Financial Ombudsman Service  

Fos to spend £300k on consultants to assist reform

Fos to spend £300k on consultants to assist reform
Nausicaa Delfas, interim chief executive and chief ombudsman at the Fos

The Financial Ombudsman Service will spend £300k on external advisers to help design and implement reforms to its operating model.

In a letter to interim chief executive officer Nausicaa Delfas, MP and chair of the Treasury Committee Mel Stride questioned the Fos on how it would get on top of the current backlog of cases.

A periodic review published last month found "substantial casework backlogs" and that the Fos was operating at a deficit, with the funding gap filled by eating into its reserves.

Following testimony to the committee that it costs the Fos on average £960 to resolve a case compared to the £650 case fee it receives, Delfas was asked to outline how it would address its funding issues.

Delfas said: “To sustain momentum and ensure continuity, we have secured the ongoing support of Oaklin Consulting, who carried out the periodic review. Oaklin were appointed following an open tender process. 

“The additional work will cost about £300k (inc VAT), a sum we are confident represents good value for money. It is critical we quickly turn the ideas in the review into a structured plan of action.” 

In the letter, she explained that over the next three months the Fos would explore the ideas and recommendations in the review and turn them into “a clear design, or ‘operating model’, for the future organisation”. 

“This will involve detailed workshops with a wide range of our staff, as well as drawing on industry best practice,” she said. “As soon as a future model has been agreed the integrated plan to deliver it will be finalised.”

The Fos is also in the process of hiring a director of transformation, who will start their role at the end of February on a two-year fixed term contract. 

While not a member of the executive, they will attend executive committee meetings as necessary and will report for the time being into its interim chief of staff as further changes are made to the executive team.

“Once the director of transformation is in post, we will review whether additional external advice is warranted and how it is best sourced, being ever mindful of the need to balance cost-efficiency with the benefits of external experience,” Delfas said.

Last month, the Fos pledged to go “further and faster” as it launched an action plan addressing the changes it will make to its operating model.

The action plan set out how the Fos will aim to improve its delivery for customers and provide help resolve cases more quickly.

Stride also requested details on how the Fos would use intelligent automation and technology in case handling, as well as whether it was realistic to achieve the commitments set out in its action plan by April 2022. 

Delfas said: “We are confident that we can achieve what we have committed to do by April 2022. Between now and March 2022 we will be carefully considering all of the recommendations and will continue to develop our action plan.