombudsman service could not afford to be complacent, however; it had an ambitious workforce, keen to develop and progress their careers in employment markets that were becoming increasingly competitive. Further, its ability to continue to  manage its PPI workload effectively over the next few years would depend on it being able to keep its most experienced case-handlers and train them to deal with the more complex and difficult to resolve cases the ombudsman service expected to get later down the line.

The service would continue to make sure that it was able to gauge levels of engagement and motivation amongst its staff. The Board noted the steps being taken to make sure that it was able to preserve its core values and maintain high levels of engagement. While it agreed that  it was right to have an eye to the future strategy and business need, it must ensure too that its response remained appropriate and proportionate.

Jun 14              Service development update              

              The ombudsman was continuing its programme of service development work, aimed at ensuring it was able to continue to provide meaningful, effective and efficient assistance to those who wanted its help. A number of work streams had been set up, focussed on specific areas for development, ranging from the early upfront help the service was able to provide and the skills and knowledge needed, to the IT infrastructure required to support customer access and effective and efficient case-handling and the insight and learning the service was able to share from its work. 

              The governance arrangements would include regular update reports to the Board, including as part of the quarterly performance and financial reviews.      

Oct 14              Service development             

              The work to develop and modernise the service was progressing well. A number of initiatives and pilots were under way to test new ways of working and the extent to which new approaches could be applied across other areas of casework, and so form the basis of a new operating model. At the heart of these initiatives was a desire to get to the root cause of people’s problems at the outset and provide appropriate answers in much quicker timeframes. The work so far had shown that while not all complaints were capable of being dealt with simply and quickly, a significant proportion were, once a greater emphasis was placed on listening to what people had to say at the start and on ready access to the right experience and knowledge. Such an approach made it easier to diagnose the problem more quickly and take immediate steps to help sort things out, rather than much later down the line, having gone down a process-driven path.

              These new ways of working also stood up to scrutiny when tested against the file review cases - alternative scenarios for which indicated that a different approach would more likely have resulted in a better outcome, in terms of a quicker answer, one that more appropriately addressed the real issue at hand, or both.

Further pilots were being planned, as were enhancements to the ways people could access the service. The Board expected to see an increase in the pace of progress to introduce a new model and new services over the next couple of years, with practical changes being implemented now, not least where pilots had proved effective and had demonstrated the value of new ways of working.     

The programme would continue to be managed and coordinated under a structured service development programme. The overarching plan, setting out the interdependencies between the component parts and the associated timelines, would come to the Board in the New Year, as part of the next update on how the service development work was progressing.

              In the meantime, staff engagement activities were focussed on the future strategy and on helping to provide clarity on the type of service the ombudsman wanted to be and the part staff could play to help deliver the vision.

Minutes from 2015

Feb 15                            Service development update             

The programme of work to modernise the service and introduce new ways of working best suited to customer needs was progressing well, and much had been achieved since the Board were updated in October last year.

The programme structure and governance arrangements had been reviewed and refreshed, providing greater clarity to the work streams and facilitating much better co-ordination between them. An executive level steering group met weekly to make sure that the programme remained on track and senior leaders from across the organisation had become more closely involved and the programme and its activities were now much more closely integrated with day-to-day operations.

The ADR directive, due to be implemented in July, was a key focus in the short term, and a detailed plan had been developed to map out the milestones over the next couple of years in delivering the longer term vision of a new operating model spanning the full breadth of the ombudsman’s casework.

In the meantime, progress on developing new approaches was progressing well: further pilots to test new ways of working were underway and a new on-line complaint form and webchat facility had also been launched, with further enhancements being planned. The implications for the skill sets required of staff, the need for responsive and flexible resourcing and the implications for cost recovery, were key part of the programme and were a factor in assessing the success of the pilots and the extent to which these new ways of working were capable of being operated on a larger scale. The Board also emphasised the importance of the ombudsman service continuing to reflect on its core purpose and strategic objectives as it developed new approaches, to make sure that they remained aligned.

As noted earlier in the meeting under the chief executive’s update, significant time and resource, including at the highest level, had been, and would continue to be, devoted to staff engagement, ensuring that staff had a shared understanding of the programme’s objectives and the role that they had to play in delivering the future vision and in making it a success.  

