*PART 1 – PUBLIC DOCUMENT
AGENDA ITEM No.
7
TITLE OF REPORT: RISK MANAGEMENT UPDATE
REPORT OF THE HEAD OF FINANCE, PERFORMANCE AND ASSET MANAGEMENT
1.
SUMMARY
1.1
To provide the Committee with an update on the management of the
Strategic/Corporate risks owned by the Corporate Management Team (CMT) and
Cabinet.
2.
FORWARD PLAN
2.1
This report does not contain a recommendation on a key decision and has not been
referred to in the Forward Plan.
3.
BACKGROUND
3.1
The Audit and Risk Committee received a quarterly report on the Top Corporate /
Strategic Risks at it’s June 2010 meeting. The main recommendations made at that
time were:



the former Top Risk of the Corporate Work Programme was split into two
separate Top Risks; Organisational Workload (CMT risk);and Corporate Plan
(Cabinet risk);
the former Office Accommodation and Asset Management Top Risk was split
into two Cabinet risks of Office Accommodation and Asset Management;
the annual report on Risk & Opportunities Management was referred to Cabinet
prior to it being presented to Council.
3.2
The Corporate Management Team have reviewed the Top Risks.
3.3
The action plan for Risk & Opportunities Management in 2010/11 included a
benchmarking exercise for risk management which will enable an improvement plan to
be developed if required. This report provides an update on progress.
4.
TOP RISKS
4.1
The risks have been reviewed and where appropriate changes have been made to the
scope of the risk and updates made to progress against the mitigating actions. They
are summarised in Appendix A.
AUDIT AND RISK (15.9.10)
4.2
Due to matters outside the Council’s control, such as the Comprehensive Spending
Review and interest rate levels, it is recommended that the probability of the Financial
Management risk is increased to a 3. A 3 score for probability means “this event is
likely to occur on numerous occasions (4 or more) within the next 12 months”. This
increases the overall score of this risk on the risk matrix to a “9” – one of the three
highest risks facing the Council at the present time. Councillor Hone has seen and
approved this risk entry as Portfolio Holder.
4.3
Following the appointment of Simons Developments Ltd for the redevelopment of the
Churchgate Shopping Centre and surrounding area, the Hitchin Town Centre
Development risk has been reviewed to reflect the current Churchgate project risks. A
specific project risk log is in place to ensure the Project Board can monitor and manage
these risks. This is again one of our “Top Three” risks as no change has been made to
the impact or probability scores.
5.
BENCHMARKING OF THE PERFORMANCE OF RISK MANAGEMENT AT NHDC
5.1
We have previously had a good rating for the Council’s risk management arrangements
in both the CPA and CAA external reviews. In the 2008/09 Use of Resources
assessment for the CAA, NHDC was the only Hertfordshire District Council to receive a
level 3 assessment (performs well) for Internal Control / Risk Management. Risk
management is embedded at the Council and it only requires a small amount of
resource to continue to maintain this.
5.2
In the annual report on risk management one of the areas for action in 2010/11 was to
carry out a risk management maturity benchmarking exercise with other local
authorities.
5.3
The members of the Risk Management Group participated in an assessment exercise
against the Alarm National Performance Model for Risk Management in the Public
Services. This Model tests the extent to which risk management is having a positive
effect and maturity is assessed at one of five levels. In all areas apart from one, the
Group assessed our performance at a level 3 (risk management is working for NHDC).
The only area where we found we were at a level 2 (risk management is happening
within NHDC) was in Partnership, Shared Risk & Resources Processes. It was felt
that risk management was handled well in our contractual partnerships but could be
improved in our partnerships with other public bodies.
It was agreed that the
Performance & Risk Manager would liaise with the Head of Policy Partnerships and
Community Development to see what improvements could be made in this area.
5.4
The Performance & Risk Manager has contacted other Hertfordshire District Councils
to see if they would like to benchmark using the Alarm Model. To date, Welwyn
Hatfield have expressed an interest.
6.
LEGAL IMPLICATIONS
6.1
No legal implications arise from Risk Management updates to the Audit and Risk
Committee.
AUDIT AND RISK (15.9.10)
7.
FINANCIAL AND RISK IMPLICATIONS
7.1
Any additional resources to complete risk management actions should be included in
the Corporate Business Planning process. There are no direct financial implications
from this report. Following the identification of key financial risks identified by each
Head of Service and cross referenced to the risk register, risks that ,should they arise,
might impact on the General Fund have been considered and built into the General
Fund balance for 2010/11.
7.2
The Risk & Opportunities Management Strategy requires the Audit & Risk Committee
to consider regular reports on the Council’s Top Risks.
8.
HUMAN RESOURCE AND EQUALITIES IMPLICATIONS
8.1
There are no direct Human Resource or Equalities implications arising from this report.
9.
CONSULTATION WITH EXTERNAL ORGANISATIONS AND WARD MEMBERS
9.1
Consultation has been undertaken with CMT and the Risk Management Group (this
includes Councillor T Hone as Risk Management Member ’champion’).
10.
RECOMMENDATIONS
It is recommended that the Committee :
10.1
Notes there have been amendments to the Top Risks.
10.2
Refers the increase in the assessment of the Financial Management Top Risk to
Cabinet.
11.
REASONS FOR RECOMMENDATIONS
11.1
The recommendations in section 4 of this report are presented in accordance with the
Council’s Risk & Opportunities Management Strategy. These changes have previously
been scrutinised by the Corporate Management Team.
11.2
The Cabinet are the owners of the Financial Management Top Risk.
12.
APPENDICES
12.1
Appendix A – Risk Matrix
AUDIT AND RISK (15.9.10)
13.
CONTACT OFFICERS
13.1
Fiona Timms
Performance & Risk Manager
Fiona.timms@north-herts.gov.uk
01462 474251
Andy Cavanagh
Head of Finance, Performance & Asset Management
andrew.cavanagh@north-herts.gov.uk
AUDIT AND RISK (15.9.10)