Agenda item

To receive the updated Strategic Risk Register.

Sally Hendrick, Head of Audit and Risk Management, presented a report on the updated Strategic Risk Register in accordance with the Risk Management Strategy.  Following a review of the Register by the Strategic Risk Management Group (SRMG) and Corporate Management Group (CMG), a number of changes had been proposed which the Committee was asked to review.  Comments were invited on the completeness of risks and the appropriateness of risk scores, with particular reference to Risks 1 and 2 which had been subject to a ‘deep dive’ by senior officers on which further details were presented.

Risk 1: Significant pressures on the Council’s ability to balance its finances whilst maintaining satisfactory service standards

The Director: Finance set out the background to this risk where it was normal to expect risk to rise around quarter 2 and 3 in each year ahead of new challenges arising, but then recede as budgetary and mitigation planning developed in response.  However, in the current year the Council was facing an unprecedented increase in demand in both Children’s Services and Adult Social Care raising the likelihood of an overspend by year end.  Officers were working hard to bring down this potential deficit looking at a number of options including possible use of the Public Health Grant currently in reserve.  A second major challenge would arise in the 2021/22 budget where the Council faced a reduction in income of £4-5m owing to changes in the business rate system.  This was fully factored into medium term planning and it was likely this could be substantially mitigated by the use of reserves.

Arising from questions and discussion, a number of points were noted:

• Bracknell Forest was one of a very few Authorities experiencing a significant increase in demand for both Children’s Services and Adult Social Care.
• While the rise in demand for Adult Social Care was not unexpected and to some degree predictable, the increase in the cost of Children’s Services was wholly unpredictable.  It seemed illogical that such an increase in demand could continue at such a rate.
• Children’s Services was experiencing an increase in the number of looked after children as well as an increase in the cost of each child looked after.  Some London Boroughs had placed children in care in Bracknell leading to extra costs falling on the Council.
• A continuing pressure on these services could be expected given the ongoing growth in population and people living longer.
• Current year income pressures included a lower than expected upturn in receipts following the building of the second chapel at the crematorium and lower car park income in the first half of the year although the December figures had been very good.
• Work was ongoing on the remaining Transformation Programme issues, including re-analysis of some projects, to realise further savings.
• Income from property would continue to rise gradually as rents increased but the Property Investment Strategy did not provide for any major acquisitions or investments to realise any significant revenue benefit.  Greater emphasis was being placed on establishing the Joint Venture Company which would generate income for the future.
• The maximisation of the Council’s income streams was kept under review but a more significant impact could be made if the number of children in residential care could be reduced.

Risk 2: Employment market pressures make it difficult to recruit permanent staff to some key posts.

The Head of Audit and Risk Management set out the background to this risk, which had been redefined, and referred to the priority need to introduce a comprehensive recruitment and retention strategy.  There was a very competitive market, particularly among neighbouring authorities, to attract staff across a range of key posts.  The contract with Matrix, the Council’s agents, was being reviewed with a view obtaining better rates.  Through the new Strategy the Council would need to increase the offer and attractiveness of working for Bracknell Forest, reviewing market premiums and other incentives that could be offered.  The development and re-design of the HR-OD service could have a significant impact on the successful roll out of the new strategy.

Arising from questions and discussion, a number of points were noted:

• The Risk 2 definition made no mention of retention; it was proposed and agreed to insert the words “and retain” after “recruit” in the definition.
• The spike in risk at quarter 2 of 2018/19 occurred during the major restructuring changes where a number of experienced Chief Officers left the Council’s employ which could not be quickly or easily replaced.
• The overall RAG rating for this risk as amber was queried.  While it was acknowledged that some elements of the risk had been mitigated, there remained other elements requiring further work to effectively mitigate them.  The Committee requested CMT to reconsider the RAG rating.
• The view was expressed that the risk chart did not adequately reflect the position as regards progress made on mitigation measures.  It was requested that the chart be reviewed to see whether it could be made more intuitive.
• The target date for implementation of the new Recruitment and Retention Strategy was late summer 2020.
• Whilst there was a clear preference to achieve the highest level of permanent staffing, the need to maintain statutory compliance was a significant driver in the use of agency staff.  Given the additional cost agency staff, it was suggested the new Strategy should have particular regard to trying to make permanent staff posts more attractive than agency contracts.
• A new bullet point under ‘Potential Impact’ was proposed relating to the loss of experienced permanent staff and replacement with less experienced agency personnel.

RESOLVED

1)     That subject to the matters referred to below, the completeness of risks and the appropriateness of risk scores be endorsed.

2)     That the additional information and presentation on Risk 1 (Finance) and Risk 2 (Staffing) following the ‘deep dive’ by senior officer be received and noted subject to the comments above, in particular those relating to the amended definition for Risk 2 and the reconsideration of the RAG rating for Risk 2 by CMT.

3)     To note that the term risk appetite had been replaced by target risk score.

4)     To note that an external review of risk management arrangements had been undertaken and the outcome will be reported separately to the Committee.