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Maidstone Borough Council Risk Register Update

Risk Register Summary

In February 2016 the Councilís comprehensive risk register contained 213 risks. The operational risks were identified across all Council services through risk workshops conducted by the Mid Kent Audit team. An externally facilitated session was conducted by Grant Thornton to identify corporate risks with Senior Officers and Members.

Throughout the summer, the audit team have met with risk owners to review and update the high level risks (those scoring 15 or more) to establish the actions taken and the effect of those actions on the overall impact and likelihood of risks (definitions for the impact and likelihood scores are attached in appendix I).†

As a result of this update we have seen an overall decrease in the number of risks, from 213 to 187. The majority of these relate to project risks where projects have now been closed (for instance Debt Recovery and Planning Support). However, there has been the addition of some newly identified operational risks and removal of risks which are no longer relevant.

The risk matrices below plot the overall risk profile of the Council based on the mitigated risk scores for likelihood and impact. For a base of comparison we have included the profile from the previous risk update in February 2016:

Risk summary by total:

Risk Colour

February 2016

September 2016

Difference

Scored 1-2

6

5

-1

Scored 3-4

64

58

-6

Scored 6-10

114

108

-6

Scored 12-16

26

15

-11

Scored 20-25

3

1

-2

TOTAL

213

187

- 26

There has been some movement in risks following the update to the register, most notably a reduction in red rated risks. For the purposes of this report, key risks are those scoring 15 and above.†

 


Risk Themes

We took time during the review of risk registers to identify and allocate a classification type to each risk. By doing this we are able to gain greater insight into common risk areas and potential themes. While not all of the risks on the register will fit nicely into a single classification, there were 4 main types of risks that featured more prominently than others. These areas are:†

         Staffing: 25% (44 service risks) relate to risks around staffing pressures, resilience, skills gaps or pay and conditions.

         Finance: 15% (27 service risks) relate to risks around funding pressures/gaps, lack of commercial investment or non-achievement of income targets.

         Customer: 12% (22 service risks) relate to risk that could prevent services from meeting customer expectations or risks that could result in reputational damage.

         Information Technology: 8% (14 service risks) relate to risks around IT failure or integrity and development of key systems.

We will continue to draw insights from the risk work across the Council, and also from the external environment and good practice guides. Mid Kent Audit supports the delivery of risk management services to varying degrees across the Mid Kent Partners. As this work progresses we will also be able to draw insights from our partner authorities and others across Kent. However, for the time being, as this work is still underway we will continue to monitor themes and trends within the risk register and address key issues with risk owners accordingly.

 

 

 


So what are the key risks?

The table below is an extract from the comprehensive risk register. The table includes all of the corporate level risks, along with any high scoring operational risks. This is the first time that this level of detail has been reported, and so we have sought to show any relationships between corporate level risks and operational risks within the table. This more clearly shows the flow of risks from the operational level up to corporate level.

Service & Ref

Risk (title & full description)

Risk Owner

Key Existing Controls

Inherent rating

I

L

Corporate 1

Lack of progress on transport infrastructure
Transport infrastructure not being fit for purpose

William Cornall & Rob Jarman

†- Liaison with partners
†- Local Plan

4

4

16

Corporate 2

Increasing difficulty in recruiting & retaining skilled staff
Unable to recruit and retain

Alison Broom & Steve McGinnes

†- Pay review

4

4

16

 

Operational

Building Surv.
BCR8

Retention and recruitment of professional staff
Insufficient terms/conditions of service and remuneration leading to loss of staff to other authorities or private sector

David Harrison

- Added market supplements (although no effect on recruitment)
- Training / continued CPD
- Pay prof subs and provide onsite parking
- Working hours / holiday / Pensions
- Use of agency / temp staff

4

4

16

 

 

Operational

Economic Dev
MED10

Skills shortage
Shortage of skills is a barrier to business growth and competitiveness.† Poor engagement with schools

John Foster

- Working with Mid Kent College, KMEP, and MEBP on skills development issues.

3

5

15

 

Corporate 3

Significant commercial failure
Commercial failure & risk that ventures will not deliver desired outcomes

William Cornall

†- CLT monitoring
†- Project management

5

3

15

Corporate 4

Not agreeing local plan
Lack of sound legal footing for local plan leaving MBC at risk of appeal

William Cornall & Rob Jarman

†- Local Plan consultation

4

3

12

Corporate 5

MKIP fails to develop a coherent vision for its future
Coherent vision for MKIP

Alison Broom & Steve McGinnes

†- MKIP Board
- MKIP Communications Strategy
†- Shared Service Boards

4

3

12

 

Service & Ref

Risk (title & full description)

Risk Owner

Key Existing Controls

Inherent rating

I

L

Corporate 6

Further financial restriction
Future government decisions post financial settlement that further restrict the Council's income

