Agenda item number: 9

COMMITTEE FINANCE & PERFORMANCE MANAGEMENT

OVERVIEW & SCRUTINY COMMITTEE
DATE 23 MARCH 2005

TITLE OF REPORT REVIEW OF STRATEGIC RISKS

RESPONSIBLE Phil Toni – Assistant Director, Financial Planning &

OFFICER Asset Management

1. PURPOSE OF REPORT

1.1 To update members on key risks facing the Council. The aim of the report is
to identify the key risks facing the council and detail how those risks are being
managed.

2. RECOMMENDATIONS

Members are asked to note the report.

3 BACKGROUND

3.1 The report analyses risks facing the Council across its directorates. In
addition, cross-council risks were also analysed.

3.2 The process of developing a risk register was based on a wide definition of
risks going beyond the traditional concept of insurable risks. The following
diagram is illustrative of the range of risks considered as part of this process:

EXTERNAL
Range of Stakeholders
Financial Historic liabilities
Deficient information
Risks gathering
Investment Poor customer service
Dependency on Service continuity Public Image
limited resources planning Strategic
Greater financial Reputation
Resource Allocation
accountability Not meeting KPI’s Media mgmt Risks
Fraud and Corruption
Major change programme
Budget overrun Political Issues

Vision
Loss of key sites Early retirement Corporate
Legislation Skill mix Governance
Sickness & absence
Motor fleet risks Human
Staff retention Rights Act
Employee liability
IT Ethics Best Value
INTERNAL
Natural Disasters Operational
Diversity of needs Risks
Hazard
Political
Risks correctness issues
3.3 Risks were then described in terms of their likelihood and potential impact.
Marsh also produced an evaluation framework which can be used to add to
the commentary. For reference purposes this is set out below:

The following diagram represents the methodology for impact criteria;

Impact Criteria

Financial Reputation Stakeholders Service

Provision
Low 0-3% Budget Contained within Affects only 1 Unable to
over or under the individual group of provide
spend service area stakeholders services for
up to 2 days
Medium 4-6% Budget Affects significant Affects more Unable to
over or under number of service than 1 group of provide
spend areas but with stakeholders services for
short term impact between 2
on public memory and 5 days
High >7% Budget Receives Affects Unable to
over or under significant press multiple provide
spend attention with long groups of services for
term impact on stakeholders more than 5
public memory days
and/or central
govt. intervention

The diagram shows examples of four different criteria for measuring impact
these are:

• Impact on the budget

• Impact on service areas
• Impact on stakeholders
• Impact on service disruption

Moving from the top to the bottom of the diagram we encounter different
levels of severity.

The second set of criteria evaluated was likelihood criteria. This is simply a
measure of the likelihood of an event happening, the MARSH model for
categorising likelihood is set out in the following diagram:

Likelihood Criteria

Low Rare activity or combination

of situations where incident is
unlikely
Medium Frequent activity or where the
conditions for loss occur on a
regular basis
High High likelihood of an incident.
4. ANALYSIS OF RISK ISSUES

4.1 Medway Council, like any other local authority, is faced by a variety of risks in
the running of its operations. The key point that should be drawn from this
report, however, is that these risks are known and managed. The report
shows clearly that in all cases where significant risks have been identified, a
range of risk reducing activities have been put into place to mitigate the
impact of these risks.

4.2 It should also be noted that this report does not represent any kind of bid for
additional funding. Dealing with the risks highlighted within the report has
already been factored into budgets as a key part of addressing these risks
has been the service planning / budget setting process itself. Budgets in
recent years have seen resources put into areas such as ICT, services for
children and adult social services to address risks such as those identified
within the report.

4.3 The appendices within the report identify a number of risks within individual
services. However, the most important risks are those that affect more than
one service or are apparent across the whole organization. A number of
cross cutting themes have been identified from this risk review. These are
detailed in the following paragraphs.

