Meeting documents

SC/14/33

Audit Committee

1 December 2014

Annual Report of the Corporate Risk Management Group

Report of the Head of Services for Communities

Please note that the following recommendations are subject to confirmation by the Committee before taking effect.

1. Recommendations

It is recommended that Audit Committee:

(a) Monitor the effective development and operation of risk management in the Council

(b) Consider and note updates to risk registers

2. Summary

This report provides an update on risk management practice in the Council in the form of the annual report of the Corporate Risk Management Group

3. Introduction

The annual report is intended to support this Committee carry out its role in providing independent assurance of the adequacy of the risk management framework and the associated control environment.

4. General update

As part of the 2012/13 Internal Audit Plan an evaluation of risk management arrangements operating across the Council was undertaken by the Devon Audit Partnership that lead to recommendations for a series of actions to strengthen risk management. Subsequently each Leadership Team agreed a consistent approach to risk management which has now largely become embedded across the Council.

The Council is engaged in a process of change to a greater emphasis on service delivery being undertaken on behalf of the Council by other organisations. There are a wide variety of joint arrangements by which such service delivery may take place and which all fall under the broad banner of partnership working. As a consequence it is right that the Council should examine and look to strengthen its risk management approach for partnership working. It is intended that an internal audit should be carried out to test the governance in a sample of higher risk partnerships to support this end. Corporate Risk Management Group will work with Heads of Service to identify the significant and important partnerships to be considered for this work.

The content of the refreshed Corporate, People, Place and Corporate Services risk registers are provided as Appendices A D. These are regularly monitored at leadership teams and action taken to escalate or reduce the management of the risks to the appropriate level according to changes in perceived risk to the Council.

5. Risk management updates from Service areas

5.1. People

5.2. Place

The Place Leadership Team (PLT) regularly monitors identified risks and mitigation measures.

All identified risks have associated management action plans which are regularly reviewed by Heads of Service. Service Risks are formally reported to PLT on a six monthly basis or more regularly as significant risk items require escalating.

The Place risk register continues to be kept under monthly review in order taking into account changes in central government policy or new initiatives that may result in new or additional risks to the Local Authority.

5.3. Public Health

The Public Health Leadership team monitor any risks identified against the Local Authority's Public Health protection responsibilities on a monthly basis.

The current risks relate to vaccination uptake, particularly influenza and measles, mumps and rubella (MMR) and the procurement of new services.

All risks have action plans against them and risks are reducing. Significant work has been targeted at promoting the influenza uptake locally and targeted work has taken place in areas of low MMR uptake.

Procurement of new services and change of providers for other services have been identified as potential risks and these are closely monitored via the risk management report until assurance is gained that the service is delivering at the required level.

Emerging risks on a national level, including Ebola awareness, is monitored locally and Public Health Devon has taken part in appropriate emergency exercises.

6. Risk management updates from areas of risk specialism

6.1. Finance

The Outturn Statement and the Statement of Accounts have been approved by the Cabinet and Audit Committee respectively. Both indicate that for the 2013/14 financial year, financial controls and risk mitigation proved effective in producing spending marginally below target. Publication of the audited Statement of Accounts without material alteration demonstrates that underlying arrangements to ensure a high standard of financial governance continue to be in place.

Looking forward, a key risk facing the Council continues to be finding budget reductions to meet increasingly tight financial targets that can be achieved in both a cost effective and efficient way. Work is ongoing to achieve this. The budget process, incorporating Cabinet, Scrutiny and ultimately County Council will determine the delivery of budget reductions for 2015/16 and the Medium Term Financial Plan will outline targets for subsequent years.

As the impact of budget reductions are determined, the way that Finance Services prioritise and deliver services will also need consideration. Budgets may be assessed to determine their volatility and from this, a risk categorisation applied. To reflect reduced Finance Services resources, budgets deemed as highly volatile may receive higher levels of support than those determined to be medium or low risk. However, the risk approach will seek to minimise financial exposure of the Authority.

6.2. Health and Safety

Health, Safety and Wellbeing risk management, when effectively undertaken, is a management discipline aimed at loss minimisation, increasing productivity and improving the quality of service delivery. Consequently effective health, safety and well-being risk management is critical to the success of the Council and the Council's Risk Management Strategy and the Council's Strategy for Improvement and Efficiency.

