Agenda Item No. 8
The Vale of Glamorgan Council
Audit Committee: 21st November 2016
Report of the Managing Director
Corporate Risk Register Update
Purpose of the Report
- To update the Audit Committee on the current position of the Council's Corporate Risk Register.
- That Audit Committee note the current position in relation to corporate risks.
- That Audit Committee note key recent developments and changes to corporate risks.
- That Audit Committee approve the suggested removal of the risk relating to the School Improvement Joint Education Service.
- That Audit Committee note the disbanding of the Corporate Risk Management Group following its amalgamation with the Insight Board.
- That Audit Committee note the change to the Climate Change risk to reflect a wider focus on Environmental Sustainability.
- That the report be referred to Cabinet.
Reasons for the Recommendations
- To highlight the current position of corporate risks for the Council.
- To ensure that all corporate risks for the Council are effectively monitored, addressed, reviewed and updated on a regular basis.
- To highlight that the School Improvement (Joint Education Service) Risk has reduced to the extent that it is suggested that this risk be removed from the register.
- To highlight the change in Corporate Governance arrangements and the establishment of the Insight Board.
- To highlight this change to the committee.
- To ensure Cabinet are aware of and endorse the Risk Register and the actions being taken in mitigation.
- The Corporate Risk Management Group (CRMG) met on a quarterly basis to review the Risk Register to consider the position of each corporate risk identified. The group evaluated whether there have been any changes in either the internal or external environment as well as any new mitigating controls that are being put in place that would prompt a re-evaluation of the risk in terms of its score/position.
- Following the approval of the Corporate Management Team, the CRMG has now been disbanded and its risk remit adopted by the new Insight Board formally established by CMT in September. In line with the Well-being of Future Generations Act and its 5 ways of working, the Insight Board will streamline integrated planning activities, providing evidence of the application of the sustainable development principle and the delivery of the Council's well-being objectives. The Insight Board will meet monthly to review a number corporate workstreams. The Risk Register will be brought to the group on a quarterly basis to ensure that all corporate risks continue to be monitored, updated and status reviewed where appropriate. An update on corporate risks and the Risk Register will continue to be brought to the Audit Committee six monthly.
- When last considering the Risk Register in November 2015, this Committee endorsed the recommendations made by the CRMG and CMT regarding developments to the Risk Register and the associated amendments.
- At that meeting, Audit Committee were advised that the Welfare Reform risk had reduced significantly to justify a reduction from a medium to a medium/low risk with a score of 3. This was due to the welfare reform changes not having the impact that was first anticipated. This remains the case with this risk, with the risk score, status and direction of travel remaining unchanged. The Audit Committee were advised that the anticipated direction of travel for the Waste Management risk would be upwards. This continues to be the case with the forecast direction of travel for this risk moving in an upward direction.
- The last scheduled Corporate Risk Register update was not brought to the Audit Committee in July 2016. However, the 13 risks listed in the register were subject to particular focus through the establishment of the Insight Board and performance management reporting arrangements.
Relevant Issues and Options
Risk Register Update
- This report provides a half yearly update on the current status of the risks contained in the Corporate Risk Register along with an update on key recent developments. There are 13 risks included in the Corporate Risk Register.
- In terms of risk status, 3 risks are medium/high, 7 risks are medium and 3 risks are medium/low. In terms of direction of travel, 2 risks are increasing, 8 risks are unchanged and 2 risks are decreasing. The risk score has been reviewed for two risks in the register. The Reshaping Services risk has changed from 6 to 9 on the risk matrix and the Waste risk has changed from 4 to 6 on the risk matrix. The following provide the committee with a description of the risks where changes have been made or proposed.
- Climate Change: To better reflect the changes brought in through the Well-being of Future Generations Act 2015, the Climate Change risk has been reviewed and renamed to become Environmental Sustainability. The Well-being of Future Generations Act came into force in April 2016 and its primary aim is to ensure public bodies improve the economic, social, environmental and cultural well-being of Wales in accordance with the sustainable development principle. To achieve this vision, the act sets out seven well-being goal for Wales, these are:
- A prosperous Wales
- A resilient Wales
- A healthier Wales
- A more equal Wales
- A Wales of cohesive communities
- A Wales of vibrant culture and thriving Welsh language
- A globally responsible Wales
Through broadening this risk, the risk will better reflect the on-going work that contributes to the delivery of the Council's new Corporate Plan that has been designed around a set of four well-being outcomes and eight objectives ensuring consistency with the Act.
