BC230604-07

Division(s): All

BEST VALUE COMMITTEE – 23 JUNE 2004

Report by Head of Human Resources

Introduction

The terms of the Best Value Committee include responsibility for reviewing the effectiveness of the Council’s risk management processes.

This report outlines the improvements made to the risk management process for service planning for 2004-05 and how the effective monitoring and review of risks and uncertainties will be incorporated into the Council’s performance monitoring arrangements.

The External Auditors will be taking a closer look at how the Council is managing risk as part of their annual review. The Comprehensive Performance Assessment also focuses on risk management and how risk management is embedded into planning and decision making. This work has also contributed to the Statement of Internal Control which the Council has to produce for 2003/04.

Why is risk management important in the planning process?

Anticipating what the key risks and uncertainties are at the planning stage means that the service has the opportunity to determine the action that is required to reduce uncertainty, manage risks or maximise opportunities. Implementation plans in some cases may need to be changed to reflect the risks. This will increase the likelihood of objectives being achieved.

CCMT and the Executive should be aware of the significant risks and uncertainties that could affect the delivery of the Council’s main priorities so that they can satisfy themselves that the appropriate resources or management action is directed towards reducing the risks or uncertainties.

The Process

The Council’s Risk Manager is part of the Performance and Review Team who have developed the improvements to the planning process for 2004/05. Part of the improvements was the requirement to include a risk analysis as part of every service plan. For 2004/05 the Risk Manager has helped senior managers to start the risk management process through facilitating a series of workshops and interviews with senior managers.

In developing the risk management process for Oxfordshire it has been recognised that the process needs to be kept simple. This will ensure that it can be repeated across all levels of the Council without managers having to go on a training course to learn how to do it or for the Council to have teams of facilitators conducting risk workshops. Annex A (download as .doc file) gives an outline of the risk assessment process

The term "uncertainty" has also been introduced to the process as it is often uncertainty that leads to outcomes being different than planned. The more that can be done in advance to reduce both risks and uncertainty the more confidence there will be in outcomes.

The outcome of the interviews and workshops was a Risk and Uncertainty Register for each of the service areas. This aimed to include action that would be taken to address the risks that required the most urgent attention. Whilst the Head of Service is responsible for updating the risk register, a copy is held by the Risk Manager for each service so that further analysis can take place to identify generic risks that affect more than one directorate. The combined register for all the services is known as the "corporate risk register" and this will be inspected by the external auditors.

Overview of benefits of the Process

The interviews and workshops gave managers the opportunity to air their concerns and issues about the delivery of priorities and to consider what action was needed. In most cases the risks and uncertainties raised were already known to managers but there had been no assessment of the impact of the issues and in many cases and no specific action to address them had been identified. This is where the risk management process helped most.

One of the most important elements of the risk management process is openness. It is essential that managers at all levels are able to feel that they can openly raise risks and uncertainties which can impact on their objectives. The Risk Manager generally felt that staff did open up about their concerns in workshops and interviews. However, it is not clear whether there was the same level of discussion takes place through the existing performance monitoring arrangements. There is still a risk that uncertainty will be suppressed unless senior managers encourage more openness.

Further Improvements needed to the planning and performance monitoring process

The risk registers need to be regularly reviewed and monitored in order to ensure that action taken has been effective to reduce the risks or new risks that have emerged are assessed and given attention.

This can be achieved through the existing performance monitoring arrangements and it is proposed that every meeting that discusses performance against planned objectives should include a discussion about risks and uncertainties and action agree to address the issue. If it is a significant risk that cannot be addressed at that level then it should be escalated to the next level of management.

Staff at all levels need to feel that they can raise risks and uncertainties in an open way and without fear of blame. This requires managers and officers to encourage more openness from staff. This is more difficult to address and will take longer as it will involve a change in culture in some areas.

However to give assurance to members and directors that they are aware of all the most important risks, it will be a requirement of the quarterly performance reports to include a section on risks and uncertainties to the achievement of the Council’s key priorities for 2004/05. This will also require an assessment of the effectiveness of any planned or existing action to address the risks.

The timetable of events leading through to the first quarterly performance report is attached in Annex B (download as .doc file).

RECOMMENDATION

The Committee is RECOMMENDED to note the progress made and endorse the approach for monitoring and reviewing risks and uncertainties

STEVE MUNN
Head of Human Resources

Background Papers: Nil

Contact Officer: Evelyn Kaluza Tel: 01865 815193