Agenda item

LIST OF BACKGROUND PAPERS AS REQUIRED BY LAW

(Papers relied on to write the report, which do not contain exempt information and which are not published elsewhere)

Contact Officer, telephone number and email:

Duncan Ellis, +441263 516330, Duncan.Ellis@north-norfolk.gov.uk

Emma Duncan +441263 516045, Emma.Duncan@north-norfolk.gov.uk

The Head of Finance & Asset Management introduced the report and informed members that the Risk Management Policy and Framework was reviewed on a bi-annual basis. It was noted that the new policy included additional information from training sessions that had taken place, such as those on identifying the Council’s risk appetite. On the risk registers, it was noted that new headings had been added to cover issues raised during training. A Covid-19 specific risk register had also been created to focus solely on the risks raised by the pandemic.

Questions and Discussion

Cllr C Cushing referred to section ten of the policy on risk scoring, and suggested that if a risk was given over a 90% probability rating, then it should be recorded as an assumption elsewhere, as opposed to remaining on the risk register. The Head of Finance & Asset Management replied that he was unsure whether the Council had used assumptions logs previously, but he would be happy to look into whether it would be possible.

Cllr N Dixon referred to previous points made on paying attention to optimism bias on the risk register, and stated that even with the best risk policy and framework, the Council still appeared to have a systemic weakness in its business and project planning and analysis. He added that until these issues were resolved, the Council remained at a high risk of project failure, and for that reason asked whether there should be an additional line in the risk register to address these issues. It was noted that in addition to the impact of optimism bias, it was also important that the Council had the appropriate skill set in place, to enable these tasks to be completed. Cllr N Dixon then suggested that the Committee should give consideration, as to whether these issues had been fully addressed. The Chairman noted that a new performance management system was in the process of being introduced, and asked whether this might help to resolve some of these issues. The Head of Finance and Asset Management stated that the Inphase system did have a built in risk register module, which it was hoped could be used to support the existing risk registers, that were currently kept on spreadsheets. He added that the system would also enable the risk registers to be presented online, with a trajectory for each risk as mitigations are put in place to manage them. In relation to project risks, the Head of Finance and Asset Management suggested that clearly defining the desired outcomes would help to avoid scope creep, clearly identify project success, and help to mitigate risks. He added that another option would be to apply gateway tests to projects, which would improve transparency of the requirements for each stage of a project. On report papers, it was suggested that adding high level summaries as standard, could help to highlight the key issues and risks for members.

The Head of Legal Services stated that optimism bias remained a cultural issue at the Council amongst officers and members. She added that whilst officers were required to provide advice, decisions were still made in a political environment, which meant that projects could maintain strong political support despite advice to the contrary. As a result, The Head of Legal Services stated that officers must be free to give their professional advice and opinion despite political pressure, and this was why a strong framework of processes and procedures was crucial to mitigate risk. Cllr N Dixon thanked officers for their comments, and suggested that it would be extremely helpful to see these comments converted into items on the risk register, to ensure that these processes could be followed. Cllr C Cushing stated that he endorsed these comments, and added that from a project management perspective, using a milestone system to stage projects would be very beneficial. He added that a benefit realization plan would also be very helpful to ensure positive outcomes for projects.

Cllr R Kershaw stated that lessons had been learnt from recent projects, and made clear that Cabinet did listen to the advice given by officers. He added that it was vital that there was an audit trail from inception to completion for projects in order to maintain transparency, and that projects must be stopped if they become unviable.

The Chairman referred to the risk appetite in section 11 p81, and stated that the recommendation suggested that the Council’s risk appetite was moderate, and asked if this could be changed to a more positive stance of ‘open’. The Head of Finance and Asset Management explained that the appraisal of the Council’s risk appetite had taken place at a workshop with Members, though Members were free to continue to discuss this rating. He added that culturally, an open risk appetite might be an aspiration for the Council, but he did not think it was appropriate at this time. The Head of Legal Services added that some members might be closer to this, but historically NNDC had never had a fully open risk appetite, and having worked elsewhere where the risk appetite was open, it was clear that there was a very different culture at NNDC. The Chairman accepted the comments and reiterated that an aspiration to achieve an open risk appetite must remain.

In addition to the officers’ recommendations, it was proposed by Cllr C Cushing and seconded by Cllr J Stenton to recommend to the responsible officer that additional lines be added to the corporate risk register, to address systemic issues caused by optimism bias, and business and project planning/analysis.

RESOLVED

1.     To note and adopt the Risk Management Policy and Framework

2.     To note the Risk Registers.

3.     To recommend to the responsible officer that additional lines be added to the corporate risk register, to address systemic issues caused by optimism bias, and business and project planning/analysis.