MPs have questioned the Financial Ombudsman Service (FOS) about a tenfold increase in the waiting time for cases to be worked on since a service restructure in 2016 which was supposed to make it more responsive.
A whistleblower had written to the Treasury Select Committee claiming there were now 30,000 new cases waiting to be allocated to an adjudicator and the waiting time for work starting on the adjudication process was ten times longer.
The queue for an ombudsman’s final decision had also grown by three times and there was a waiting list of 8,000 cases.
The 2016 reorganisation was an attempt by FOS to make themselves more responsive in the face of an increased case load
Under the new structure the person who received the initial appeal would consider the complaint, regardless of whether or not it was about an area of which they had special knowledge.
Previously cases had been assigned to adjudicators with specialist knowledge which had created backlogs.
Committee member Labour MP Rushanara Ali asked FOS chief executive Caroline Wayman if the numbers were correct and if that made ‘a much more vociferous case’ for better resources to be provided.
Ms Wayman did not dispute the numbers quoted by the whistleblower but insisted the increases were not the result of a failed restructure, blaming the delays on an unexpected increase in the caseload in 2018.
She told the committee that FOS had experienced ‘unprecedented growth’ in several areas with the number of complaints about payday lenders being particularly acute’.
She said: “We have more people waiting than we did three years ago, but that is a straightforward function of having more cases. Had we had stable demand, I don’t think we’d have any wait times.”
Committee members expressed concern that the service could become ‘swamped’ when an additional 210,000 companies qualify to complain from April 1st.
SNP member Stewart Hosie said in his opinion the proposed recruitment of 20 additional case-handlers to deal with the new style claims might not be enough to cope, saying: “It doesn’t look like you’re throwing the artillery at what could be a potential problem.”
Ms Wayman said: “Part of what I think we have to do is to look at ways to reduce demand in the right way with financial businesses, particularly pay day lenders as an acute area at the moment.
“There are cases that come to us that shouldn’t come to us, so within the plan and budget we are looking at quite significant investment next year.”
MPs were shocked to learn that FOS is shedding permanent staff through a voluntary redundancy programme while planning to take on more expensive contract staff at a cost of £100 million for the next financial year.
Questioned about it, Ms Wayman told the committee the move would give FOS greater flexibility to do their job.