The Board commended GW on the shape of the programme and the progress that had been made: updates would continue to come to the Board at quarterly intervals, at least, with additional reports on progress at significant points in the programme.

Jul 15              Service development              

An progress update was provided on the service development work. As the Board had noted in February, the first phase of the work had focussed on the ADR directive requirements and the timetable for its implementation. The ADR Directive was now in force, the ombudsman had been certified and a great deal of work had been involved in getting the service operationally ready. At the same time, the trials and pilots for new ways of working had continued.  The next phase was now focussed on delivering the long term strategy, taking the experience of the trials and pilots to determine how the new ways of working could rolled out more widely and to inform the new organisational design.

An update would come to the September Board away days: further detail would be  provided on the emerging organisational design and on a number of other associated considerations, including the funding arrangements .

Nov 15              Service development              

The programme of work to develop and modernise the service to ensure it remained aligned with the needs of customers and to secure its future relevance and sustainability was progressing well. Work was now underway to take forward the learning from the pilots and trials and to establish a number of new casework teams, working in agile ways, better able to respond efficiently and effectively to the work received. 

The governance arrangements for the service development programme included Board member attendance at steering committee meetings which would provide the forum for more detailed scrutiny of particular aspects of the programme, as appropriate. The committee would be best placed to determine, therefore, those matters on which the whole Board would want to satisfy itself, as well as any matters that might be better suited to the audit committee.  More generally, regular updates would come to the Board on the programme’s progress.

Minutes from 2016

Feb 16              Service development             

The programme of work to develop and modernise the service to ensure it remained aligned with the needs of customers and to secure its future relevance and sustainability was progressing well.

The new casework teams would work in agile ways and be better able to respond efficiently and effectively to the work received. The recruitment process for the new teams had now begun, and staff had responded very positively, with many eager to take on new roles and work in new ways. 

The senior management team was grateful to Board colleagues providing critical friend support to the steering committee, the oversight forum for providing more detailed scrutiny of particular aspects of the programme.

Apr 16              Service development update              

The programme of work to develop and modernise the service to ensure it remained aligned with the needs of customers and to secure its future relevance and sustainability was progressing well.

The new ways of working continued to be tested, with case-handlers working in more agile ways, better able to respond efficiently and effectively to the work received. As a result, customer satisfaction levels were higher than at any time before, and business feedback was positive, with some, for example, reporting customer retention improvements. Board members who had spent time with the teams commended the work being done there. They had seen at first-hand the benefits to both parties of the early resolution of complaints and how the teams were working to ensure they were able to keep on top of performance.

New casework teams were due to start work the following week, with other teams starting over the coming few weeks. Performance in the new teams would be closely monitored, ensuring that productivity, consistency and quality remained at the fore.

The Board reflected on the people challenges and risks associated with change, both in terms of the inevitable uncertainty change brought for people and managing the disappointment for those who had been unsuccessful in their applications for new roles. The Board noted the focus on staff engagement and helping people to understand the case for change, as well as the support being provided to people who had not been successful. The support included detailed feedback on development points and identifying steps to take and training needs to help get them ready for future rounds of recruitment.  

The Board agreed the plans which the steering committee had reviewed in detail, which anticipated rolling out the new ways of working across all of general casework. Once all the detail had been fully worked through, the decision would be communicated to staff so that they had certainty about future opportunities and the choices that they would have to make. On PPI, the continuing uncertainties, including for future volumes, meant the service would need to keep its options open for how it might best manage its caseload here. The executive and Board would keep the position under review as the picture became clearer, including in the light of the expected FCA rules and guidance on cases affected by the Supreme Court ruling in the case of Plevin and on a time-bar. 

The senior management team was grateful to Board colleagues providing critical friend support to the steering committee, the oversight forum for providing more detailed scrutiny of the programme.

Jul 16              Service development update             

A key feature of the service development update – which had been picked up across a number of papers before the Board, including the chief executive’s update and the performance report - was staff engagement. As the Board had noted at its April meeting, there were people challenges and risks associated with change, in terms both of the inevitable uncertainty change brought for people and of managing the disappointment for those who had been unsuccessful in applications for new roles.