- Reshaping Services: This risk has two aspects to it. There is a risk that the Council fails to deliver the Reshaping Services Programme (and therefore does not realise the benefits associated with it). There is also a risk associated with pursuing such a programme which brings with it the need to deploy resources and develop new skills at a time when these are under pressure for the Council and our partners. In reviewing this risk, the likelihood of both of these risks materialising was considered to have increased to probable (a score of 3) whilst the impact remained at high (a score of 3). This re-categorises the risk as a medium/high risk. This reflects the experience of the Council in delivering Reshaping Services projects which are by their nature complex, large scale and requiring change on a significant scale. Projects contained in the programme are likely to increase in scale and complexity due to the delivery in previous years of "quicker wins". The on-going period of austerity and the impact upon the Council's resources and those of our partners also looks set to continue and as such it is considered prudent to suggest that the likelihood of this risk materialising would continue upwards in the future. In response, the Council is considering the nature of projects that will contribute to the programme in future years and the balance between Reshaping Services projects and other financial savings as part of the Council's budget setting process. The Council will continue to use resources creatively to deliver the programme, both internal and external to the organisation. The regular oversight of the Reshaping Services programme board in considering programme risks, resources and supporting activity (such as organisational development and communications) are considered to be appropriate mitigating measures.
- Waste Management: In terms of the Waste Management risk, although there have not been any significant developments it is anticipated that the forecast direction of travel will continue in an upward direction. Although we achieved a recycling rate of 58% (above the national average) for the 2015/16 financial year, the on-going Waste Resource Action Programme (WRAP) process with Welsh Government has resulted in a reviewed risk score of 6 and a direction of travel that remains as increasing. WRAP presented their draft findings to Business Cabinet on the 12th September 2016, it is hoped that the report will be finalised in the coming months and will enable further consideration of this risk in the future.
- School Improvement (Joint Education Service): Following the positive outcome of Estyn's Inspection of the Central South Consortium Joint Education Service in February 2016, it is considered that the risk of the Joint Education Service failing to deliver statutory school improvement functions is unlikely. As a result, both the Interim Director of Learning and Skills and the Head of Performance and Development felt that the regular monitoring of this risk through the Corporate Risk Register no longer added value. Subject to the approval of the Committee, it is suggested that this risk be removed from the register.
- The detail regarding each corporate risk can be found in the Risk Register attached as Appendix A.
- The Corporate Risk Register has been updated to ensure that where relevant any mitigating actions outlined in Service Plans are reflected as actions within the Register. This has strengthened the connection and monitoring of risk at service and corporate levels as contained as a proposal for improvement in the Welsh Audit Office's Corporate Assessment of the Council. Appropriate linkages have also been made with any regulatory reports/reviews, by ensuring that any improvement proposals/recommendations outlined in the reports from the inspectorates have also been appropriately referenced in the Register (where applicable to a corporate risk).
- Risk Register will now be published on the Council's website.
Resource Implications (Financial and Employment)
- Managing and reducing risks effectively helps prevent unnecessary expenditure for the Council, reduces insurance claims and premiums and provides better protection for the Council and its staff and members.
Sustainability and Climate Change Implications
- Monitoring and reducing the exposure of the Council to risk ties directly to the five ways of corporate working as outlined by the Well-being of Future Generations Act 2015. Risk management contributes to the long-term and preventative working highlighted by the Act as good practice in embedding the sustainable development principle through corporate working and procedures. Countermeasures and controls to mitigate any sustainability related risks are outlined in each risk template in the Risk Register and monitored by the Corporate Risk Management Group.
- Environmental Sustainability has been identified as a medium level corporate risk to the Council and is being monitored as part of the Corporate Risk Register.
Legal Implications (to Include Human Rights Implications)
- Identifying, managing and reducing risk effectively helps to prevent legal challenge.
Crime and Disorder Implications
- There are no Crime and Disorder implications arising from this report.
Equal Opportunities Implications (to include Welsh Language issues)
- Countermeasures and controls to mitigate against any equalities related risks are outlined in each risk template in the Corporate Risk Register and monitored by the Insight Board.
- Risk management is an intrinsic part of corporate governance that is embodied within the principle of community leadership. It is a key competency for the Council to demonstrate as part of the Wales Programme for Improvement. Effective risk management assists the Council in managing its assets more efficiently and thereby promotes the achievement of the Council's objectives in relation to community leadership.
Policy Framework and Budget
- This is a matter for Executive decision.
Consultation (including Ward Member Consultation)
- Consultation has taken place with nominated risk owners and members of the Insight Board.
Relevant Scrutiny Committee
- Corporate Performance and Resources
Huw Isaac, Head of Performance and Development
Rob Thomas, Managing Director