Partnership Working

4.4 It is generally acknowledged that a partnership approach is key to the

successful delivery of local government services. The success of this
approach is contingent on sound governance structures and all partners
accepting shared responsibility for outcomes. This position is the case for all
local authorities.

4.5 In terms of managing the risks implicit in partnership working there are a
number of important mitigation factors. The two key ones are ensuring the
council has staff suitably experienced in partnership working and secondly
sound project management systems.

4.6 The employment of suitably experience staff is an issue that has been widely
identified across the council, with appropriate action being taken to address it.
A good example of this has been the Medway Rennaisance Development Unit
(MRDU). In the case of MRDU, it was identified that the delivery of the
Sustainable Communities strategy relied on having a suitably resourced
project management team.

4.7 In other areas, such as the roads programme, the Council has recognized the
need for suitably resourced outside expertise. This has led to the appointment
of Mouchelle Parkman to assist in the delivery of major roads projects.

4.8 The importance of these kind of arrangements is also highlighted in Appendix

5 in the context of ensuring the utilisation of capital resources.
 The Children’s Act

4.9 The Children’s Act will result in major changes to the way all local authorities
deliver services to children. This presents risk in terms of integration of staff
into a new management structure and the integration / development of
infrastructure such as ICT systems.

4.10 Bearing in mind that the changes referred to in the preceeding paragraph
involve a fundamental change to the way children’s services are delivered in
Medway it is widely recognised that getting this process right is extremely
important. For this reason the Council has taken appropriate steps such as
ensuring the process of change goes through an extensive consultation
programme and that adequate time is built into the overall change process to
ensure that it is handled effectively. A well co-ordinated project management
of delivering the new agenda is seen as key to risk reduction.

Human Resource (HR) related Issues

4.11 A further area highlighted by all directorates related to staffing issues such as
recruitment, retention, violence towards staff and sickness.

4.12 These are issues that affect local authorities and Medway is fully aware of
them and active in their management. Across the council, human resource
issues are managed by the Human Resources section. In addition there is a
Human Resources Board, made up of assistant directors representing all
directorates, which contributes to the development of HR Strategy.

4.13 In 2003 a major exercise was carried out to kick-start Workforce Planning.
This linked business planning to HR planning and looked at the medium term
and long-term staffing needs of the Council. This work is the basis for the
Council’s plan to ensure sufficient staffing to meet the delivery of its services
in the longer term. Activities resulting from this,for example, have been
succession planning and the re-scoping of jobs to ensure the skills and
experience specified for roles meets with true requirements. In addition, the
Council recognizes the need to promote itself as the employer of choice, and
has focused on improving its image as an employer in an increasingly
competitive local employment market.

4.14 A successful initiative that has been undertaken over the last three years has
been the internal recruitment agency within the Council. This has saved
money by recruiting temporary staff directly rather than through agencies. It
has also acted as a springboard for the recruitment of permanent staff through
introducing them to the local government service.

4.15 With regard to the issue of staff retention, this has been address through the
council’s overall package of personnel policies. In addition, the Council has
introduced a single job evaluation process to ens ure that staff are paid
consistently across the council.

4.16 Violence to staff has been address through the provision of security in Council
buildings and appropriate training for dealing with difficult customers or
 customers in distress. Risk assessments for lone-worker situations are
standard for all services across the Council.

4.17 Staff sickness is a key issue, both in terms of identifying and addressing the
causes of sickness and its impact on services to the public.

4.18 Regular reporting of sickness to managers, return to work interviews with all
staff after periods of sickness and the intervention of occupational health after
prolonged or persistent periods of sickness are now standard across the
Council. Sickness management has a high profile across the Council and is
regular sickness reports are received by the Corporate Management Team,
Directorate Management Teams and individual managers.

4.19 The return to work interview process is an important part of the sickness
management process as it helps to identify the causes of sickness. Where
appropriate, changes can be made to the workplace to alleviate the causes of
sickness.