Various sources were helping identify how staff were feeling, including:

-          internal ‘finger on the pulse’ temperature checks;

-          the staff consultative committee;

-          staff employee networks;

-          direct feedback; and

-          external platforms and fora.

The picture was complex and reflected the range of feelings and responses to which change inevitably gave rise.  Many were undaunted and up for doing new things in new ways, while others naturally had questions.  

It was important that people felt listened to – and that senior management were responsive to genuine concern – engagement efforts would, therefore, continue to be focussed on providing a range of channels for people to have their say and on supporting people to see their future at the service.

In the context of the discussion on general levels of engagement, the Board noted that there had also been some commentary on external fora that had touched on the quality and consistency of decisions being made in the new investigation teams (this was also expected to be picked up in an on-line media article in the next day or so). Fairness – providing answers that were fair and felt fair – was at the heart of the new ways of working. Performance in the new investigation pods was, therefore, subject to scrutiny against this critical measure in the same way as casework performance had always been. The results so far had been very encouraging, with performance measures on track and customer satisfaction exceeding levels elsewhere.

Similarly, analysis showed sustained quality and no anomalies in case outcomes in the investigation pods. While the new ways of working were bedding in, additional checks were being done to compare outcomes with those cases handled outside of the investigation pods. Further, one of the new investigation pods would also be responsible for helping to identify and develop the service’s approach to cases, as well as overseeing and checking the quality and consistency of the work. 

The Board restated its unequivocal support for the new ways of working and for the steps being taken to develop a service that was still relevant and responsive to customers. While change would inevitably be difficult for some, board and executive colleagues should remain alive to feedback and how people were feeling, and the steps being taken to facilitate this were welcome. 

Oct 16              Service development update              

The service development programme of work to modernise and provide for a more responsive and flexible case handling model better suited to meet the needs of today’s customers was well advanced. 

The latest internal recruitment round was now complete and colleagues would move to new roles between now and the end of January. It was likely that further internal recruitment would be needed, and that some external recruitment would be likely now too. 

Consumers and businesses were responding constructively and positively to the new ways of working. While customer satisfaction levels were at record high levels across the service, they were even higher for cases handled in the new model.  Businesses were also seeing signs of increased customer retention in their own performance measures.

The audit committee had received a detailed update on the associated IT development programme at its meeting in early October and had been assured about the progress being made to date. It was though early days and there was much still to do. The Board would keep track of progress and a substantive update was due to come to its meeting in February next year. 

Nov 11              Service development update                   

The next investigation teams were being established, following the latest recruitment round, with the lessons from setting up the first teams informing training and transitional arrangements.

The knowledge infrastructure to support a multi-skilled and flexible working environment was being put in place and the service development steering committee was due to undertake a ‘deep dive’ review to look at the knowledge infrastructure in more detail. As noted at the October meeting, a detailed review of the IT development programme was due to come to the February Board. 

In the meantime, performance was good, with customer satisfaction levels higher than elsewhere and productivity levels on track against plans. The chairman and other Board members had spent time recently in the investigation teams and had been struck by levels of engagement  and the commitment to delivering a timely and responsive service to customers. While case-handling colleagues were very busy, they appreciated that this, in part, reflected the additional challenge of learning new things.  

As discussed at previous meetings, staff engagement levels more generally continued to reflect a period of change, with some colleagues feeling unsettled and unsure about the future role they could see themselves playing. Board members noted the backdrop of an uncertain external environment more broadly, which may well be adding to people’s sense of uncertainty. 

The Board would be kept updated on staff engagement through the regular reports on the key corporate commitments and, as appropriate, through other ad hoc feedback.

Minutes from 2017

Feb 17              Service development                    

              Programme update             

              The update on the service development programme focussed on:

•                                                                                                                                                                                                                         The progress being made in establishing the investigation teams:

The majority of the recruitment for the new investigation pods had been completed - and the ‘waves’ of new teams were being rolling out as planned.

