Third supplementary memorandum by the
Parliamentary Ombudsman
OPCA/HSC COST ANALYSIS
1. In October 1997 the Office introduced
a time recording system for investigation staff and their managers,
in order to enhance the range and quality of management information.
We have been seeking to develop that system with financial data
to produce costs for the various activities that the investigating
divisions undertake. The task is a complex one and continually
developing as the organisation develops. We do not yet have reliably
accurate unit costs for the Office's investigative activities.
More work is required in several areas, for example: defining
further the range of our activities and outputs and their costs,
and in particular achieving a more accurate allocation of overheads
and thus total costs.
2. The most meaningful information we can
provide is set out immediately below. It focuses on cases concluded
as the best representative measure that we have at present. But
it does not capture the total work of the Office, and some important
types of additional output are mentioned later in the paper.
3. The figures cover the two years 1997-98
and 1998-99. 1997-98 was the first year that OPCA started operating
on a financial year, not calendar year, basis; and this aids comparison.
4. Total Voted Expenditure for the years
1997-98 and 1998-99 was as follows:
Table 1
| 1997-98 | 1998-99
|
| £s | £s
|
| PCA direct costs | 3,531,534
| 3,180,581 |
| HSC direct costs | 2,763,487
| 2,583,055 |
| Sub-total | 6,295,021 | 5,763,636
|
| Central services and accommodation costs |
6,946,979 | 6,926,364 |
| Total Voted Expenditure | 13,242,000
| 12,690,000 |
| | |
Numbers of cases concluded (but see paragraph 10 below) were:
Table 2
| 1997-98 | 1998-99
|
| PCA | 2,102 | 1,543
|
| (including 402 full investigations)
| (including 388 full investigations) |
| HSC | 3,039 | 2,712
|
| (including 120 full investigations)
| (including 119 full investigations) |
| | |
| Total | 5,141 | 4,255
|
| (including 522 full investigations)
| (including 507 full investigations) |
| | |
Note: HSC cases exclude those that fall into the categories
of "Enquiry answered" and "No action required".
PCA cases exclude advice and response to direct written contacts
from members of the public in connection with PCA matters.
5. This gives the following figures of cost per case
concluded for the Office as a whole.
Table 3
| 1997-98 | 1998-99
|
| £s | £s
|
| Office costs per case concluded | 2,575
| 2,982 |
| | |
6. It is when one attempts to break the above figures
down, for example into separate figures for PCA cases and HSC
cases that a degree of arbitrariness sets in. That is because
while direct PCA and HSC costs are separately recorded,
the way in which central service and accommodation costs are apportioned
between the two sides of the Office markedly affects the figures.
For example, if those costs were to be allocated to PCA and HSC
pro rata to average staff in post then the respective central
service charges for PCA cases and HSC cases would become:
Table 4
Central services allocated on the
basis of average staff in post
| per cent | 1997-98
£s
| per cent | 1998-99
£s
|
| PCA Central Service Charge | 57
| 3,959,778 | 55 | 3,809,500
|
| HSC Central Service Charge | 43
| 2,987,201 | 45 | 3,116,864
|
| Total | | 6,946,979
| | 6,926,364 |
| | |
| |
7. That in turn would produce the following figures for
cost per concluded case:
Table 5
| 1997-98 | 1998-99
|
| £'s | £'s
|
| PCA | 3,564 | 4,530
|
| HSC | 1,892 | 2,101
|
| | |
8. Conceptually, it is difficult to break the above figures
down still further by costing separately cases which go through
to a full investigation and those which do not. For example, if
on the PCA-side the direct costs of all staff in the investigation
directorates are wholly attributed to cases going through to a
full investigation and the direct costs of staff in the screening
directorate are wholly attributed to the remaining cases which
do not, and if the central services and accommodation charges
attributed to the PCA-side in paragraph 6 above are themselves
allocated between the PCA directorates on the basis of average
staff in post, then that would yield the following figures:
Table 6
| 1997-98 | 1998-99
|
| £'s | £'s
|
| Cost per full PCA investigation | 12,376
| 11,660 |
| Cost per other PCA case disposed of | 1,480
| 2,135 |
| | |
However, the work we have done shows that to be a gross oversimplification,
and so inaccurate. Staff in the screening directorate do some
work on cases which go through to full investigations; and staff
in the investigation directorates often do work on cases which
do not. Put simply, the figures in this paragraph cannot be taken
as reliable.
9. There would be even more difficulty in adopting such
an approach for OHSC as it does not split screening and investigations
work. Instead the HSC directorates operate with an integrated
approach.
10. But even the limited figures presented in paragraph
5 (Table 3) hide considerable uncertainties that make comparison
or analysis problematic. Difficulties arise from:
(a) The data are affected by the efforts made throughout
1997-98 and 1998-99 to eliminate the backlogs in screening and
investigations from earlier years, particularly in OPCA. Whenever
the handling of a case extends over more than one financial year
costing problems arise: those are made worse when (as in 1997-98
and to a lesser extent in 1998-99) there are significant backlogs
overhanging the normal in-year workload;
(b) The figures for cases concluded in paragraph 4 (Table
2) above do not include the Office's advice and response to direct
written contracts from members of the public in connection with
PCA matters. Only a minority of these come back as cases subsequently
referred by Members of Parliament. There were some 1,087 such
approaches in 1997-98 and 822 in 1998-99. They are not included
in the figures for numbers of cases concluded in paragraph 4 (Table
2) above to avoid any risk of double counting. Nevertheless, they
are a tangible output of the Office which consumes resources:
most other Ombudsmen would count them as cases. (If they were
to be included the cost per case figures in paragraph 5 would
fall to £2,046 (1997-98) and £1,838 (1998-99);
(c) Apart from screening and investigation cases and dealing
with enquiries the Office has other significant activities and
outputs. They include those in support of the Ombudsman's strategic
aim to promote improvements in services and increase awareness
of the Office. This covers, for example, the representational
duties that the Ombudsman and his senior staff undertake, and
the work of the Office in working with organisations to improve
their practices, the production of volumes of selected investigations,
and the spreading of advice and good practice through a range
of initiatives.
11. As noted above we are working to develop our systems
to provide better information to measure and increase our efficiency.
We shall take this forward in the coming year with the aim of
being able to produce reliable cost information that is relevant
to and meets the needs of internal and external users.
26 January 2000
|
