In the 2006 ALARM Risk Management Benchmarking Survey, 78% of respondents say risk management is clearly embedded in strategic plans, while 81% report that it is explicit in their financial planning.
Comparison with previous survey responses in 2003 shows a considerable increase in the contribution that risk management is making to the achievement of corporate objectives, delivery of innovative projects, targeting of resources and improvement in service delivery.
The survey was undertaken by ALARM with support from the Audit Commission. It assists in tracking the development of risk management practice within the public sector. Carried out during October and November 2006, the survey was sent to 388 organisations; the response rate was 42%. The top five risks are summarised as:
- critical incidents/business continuity
- partnerships
- not achieving objectives/targets
- service delivery
- housing stock transfer
Each responding organisation is receiving a report that will allow it to compare its overall risk management performance with others in the sector and view the progress it has made since 2003. They can also identify areas that might benefit from a detailed analysis, review or workshop event.
Dr Lynn Drennan, chief executive of ALARM, comments: "The survey results demonstrate considerable progress in public risk management, particularly with regard to the management of internal risks. While it is clear that some external risks, such as those that arise through partnership arrangements, are being addressed, there is still room for improvement in embedding risk management within strategic decision making."
According to Peter Andrews, ALARM chairman, the survey confirms the increasing sophistication of risk management in the UK public sector. "It is significant that 70% of respondents confirmed that risk management is contributing to improved performance. In the risk financing area there are also some significant results, with increasing numbers of organisations taking higher levels of self-insurance, and the number of claims remaining static for the last two years."
The Audit Commission, which supported the survey, is an independent body responsible for ensuring that public money is spent economically, efficiently and effectively, to achieve high-quality local services for the public. Its remit covers around 11,000 bodies in England, which between them spend more than £180bn of public money each year, and its work covers local government, health, housing, community safety and fire and rescue services.
Commenting on the survey, Gareth Kelly, who leads on risk management at the Audit Commission, says: "It is encouraging that the majority of respondents to the survey indicate risk management is starting to make a significant contribution to better outcomes. Forty-three per cent of respondents also stated that risk management had made a significant contribution to their successful partnerships. While the survey results are encouraging, more needs to be done to further integrate risk management, including risks to be more outcomes-based, which factor in opportunities as well as threats."
A full report on the findings of the survey will be published later this year.
Book offer
A 20% discount is available for IRM members ordering the book "Managing Risks in Public Organisations" by Martin Fone and Peter C. Young. This is essential reading for the IRM Public Sector Risk Management subject module.
