Manchester City Council Audit Committee March Corporate Risk Register

Choim - Manchester City Council

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MANCHESTER CITY COUNCIL REPORT FOR INFORMATION / RESOLUTION COMMITTEE Audit Committee DATE: 22 March 2007 SUBJECT: Development of the Corporate Risk Register REPORT OF: The City Treasurer ___________________________________________________________________ PURPOSE OF REPORT To inform members about the developing methodology for and current status of the Corporate Risk Register following introduction of supporting risk management arrangements within business planning. RECOMMENDATIONS Members are requested to:- 1) Note the progress made in updating and further developing the Corporate Risk Register. 2) Consider if and when the Corporate Risk Register will be reviewed as part of the committees work programme in the coming municipal year. FINANCIAL CONSEQUENCES FOR THE CAPITAL AND REVENUE BUDGETS: None CONTACT OFFICERS Tel Number E~Mail Address Richard Paver 234 3564 r.paver@manchester.gov.uk John Bradley 234 1429 j.bradley@manchester.gov.ukGeoff Little 234 3317 g.little@manchester.gov.uk John Gill 3715 j.gill1@manchester.gov.uk BACKGROUND DOCUMENTS none. WARDS AFFECTED N/A IMPLICATIONS FOR KEY COUNCIL POLICIES Anti-poverty Equal Opportunities Environment Employment None None None None 1. Introduction 1.1 The Audit Committee, at it’s meeting in June 2006, considered the Corporate Risk Register ...

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management

risk management

managers

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Publié par	Choim
Nombre de lectures	25
Langue	English

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MANCHESTER CITY COUNCILREPORT FOR INFORMATION / RESOLUTION COMMITTEE AuditCommittee DATEMarch 2007: 22SUBJECT: Developmentof the Corporate Risk RegisterREPORT OF:The City Treasurer___________________________________________________________________ PURPOSE OF REPORT To inform members about the developing methodology for and current status of the Corporate Risk Register following introduction of supporting risk management arrangements within business planning.RECOMMENDATIONS Members are requested to: 1) Notethe progress made in updating and further developing the Corporate Risk Register. 2) Considerif and when the Corporate Risk Register will be reviewed as part of the committees work programme in the coming municipal year. FINANCIAL CONSEQUENCES FOR THE CAPITAL AND REVENUE BUDGETS:None CONTACT OFFICERSTel NumberE~Mail Address Richard Paver234 3564r.paver@manchester.gov.uk John Bradley234 1429j.bradley@manchester.gov.uk Geoff Little234 3317g.little@manchester.gov.uk John Gill234 3715j.gill1@manchester.gov.uk BACKGROUND DOCUMENTSnone.WARDS AFFECTED N/AIMPLICATIONS FOR KEY COUNCIL POLICIES AntipovertyEnvironment EmploymentEqual Opportunities NoneNone NoneNone

1.Introduction 1.1 TheAudit Committee, at it’s meeting in June 2006, considered the Corporate Risk Register (CRR) which had been adopted by the Strategic Management Team (SMT) as the way of overseeing, at a strategic level, the risks to the achievement of the Council’s objectives.In noting the contents of the CRR members referred the content to Chairs of Scrutiny Committee for consideration in relation to their work programmes. 1.2 Sincethe June meeting, the Council has radically redesigned its business planning methodologies, including how they address risk management.This was to be the main process for continuing to embed risk management.The new structure of business planning, set as it is at “Heads of Service” level provides an excellent bridge between strategic risks overseen by Strategic Directors and how these risks translate into operational risks overseen by managers at various levels.The approach adopted provides both the opportunity for the CRR to inform business planning as a contribution to managing those risks but also acts as an early warning of a worsening status of the those risks included in the CRR or indeed to flag new risks which ought to be brought under theumbrella of the CRR and be overseen by SMT. 1.3 Thenew business planning methodology has enabled a significant step forward to be taken in embedding risk management but it has also highlighted the need to refine the process of updating the CRR both in relation to escalating existing risks and agreeing new areas.However, at this stage the methodology has been inconsistently applied partly as a result of the condensed timescales associated with the introduction of the new methodology and the need to develop the skills and experience of managers in consistently utilising the methodology.As a result further work needs to be completed over the coming weeks to enable SMT to consider and agree an updated version of the CRR 1.4 Thisreport outlines a preliminary assessment of the status of the risks contained within the CRR considered in June, highlights some of the potential issues which will need to be considered by SMT in updating the CRR and provides details of the increased support put in place by The Chief Executive to ensure that risk management develops into an effective management tool. 2. TheExisting Corporate Risk Register 2.1 TheCRR considered in June 2006 contained 18 risks which are listed in summary form at Appendix 1.At the time of the review by Audit Committee, members commented on the benefits of separately identifying those risks which are internal to the Council and those which relate to external relationships. 2.2 Sincethat Meeting the Council has established the Public Service Board to oversee the operation of the Manchester Partnership and it is considered that there is merit in splitting risks in the CRR between SMT and the Board.In relation to the current CRR this would mean that the following risks would be reassessed from this dimension

