Risk Management Strategy 2021-2024 (EX3952)
Purpose: To set out the overarching framework for managing risk at the Council, the Council's risk appetite and the risk management objectives for the next three years.
· The Risk Management Strategy be approved together with the associated risk appetite.
· Appropriate Governance Boards would approve the risk appetite on new projects within their remit. Corporate Programme Board would have oversight of this.
· The Governance and Ethics Committee’s endorsement of the Strategy and risk appetite be noted.
This decision is eligible to be ‘called-in’. However, if the decision has not been ‘called-in’ by 5.00pm on 7 May 2021, then it will be implemented.
The Executive considered a report (Agenda Item 7) concerning the Risk Management Strategy 2021-2024 and the purpose of the report was to recognise the importance of the Council’s role in ensuring that it managed risk effectively and that it was risk aware. This would enable the Council to know when to accept a greater or lesser amount of risk in its activities. Furthermore, the Risk Management Strategy set out the overarching framework for managing risk at the Council, the Council’s risk appetite and the risk management objectives for the next three years.
Councillor Howard Woollaston stated that Risk Management was a very important area of West Berkshire Council’s Internal Governance process and represented a prudent approach to the running of the Council. This strategy had already come before the Governance and Ethics Committee and had been considered and approved.
The risk register was a dynamic document which was updated on a quarterly basis, the most recent being Quarter Three, where already one of the risks had been downgraded in the light of new information. The key changes were a slight increase in the risk appetite details as set out in paragraphs 7.3 and 8.8 of the appendix. The risk matrix was set out in paragraph 8.11 of the strategy. The risk score would trigger a particular type of response for risks relating to the Council’s objectives.
He hoped that in the light of the above that this would be regarded as an uncontentious report and he would therefore like to propose it.
Councillor Jeff Brooks was pleased to see this strategy come forward as he liked the fact that it had now got objectives highlighted in a strategy which was all about objectives and goals. The Council seemed to be being a bit more risk aware and to take a broader approach to risk. He raised the following points:
· Page 43 of the agenda talked about focus and involvement of Councillors through more in depth training. Councillors generally had quite a lot of experience and he asked for assurance that there would also be an emphasis on training Manager/Budget holders as well. Councillor Woollaston stated that the intention was to bring all Councillors up to the same level and he agreed with the point made about Officers receiving training as well.
· He also referred to the table on page 53 paragraph 7.3 and in particular the column entitled Legal (litigation, regulatory, contract) – Losing regulatory related legal challenge. He was of the opinion that there was no certainty that the Council would win a legal challenge and therefore that might need a little finessing. Councillor Woollaston would need to take further advice on the issue raised and would come back to Councillor Brooks.
· Page 56 stated that the Council would not be willing to operate with risks that exposed the organisation to an estimated current/actual financial loss or cost of above £3m for any individual risk. He suggested that the Council might want to think about a total aggregated risk. Councillor Woollaston understood the point being raised but could not see a logical way around it. Councillor Brooks suggested that the quantum of the total risk could be a KPI so that there was some awareness of trend movement.
Councillor Jo Stewart noted that the strategy did say that the risk appetite would be reviewed during the period of the strategy and where the Council decided that there might be external factors, or indeed even internal factors, that might be changing the landscape then there was a sliding scale which could move upwards or downwards according to what the risk appetite might be at that point in time. This was a new concept for this authority and was allowing some flexibility for it to be ambitious. Discussions on the risk register did take place at Operations Board where the Executive would come together with relevant Officers and Executive Directors to have some of those discussions about whether to move that risk appetite on a sliding scale.
Councillor Stewart confirmed that she had worked with this framework in the private sector. It was a known model that worked well if it was followed and if people were trained and understood it and it was important to have that understanding at all levels within the Council. By having clearly defined tolerance levels at each stage of the risk assessment process then the Council would ensure that it continued to deliver sound improvements in services and infrastructure in West Berkshire as well as new, innovative and ambitious projects.
(1) The Risk Management Strategy and the associated risk appetite be approved.
(2) Governance Board’s would approve the risk appetite on new projects within their remit and Corporate Programme Board would have oversight of this.
(3) It be noted that at the meeting on the 19th of April 2021, the Governance and Ethic Committee resolved that the Committee endorsed this Risk Management Strategy and the associated risk appetite.
Reason for the decision: It was discussed that Risk Management was a very important area of West Berkshire Council’s Internal Governance process and represented a prudent approach to the running of the Council. This strategy had already come before the Governance & Ethics Committee and had been considered and approved. The risk register was termed as a dynamic document updated quarterly, the most recent being Quarter 3 with already one of the risks having been downgraded in light of new information. Therefore due to the aforementioned points, the Risk Management Strategy 2021-24 has been regarded as an uncontentious report that should be proposed.
Other options considered: The Council could operate without a defined risk management strategy or appetite, though this could lead to a less strategic approach to how the Council manages risk.
- 7. Risk Management Strategy 2021 2024 for Exec, item 6. PDF 706 KB
- 7a. Appendix 2 2021-22 Corporate Risk Register, item 6. PDF 394 KB