Agenda item

This report updates the Committee of the risks, controls, assurances and management action orientated to manage organisational level risks.

Michael Sloniowski, Principal Consultant- Risk Management, introduced the report, which set out work on risk management within the Council since the last Committee meeting. The report set out the outcome of internal audit’s assessment of the Council’s risk standard’s compliance with the British Standard for risk management, which was appended to the report. The Corporate Risk Register was also appended to the report: significant changes included the addition of an opportunity risk with regards to the proposed merger of services with Westminster and Kensington & Chelsea and the removal of the risk that related to PCT integration.

Councillor Ginn asked about the structure of the Council’s risk management function, in the light of integration with other Councils and the potential for rising demand on the service. Michael Sloniowski said that while he was the only officer whose principle role was risk management, there were also officers working on insurance matters, business continuity and emergency services; these services were working increasingly closely together prior to integration.

Eugenie White raised four issues that she felt were not captured in the Corporate Risk Register- firstly, the IT Business Continuity already discussed; secondly, the risk of an interest rate rise and/or decline in market value on asset sales failing to reach target values in the Council’s financial strategy; thirdly, the risk of a serious incident connected to the Council’s child protection and responsibilities for looked-after children, particularly should it generate media interest, and; fourthly, that the Civic Accommodation project should, as with the Shepherds Bush Market, be included as a risk.

With regard to the point raised on the risk to the Council’s budget strategy, Michael Sloniowski said that officers had recently refreshed the finance risks, and the issue of potential market saturation was on the MTFS risk register. With regard to the corporate parenting risk, he said that the issue was likely on the departmental risk register, but that he would review its status with the Director of Children’s Services. With regard to the risk surrounding the Civic Accommodation project, he said that he would take the matter up with EMT.

In response to a question from the Chairman on the risk arising from the merger, Councillor Botterill said that the project was at an early stage. The intention was for those elements that offered short-term gain to be fast tracked, whilst other issues, such as IT systems, would need to be addressed in the longer term. Though this approach did not entirely synchronise with the Comprehensive Spending Review, the intention to proceed was firm.

Councillor Murphy raised concerns that mergers often did not deliver the proposed cost savings, with different organisational cultures a key factor; this formed a significant risk to the project achieving its aims, particularly as mergers lay outside the normal experience of many Council staff.

Councillor Botterill said that the parallel nature of the organisations meant that the difficulty of operational integration was considerably diluted, noting that cultural differences had also existed between departments within the Council and between the Council and PCT. Councillor Iggulden also noted that an excessive price paid for an acquisition was often the cause of mergers failing to achieve the forecast financial return, something that would not apply in the Council’s case.

Jane West, Director of Finance and Corporate Services, said that mapping the different organisational cultures was a key stage of the project, and already under way. She noted that senior management at all three Council included individuals with experience of private sector mergers and acquisitions. She also noted that the Council had already partially undertaken a merger with the PCT, gaining valuable experience.

RESOLVED THAT

The review of the Hammersmith and Fulham Risk Standard, and the latest iteration of the Corporate Risk Register, be noted.