Agenda item

To present the report of the Head of Audit and Risk.

The report of the Head of Audit and Risk incorporating a proposed new Risk Management Policy and Strategy along with accompanying Risk Management Guidance was presented for the Committee’s consideration.

The Risk and Insurance Manager referred to the main aspects of the Risk Management Policy which recognise that risks can have an impact on aims, objectives and service delivery; that they pose a threat and also provide opportunities and that they need to be identified and managed in order to inform decision-making. The Risk Management Strategy explains how the policy will be delivered and sets out the risk appetite statement which is the level of risk that the Leadership Team feels the Council aims to operate within. The Risk Management Guidance provides details of the process to be followed and explains the different considerations needed depending on the nature of the risk. The guidance includes a new section on the positive or opportunities aspects of risk. A new version of the risk management software is being rolled out which also means a change in the way that risk is scored from the alpha numeric method of scoring risks to the traditional numeric way as outlined within the report.

In considering the documentation which the Committee acknowledged as comprehensive, the following points were raised –

·                The range of risk appetite settings for the different risk categories within the Risk Appetite Statement and how these have been determined. The Risk and Insurance Manager advised that each member of the Strategic Leadership Team was asked to individually evaluate the risk appetite for each risk category after which the resulting information was collated, the highest and lowest values were discounted and the median value of the remainder was taken which produced the values as noted in the risk appetite statement.

·                The approach taken to managing contract risk particularly those within the building/construction sector in order to minimise the risk of financial loss and overruns. The Director of Function (Resources)/Section 151 Officer advised that construction contracts which the Council enters into are based on an assessment of a contractor’s ability to deliver as well as on price and value for money considerations and due diligence checks are made. Mitigating controls usually take the form of a performance bond which covers the cost of re-tendering and any increased costs arising therefrom in the event a contractor is unable to complete a project. Delivering a level of capital expenditure in line with the Council’s aspirations e.g. building 45 new council homes each year can be difficult due to local contractor capacity issues and engaging contractors from further afield usually means higher costs. The Council does seek to work with local contractors in the spirit of contract partners and as a dependable long-term source of business.

·                The lack of reference in the Risk Management Strategy to learning lessons from risks that have materialised and how that is communicated and applied across the Council. The Risk and Insurance Manager in acknowledging the point advised that learning from risks is part of the management process but consideration would be given to clarifying that aspect in the strategy.

It was resolved to note the Risk Management Policy and Strategy.