Meeting: Corporate Scrutiny Sub-Committee (Meadowfield - - 03/04/2007 10:00:00 AM)
Item: A7 Corporate Risk Management - Report for the Quarter period October - December 2006
REPORT OF THE DEPUTY CHIEF EXECUTIVE ON BEHALF OF THE CORPORATE RISK MANAGEMENT GROUP
Purpose of Report
1. The purpose of this report is to inform Members of he Risk Management update report presented to Cabinet on 22 February 2007. A copy of the report is attached for information.
2. Members to note that Councillors’ Forster & Henderson have been identified as the lead Overview and Scrutiny Members for Risk Management. They will be liaising with the Corporate Risk Manager on a regular basis and be kept informed on relevant issues as they arise.
Comments
3. The Corporate Risk Manager will be attending the Meeting and will be available to answer Members questions.
Recommendation
4. That Corporate Scrutiny Sub-Committee Members note the contents of this report.
Contact: David Marshall, Corporate Risk Manager Tel: 0191 3835726
on behalf of the Corporate Risk Management Group
Cabinet
22 February 2007
Corporate Risk Management
Report of the Quarter period October - December 2006.
Report of the Deputy Chief Executive on behalf of the Corporate Risk Management Group
1. Purpose of Report
The purpose of this report is to provide an update on the work carried out by the Corporate Risk Manager and the Corporate Risk Management Group during the quarter period October - December 2006, and highlights the current status of risk across the Council. As well as good management practice, this report also positively responds to the Comprehensive Performance Assessment Use of Resources Key Lines of Enquiry. The report is broken down into a summary in paragraphs 2 to 5, focusing on the current major risks to the Council and external changes on the horizon which may lead to potential new risks. Detail supporting this summary to be found in the attached Appendices 3 to 5.
2. Current Status of Risks to the Council Risks are assessed and managed at both a service and corporate level. Throughout this report, both in the summary and the Appendices, all risks are reported as Net Risk, which is based on an assessment of the impact and likelihood of the risk occurring with existing controls in place. At the end of December 2006, the major risks being managed were:
- Failure to comply with employee legislative requirements, such as not implementing an equality proofed pay structure under Single Status, has always been a major risk to the Council. However, as a result of recent litigation involving other local authorities regarding Job Evaluation, the potential financial risk to the Council has increased considerably, as further claims may be made.
- Failure to deliver the Building Schools for the Future programme within time and budget, with minimal disruption to service delivery. Risks are managed by the project team, and key risks are highlighted monthly to the project board.
- Failure to effectively implement the proposed Waste Management Contract. As well as reputational damage, the financial implications may require funding diverted from other Council budgets or other revenue. To date, there has been only minimal reduction of the level of risk, but as the project progresses, the risks will be addressed.
- The failure to improve educational attainment of children in public care. Although management consider that they have adequate controls in place to significantly reduce the likelihood that this risk will occur, this is still considered a key risk, as it is one of our priorities for improvement.
3. Emerging risks - In this quarter, October to December 2006, the major item which emerged as raising a potential risk is the impact on Services due to the increased migration from Eastern Europe.
- In the last quarter, July to September 2006, the major emerging risk was the Bournewood Judgement, which relates to service users who at the time of admission, lacked the capacity to consent or object to residential or nursing care, and where this involved a restriction of liberty or informal detention. The potential risks surrounding this are still being monitored, but the risk exposure is not expected to be as significant as initially anticipated.
- Looking forward, risks will inevitably arise from any changes to local government in the County as a result of the proposed bids by the County Council and separately by the District Councils.
4. Changes to major risks in this quarter Services have been reviewing their risks during November and December, a process which takes place every six months. This involves identifying new and redundant risks and re-assessing existing risks. Consequently, there have been a number of changes to the top 15 risks compared to the last quarter. Major changes to note include:
- The likelihood of injury or fatality due to a lighting column collapse has been re-assessed, and in light of the current controls now in place, is no longer ranked as a major risk to the Council.
