Headlines: January 24th, 2007

SURVEY SHOWS RISK MANAGEMENT INCREASING IN IMPORTANCE FOR COUNCILS

 

Risk management is continuing to grow in importance within local authorities according to a new survey, which shows a considerable increase in the contribution that risk management is making to the achievement of corporate objectives, delivery of innovative projects, targeting of resources and improvement in service delivery. The Risk Management Benchmarking Survey comes from ALARM, the National Forum for Risk Management in the Public Sector and found that 78 per cent of respondents saw management as clearly embedded in strategic plans and 81 per cent reported that it was explicit in financial planning.

The survey, conducted with support from the Audit Commission during October and November, will assist in tracking the development of risk management practices in the public sector. The top five risks were assessed by respondents as critical incidents and business continuity; partnerships; not achieving objectives and targets; service delivery and housing stock transfer. Each of the authorities that responded will now get a report allowing it to compare its overall risk management performance with others in the sector as well as reviewing the progress the organisation has made since 2003. These reports will also help organisations to identify areas that might benefit from more detailed analysis or review.

Dr Lynn Drennan, Chief Executive of ALARM, said the results demonstrated the considerable progress that was being made in public risk management, particularly with regard to the management of internal risks. “While it is clear that some external risks, such as those that arise through partnership arrangements, are being addressed, there is still room for improvement in embedding risk management within strategic decision making,” Dr Drennan said. Gareth Kelly, who leads on risk management at the Audit Commission, was also encouraged that the majority of respondents to the survey had indicated that risk management was starting to make a significant contribution to better outcomes and Peter Andrews, the chairman of ALARM, said the results confirmed the increasing sophistication of risk management in the UK public sector. “It is significant that 70 per cent of respondents confirmed that risk management is contributing to improved performance. In the risk financing area there are also some significant results, with increasing numbers of organisations taking higher levels of self-insurance, and the number of claims remaining static for the last two years,” he said.