The annual report on progress for 2013-14 and a detailed action plan for 2014-15 was presented to the Devon Health & Safety Panel on 23rd September 2014. The report identifies a number of achievements and initiatives throughout the Council since the previous report.

Achievements include a further reduction in the rate of accidents to employees, including a fall in the overall number of violent incidents. A new Employee Assistance Programme (EAP) was introduced in April 2014 which has significantly reduced the costs of counselling to DCC and in addition, the number of staff absence due to ill health reduced.

Challenges in the past 12 months include a number of regulatory and standards changes that have occurred which required amendments to be undertaken to DCC's policies, guidance and actions and whilst the overall number of incidents have reduced, there have been some notable or high profile incidents that have brought DCC health and safety arrangements under scrutiny by external bodies. However, beyond a single notice of contravention involving a DCC Farm, none of these incidents resulted in any other regulatory enforcement against DCC. Following a serious incident in May 2014 and a review of premises arrangements across the organisation, Health and Safety returned to the overall Corporate Risk Register and will remain there until a number of improvements identified have been put into place. The Devon Health & Safety Panel continues to closely monitor the performance of health and safety standards across the organisation.

6.3. Information Governance

The Council's top five information risks are as follows:

1. Fines and Compensation for Damages caused by Data Protection Act Breaches

2. Imperfect Sharing about Vulnerable (or Potentially Vulnerable) People

3. Information during service divestments, take-overs and mergers.

4. Failure to adhere to information management standards

5. Information Governance Capacity and Resources

In 2013/14 there were 212 security incidents reported to the Information Governance Team. Over the last 3 years the council has seen a 285% increase in incidents being reported. During this period the Information Governance team has rolled out mandatory Data Protection training and has carried out awareness sessions on recognising and reporting incidents. It is likely that as a result of this and staff becoming more aware of information security, this has contributed to the increase.

6.4. Insurance

The premiums for most of DCC's insurance policies have remained fairly static during the past year. However, for the reason outlined below, there is a possibility that we might receive a substantial increase for 2015.

2014 has been one of the worst years ever for highway claims for damaged cars due to potholes in the roads. During the peak winter period at one point we were receiving 30 claims per day. Whilst the volume has diminished, the claims have continued to come in on a regular basis right through the year with people damaging their cars due to potholes in the summer months.

With the councils throughout the country suffering from similar problems, there is a good chance that insurers will pass on their misfortune with increased premium charges.

On the plus side, the number of claims received under our Employer's Liability Policy remains very low with only 4 claims received so far in 2014. As usual, this is a result of the robust health and safety regime that DCC follows.

6.5. Emergency Planning

The Emergency Planning Team continues to work closely with the Highways Operations Control Centre, the Flood Risk Management Team and the Council's social care infrastructure to ensure that the Council is able to respond to major incidents and emergencies in a speedy and effective way. The storms around Christmas in 2013, and early in 2014 tested these arrangements thoroughly and highlighted where the plans worked well, and where further work was needed. Overall the response was well handled and the partnership with agencies across the County proved to be robust and reliable. Business continuity challenges in the case of an outbreak of pandemic flu were due to be tested through a national exercise in October 2014, but this was postponed to enable all agencies to put in place those strategies to respond to any cases of Ebola that may occur in the County. Again, close working with partners both within the County and from other specialisms, has proved to be a sound foundation for whatever challenges arrive.

John Smith

Head of Services for Communities

Appendices

Appendix A: Corporate Risk Register

Appendix B: Leadership Team People Risk Register

Appendix C: Place Leadership Team Risk Register

Appendix D: Corporate Services Leadership Team Risk Register

Electoral Divisions: All

Cabinet Member for Community and Environmental Services:

Councillor R Croad

Chief Executive: Dr Phil Norrey

Contact for enquiries: Simon Kitchen

Room No. G43

Tel No: (01392) 382699

Corporate Risk Register (as at 10 November 2014)

Leadership Team People Risk Register (as at 10 November 2014)

Place Leadership Team Risk Register (as at 10 November 2014)

Corporate Services Leadership Team Risk Register

(as at 10 November 2014)