- The failure to manage Gypsy and Traveller sites was previously a significant risk, but following a number of improvement measures, management consider the level of risk has reduced to a more manageable level.
- The risk of increasing fuel and energy costs, and their implications for the Council, was raised due to the likelihood that these costs would continue to increase. Although energy costs have decreased in recent months, and the financial impact on the Council has consequently been reduced, the increasing worldwide demand may lead to further increases.
5. Progress this Quarter A process to ensure effective assessment and reporting of risks associated with Key Decisions has been approved by the Corporate Management Team and Cabinet, and is now being applied to reports on a pilot basis, working in conjunction with the Acting Director of Corporate Services.
A separate report will be provided in due course as an update on business continuity.
6. In the next Quarter Moving forward, risk management training courses for all Members, and separate courses for appropriate staff, are scheduled for February and March 2007.
7. Recommendation Members are requested to note this report.
| Contact: David Marshall, Corporate Risk Manager Tel: 0191 3835726 on behalf of the Corporate Risk Management Group |
Appendix 1: Implications | Finance Addressing risk appropriately reduces the risk of financial loss.
Staffing Staff training needs will be addressed in the 2006-07 risk management training plan.
Equality and Diversity None Accommodation None
Crime and disorder None
Sustainability None
Human rights None
Localities and Rurality Managing risk will positively impact localities by improving the Community Leadership of the Council.
Young people None
Consultation None
Health None Appendix 2: Background |
To date within the Council, a large amount of work has already been carried out in shaping and developing our approach to risk management. In summary, Cabinet and the Corporate Management Team have designated the Deputy Leader of the Council and the Deputy Chief Executive as Member and Officer Risk Champions respectively. Together they jointly take responsibility for embedding risk management throughout the Council, and are supported by Keith Thompson (Assistant County Treasurer) and Burney Johnson (Head of Transport Strategy and Design), the lead officers responsible for risk management, as well as the Corporate Risk Manager. In addition, the lead Members for Overview and Scrutiny on risk management are the Chair and Vice Chair of the Overview and Scrutiny Corporate Sub-Committee. Each Service also has a designated member of staff (the Service Risk Manager) to lead on risk management at a Service level, and act as a first point of contact for staff who require any advice or guidance on risk management.
Collectively, the Service Risk Managers and the Corporate Risk Manager meet together as a Corporate Risk Management Group. This group monitor the progress of risk management across the Council, advise on corporate and strategic risk issues, identify and monitor corporate cross-cutting risks, and agree arrangements for reporting and awareness training.
It is the responsibility of the Chief Officers to develop and maintain the internal control framework and to ensure that their Service resources are properly applied in the manner and to the activities intended. Therefore, in this context, Heads of Service are responsible for identifying and managing the key risks which may impact their respective Service, and providing assurance that adequate controls are in place, and working effectively, to manage these risks where appropriate. In addition, independent assurance of the risk management process, and of the risks and controls of specific areas, is provided by Internal Audit. Reviews by external bodies, such as the Audit Commission, Ofsted and CSCI, may also provide some independent assurance of the controls in place.
Risks are assessed in a logical and straightforward process, which involves the Risk Owner (within the Service) assessing both the impact on finance, service delivery or stakeholders if the risk materialises, and also the probability that the risk will occur over a given period. The assessment is confirmed by the Service Management Team, and Chief Officers agree their Service Risk Register with the Cabinet Member responsible for their Portfolio Service.
TO VIEW APPENDICES 3,4 & 5 PLEASE CLICK ON PDF ATTACHMENT OR REFER TO HARD COPIES LOCATED IN CORPORATE SERVICES AND THE COUNTY RECORD OFFICE Attachments
06-07 - Quarterly report - Quarter 3 - Cabinet (Final).pdf;
06-07 - Quarterly Report - Quarter 3 - O&S - Update.pdf