4.20 The council is also focusing more on the treatment and management of
stress. In 2004 there was a week of publicity and events designed to highlight
stress in the workplace and how individuals can combat stress. Help is also
available through the confidential advice line available to staff.

Business Continuity

4.21 Business continuity (business interruption) issues are an important area for
risk management within any council, or for that matter, any organisation.
Business Continuity risk management is being dealt with as a cross-council
initiative. Marsh are currently finishing off three separate exercises for the
Council.

4.22 The first area of work is the updating of site response plans. Site response
plans have been developed for the Civic Centre, Compass Centre, Municipal
Buildings and generic front-line service delivery points. The plans cover
issues such as:

• Evacuation plans
• Shut down of sites
• Initial communications
• Salvage and
• Damage assessment

4.23 Moving on from this Marsh are also finalising work on the Crisis Management
Plan. The Chief Executive, relevant Directors and Assistant Directors
(depending on the nature and location of the incident) and core support in the
form of IT and buildings management personnel form the Crisis Management
Team. The team are responsible for:

• The deployment of personnel

• The recovery of basic IT and other infrastructure
• Managing external Communications
• Briefing Staff
 • Management of the incident until such time as it is re-classified as an
operational matter.

4.24 The final aspect of Marsh’s work with the Council is Service Continuity
Planning. Service Continuity Plans have been developed to assist in the
recovery of key functions within service areas. The two main areas of service
continuity planning have been IT and buildings. All IT systems across all
directorates have been ranked in order of strategic importance / risk of non
availability. These rankings have then been merged by the ICT Strategy
Group to provide an overall priority list. In the event of a major loss of IT this
ranking will form the order for service recovery.

4.25 The process is supported by a full range of back up plans and procedures to
ensure a speedy recovery of service.

4.26 Linked to this work, service locations and accommodation usage has also
been assessed. Service priority for space has been ranked Red-Amber-
Green based on risks to life etc. of a service outage. This has been tied back
to the IT plan as there is no point in having IT systems available for staff to
use in the event of a disaster as a high priority but no accommodation
available to site the service.

4.27 In the event of the loss of all or part of a building the Crisis Management
Team will have the relevant information available to high priority teams into
accommodation currently used by services assessed as having a lower risk to
life etc. through business interruption.

4.28 Further measures such as the use of alternative sites would come into play if
necessitated by the severity of the business interruption.

5. SUMMARY

5.1 It is impossible to eliminate risks. What is important is that appropriate

procedures are in place for their identification and mitigation. This report
demonstrates that systems and processes are in place for this to be carried
out across the council.

5.2 The appendices within the report illustrate the range of risks that have been
identified and the range of existing measures that have been actioned to deal
with the risks.

5.3 Relevant officers from all service directorates will be present at the meeting
should members wish more information on individual risks areas.

6. FINANCIAL IMPLICATIONS

6.1 The starting point for the annual budget setting process is the evaluation of
individual service area plans. As in previous years, service plans included an
evaluation of the risks facing each service. Resourcing for the risks facing the
council was built into the budget setting process for 2005/2006 as it drew on
these underlying service plans. This is illustrated by the resourcing put into
areas such as children’s services, adult services and highways. These
 additional resources have had the effect of mitigating the risks faced by the
Council.