•                                                                                                                                                                                                                          Service performance and quality:

The performance in the first of the established investigation pods continued to track against the trajectory. Productivity in the teams was also tracking as expected against plan. A number of changes to both the induction and performance management framework training had been introduced, based on the feedback from the first teams on what could be better. On performance management, the full breadth of what colleagues were doing to help customers was not being recognised and people were feeling undervalued as a result.

Consumer satisfaction on non-upheld cases continued to be higher than elsewhere in casework, and the investigation teams were now resolving around 50% of cases within 6 weeks, again this compared very favourably to waiting times elsewhere in casework.

•                                                                                                                                                                                                                         The transition of colleagues to mass claims teams:

Planning was underway to transition staff from general casework to PPI – a complex task for which the logistics themselves were significant in terms of the physical moves, but importantly, where much planning was needed to balance the teams to get the right blend of skills and capabilities. The transition would also require the close management of existing caseloads and a training programme to equip general casework staff to handle mass claims casework. The impact on staff morale and levels of engagement could not be underestimated either.

Governance for the programme of work for mass claims would now come under the service development programme arrangements.

•                                                                                                                                                                                                                         Staff engagement:

As the chief ombudsman and chief executive had highlighted in her report to the Board, the service was working with independent external consultants to gauge how people were feeling through this period of significant change. As noted earlier in the discussion, feedback from the focus groups held with the first investigation teams was helping identify those things where things could done better – the quick wins and the things that might take a little longer to work through.

The Board emphasised the need to track engagement over time and across the different areas to check the impact of interventions and initiatives.

Mar 17              Service development      

              The staff moves to prepare for the anticipated work in PPI had gone well, and the Board thanked facilities colleagues for managing the logistics so smoothly. The challenges around workload and resource planning had abated considerably since the FCA had finalised its PPI rules and guidance, and training and operational plans were now being advanced with a greater sense of clarity.   

                            In the investigation teams, performance continued to track well against plans, with customer satisfaction levels remaining a good deal higher compared to other casework areas. While the transitional period was impacting timeliness, again, customers were getting answers more quickly than in other casework areas. 

                            Recognition of the value of a broad range of case-handling activity – from early interventions through to formal decisions – was helping to encourage the right behaviours, with customer need as the primary driver. The service continued to engage with financial businesses to ensure that they could play their part too and that their operational response and resourcing supported timely and effective interventions. 

In terms of staff engagement, the independently facilitated focus groups had found that the lessons from the first teams’ experiences was feeding through to the later teams.  The Board acknowledged the importance of ensuring that the positive feedback was shared across the teams, making it clear that lessons were being learned from the

earlier feedback. 

Staff engagement would continue to be tracked as part of the service’s commitments, and this would include comparisons across different departments, and an all staff survey planned for a few months’ time would also compare how people were feeling across the service.  

              The advanced stages in the establishment of the investigation pods and the transition of colleagues to mass claims also provided an opportune time to ensure that the senior leadership teams in both areas understood their role, and that of their people, in delivering the service’s vision of a first rate service for its customers. To this end, the chief executive and the wider executive team had spent time with the investigation team leadership, and were due to do the same with the mass claims leaders in the next couple of weeks. Initial feedback showed appreciation for the investment that this time represented.

May 17              Service development                    

The Board reflected on a year of change in which the strategy for a more relevant and sustainable service had been realised. The first investigation teams were now well established and performance was on track against the plans. Higher general casework volumes had necessitated a phased transfer of cases over to the investigations teams. The expectation had been that all new general casework cases would go to the investigation  teams from 1 April; however, case-handling colleagues who had transferred over to mass claims teams would continue to deal with certain cases until the investigation teams had the capacity to take them on and volumes allowed.

In other developments, general casework front line calls were now going to the investigation teams,  the first release of the new customer-centric case-handling system had been rolled out to staff and external recruitment had begun for ombudsman managers, with further opportunities for staff internally to follow. Work to establish the knowledge infrastructure was also continuing apace, with more and more content available on the knowledge portal, Discovery, and search and access vastly improved.   