Mark Green & Ellie Dunnet

†- Efficiency statement
†- Budget monitoring

5

2

10

 

Operational

Economic Dev
MED11

Restriction in access to government funding through SELEP/KMEP
Government putting more funding through South East Local Enterprise Partnership and Kent & Medway Economic Partnership, leading potential restrictions in funding due to uncertainty in the bidding process

John Foster

- Feedback to KCC
- Agreed to re-establish joint management group to review agendas/papers and address concerns earlier

4

4

16

 

Corporate 7

Over cautious administration
Councils not taking 'brave decisions' due to elections and a lack of (or ill-defined) risk appetite

Alison Broom & Angela Woodhouse

†- Governance review

3

2

6

Corporate 8

Demographic change
Aging population and reduction of people in workforce

Alison Broom

†- Residents' survey

2

2

4

Corporate 9

Slow or inaccurate decision making
Lack of swiftness and information in decision making

Mark Green & Angela Woodhouse

†- Governance review

2

2

4

Corporate 10

IT requirements progress faster than budget allows
Lack of investment technology, inability to maintain pace with requirements

Mark Green & Andy Cole

†- ICT Commissioning Group

3

1

3

 

All 10 corporate risks on the register will be updated over the next couple of months, to ensure that they remain current. Most of these risks were identified at the beginning of the year, and so we will be working with the risk owners to update the risk descriptions, and then to identify any related risk actions necessary to manage the impact and likelihood of the risks.

Corporate risks by their very nature are more broadly linked to the achievement of the Councilís priorities. Therefore, by keeping the corporate level risks under review and updated, the Council is able to remain aware of the key risks and barriers to the achievement objectives, and react and take action accordingly.

 

Housing & Homelessness

Perhaps one of the key insights provided from the risk assessments at the operational level was the identification of some significant risks being faced by the Councilís Housing Service. Four of the Councilís highest scored risks come for the operational risks associated with Housing, and the challenges around Homelessness:

Service & Ref

Risk (title & full description)

Risk Owner

Key Existing Controls

Inherent rating

I

L

Operational

Housing
H2

Housing market failure leading to an increase in homelessness approaches
Inability to meet service demand, leading to longer stays in TA, increasing TA spend, reduced TA options due to capacity issues, leading to possible suitability issues. Potential for legal challenge due to likely increase in breaches of statutory duties. Focus shift from managing preventions, to resolving homeless cases due to service staffing constraints contributing to a cycle of increased approaches.

Ellie Kershaw

- Triage service in place.

- Monthly and quarterly reports on service indicators, raising resourcing needs.†

5

5

25

Operational

Housing
H3

Lack of suitable temporary accommodation options
Open to legal challenge by judicial review. Excessive demand to keep moving houses leading to drain on team staffing resource. Difficulty in recovering rent. Increase in departmental spend. London boroughs taking temporary accommodation. Lack of >2 bed accommodation.

Ellie Kershaw

- Securing Maidstone owned TA
- Working with more providers
- Appeals on website for more providers
- Working with provider to secure more disabled facilities

5

4

20

Operational

Housing
H6

Lack of affordable housing
The Government reduced rents in social housing in England by 1% a year for four years from April 2016. This applies to both social rent and affordable rent. This could impact on the ability of registered providers (housing associations) to provide much needed affordable homes for rent.† New powers through the planning system are also being proposed to allow starter-homes to count as affordable housing obligations. This could reduce affordable rented provision even further. Reduced supply will mean applicants on the Housing Register will be waiting longer to be re-housed.

Andrew Connors

- Adopted Affordable Housing DPD
- New Maidstone Housing Strategy 2016-2020.

- Emerging Local Plan Policy
†- Viability evidence
- Monitoring impact of 1% reduction
- New s106 agreement agreed with legal

4

4

16

Operational

Housing
H4

Inability to access affordable private rents in Maidstone
Minimal affordable renting options for residents in Maidstone. Resulting in increase in out of borough placements for homeless households. Failure to meet corporate goals. Increase in homeless approaches due to lack of affordable local renting options

Ellie Kershaw

- Survey of local landlords regarding current MBC incentive.

- Best practice review approach of other local authorities Social Lettings services.
- Incentive scheme reviewed

3

5

15

This is a good example of where we are seeing the raising of risks from the bottom up, with the operational level identifying potential consequences based on higher risk impact and likelihood.


What are we doing about the risks?

A key function of any risk management process is deciding what (if any) action should be taken to address the identified risks.† The Councilís risk management framework requires action to be taken to manage any risks that fall within the Black/Red rating. The purpose of risk action is to reduce either the impact or likelihood of the risk.

