Agenda item

(Director of Resources) To consider the attached report (AGC-030-2013/14).

The Director of Resources presented a report on the effectiveness of the arrangements for Risk Management within the Council.

The Director reminded the Committee that its terms of reference included the consideration of the effectiveness of the Council’s Risk Management arrangements. This contrasted with the role of the Finance & Performance Management Cabinet Committee to advise and make recommendations to the Cabinet on Risk Management and Insurance issues. The internal arrangements for Risk Management had not changed during the year. Each Directorate had a nominated ‘Champion’ for Risk Management who represented their Directorate at meetings of the Risk Management Group. All Directorates were required to have a section on Risk Management in their Business Plans and have a standing item regarding Risk Management on the agenda of their management ream meetings. This was to ensure that Directorate Risk Registers and action plans were regularly monitored.

The Director stated that, at the corporate level, the Risk Management Group met quarterly to discuss issues and recommend alterations for the Corporate Risk Register to the Corporate Governance Group. The Corporate Governance Group considered the proposed changes from the Risk Management Group and undertook a separate review of the Corporate Risk Register to ensure that there were not any further risks for inclusion. Recommendations for updating the Corporate Risk Register were then considered by the Finance & Performance Management Cabinet Committee and approved by the Cabinet.

The Director reported that a major restructure of the Corporate Risk Register was undertaken in 2013/14, which resulted in the following key changes: use of a smaller four x four matrix; a stronger focus on key strategic risks; the removal of tolerated risks; and a new system of colour coding. Previously, the Corporate Risk Register had consisted of 26 risks; 16 above the tolerance line and 10 below. The new Corporate Risk Register had reduced these individual risks to six strategic risks, to which a further two new risks were added to give a total of eight key strategic risks. Five of these strategic risks were in the red area of the new matrix and were subject to monthly monitoring by the Management Board, whilst the other three were in the amber area and scheduled for quarterly monitoring.

The Director highlighted that the report had outlined the eight strategic risks in more detail and the key points from the subsequent reviews by the Finance & Performance Management Cabinet Committee. To aid Members in their discussion, both the old style and new style Corporate Risk Registers had been attached to illustrate the changes in format. The internal audit of Risk Management for 2013/14 had been recently completed and the report had concluded with a score of ‘Substantial Assurance’.

The Vice-Chairman enquired about Risk 2, Strategic Sites, as it appeared to have a degree of imprecision, which could increase the risk associated with it. The Director acknowledged that Risk 2 had a wide definition as the Council possessed a number of strategic sites across the District, each of which had a number of different possibilities. The composition and scoring for this risk could be reconsidered at the next meeting of the Finance and Performance Management Cabinet Committee.

The Committee felt that the new structure of the Corporate Risk Register underplayed some significant service risks, such as the Waste Management Contract currently being re-let, and perhaps the inclusion of some service level risks could be considered in future or the Committee could examine some of the higher level risks from the Directorates. The Director stressed that the Corporate Risk Register had been considered and approved by two Officer Groups and the Finance & Performance Management Cabinet Committee, and that ultimate responsibility for the inclusion of risks on the Register rested with the Cabinet Committee.

The Committee had misgivings about the lack of evidence provided for the scoring of the strategic risks and suggested that the Directorate Risk Registers be made available to the Committee to examine annually if only strategic risks were to be included on the Register in future. In addition, there had been no evidence presented for the consolidation process of the risks at a corporate level, as the previous structure had showed the main service risks as well. The Committee expressed a desire to see evidence for the process being carried out and how the scores were arrived at, to give the Committee some assurance about the effectiveness of the arrangements for Risk Management. The Chairman proposed that an agenda and set of minutes from one of the review meetings be circulated to the members of the Committee to validate the process that was followed.

Resolved:

(1)        That the review of the effectiveness of the arrangements for Risk Management be deferred until evidence of the process followed had been presented to and examined by the members of the Committee.