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Appendix 3
 |
February 2022
Policy & Resources Committee
Report Author: Alison Blake
Maidstone Borough Council
Introduction
Risk management is managing the effect of uncertainties on our objectives and is a key principle of corporate governance. Risk managements importance is recognised explicitly in our Local Code of Governance, the Annual Governance Statement and through the Risk Management Framework. By being aware of risks, and actively seeking to manage risks to acceptable levels, we are more likely to achieve objectives, safeguard our resources and be better prepared in the event of major uncertainty.
The risk management framework is the guide that sets out how the Council identifies, manages, and monitors risks. This includes the risk appetite statement, which articulates the Council’s appetite for and tolerance of risk – basically how much risk the Council is comfortable with.
In summary, the risk management process for the Council can be broken down into the following key components. Appendix 3C gives a one-page summary of the risk management process.
This report provides details of the updates and changes to the corporate and operational risk landscape since the last report to Committee in November 2021.
Corporate risk profile
Our corporate risks are reported to Policy & Resources Committee on a quarterly basis to ensure effective oversight and monitoring. The risks are reviewed and updated by risk owners and any related risk actions are followed up. By their very nature, corporate risks have a broader and more strategic impact, as such, they are inherently riskier (and are scored higher as a result).
The table below
summarises the 16 risks on the corporate risk register. Further detail
on the corporate risks, including a description of the risk and details of
existing and planned key controls can be found in Appendix 3A.
|
Corporate risk |
Current Risk |
Corporate Priority |
||||
|
1 |
Contraction in retail sector |
25 |
|
|
|
|
|
2 |
Financial Uncertainty |
20 |
|
|
|
|
|
3 |
NEW Construction Costs / Insolvency |
20 |
|
|
|
|
|
4 |
Environmental damage |
16 |
|
|
|
|
|
5 |
Housing pressures increasing |
16 |
|
|
|
|
|
6 |
Major unforeseen emergency |
15 |
|
|
|
|
|
7 |
UPDATED IT security failure |
12 |
|
|
|
|
|
8 |
Not fulfilling residential property responsibilities |
12 |
|
|
|
|
|
9 |
Major contractor failure |
12 |
|
|
|
|
|
10 |
Governance changes |
12 |
|
|
|
|
|
11 |
UPDATED Covid-19: Restrictions to Council operations |
12 |
|
|
|
|
|
12 |
Ability to access / leverage new funding |
9 |
|
|
|
|
|
13 |
Reduced effectiveness of relationships with strategic partners |
9 |
|
|
|
|
|
14 |
Resilience of the voluntary & community sector |
9 |
|
|
|
|
|
15 |
Loss of workforce cohesion and talent |
9 |
|
|
|
|
|
16 |
Covid-19: Community & business recovery |
8 |
|
|
|
|
External threats (horizon scanning)
Our horizon scanning process identifies external threats over which we have no direct control or ability to manage the impact on delivery of our priorities. Our response to these threats will be an important factor in how we develop our strategies, policies and how we translate that into service delivery. As such, we can draw down any of these threats into our corporate risk register if (or when) the time is right.
For the time being, we will keep our eye on these threats and continue to provide updates as part of the quarterly monitoring report. The diagram summarises the external threats aligned to each of our priorities with those closest to the centre being those likely to happen soonest.
The following points provide some more detail on the threats outlined in the diagram above:
· Economic Restructure – uncertainty around employment rates, interest rates and inflation increases, and the affect this will have on the local economy and our own wage bill.
· Climate change unknowns – some of the implications of climate change are already captured within the corporate risk register. But this reflects the possibility of other as yet unknown implications from climate change.
· Crime and disorder – increase in anti-social behaviour and other community protection elements.
· Policy change uncertainty – potential for changes in legislation and other central government policy changes.
· Renewal funding uncertainty – ability of Maidstone BC to get funding which matches its aspirations and delivery goals.
· Stakeholder engagement – heightened sensitivity to Council plans leading to increased intolerance and complaints.
· Resident Wellbeing and recovery – potential for residents in the borough to not have long term improvements to their wellbeing
· Rising health inequalities – increasing inequality in access to health care provisions.
· Rising construction costs – unanticipated consequences from rising costs in the construction industry. This will be reconsidered as part of the next CLT update following the addition of a new corporate risk in this area.
· Community skills and expertise – decline in diversity of skills and expertise within communities
Operational Risks
All operational risk registers were updated between January and March 2021, the outcomes of which were reported to the Policy and Resources Committee in June 2021. Since then, risks have been routinely reviewed with a focus on updating high-level (red / black) risks quarterly.
At the last update we reported 19 risks identified as being scored 12 and above for their current rating and this has increased slightly to 20. The number of high-level risks after further action is taken (the mitigated rating) reduces to 7.