Figure 1: High level risks (inherent)

Likelihood

5

 

 

 2

4

 

 

3

1

3

 

 

 

2

 

 

 

 

 

1

 

 

 

 

 

 

 

1

2

3

4

5

 

 

Impact

This matrix shows the operational risks with an impact and likelihood score of 15 or above.

These risks may be more likely to occur, and if they do, the consequences are more significant and could prevent the Council and Service from delivering its objectives.

There are 7 risks that inherently sit above the risk appetite of the Council.

 

 

 

Figure 2: High level risks (residual)

Likelihood

5

 

 

4

 

 

 

2

 

3

 

3

1

2

 

 

 

1

 

 

 

 

 

 

1

2

3

4

5

 

 

Impact

This matrix shows the movement of the 7 high level risks, following the identification of planned controls and the re-assessment of the impact and likelihood.

The residual risk assessment takes into account controls that are planned, or where additional action needs to happen in order to manage the risk down to an acceptable level.

The re-assessment of these risks leaves 3 risks that, even with planned actions and controls, sit above the risk appetite of the Council. We provide further details of these risks below.

 

 

As we progress with the implementation and embedding of the risk management process, the audit team will meet with risk owners on a regular basis to review the effectiveness of the controls and the effect on the risk impact and likelihood. This will take place over the course of the next few months, as we begin to update and refresh risk registers to complement the service plans as we move into 2017/18.†


The table below provides details on the planned actions that the Council will take in order to manage the risk, and the effect that this is likely to have on the overall risk rating:

Service & Ref

Risk Title

Risk Owner

Inherent rating

Controls planned

Effective Date

Mitigated rating

I

L

I

L

Operational

Housing
H2

Housing market failure leading to an increase in homelessness approaches

Ellie Kershaw

5

5

25

Continuous delivery of a range of affordable housing. Improvements made to reduce unit cost of homelessness. Requests made for additional staffing proposed to improve preventions. Business continuity planning to deal with emergency situations. Recruiting bus improvement officer to ident efficiencies w/in service
Employing 2 temp preventions officers
Council owned/built properties

Ongoing

5

5

25

Operational

Housing
H3

Lack of suitable temporary accommodation options

Ellie Kershaw

5

4

20

Increase the number of directly owned TA through purchase and convert. Continuing to find more providers. Make deals with London boroughs to use proportion of their properties
Bus improvement review of processes

Ongoing

4

4

16

Operational

Building Surv.
BCR8

Retention and recruitment of professional staff

David Harrison

4

4

16

Need to address remuneration restrictions

March 2017

4

4

16

Operational

Housing
H4

Inability to access affordable private rents in† Maidstone

Ellie Kershaw

3

5

15

MBC investigating purchasing property.

Ongoing

3

4

12

Operational

Economic Dev
MED11

Restriction in access to government funding through SELEP/KMEP

John Foster

4

4

16

Discussions with MPs
Monitor future bids

Autumn 2016

3

3

9

Operational

Housing
H6

Lack of affordable housing

Andrew Connors

4

4

16

Review s106 schemes, viability evidence and property types to be delivered in order to maximise affordable rent
Creation of Local Housing Company to build/acquire new affordable and private homes to meet the commercial and housing objectives of the Council. Delivery of council led development through acquisition of land and on land already in our ownership.
Local Plan Policy (including Affordable Housing SPD).

On going

3

3

9

Operational

Economic Dev
MED10

Skills shortage

John Foster

3

5

15

Bus/education partnership task & finish group

01/09/2016

3

3

9

As a result of the Councilís response to the high level risks, and the planned actions, 3 of the 7 risks can be managed down to the amber level.


Next Steps

All risk owners involved in the review and update of their risks have been really engaged and positive about the process, and so we intend to build on this over the coming months to ensure that the risk profile and awareness remains at a good level, and so that we can continue to make improvements to the effectiveness of the process.†

One significant piece of work being undertaken is to support the Council in establishing and articulating risk appetite and tolerances.† This will provide guidance around the amount of risk that the Council is willing to seek or accept in pursuit of its long term objectives.† In September 2016 we presented CLT with a number of different approaches which could be used.† With an agreed format in mind, the next steps will be for us to engage with Members and Senior Officers about how we best reflect the Councils philosophy to risk taking, into an overall appetite statement. We anticipate this work to begin in November 2016.

Further key next steps include:

         Discussions are under way with Policy and Information about integrating risk management with the Councilís service planning process.

         Establish a web presence on the Councilís intranet in order to increase awareness of the Risk Management process and allow access to key documents and templates Ė November 2016.

         In association with Policy and Information adapt the Covalent system to reflect the Risk Management Framework and upload all identified risks into the system Ė December 2016.

         A template has been developed and disseminated to managers to facilitate the integration of risk assessment into the Councilís decision-making process and to promote a positive risk culture.† Further work is ongoing to ensure that this is embedded.

 

 

 

 

 

 

 

 

 

 


Definitions