On staff engagement, the Board discussion in February had flagged the importance of continuing to track how people were feeling over time, and as between the different areas of the service, and monitoring the impact of key interventions. The May update included a comparison between the different areas and a more detailed discussion followed under the substantive item on staff engagement at fos/17/05/10.  A paper on the annual staff survey was due to come to July Board and staff engagement levels would continue to be tracked and reported to the Board in substantive papers, including the quarterly performance report on the service’s commitments.  

May 17                            Staff engagement              

              CEO board reports and service development papers had, to date, included updates on employee engagement and how staff were feeling during the service’s change programme. The updates had highlighted the feedback staff had provided through various channels, including:

-          ‘finger on the pulse’ temperature checks; 

-          the commitment measures;

-          the staff consultative committee; and

-          external platforms, including the online employee review site, ‘glassdoor’.

The strategy for tracking staff engagement during a time of significant change had also included independently facilitated focus groups with staff across the different areas of the service. Aspects of this work had been included in previous updates, and now that the work had been competed Jenny Davenport, independent employee engagement consultant, attended the Board meeting to share the overall findings from the qualitative research she had undertaken.

                            By way of background, the work had been commissioned to help identify how different groups of staff were feeling, recognising that their experiences of change would be  different, depending on the area in which they worked, and that the opportunities to address concerns would be different too. For colleagues in the investigation teams, where new teams were being set up in a phased way, the focus groups were also intended to help flag the lessons from the first teams. And then in turn, the feedback from the later teams would provide a useful check on whether the lessons were being learnt.

              Overall, the findings were consistent with the general picture the other feedback channels had provided. Encouragingly, the focus groups identified staff had a real passion for what the service did and a commitment to its objectives and customers. Colleagues were also very supportive of each other, with a strong sense of the team and collegiate working.    

              The picture elsewhere was mixed, and varied depending on where in the service people worked and/or where people saw their future at the service. Initiatives to deal with aspects of the feedback in different areas were bearing fruit, though there was still more to do make sure the feedback helped drive improvements and address concerns. The forthcoming all-staff annual survey would provide further granularity, and aid targeted and meaningful action.

                            In the meantime, the Board stressed the importance of continuing to differentiate the causes of concern. Where concerns stemmed from the service model changes themselves and the realisation of the strategy – the case for change would need to continue to be made to ensure staff understood fully the imperatives, including the financial ones. It would be important too to continue to show how the more flexible and responsive ways of working were serving customers well, and better than before.

              Where people’s concerns arose from uncertainty about job security, the sooner the outlook was clearer about expected case volumes and timelines, particularly in PPI, the better. And where the executive and management recognised that things had not been done well or could be done better now, then it would be important to be open about them and ensure changes and improvements were made quickly and visibly.

                            Other service–wide areas of continued focus, and ones which were almost certainly going to be a feature of the staff survey results, included the relationship between the senior leadership team and ombudsman service colleagues more widely and the effectiveness of communications. On the former, while the executive team were confident that there were no fundamental cultural issues at play, the focus groups and other feedback had identified clear misgivings and the need to repair relations. On the latter, a new head of internal communications had been appointed and new approaches and practices to ensure timely and meaningful communications were being adopted, and from which early signs had been positive. 

              As noted earlier, a further substantive discussion on staff engagement would come to the July Board, when the service would have the results of its annual staff survey and the more granular analysis that this would provide. The staff survey would provide a whole service view across a broad set of considerations and would help provide further focus to the areas of challenge and the further actions required.

Jul 17              Developing the service and our people journey              

For the last two years, the service had been transforming the way it worked in line with its strategy to develop and maintain a ‘relevant and sustainable’ service fit for the future. To do that, it had been balancing a number of priorities to:

• modernise and re-engineer its casework model to provide a responsive and efficient service for its customers;  
• manage considerable uncertainty in its PPI caseload and see it through to an orderly conclusion; and
• reduce the costs of its support functions and make better use of its resources.

The large scale changes, which had touched every part of the service, had been unsettling and had brought significant uncertainty for staff. The impact on engagement levels had been considerable.   

At the May Board, Jenny Davenport, an independent consultant, had provided an update on how staff were feeling and presented the overall findings from the service-wide staff focus groups she had facilitated. She had mentioned that the results of an all-staff survey, due to be run at the end of the month, would provide further insight and help identify where actions should be focussed. 