The table and matrices below show the total number of risks on the Maidstone and Shared Services risk registers as at January 2022 and the profile of these risks:
|
Risk Severity |
Total Number of Risks |
||
|
Current Rating NOVEMBER ‘21 |
Current Rating JANUARY ‘22 |
Mitigated Rating JANUARY ‘22 |
|
|
BLACK |
1 |
1 |
- |
|
RED |
18 |
19 |
7 |
|
AMBER |
100 |
100 |
92 |
|
GREEN |
26 |
31 |
49 |
|
BLUE |
9 |
2 |
5 |
|
TOTAL |
154 |
153 |
153 |
From the above you can see that the overall number of risks have decreased slightly (from 154 to 153). The operational risk register will be reviewed in its entirety as part of the JCAD rollout to ensure that all the risks on the operational risk register remain relevant.
There remains one high level risk with a score of 20 on the risk register. Details are included below.
|
Infrastructure Improvements |
||||||
|
Service Area: Economic Development |
Ownership: John Foster |
Score: I4 x L5 |
20 |
|||
|
Risk Infrastructure improvement to road, rail, public transport, cycling, community & social infrastructure and broadband fail to take place due to lack of investment or change to government priorities. |
Existing Controls · Work with KCC on Broadband, · Continue to work with KCC, Network Rail and Helen Grant MP to secure Thameslink services and further improvements · KCC Transport Planner working for and assisting MBC · Maidstone Strategic Infrastructure Working Group in place and includes delivery of improvements to Loose Road corridor · Ongoing agenda item in RED · Manager supervision and regular 121's |
Risk Response · Continue to monitor what will replace the SE Rail franchise · Dedicated officer will be appointed to deliver the Integrated Transport Strategy, until then, CIL/S106 team and planning policy officers advise · Making Maidstone More Active project to identify sports facility requirements across the Borough · Future options for Mote Park Leisure centre to be considered by ERL during 2021 as the contract with MLT and Serco comes to an end in August 2024 |
||||
|
Risk review: April 2022 |
|
Score: I4 x L3 |
12 |
|||
Upcoming Work
Risk management is a continuous process, and to be valuable it must be updated and maintained. The following areas will be focussed on over the coming months:
1. Risk Management Software: The JCAD software build is almost complete and we await the release of the latest version of the software before we roll it out across the Council. An implementation plan will be taken to Wider Leadership Team for discussion ahead of the JCAD rollout.
2. Risk Reporting: Linked to the implementation of JCAD we will be reviewing how risk information is reported across the authority to ensure that the reports are providing the right information at the right time to officers and Members.
Work is also underway to develop the 2022-23 risk management work programme. This will be included in the annual risk management report to Audit, Governance and Standards Committee in March 2022.
We have continued to receive a positive level of engagement and support from Senior Officers and Managers in the Council which enables embedded risk management process. So, we’d like to take this opportunity to thank officers for their continued work and support.
Appendix 3A Corporate Risk Register
The table below sets out the current 16 corporate risks in detail. Risk owners have assessed the impact and likelihood of the risks and identified the key controls and planned actions necessary to further manage the risk to an acceptable level where possible. The current rating is the rating assuming existing controls are working effectively, and the mitigated rating is the future risk rating after planned actions are complete.