7 LEGAL IMPLICATIONS

7.1 There are none.

8. BACKGROUND DOCUMENTS

8.1 None

APPENDICES

Appendix 1 – Education and Leisure – Critical Risk Factors

Appendix 2 – Development and Environment – Critical Risk Factors
Appendix 3 – H & CS – Critical Risk Factors
Appendix 4 – F & CS – Critical Risks Factors
Appendix 5 – Cross-Council – Critical Risks Factors
 Appendix 1 – Education and Leisure - Critical Risk Factors
Risk
A key function of the LEA
and by implication the
Council is to deli ver high
quality education services.
Central to this is providing
a strategic lead and
support and challenge to
schools.
Failure to demonstrate
rising standards in adult
basic skills
Failure to reduce the
number of permanent
exclusions from schools in
line with targets.
Potential Impact
A failure to perform in this
area would lead to an
increased number of
schools in serious
weakness or special
measures/poor Joint Area
Review outcomes and
poor Council CPA score.
Likelihood: Low/Medium.
Impact: High
Adult education is a key
issue for helping
Medway’s citizens achieve
their aspirations. It is also
central to improving the
economy and
regeneration. Success in
this area is of key strategic
importance.
Likelihood of failure:
Low/Medium.
Impact: Medium
Failure to deliver on this
target will have long-term
adverse implications for
the children who have
been permanently
excluded and also will
leave the authority subject
to scrutiny under future
Joint Area Review
inspections of Children’s
Services.
Likelihood: Medium
Impact: High
Risk Reducing Activities
The need for adequate
resourcing will need to be
taken into account during
Council re-organisation.
Performance Management
arrangements in place
include rigorous self-
evaluation process against
Ofsted/Joint Area Review
criteria. Completion of
Annual Performance
Assessment for Children’s
Services.
Close partnership with
Learning and Skills Council.
Review of Adult Basic
Education Strategy and
Provision to be completed by
December 2005.
A range of strategies to build
capacity in schools and
strengthen the Behaviour
Support Service. These
Include:-
Key Stage 3 Attendance and
Behaviour Strategy,
Learning Support Units
within secondary schools,
“Invest to Save” Initiative at
Silverbank Park, promoting
managed transfer of pupils
between schools,
Connexions Personal
Advisers.
Fundamental Review of
Exclusions is currently in
progress.
Current figures for 2004-05
show a substantial fall in
numbers of permanent
exclusions.
Risk
Failure to meet targets in
national strategies for
raising attainment in
schools.
Failure to plan adequately
for pupils with high levels
of special educational
needs.
Failure of Inward
Investment to support
Medway’s Cultural and
Leisure Strategy.
Inability to deliver services
due to vacancies of key
staff and the lack of
suitably qualified staff.
Potential Impact
Failure to meet national
targets for raising
attainment (for example at
Key Stage 2) will
adversely affect the life
chances of the children
concerned, including their
subsequent
opportunities to access a
fast-changing labour
market.
Likelihood: Medium/High
Impact: Medium
This could lead to pupils’
needs being met
inadequately, or high
levels of expenditure in the
independent/non-
maintained schools’
budget. Planning is
undertaken through the
Special Educational Needs
Development Plan and in
conjunction with Social
Services and Health.
Likelihood: Medium/High
Impact: Medium
Substantial external
funding is being levered in
to support Medway’s
Cultural and Leisure
Strategies.
Likelihood: Medium
Impact: Medium
There are continuing
difficulties in recruiting and
retaining teaching staff in
schools and pupil referral
units, particularly in the
shortage subjects and in
more difficult-to- recruit
areas such as behaviour
management. There are
also difficulties in recruiting
to some central services,
including the Behaviour
Support Service and the
Educational Psychology
Service.
Likelihood: Medium
Impact: Medium
Risk Reducing Activities
The range of measures to
support and challenge
schools on raising
attainment are set out in the
Education Development
Plan; the Primary Strategy,
the Key Stage 3 Strategy
and the 14-19 Strategy.
There is a Standards and
Review process for looking
at individual schools in
conjunction with the school.
These are set out in the
Medway Inclusion Strategy
and SEN Development
Plan 2002-05 and include:
delegation of funding to
Schools so that they can
plan flexibly to meet pupils’
needs, provision of a wide
range of training for schools,
close working with Social
Services and Health.
Capacity needs to be
retained to continue to do
this.
Through the Teacher
Recruitment Team, Medway
has: developed a wide range
of measures to encourage
Newly Qualified Teachers to
locate in Medway Schools;
Support Graduate and
Registered Teacher
Programmes, has two
training schools, runs a
Returner’s Course and is
raising awareness of
teaching as a profession
amongst minority ethnic
communities. The school
Well Being Initiative for Staff
is in place.
Risk
School Place Planning is
ineffective.
Failure to implement
tracking of children out of
school.
Sustainability of services
through changes to the
Central Government
Funding Formula.
Failure to spend capital
project allocations.
Planned maintenance
programmes to ensure the
continuing development
and safety of buildings
infrastructure.
Potential Impact Risk Reducing Activities
Good place planning, Capacity needs to be
including reviews of retained in order to undertake
schools, and new build this.
where necessary, is
essential to avoid vacant
places above government
guidelines, or alternatively
children out school.
Likelihood: Low
Impact: Medium
Failure to implement Information, Referral and
system to track children Tracking systems are being
not in school can lead to put in place and close work
children being lost to with relevant agencies.
education, with all the
consequences that entails.
Changes in the This is being taken into
methodology for local account in the budget
government funding have
led to potential risks to
centrally-funded services
as opposed to schools and
other services which a re in
the “schools block” of
funding.
Likelihood: Low/Medium
Impact: Medium
Medway’s schools capital
Sufficient capacity needs to
programme is currently of
be retained to ensure that the
the order of £20m per
Schools’ Capital Programme
annum and Medway has
is managed closely and
an excellent track record
effectively in accordance with
spending its capital
DfES policies and the need to
allocations within the
meet targets for raising
timescales required.
attainment in schools.
Likelihood: Low
Impact: Medium
Lack of effective planned Effective support to schools
maintenance will lead to a from commissioning and
poor physical environment technical services.
for children and potentially Under the LEA Asset
health and safety risks. Management Plan, there is a
Likelihood: Low rolling programme of
Impact: Medium condition surveys of school
buildings which are reported
back to schools and are
monitored centrally.
Maintenance Programmes
are planned in the light of
this.
Appendix 2 – DEVELOPMENT AND ENVIRONMENT - Critical Risk Factors