The staff survey results were now available. The response rate was high, with 78% of staff completing it. The results showed that there was much that staff were unhappy and concerned about – consistent with the feedback other channels had provided to date – including the service’s ‘pulse surveys’, the focus group sessions, external commentary on review site, ‘glassdoor’ , and the on-going follow up work in teams.

Encouragingly, 88% of staff said they were committed to playing their part in helping the service achieve its objectives and to treating customers well and respecting their needs. While there was marked improvement on the extent to which colleagues were proud of the work the service did, compared to the results reported in the last quarter’s performance dashboard, there was still some way to go before the scores were at a more comfortable level.   

The May Board had noted that the results were likely to be particularly critical of executive-level management, and this had proved to be the case.  This made for uncomfortable reading particularly, taken with low scores for the perception of how changes had been managed and communicated. People were sceptical about anything happening as a result of the feedback and, while there were no apparent cultural issues as far as bullying and harassment were concerned, it would be important to look at the results at a more local level to check for any outliers and to do more to understand the results which indicated low levels of reporting.   

Other concerns were more area-specific; for example, colleagues dealing with mass claims cases felt they had fewer opportunities to learn, develop and progress compared to previous years where there had been rapid recruitment and progression. Added to this, people were uncertain about their future. They knew PPI work would come to an end at some point – but when was an open question, given how much was outside the service’s direct control.

In investigation, progression and job security were less of an issue, and key concerns  centred on the pressure staff were feeling in their new roles, with lots of new things to learn and demanding targets. Levels of stress or worry were therefore higher than elsewhere. 

The summer period would provide for a period of reflection, as the results were shared with staff and they had time to assimilate them. The executive management team was determined to listen and respond to staff, both by building on the things that were already in train and by looking at what else needed to be done to improve and do things differently. It would take visible and credible action to improve engagement levels and everyone’s experience of working at the service. 

It would be important to involve people in addressing the concerns – the feedback in the staff survey showed that staff wanted to be consulted on the big issues. This was especially the case for senior leaders, who wanted to share their experience and expertise and make a contribution. A collaborative approach would enable that and encourage a sense of joint ownership, with colleagues able to play their part to help.

The Board agreed that the results made for difficult reading, and were struck too by the feedback that was directed at the executive-level management. While the results, in large part, reflected the major change that the new strategic direction involved, coupled with considerable uncertainties outside the service’s control, there was a clear need to get underneath the concerns being raised and address issues.    

Engagement levels and how people were feeling would remain a key priority for the Board as the executive put in place its action plan to address the issues raised. It would keep in touch on a continuing basis with staff sentiment across the service, as well as at a more granular level where there were variances between the different departments. More specifically, the Board would want to continue to receive assurance on:

-          how the investigation model was delivering everything the service and its customers needed it to (and that colleagues understood how the changes were benefitting customers); 

-          how PPI was being managed to an orderly conclusion (and that colleagues in mass claims were being given as much clarity as possible about the future outlook).

Casework performance and people measures would continue to be tracked through the commitments dashboard – and the service would look at what other metrics and measures it could draw on, for example, other relevant benchmark surveys and feedback channels.

Sep 17              Chief ombudsman and chief executive’s update

On staff engagement, the chief ombudsman and chief executive provided an update on the action planning work that was under way to address the range of issues which had been raised in the recent staff survey, and which the Board had discussed in depth at its meeting in July.  To help inform the action planning, the executive had run workshops with senior leaders and staff representative groups to share thinking on the actions that could be taken in response to the survey and to seek wider participation and contribution.

The executive had taken away the strong sense that colleagues continued to be committed to helping make the service a great place to work. The levels of engagement during the sessions provided every reason to be encouraged, though there was much work to be done before significant shifts in how staff were feeling were likely to be realised.

The action planning work was now being overseen by a project manager, Tessa Clark, who was in the process of introducing regular reporting on the work in hand and ensuring that different initiatives and interdependencies were joined up. She was also working with the head of internal communications to ensure timely and coordinated updates were provided to staff. 