|
Risk Owner |
Key Existing Controls |
Current rating (I x L) |
Controls planned |
Mitigated rating (I x L) |
|
|
General and localised economic pressure leads to contraction in retail sector, limiting the appeal of Maidstone town centre threatening social cohesion and business rates income. |
William Cornall |
• Working with Key stakeholders including One Maidstone to
safely reopen the High Street. |
(5 x 5) |
• Taking advantage of opportunities to support infrastructure investment • Consider a targeted programme of place promotion campaign activities • Development of a Town Centre strategy to guide the reallocation of land uses within the Town Centre (including retail) • A programme of town centre events and activities is now in place funded through covid response monies. · The Council will soon be considering putting in place a new Article 4 Direction for the core shopping area of Maidstone town centre to retain greater control over planning in that location. |
(4 x 5) |
|
General financial uncertainty, unexpected changes to government funding or failure to achieve income or savings targets places further financial restrictions on the Council resulting in difficulty maintaining standards or meeting aims. |
Mark Green |
• Agreed work programmes in transformation and commissioning · Robust risk assessment of new business opportunities |
(4 x 5) |
• Currently updating MTFS to reflect impact of Covid-19 and longer-term
issues of slower economic growth |
(4 x 4) |
|
Inflation continues to rise and a significant economic event (e.g. further pandemic impacts, BREXIT, supply chain issues) causes significant changes in construction costs which may also result in a contractor insolvency, as they are generally locked into delivering schemes at a fixed price, and so need to manage their exposure to rising costs in their supply chain. For the Council, this leads to a narrowing gap between build price and end of property values, increased costs to the Council and a possible time lag in delivery of 1000 affordable new homes, owing to a lack of capacity in the construction sector. |
William Cornall |
· Use of "off-site" and other Modern Methods of Construction where possible to ensure schemes are delivered efficiently · Designing buildable efficient schemes · Financial stability and overall exposure checks for contractor · Performance bonds and quality monitoring · Realistically set financial scheme approval hurdle rates |
(4 x 5) 20 |
· Exploration of suitable contractor frameworks to access. · Managing exposure levels to different contractors as the programme gathers momentum. · Delaying the letting of key contracts if tendering does not yield VFM proposals that are financially robust. |
(4 x 4) 16 |
|
Increased effects from climate change or reduction in air quality causes environmental damage reducing residents' quality of life and increasing risks from adverse weather events |
Georgia Hawkes |
· Biodiversity and Climate Change Strategy and action plan in place · Air Quality Action Plan in place · Emergency planning arrangements · Parks strategy · Budget available to deliver actions · Communication / engagement strategy for adverse weather events · Member of the Kent Climate Change Network · Permanent Biodiversity and Climate Change officer in post |
(4 x 4) |
· Implement the Carbon trust report actions to get our estate to carbon neutral by 2030 · Implementation of the BD&CC strategy action plan · Review of our own estate in line with ambition to be carbon neutral by 2030. · Policy and resources committee to provide governance for delivery and oversight of BD&CC Strategy |
(4 x 4) |
|
The broader housing crisis leads to housing pressures increasing on the Council, affecting both costs associated with homelessness and ability to meet wider housing needs in the borough. |
William Cornall |
• Homelessness prevention team in place with
increased resource |
(4 x 4) |
· Continued progress towards the temporary accommodation acquisition programme funded through the MBC capital programme · Approval secured to provide hostel and ‘move on’ type TA in the town centre, and this new facility will be ready for occupation in December 2021. · Leader of Council ambition to build 1000 new Council homes as soon as possible and plans to meet this aspiration are being developed · New draft Housing Strategy has been considered by the CHE committee and is now out for public consultation with a view to it being adopted in January 2022 · The Council has acquired the Trinity Place community asset which is currently being refurbished and will provide a range of housing types for those in housing need from March 2022. |
(3 x 4) 12 |
|
Major unforeseen emergency with national / international impact (e.g. new pandemic, environmental disaster) |
Alison Broom |
· Strong existing emergency planning framework · Active engagement with Local Resilience Forum · Flexible, committed and appropriately trained workforce · Quarterly oversight & monitoring through the Emergency Planning Group (EPG) · Some financial reserves · Good partnership working as demonstrated during Covid-19 pandemic · Continued update to Business Continuity Plans and arrangements · Ongoing considerations of financial reserves which have been increased |
(5 x 3) |
· Plan for dealing with different types of major emergencies · Review and update of the Council’s IT Disaster Recovery arrangements and Business Continuity Plans · Embedding arrangements over the quarterly review of emergency threats and risks through the EPG including horizon scanning and early warnings · Recovery and renewal funding allocated to strengthen work on community resilience |
(4 x 3) |
|
Amended Covid-19: Frequent changes to restrictions over a prolonged period impact on our organisational stability and our ability to deliver services consistently. |
Alison Broom |
• Strong existing business continuity planning arrangements • Emergency response plans have been made Covid secure • Learning from current pandemic has been captured • Risk assessments in place for all Council buildings • Plans in place to enable staff who cannot work from home to work safely in our workplaces/activities including grounds maintenance, street cleansing, museum, and some office activities • Arrangements in place to accommodate hybrid and agile working with ongoing review to reflect current covid-19 rates • Flexible / remote working arrangements in place, embedded and regularly reviewed • Regular internal communications with all staff • Embedded performance monitoring and reporting |