Risk Potential Impact Risk Reducing Activities

Reduction in income Likelihood of problems
The directorate has a
due to changing profile in 2005/6 are low but
successful track record of
of parking in potentially increasing to
managing budgets to
redeveloped Chatham. high in future years.
ensure a balanced position
over the year.
Impact potentially on
budgets / service users
Future changes in income
in 2006/07 and beyond.
will be profiled within the
medium term financial plan
and addressed as part of
future budget setting.

Severe weather from Reduce the level of spend

rainfall, wind and bad on the highway
winters will lead to maintenance budget to
budget pressures, e.g. fund any overspend.
gritting costs.
As an alternative, set-off
against other budgets.
Likelihood –Medium
Taken council-wide across
a range of services extra
Impact – High
costs generated by
unusually bad weather
conditions can be balanced
by unexpected savings
elsewhere.

In addition, the Belbin

scheme provides central
government funding for
major natural disasters to
mitigate against their costs.

Failure to deliver Likelihood – Low to

Business and Project plans
projects to time and/or Medium
are in place, a dedicated
spend the ODPM
project board works to
funding Impact potentially high
resolve issues and
on the Council’s
problems and continual
reputation.
dialogue with ODPM helps
to mitigate the risk.
Risk Potential Impact Risk Reducing Activities
Implementation of the Potential impact will
Project Boards and
Customer First project depend on level of
dedicated project
and the FLTF Confirm capacity built into FPOC
managers are in place for
system could lead to
each system. This should
additional pressures on
ensure managers can
services as they
feedback issues/problems
respond to demands for
to relevant personnel.
support & information.
To mitigate this risk, and
additional £445,000 in
revenue funding was put
into the 2005/2006 budget
for this area.
Deterioration of the Likelihood of problems
greenspaces, highways in 2005/6 are low but Revenue budget
network, including the potentially increasing for maintained for 2005/2006.
Medway Tunnel, and future years if no action Additional highways capital
other assets. is taken. expenditure provided
within the 2005/2006
Impact potentially high approved budget.
for budgets and service Systems to ensure early
users, and on the identification of problems
reputation of the exist along with regular
Council. monitoring and reporting of
the state of the assets.
Appendix 3 – HEALTH AND COMMUNITY SERVICES - Critical Risk Factors

