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Councillor Cory (in respect of his previous membership of the North East
Essex Clinical Commissioning Group) declared a non-pecuniary interest in the
following item pursuant to the provisions of Meetings General Procedure Rule
7(5).
The Committee considered a report providing members with an overview of the
Council’s risk management activity undertaken during the financial year from 1 April
2021 to March 2022.
Andrew Weavers, Monitoring Officer, introduced the report to the Committee and
assisted the Committee in its deliberations. He explained that the Committee were
invited to review the Risk Management Strategy and recommend it to Cabinet, who
in turn could refer it to Council for inclusion with the Policy Framework. There had
been no changes to the fundamental processes underpinning the Strategy, but the
opportunity had been taken to update some of the terminology. The strategic risks
were reviewed quarterly by the Senior Management Team. The latest review had
been undertaken in June and the risks identified were shown in the Risk Register.
The current strategic risks facing the Council were set out at paragraph 1.4 of the
Assistant Director’s report.
In discussion, the Committee indicated it was surprising that risk ST2 on Spending
Power did not identify public sector wage growth and the potential for industrial
action as risks and also that the Risk Register did not identify key person
dependency as a risk. The Monitoring Officer explained that these issues would be
looked at the next review of the strategic risks by the Senior Management Team in
September.
In respect of the Risk Matrix, concern was expressed by a member of the Committee
that several risks had moved through two bands without sufficient detail on mitigation
to explain why. More detail needed to be provided so there was better
understanding of why risks had changed bands. In terms of residual risks, five risks
sat outside the risk tolerance line and there was insufficient information to explain
what was being done to move them back within tolerance. Confirmation was also
sought as to who set the risk tolerances. In terms of the Risk Management Strategy,
there was nothing on Black Swan events (i.e. events that were infrequent but had the
potential to have a very significant impact threatening the future of the organisation).
The Strategy should identify how these issues would be dealt with in future. Whilst
the Risk Management Processes set out in Appendix 1 were noted, there was no
reference to risk closure.
The Monitoring Officer explained that risk tolerances were agreed by the Senior
Management Team and a written response on the issues raised on residual risks
would be circulated to the Committee.
The Committee also explored issues relating to risk ST3 on Partnership
Commitment. It was suggested that the Council ought to be more proactive in
assessing the risks of dependency on partners and the possibility that they may
change structure or direction, before the Council began to rely them for the delivery
of strategic priorities. The Council should be more cautious in its reliance on partners
for delivery of strategic priorities and should always consider the potential impact of
the failure of partner organisations at the outset. If services were delivered in house
this risk was mitigated as Cabinet would have complete control. The pitfalls of
partnership working were clearly shown in the commentary to risk ST3 and due
diligence should have been undertaken on the Clinical Commissioning Group before
entering into partnership with them. The risk would not have had such a high rating
if the Council had sought the right assurances in the first place.
Other members of the Committee emphasised the importance of working with
partners and that, given the resources under the Council’s direct control, partnership
working enabled the Council to deliver considerably more to residents. The Council
did have to accept the risk that the financial position or strategic direction of partners
could change That needed to be assessed as early as possible and mitigated where
possible but it should be recognised that it could be very difficult to assess the risk
of, for example, a change in government policy. As partnerships developed and
grew stronger the likelihood of this risk should decrease.
The need to keep risks under regular review, particularly those that related to
frontline services that supported residents, was emphasised. This would minimise
the risk of disruption to vital services for residents.
The Monitoring Officer explained risk ST3 looked at the implications for the authority
if partnerships were to fail. It had been reviewed and raised as a risk for the reasons
set out in the report. However, the Council did understand what those potential
impacts were. As much mitigation as possible was put in place and the Council
worked very closely with partners to try and ensure this did not happen.
The Chair invited Councillor King, Leader of the Council and Portfolio Holder for
Strategy, and Councillor Cory, Portfolio Holder for Resources, to respond to the
debate. Councillor King indicated that he had found the Committee’s comments very
helpful and he would continue to review and take advice on the issue. He believed
the risk ST3 had been appropriately assessed and rated but the quality of
relationships with partners was vital and mattered more than the quality of the project
management. Councillor Cory indicated he understood the concerns that had been
raised and that perhaps another level of assurance should be sought in such
circumstances, given the importance of these partnership in delivering the Council’s
priorities. He echoed the comments made about risks reducing as partnerships grew
and emphasised that these partnerships reduced the Council’s risks in terms of
budgetary commitments. The changes in the health arrangements set out in risk
ST3 had been driven by government policy. However, the relationships built up
previously through the Alliance would mitigate the risks of these changes.
It was also queried whether risk CO3 on financial inequality should have increased,
particularly in terms of probability, given the cost of living crisis, It was suggested
that Cabinet could take note of this when it reviewed the Risk Register and Strategy.
RESOLVED that the submission of the Assistant Director’s report to Cabinet to
approve the risk management strategy for 2022/23 be endorsed.