¾Failure to deliver key objectives within the Respect agenda has a destabilising effect within sensitive neighbourhoods and affects the overall programme to deliver neighbourhoods of choice. ¾Relationships with key public partnership agencies (for example, Health, Police) fail to deliver anticipated outcomes in joint working initiatives ¾Failure to implement key strategies to reduce worklessness and improve the quality of work opportunities, impacts on individual well being and affects the ability of the Council to deliver its aims for the city (neighbourhoods of choice, individual and collective self esteem, reaching full potential). 2.3 Inrelation to the management of the risks within the CRR the following should be noted ¾The Joint Venture arrangements relating to the future of City Works have successfully developed to a stage that SMT will consider whether or not this can now be omitted from the CRR ¾Interrelated risks relating to the budget, the continuation of external funding and expectations of savings from the Manchester Improvement Programme have required significant managerial attention.Controls have been strengthened as a result of this managerial activity ¾The position in relation to the implementation of single status has progressed with particular emphasis placed on resolving equal pay settlements.The current position on single status and the implications for equal pay claims will need to be reassessed in the light of this progress Whileadditional measures have been put in place to address these matters as they developed, SMT will clearly need to formally review whether or not the controls which are in place to manage these risks will need to be amended in the light of their updated assessment. 2.4 Thisanalysis has confirmed that the issues which have most concerned SMT since the CRR was reviewed were successfully identified and that no other significant strategic issues have emerged which, with hindsight, should have been included.However, the risks outlined in the CRR are, in some cases, drawn very broadly and some may benefit from more focus in the light of the way in which these risks manifest themselves in the individual service Business Plans 3 RiskIdentified in Business Plans.3.1 Themethodology for identifying risks categorises them into high, medium and low. Inrelation to the consideration of risks as candidates for the CRR it is natural to review all high risks (those with a high consequence and a high or medium likelihood of coming to fruition or those with a medium consequence which are judged as highly likely to materialise).

3.2 TheDraft Business plans have identified 134 high risks.71 of these directly relate to risks contained within the CRR principally relating to the budget, continuation of external funding and in relation to workforce capacity (including single status), largely reflecting the issues outlined in section 2. Not only does this provide evidence on which SMT can base their assessments of consequence and likelihood of risks materialising but the emphasis placed on these risks may point to the need to refocus the risks or controls articulated in the CRR. 3.3 Someof the residual high risks relate to issues which SMT may not consider sufficiently strategic or indeed may represent incorrectly high assessments. However, many of the remaining risks require more specific assessment because they do not clearly reflect the nature of the issue.For example, on a number of occasions Heads of Service have identified, in some form or another, failure to achieve performance targets as a high risk.However, it is the reason why performance may be jeopardised which represents the risk. This could be lack of resources, lack of staff, failure of IT systems or a more specific issuerelevant to that particular service 3.4 .Four workshops have recently been completed for Heads of Service and their teams which examined risk registers in business plans.This confirmed that there was variable understanding of the methodology and it would be wrong for SMT to reconsider the CRR at this stage in the light of the analysis provided by Business Plans without giving the opportunity for Heads of Service to confirm their assessments. 3.5 Ingiving Heads of Service the opportunity to reflect, the intention is therefore to request Heads of Service to formally report high risks identified in their Business plans to their respective Strategic Directors together with their assessment of how these risks are controlled so that Strategic Directors can recommend to SMT whether or not the CRR needs to be amended. 3.6 Thisprinciple needs to be established on an ongoing basis and it is intended that the methodology for reviewing Business Plans will require that Strategic Directors are updated in this way on a quarterly basis. 4 Supportfor the further Development of Risk Managementand the CRR 4.1 Thenew methodology for business planning was designed for a number of reasons including its contribution to risk management.It is recognised that, at this stage, the process has only progressed through half of the annual cycle and, as such, cannot be expected to be fully developed.The Chief Executive has overseen a review of the effectiveness of the process and has identified the need to provide corporate support to and constructive challenge of Heads of Service in the development of Business Plans. 4.2 Aworking group of senior officers has now been established to develop that support and to provide effective challenge.Business planning, including how this informs the Corporate Risk Register, will now be the subject of continuous improvement during the coming year.In relation to risk management, these arrangements will be supplemented by additional guidance and support made available to all managers.