Updates on steps being taken to address some of the area-specific concerns highlighted in the staff survey were provided under substantive business later on the agenda.    

Sep 17              Developing our service               

Progress on establishing the investigation teams

The success of the investigation model and improved staff engagement were two sides of the same coin. Management attention was focussed currently on balancing the need to respond to higher than anticipated customer demand and giving case-handlers the time and support they needed to develop properly in their roles.

Overall, however, the executive team remained confident about the viability of the model. Improved customer outcomes were evident in the performance metrics to date, as well as in independent benchmarking results (see below). At the same time, a great deal of work was being undertaken to understand the support and infrastructure required to address capability and capacity challenges, the developing plans for which would be shared with the Board, as appropriate.

In discussing the staff survey results at its July meeting, the Board had stressed that it would wish to be kept up to date with trends and actions. As well as tracking casework and people performance through the commitments dashboard, the service undertook to look at what other metrics and measures it could draw on from time to time.

The commitments performance dashboard for the half year would be presented at the October Board, but in the meantime, the service had received the Institute of Customer Service (ICS) benchmarking survey results which showed an overall improvement (4%) in customer satisfaction. The improvement could be directly attributed to case-handling under the investigation model, as satisfaction levels were notably higher for cases handled in the investigation teams than for those cases handled elsewhere. Further detail on performance against the underlying key metrics in the ICS survey would come to the October Board, alongside the half-year performance report. 

Managing the PPI caseload

Since the Board last met in July, the FCA had introduced the rules and guidance for
Plevin-affected cases and a PPI time-bar and had launched its awareness campaign to encourage people to take action before the deadline.  

The start of the campaign and the introduction of the rules and guidance marked a significant milestone. It would provide a greater degree of certainty to the service’s planning, albeit a number of factors would remain at play which could impact the path ahead. Importantly, it also meant that the service would be able to give staff more clarity about the forward view and what colleagues working in this area could expect over the next few years (which would go a long way to addressing the most pressing issues from the staff survey for these colleagues). 

The service had yet to see any significant impact from the campaign on volumes, but it would keep a very close eye on all the lead indicators to inform its thinking and plans. The Board would take account of the latest analysis when it looked at the short and medium term view and agreed the forecast position at the mid-year point at its October meeting.

Oct 17              Developing the service  and the people journey             

Staff survey governance

Governance arrangements had been established for overseeing the staff survey action plan, with dedicated project management support to ensure timely and joined-up action.

Progress on establishing the investigation teams

The update focussed largely on what was in train and planned to help develop colleagues in investigation and relieve some of the pressure to allow them to build capacity and capability.

The pressure of targets and getting up to speed on new areas of knowledge were major features of the staff survey feedback for colleagues in investigation.

The plans for a transition support area and an academy pod would go a long way to helpi mitigate the pressures and address the main areas of concern for staff in this area.

Managing the PPI caseload

As noted earlier, the FCA’s PPI rules and guidance were now in force and its deadline awareness campaign had started. While many variables remained at play, the service now had a firmer basis upon which it could plan.   

The staff survey had highlighted that future uncertainty and a sense of a lack of investment in development and progression were uppermost in people’s minds in mass claims. A firmer planning basis meant more certainty could be given to staff about the outlook and the choices they had.

The Board agreed the ‘offer’ the executive proposed to put forward for mass claims colleagues which included career coaching, an enhanced professional development entitlement, clear progression opportunities and outplacement support.

This ‘offer’ represented a good deal for staff and communications should emphasise that, in choosing to stay on with a more certain outlook and acceptance of the offer, people were signing up to the professional and cultural standards expected of everyone working at the service. 

Appendix E

Our staff survey results

The Committee has requested the full results of the staff surveys over the period of organisation change, and staff surveys prior to this period to allow the Committee to reflect on the impact of the organisational changes (potentially from 2012 but earlier if necessary)

We have attached the following:

-          briefings to our executive team on Best Companies staff surveys which took place between 2012 and 2015

-          our pulse surveys results, which took place in 2016 to give more timely feedback during this period

-          the results of our most recent staff survey by Facta Consult in 2017, which are published on our website