Risk Potential Impact Risk Reducing Activities

The Government expects The review of services Older Persons Plan agreed
LAs to continue to invest for Older People by the to address these issues.
in developing community Health Act Commission Robust project management
alternatives to hospital and CSCI will be procedures are in place to
and permanent care in completed in 2005/06. manage the process.
respect of services for The findings of this
adults. Although the review will impact on the PFI expression of interest
Change Plan has been Council’s CPA has recently been submitted
effective in 2004/05, the assessment. to bid for resources to fund
change needs to be development of the
embedded and further Impact potentially high Woodlands and Shawswood
initiatives developed / on the Council’s sites. The outcome of the
delivered – e.g. reputation and on the bidding process will be know
Woodlands and Shaws budgets / service users in June 2005. Alternative
Wood. in 2005/06 and beyond. plans and funding streams
are also being researched
and developed.

The Stock Option Housing is a key Robust project management

appraisal may lead to a service. Impact of any procedures to be put in
significant reorganisation. failure in business place.
continuity would be
severe
Community Services: Impact high for service Robust project management
Relocation of Registrars users and on the procedures to be put in
entails complex office council’s reputation. place
moves and the
management of an
effective booking system Likelihood low.
for marriages. The non-
availability of the service
/ failure to
provide a booked
ceremony would be
unacceptable to the
public and could result in
failure to achieve the
forecast increase in
income.
Risk Potential Impact Risk Reducing Activities
Death or injury of a Likelihood Low Existing Area Child
service user – particularly Protection Committee
a child Impact High (ACPC) procedures give
detailed guidance to all staff
working with vulnerable
children. All staff are trained
in these procedures and are
required to comply with
them.

Regular supervision is
provided for all staff working
in this arena.

Audits of activity are

undertaken to ensure that
proper processes are
complied with.

Adult services has similar

systems in place to
minimise risks to vulnerable
adults
The Council has in both
04/05 and 05/06 has
increased resources to deal
with increased activity.

The pressure on social Likelihood of problems An Older Persons Plan has

care services driven by in 2005/6 are low but been adopted and is being
demographic changes potentially increasing implemented. A Disability
and high expectations therefore requiring Change Plan Board has
continues to increase action in current year to been established to explore
abate future problems. and o versee the
Capacity within the local implementation of new ways
care sector is close to Impact medium for of working and generating
saturation. Any 2005/06 but building – additional, affordable
unexpected demands particularly on budgets capacity
created by an epidemic /
bad weather / Impact potentially high Significant additional
exceptionally hot weather for budgets and service revenue funding provided in
/ the need to move large users, and on the last two financial years
numbers from hospital reputation of the Council (2003/2004 and 2004/2005)
could place unmeetable to mitigate against these
demands on Medway’s risks. Additional funding
care economy also provided within
2005/2006 budget.
Risk Potential Impact Risk Reducing Activities
The nature of the work of Likelihood Medium Established programme for
the Directorate presents H&S training is in place,
Health & Safety risks to Impact Low to High supported by three H&S
staff and service users depends on the nature staff. Health & Safety Audits
alike. The Council retains of the incident are undertaken to check
liability for services compliance with policies and
provided on its beha lf by procedures. H&S is
the independent sector. overseen in the Directorate
by service specific H&S
Groups that report to a
Directorate H&S Board.
Dedicated staff provided to
cover H&S issues.
Learning and Development
funding provided by Council
and Department of Health.
The Directorate’s Social
Care Procurement Team
oversees the independent
sectors compliance with
health & safety
requirements.
Staff shortages resulting Likelihood Medium Workforce plan and learning
from problems recruiting & development strategy is
and retaining staff can Impact High being developed in
inhibit care service conjunction with the private
delivery for both the care sector.
Council and private Relationships with the
sector ‘Universities at Medway’ are
being developed.
Effective agency staff
arrangements are used to
ensure services remain safe
and compliant with statutory
requirements.
An absence management
plan has been devised and
is being implemented.

