Oversight board questions rising budget as huge backlog threatens the Ombudsman’s future
The Legal Services Board has warned that it holds “significant concerns about the viability” of the Legal Ombudsman as the complaints body continues to struggle with rising demand and an entrenched backlog of unresolved cases.
The Office for Legal Complaints, which oversees the Legal Ombudsman, has opened a consultation on its budget for the year from April 2026. It has outlined four options for raising the current twenty-million-pound budget. The lowest option proposes a 6.7 per cent increase and the highest suggests a 17.1 per cent rise, which would allow the Ombudsman to recruit additional investigators and make a meaningful reduction in the number of cases waiting for allocation.
The preferred option suggests a 12.1 per cent increase, equivalent to around two point four million pounds, which would fund twenty-six new staff members. A further one per cent rise has also been requested to support a full review of the Ombudsman scheme rules. However, the Legal Services Board has queried whether an 11.1 per cent operational uplift can be justified when, in its view, there are deeper issues with the Ombudsman’s operating model that cannot be resolved simply by injecting more money.
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The current business year opened with more than three thousand two hundred investigations waiting to be allocated and an average delay of three hundred and nineteen days before a case reached an investigator. Demand has since increased significantly. In the first half of 2025 to 2026, the Ombudsman accepted six thousand three hundred and seventy three complaints, a rise of twenty six per cent compared with the same period last year and more than one thousand above its own highest demand projections.
The Ombudsman now expects the queue of unallocated investigations at the end of March 2026 to stand between three thousand three hundred and seventy-eight and three thousand seven hundred and fifty-four. This would exceed the number awaiting allocation at the start of the year and remain well above previous forecasts. Although the nature of complaints, such as delays and poor communication, has not changed markedly, the number of issues raised in each complaint and the overall complexity of cases have increased. Residential conveyancing continues to be a significant source of new complaints.
The Legal Services Board has noted that even the consultation’s preferred option, combined with the most optimistic demand forecasts, would still leave the Ombudsman with a substantial backlog for at least a further two years. It has therefore questioned the sustainability of the current model and recommended that the Ombudsman also consider what could realistically be achieved under the lowest proposed increase of 5.8 per cent.
The Office for Legal Complaints will submit its final budget proposal to the Legal Services Board in March. Meanwhile, Phil Cain has been appointed as the next Chief Legal Ombudsman. He is currently operations director at the Gangmasters and Labour Abuse Authority and previously served as deputy chief constable of North Yorkshire Police. He is due to take up the role in February.