Appendix 3 – Strategic Risks Q4 / Year End 2016-17
STRATEGIC PROJECTS REPORT: QUARTER 4 2016-17 (as at Mar 2017)
STRATEGIC RISKS REPORT: Q4 / YEAR END 2016-17Strategic risks are defined as high-value exposures (both financial and other) to the Council as a whole that have a high probability of occurring without continued preventative action.
Risk rating: -
Risks are scored based on an assessment of the impact of the risk multiplied by the likelihood of the rick occuring, based on the following scoring system.
Score / Impact / Likelihood1 / None / Remote
2 / Minimal / Unlikely
3 / Limited / Possible
4 / Moderate / Probable
5 / Catastrophic / Certain
Overview
Council Leadership Team (CLT), on a quarterly basis, receive an assessment of the likelihood of the risk occurring and a review and update on the mitigating actions.
Performance
No strategic risks have an increased risk rating since they were previously assessed in Quarter 3 and six risk ratings have reduced.
Risk code / Risk description / Responsible Officer / Previous rating (impact x likelihood) / Current rating (impact x likelhood) / Direction of TravelSR01 / Financial Sustainability / Service Director Resources – Andy Brown / 5 x 2
= 10 / 5 x 2
= 10 / ð
Due to the decreasing central government funding, increased demand on services, cost fluctuations due to Brexit, the risk is that the Council is unable to deliver and provide statutory services and those discretionary services it chooses to provide to a level that meets the expectations of the communities of Cornwall and is legally defensible. Reduced group company profits post Brexit from funding reductions and material cost increases.
Mitigations
· Overall Budget - On-going monitoring of the overall budget as well as savings delivery will ensure that relevant and appropriate information is available to managers so that timely action can be taken to mitigate potential failures.
· Medium Term Financial Plan - The Medium Term Financial Plan provides a focus on both Revenue expenditure (day-to-day running costs of providing services) and Capital expenditure (long-term investment in infrastructure, like schools and roads), as well are setting out the Council's overall Financial Strategy.
· Sufficient Capacity - There needs to be sufficiently qualified and experienced staff to contend with requirements driven by development of the plan and business as usual.
Review notes
A balanced budget for 2017/18 was approved by Council in February 2017. This incorporated changes arising from the Council’s business rate retention pilot and means that from 1st April Cornwall will be an early mover to the new funding system and, going forward, will now retain 100% of business rate growth.
A review of the risk is that this remains unlikely, owing to the plans the Council has put in place and the move on changes in the funding system. The final government settlement was also as expected and positively confirmed the Government’s continuing commitment to the existing spending review ‘funding offer’, reducing the risk (in the short term at least) that further cuts will be imposed.
This does not however affect the potential impact in the event that those plans or assumptions do not materialise and there will be demands on the new administration to continue to place the Council in a financially sustainable position that delivers services within its resources.
Risk code / Risk description / Responsible Officer / Previous rating (impact x likelihood) / Current rating (impact x likelhood) / Direction of Travel
SRO2 / Organisational Sustainability / Service Director Strategy & Engagement – Jessie Hamshar / 5 x 3
= 15 / 5 x 3
= 15 / ð
The risk is that the Council is too focused on short-term financial issues and is not developing strategies and structures to meet the future needs of Cornwall or makes reactive or popular decisions that are not strategically aligned and fail to reflect financial pressures
Mitigations
· Business & Financial Plan - The focus has shifted from the short term to the delivery of a four year Strategy, supported by a new Business and Financial Plan.
· Strategic Cohesion - The chairs of the three key strategic partnerships (Local Enterprise Partnership, Local Nature Partnership and Health and Wellbeing Board) have started to meet on a regular basis to ensure strategic cohesion.
· Organisational Development Strategies - Organisational Development strategies are in place, including a People Strategy that includes a focus on workforce planning, talent management and succession planning to meet future resource and capacity requirements.
· Governance - New board structure and governance arrangements in place from June 2016.
Review notes
The Council Strategy continues to provide the long term direction for the organisation, with a four year Business Plan which is updated on an annual basis. New for 2016/17 was a summary version of the Business Plan which was circulated extensively in public buildings. A number of changes have been put in place for 2017/18 - firstly, given the elections on 4 May, the Business Plan agreed in February covers a single year and secondly, the summary version of the Plan (called Our Aims 2017) was issued to all households with the council tax bills.
The Council is currently implementing the recommendations of the independent Governance Review External Group to strengthen our internal decision making processes but also provide greater governance of place at a strategic and local level. The latter includes the creation of a new Cornwall and IoS Leadership Board that being together the chairs of the strategic partnerships on a more formal and transparent basis.
The new Corporate Forward Plan has been further developed to support decision making - this now links with communications tracker.
Having reviewed the mitigating actions I can confirm that there has been no change to the risk likelihood and there are no concerns that require review by CLT / Cabinet at this stage.
Risk code / Risk description / Responsible Officer / Previous rating (impact x likelihood) / Current rating (impact x likelhood) / Direction of Travel
SR03 / Governance and Effective Decision-making / Service Director Assurance – Richard Williams / 5 x 3
= 15 / 3 x 3
= 9 / ò
The risk is that governance and organisational structures will not be sufficient to enable the Council to make evidence-based, rational and reasonable decisions and the governance structures are not followed leading to ineffective and potentially unlawful decisions being made.