Industrial action – Likelihood Medium Contingency plans to ensure

perhaps associated with Impact unknown – coverage for industrial
potential changes to LG depends on the nature action will be put in place
pension scheme. of action taken. when the nature of any
action is known.
Risk
Loss of a facility (Council
or private sector)
because of fire / flooding
/ loss of registration /
non-compliance with
DDA
etc.
Failure to effectively
implement the new
Adults Information
System would be costly
and undermine delivery
and management of
services
Loss of crematoria
‘business’ to new and
more modern facilities
being developed close to
Medway
Loss of Registrars
‘business’ as a
consequence of better
facilities being offered
elsewhere
Independent providers of
social care do not accept
the 2.5% price increase
factored into the 2005/06
budget
Potential Impact Risk Reducing Activities
Likelihood Low Ensuring compliance with
fire regulations as part of
Impact High contract compliance
reduces this risk. Fire
certificates and equipment
are maintained on all
Council run premises
Likelihood Low A dedicated project
manager and team have
Impact High been established. The old
(V98) and the new
information systems will be
run in parallel for 3-month.
Use of V98 could be
extended. The Directorate
ICT Board oversees this
project.
Likelihood increasing An Asset Plan for the
service is being developed
Impact High on budgets to seek ways to rationalise
the portfolio and to invest
more into modern facilities
and buildings.
Likelihood High Procurement team
negotiates prices. Additional
Impact High funding is being made
available to support the
learning and development of
the social care workforce.
This investment should
reduce the need for the
independent care sector to
factor required staff training
into their fee structure.
In the medium to long term
the older persons plan is
being developed.
Risk Potential Impact Risk Reducing Activities
Underachievement of Likelihood Medium Marketing plans are being
income across all develped to sustain or
chargeable services – Impact Medium increase income.
bereavement, social
care, interpreters and Revenue budgets will need
Registrars. to be managed to ensure a
balanced position is
achieved across the
directorate.

Service demand places Likelihood High Regular budget monitoring

pressure on existing by service managers and
approved budgets Impact potentially high DMT will ensure the early
identification of problems

Project Boards in place to

develop and implement
cost-reducing service
changes
Appendix 4 – FINANCE AND CORPORATE SERVICES - Critical Risk Factors

Risk Potential Impact Risk Reducing Activities

Large scale fraud Poor stewardship of public Established control
money, risk to service procedures in place.
provision and reserves Compliance with Controls
Failure to set sustainable framework.
Operation of procedures
assessed by internal and
external audit.
Established fraud
reporting procedures at
officer and member level.
Daily check on bank
account and bank.
Service demand exceeds Likelihood High Regular budget monitoring
budget provided by service managers and
Impact potentially high DMT will ensure the early
identification of problems

Project Boards in place to

develop and implement
cost-reducing service
changes

(A number of F & CS risks are covered in Appendix 5)