5 Conclusion 5.1 TheCorporate Risk Register considered by Member in June 2006 has proven to be an accurate reflection of the strategic risks faced by the Council. Several of the risks identified have required managerial action over recent months to contain their impact. 5.2 Thenew business planning methodology will significantly improve the way in which risks are escalated and cascaded from the strategic to the operational levels but the process, which is in first iteration, has provided mixed results, albeit this was anticipated when introducing the new methodology.This has delayed the expected review of the CRR which will now be completed over the coming weeks. 5.3 Additionalsupport has been identified to support the business planning process and methodologies for reviewing the progress of business plans will ensure that risk registers will be maintained and updated on a quarterly basis.

Appendix 1 Corporate Risk Register June 2006 1 Failureto effectively integrate Children Services and to deliver the Children’s Plan 2 Housingmarket fails to develop in line with council objectives. Population increases do not materialise and economic growth in key deprived areas is slowed or reversed. Lack of housing choice fails to attract new residents” 3 StockTransfer fails and decent homes standards not achieved. Failure part way through the transfer process leaves the council with a residual stock of substandard housing and limited options for a management strategy 4 Failureto deliver new JVC structures that reflect value for money and establish partnership working has significant financial and organisational consequences for the Council. 5 Reviewof Manchester Education Partnership fails to configure cost effective services which make a significant contribution to meeting worst quartile education performance targets as well as delivering efficiency savings 6 BuildingSchools the Future, academies and the associated district model of governance fails to deliver a step change in improvement in key education performance targets 7 Failureto effectively manage the Council’s budget in the light of volatile spending in some services, high overall expenditures judged as poor value for money and the need to generate efficiency savings to balance the medium term budget. 8 Externalfunding from Government and/or partners fails to materialise or is significantly reduced or withdrawn 9 Failureto deliver key objectives within the Respect agenda has a destabilising effect within sensitive neighbourhoods and affects the overall programme to deliver neighbourhoods of choice. 10 Failureto deliver single status and achieve the necessary skilled, stable and representative workforce including effective recruitment and retention 11 Failureto secure the development of a workforce that has the capacity and flexibility to manage and deliver the programme of internal changes to service delivery. 12 ITand Councilwide infrastructure(including staff resources and appropriate skills) fails to deliver service improvement dependent on new technologies. 13 Inabilityof Councils business continuity arrangements to cope with scale of interruption. The Council is unable to restore services to local population quickly. 14 Failureto deliver critical initiatives directly related to the City Council’s strategy for economic growth

15 Relationshipswith key public partnership agencies (for example, Health, Police) fail to deliver anticipated outcomes in joint working initiatives 16 TheManchester Improvement Programme generally fails to deliver the step change improvement in customer service delivery and / or generate required levels of financial savings. 17 Failureto implement key strategies to reduce worklessness and improve the quality of work opportunities, impacts on individual well being and affects the ability of the Council to deliver its aims for the city (neighbourhoods of choice, individual and collective self esteem, reaching full potential). 18 TheCouncil is retrospectively found to be in breach of regulations regarding the use of grant funding producing a demand for clawback of funding (for example to ERDF).