Mitigations
· Report Management and Procedures - Robust report management systems and procedures in place to ensure formal decision-making is informed and lawful, including clearance of reports on behalf of the Monitoring Officer and Chief Financial Officer, with Head of Service and Corporate Director approval where needed.
· Statutory and Directive Requirements - Constitution in place in compliance with the relevant statutory and directive requirements and kept under constant review.
· Information and Guidance - Information and guidance available on decision-making from the Monitoring Officer and his staff.
· Positive Governance Strategy - Approved as part of the Organisational Development.
Review notes
New report template approved through Member process. Work in place to develop guidance and face-to-face training.
Latest changes arising from the governance review to be considered by the new Council at its AGM on 23/05/2017.
Work in hand on the implementation tracker with reference to the outcomes of the governance review implemented thus far.
Plans in place to link the work programmes for the new Overview and Scrutiny Committees with the Corporate Forward Plan through a single process
Report to Council on 04.04.2017 on progress to date and setting out work programme for new Constitution and Governance Committee following the election.
Risk code / Risk description / Responsible Officer / Previous rating (impact x likelihood) / Current rating (impact x likelhood) / Direction of Travel
SR04 / Commissioned Service Delivery / Service Director Commercial Services – Kieran Topping / 5 x 3
= 15 / 4 x 3
= 12 / ò
The risk is that the Council fails to comply with its commercial strategy and procurement rules resulting in inconsistent approaches to commissioning and procurement and service delivery arrangements that do not meet the Council’s objectives, including in relation to the Council’s companies, strategic delivery arrangements and other providers.
Mitigations
· People Strategy - People strategy is in place, as part of the Organisational Development Framework.
· Governance - People and Workforce Board being reviewed and developed as part of the wider review of Board governance arrangements. Final terms of reference being signed off by Corporate Leadership Team (CLT) on 21 July. The Board will be the ‘delivery arm’ of the People Strategy.
· Productivity, Health & Wellbeing - Productivity, Health and Wellbeing Strategy being developed.
· Business and financial planning - Business and financial planning will now identify and consider the workforce implications of any proposals.
· HR Dashboards - HR Dashboards and interventions will be developed further to support managers and the People and Workforce Board.
· Capacity and Capability development - Capacity and Capability will be developed through appropriate investment in core skills, management and leadership.
· Service Delivery - We will identify roles and/or individuals where there is a delivery risk and will develop plans to fill key roles / develop key skills and retain key individuals.
Review notes
Overall the governance frameworks are in place and the issues are now more around embedding adherence and compliance from across the Service Directorates - this will be added by the wider roll out of the Commercialisation training.
Risk code / Risk description / Responsible Officer / Previous rating (impact x likelihood) / Current rating (impact x likelhood) / Direction of Travel
SR05 / Organisational Capacity and Capability / Service Director Resources – Andy Brown / 5 x 3
= 15 / 4 x 3
= 12 / ò
The risk is that the Council will not have the ability and capacity to manage all the changes required as well as continue to deliver services
Mitigations
· People Strategy - People strategy is in place, as part of the Organisational Development Framework.
· Governance - People and Workforce Board being reviewed and developed as part of the wider review of Board governance arrangements. Final terms of reference being signed off by Corporate Leadership Team on 21 July. The Board will be the ‘delivery arm’ of the People Strategy.
· Productivity, Health and Wellbeing Strategy - Productivity, Health and Wellbeing Strategy being developed.
· Business and Financial Planning - Business and financial planning will now identify and consider the workforce implications of any proposals.
Review notes
The senior management capability and capacity review has now been concluded and a project review undertaken.
All appointments to roles at Strategic and Service Director have now been made but searches will now begin for the Assurance SD post.
The CLT Leadership Programme is now underway and being openly designed to provide the tools and learning for the new CLT to lead the organisation differently, both individually and as a collective. Plans are in place to filter this down and wider to ELT in April and future sessions.
Appointments continue to be made at tier 4 throughout the organisation following end of consultation and significant number of restructures are now planned in the proceeding 6-12 months from tier 5 downward to either realign service functions to new service designs and/or delivery planned savings/efficiencies.
There is a risk that the loss of project management support to restructures will not only delay the process, but that more time will be required from HR BP to manage the overall process.
The potential risks to the continuity of service delivery associated with implementing the outcomes of the review continue to be managed and mitigated through project governance.
Work is continuing at service and directorate level on strategic workforce planning so that the Council is better placed to anticipate and address issues relating to overall capacity and capability across the Council.
Risk code / Risk description / Responsible Officer / Previous rating (impact x likelihood) / Current rating (impact x likelhood) / Direction of Travel
SR06 / Public Sector Collaboration / Service Director Strategy and Engagement – Jessie Hamshar / 5 x 3
= 15 / 5 x 3
=15 / ð
The risk is that through a failure to collaborate and communicate effectively in the context of service delivery, procurement, co-location and restructure opportunities and because of changing national financial rules and requirements, Cornwall Council and its public sector partners will fail to align to deliver savings and efficiencies for the benefit of Cornwall including failure to deliver on elements of the Cornwall Devolution Deal.
Mitigations
· Cornwall Executive Group - Cornwall Executive Group in place to deliver holistic solutions, long term solutions.
· Devolution Deal - Devolution Deal in place, monitored through Programme Board.
· Long term Cornwall Strategy - Long term Cornwall strategy to be developed, underpinned by public sector balance sheet.
· Sustainable Transformation Plan - Sustainable transformation plan to be developed – bringing together council and our health partners.