Appendix 5 – CROSS COUNCIL - Critical Risk Factors
Risk
Service delivery may be
temporarily affected as a
result of reorganisation
and/or the implementation
of the recommendations
from the Gershon report.
Possible budget
overspends as a
consequence of new
demands for
statutory/mandatory
services
Failure of partners to
accept shared
responsibility leading to
the failure of the council to
deliver on key projects
Potential Impact Risk Reducing Activities
Likelihood - Medium Robust project
management
Impact – High arrangements are being
put in place to ensure key
services are not
destabilised by the
restructuring and
redeployment of staff.
Regard will need to be
given to the capacity of the
Council’s officers to deliver
these changes as well as
ensuring services are
competently delivered
during what could
potentially be a period of
‘unrest’ on the part of staff
whose jobs may be
deleted or significantly
changed
.
Likelihood – Low given
Regular budget monitoring
that services will develop
by service managers and
budgets to meet their
Directorate Management
respective control totals
Teams will ensure the
early identification of
Impact - High on the
problems and look for
budgets and service
compensating savings
users.
Likelihood – Low to Partners are aware of their
Medium responsibilities through
effective collaborative
Impact – High working and SLAs. The
LSP commitments provide
a clear example of this.
A further control is the
existence of sound project
management systems
overall combined with
cross agency working to
assist in delivering joint
objectives.
Risk
The Council’s CPA score
may be affected by the
under-performance of
individual services.
Normal service delivery
would be affected by the
need to respond to a large
scale civil emergency
Loss of key staff and
potential difficulty in
replacing them due to
skills shortage.
Lack of prioritised service
continuity plan in the event
of a major disaster
Failure to implement/keep
up to date with legislation
Potential Impact Risk Reducing Activities
Likelihood - Low Services are monitored
regularly through effective
Impact – High performance
management, e.g. Critical
Success Factors. There is
a clear accountability
across the organisation for
setting and achieving
performance standards.
Likelihood - Low A comprehensive
Emergency Plan and
Impact – High periodical practice events
attempt to minimise
disruption.
Use agency staff where
Likelihood - High of not
needed.
being able to deliver
Continually review and
services to an acceptable
implement new
standard
opportunities of enhance
recruitment activity.
Impact – High on the
Explore and implement
Council’s reputation and
new ways of working and
on service users
generating additional
capacity in Medway.
Refine and continue to
implement existing
workforce plans across the
Council, augmented by the
learning & development
strategy.
Without an agreed priority With assistance from
for services to be Marsh risk management
recovered following consultants a plan is being
disaster, resources could developed (focusing on
be misplaced resulting in property, ICT and service
major strategic impacts on delivery) to address
the Authority and the business interruption.
community. This will be available in
June 2005.
This could lead to the Close Monitoring
failure to receive Management awareness
resources, inappropriate
Networking Attending
use/distribution of
Seminars
resources or liable
compensation claims. Engage consultants for up
to date advice.
Ensure systems are
compliant and lead in
should be suitably long
enough for proper
arrangements to be made.
Risk Potential Impact
Failure to deliver capital All capital spends are
programme there fo r a strategic
purpose, covering
economic development,
regeneration, improved or
continuous service
delivery. Failure to
achieve that programme
could result in the loss of
that strategic purpose.
Reputation risk to Council
– Risk that ODPM etc. will
lose faith in Medway as a
delivery vehicle for
regeneration etc. – result
will be loss of grant /
borrowing approvals
Lack of change Can result in loss of
management skills morale increased
negativity and depletion of
service provision
Failure of IT Systems Resulting in delays or loss
of services throughout the
Authority, examples of the
impact could include,
delays in billing leading to
cash flow problems,
backlog of benefits could
increase homelessness
levels resulting in a
negative impact upon the
local economy. Failure to
pay suppliers could lead to
service suspension.
Lack of succession Leading to skill gaps, loss
planning of leadership
Violence towards staff Injury, stress, insurance
and compensation claims
Loss of power supply Lead to the delays and
breaks in service delivery
Risk Reducing Activities
Established and effective
monitoring procedures
have doubled delivery of
capital schemes since
2001. Regular reporting to
Members and
management teams is in
place.
Pro Active monitoring by
Financial Planning team.
The development of the
role of the Capital &
Property Board to oversee
programme development.
Bringing new schemes in
to replace abortive works.
Develop Personnel
managers and line
managers in change
management skills
Large investment in ICT
systems in recent years.
Opportunities for future
investment identified. All
single points of failure
identified and monitoried.
Dedicated resources and
effective programme fro
response in place.
Regular attendance at IT
user groups; encourage
greater support from
partners; keep up to date
with releases of new
software.
Linked to “Strategic Risk -
Loss of key staff
Members” plus need
successful Management
Development process
Security systems and
procedures in place
Stand by Generator / UPS
for loss of power