(3 x 4) 12 |
· Ongoing review and development of new ways of working because of Covid-19 · Culture change research and discovery with our staff is underway to support new ways of working · Staff Survey underway (closes 27 February) · Consideration of the Council's Digital Strategy (2022-25) for adoption by P&R · Benefits arising from the wider Microsoft 365 project |
(3 x 9) |
|
Amended Security breach or system weakness leading to IT network failure results in wide-spread system unavailability, increased legal and financial liability and reputational damage. |
Steve McGinnes |
•
Regular backup programmes • IT Business Continuity Plan which prioritises the systems that need to be bought back online. |
(4 x 3) |
• IT infrastructure replacement programme being considered to ensure that IT equipment is fit for purpose • Cyber Security Incident BC Exercise to be undertaken in the first quarter of 2022 • Business Impact Assessments to be reviewed and updated by the end of January 2022 • Update the bulk messaging system to ensure adequate communication lines available. |
(3 x 3) |
|
Insufficient awareness / expertise leads to not fulfilling residential property responsibilities resulting in possible health & safety breaches. |
William Cornall |
• Faithfull Farrell & Timms have been
retained as a critical friend to allow the new housing management function to
up skill. |
(4 x 3) |
· Possible due diligence review by Mid Kent Audit to advise on integrity with respect of KPI production and reporting. · Eventual goal of real time reporting in terms of gas safety, via the WKHA contractor. · Review of existing resources and skills underway to support the housing portfolio and management of properties. · Policy & Resources Committee has recently approved a sizable re-investment in the Council owned Gypsy & Traveller site portfolio |
(3 x 3) |
|
Failure of a major contractor: One of the Councils contractors goes into liquidation / administration |
Mark Green |
• Regular contract monitoring and communication with contractors
|
(4 x 3) |
• Ongoing financial performance and resilience
checks of our suppliers and contractors |
(4 x 3) |
|
As a result of significant changes to the Councils' governance (including moving to executive model and the boundary review) sound governance processes may not be maintained during the change or poor processes may be introduced. Leading to delays in decision making, reputational damage or legal implications. |
Angela Woodhouse |
· Existing governance structure will remain in place until the change is complete, including the constitution and committee structure · Monitoring Officer in place to oversee Council activities and provide advice · Code of Conduct · Timeline agreed for the Local Government Boundary Commission review and work overseen by the Director of Finance and Business Improvement |
(4 x 3) |
· Recruit an additional officer into Democratic Services to help deliver projects · Appoint an external legal advisor to help draft the new constitution · Purchase software to facilitate consultation on ward boundaries |
(3 x 2) |
|
Ability to access /
leverage new funding |
Mark Green |
· Access to professional networks to identify opportunities for funding · Experienced officer capacity · Good relationships with funding partners, e.g. Homes England |
(3 x 3) 9 |
· Investment of one-off resources for putting together funding bids |
(3 x 3) 9 |
|
Reduced effectiveness of
relationships with strategic partners |
Alison Broom |
· KCC partnership arrangements through the strategic board · The Community Safety Partnership with the Police and other key parties · The West Kent Elected Members Forum with local health authorities · Survey of all voluntary and community sector to understand changes in community need and demand for services · Good integration with County-wide networks |
(3 x 3) |
· Strengthen processes for continued horizon scanning with partners to understand changes in priorities and formulate an overview of all key partners · explore Maidstone Anchor Institution Network |
(3 x 3) |
|
Resilience of the
voluntary & community sector |
Alison Broom |
· Commitments obtained to establish an architecture to support the voluntary and community sector and provide funding. |
(3 x 3) |
· Establish a community sector forum · Funding to provide support for volunteering · Funding to equip Trinity Foyer to become a Community Hub · Funding for the Love Where You Live & Get Involved project · Agreed Financial Inclusive Strategy · A Community Resilience Fund that groups can bid for funding from · Agreed part funding with the Citizens Advice Bureau for a Debt Management post |
(3 x 2) |
|
NEW Difficulties in recruiting and retaining the right skills and adapting to hybrid working leads to a loss of workforce cohesion and talent. This results in a loss of productivity. |
Steve McGinnes |
· Workforce strategy monitoring & reporting · Training & development programme (including hybrid working skills) · Occupational health, employee support and HSE Stress Survey · Recruitment process that includes ability to adjust pay and market supplement for hard to recruit jobs · Rewards package reviewed regularly · Commissioning specialist external support as required · Online onboarding of new staff · Use of ClearReview to encourage continuous conversations and clear objectives · Hybrid Policy and service review of hybrid working arrangements |
(3 x 3) 9 |
· External market salary benchmarking · Use of SmartPath to offer additional support to managers · Appoint specialist consultant to advise on culture change · Engagement survey for all staff the output from which will create an action plan for the Council |
(2 x3) 6 |
|
Covid-19: Inability to support the response and recovery from Covid for the community and local businesses |
Alison Broom |
• Active engagement with Local Resilience Forum |
(4 x 2) |
• Implementation, development and strengthening
of the agreed strategic approach to engagement with community groups |
(4 x 2) |
Appendix 3B Impact and Likelihood Definitions
Risks are assessed for impact and likelihood. So that we achieve a consistent level of understanding when assessing risks, the following definitions were agreed and have been used to inform the assessment of risks on the risk register.
Appendix 3C One Page Process Summary
