Society for Risk Analysis MeetingSociety for Risk Analysis Meeting5-8 December 20045-8 December 2004

Improving Government Risk Improving Government Risk Management and Appraisal of Risk to Management and Appraisal of Risk to

the Publicthe Public

Brian GlicksmanBrian Glicksman

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Outline of PresentationOutline of Presentation• Context Context

• The Risk Programme The Risk Programme

• Key issues and Actions Key issues and Actions

• Managing risks to the public Managing risks to the public

• Appraisal of risks – assessing risk Appraisal of risks – assessing risk perceptions perceptions

• The futureThe future

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Context for Government risk management…

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We are taking on We are taking on more risk - focus is on more risk - focus is on

delivery delivery

• Aiming high – targets focus us on Aiming high – targets focus us on outcomesoutcomes

• Achieving outcomes is complex and Achieving outcomes is complex and hard-workhard-work

• Will only happen if risks that can knock Will only happen if risks that can knock us off course are anticipated, and us off course are anticipated, and managed wellmanaged well

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Project failuresProject failures

Departments continue to suffer, particularly in:• New complex IT systems

• Traditional procurement programmes

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We face new threats...We face new threats...

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Pace of change brings both Pace of change brings both opportunity opportunity andand

uncertainty...uncertainty...

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Connections increase Connections increase exposure...exposure...

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And risk matters more to people...

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Public more aware & want Public more aware & want more say in risk mattersmore say in risk matters

Better educated & aware

Demand high standards and actions to address concerns

Demand more openness and clear evidence

Demand more influence and choice

Prepared to litigate

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Trust is an issue… Trust is an issue…

Family Family Doctors, Doctors,

Teachers, Teachers, Local PoliceLocal Police

Business LeadersBusiness Leaders

Senior Civil Senior Civil ServantsServants

Real Estate Real Estate Agents/ Agents/ ““Red-top” Red-top” journalistsjournalists

Greenpeace/Greenpeace/AmnestyAmnesty

Trust in individuals Trust in individuals andand

institutions, 2003institutions, 2003

Low trust means: less Low trust means: less support for innovation support for innovation and change; more and change; more demand for regulationdemand for regulation

PoliticiansPoliticians

Source: Market & Opinion Research International

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So change So change needed…needed…

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Risk PRisk Programme rogramme --improving government improving government

capabilitycapability

• 2 yr programme of change 2 yr programme of change

• Civil Service Management Board Civil Service Management Board

GroupGroup

• Cross-government networksCross-government networks

• Learning from public/private sectorsLearning from public/private sectors

• Treasury Chief Secretary Reports to Treasury Chief Secretary Reports to

Prime MinisterPrime Minister

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What is our Aim?What is our Aim?• Embedded risk management - Embedded risk management -

skills, guidance, structures, skills, guidance, structures, incentives, cultureincentives, culture

• Effective - anticipation, Effective - anticipation, decision-making, decision-making, preparedness, crisis handling, preparedness, crisis handling, communications, coordination; communications, coordination; fewer adverse reports from fewer adverse reports from auditors/politicians auditors/politicians

• Policies, targets, projects are Policies, targets, projects are being delivered; public safety, being delivered; public safety, confidence, trust are being confidence, trust are being achievedachieved

CapabilitiesCapabilities

Risk HandlingRisk Handling

Better Better outcomesoutcomes

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Innovation and Innovation and well-managed risk takingwell-managed risk taking

Current Current performancperformanc

ee

New New endeavours/ endeavours/ stretching stretching

targetstargets

““Self Self imposed” imposed”

riskrisk

Operational Operational riskrisk

External External threatsthreats

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Key ChallengesKey Challenges

• Leadership Leadership • Embedding in business processes Embedding in business processes • Risk in policy makingRisk in policy making• Managing risks with partnersManaging risks with partners• Managing risks to the public Managing risks to the public • Learning from good practiceLearning from good practice

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Managing risk to the public…

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Principles:Principles:

Openness & transparencyOpenness & transparency

Involvement Involvement

Proportionality and consistencyProportionality and consistency

Evidence for policies, actions, Evidence for policies, actions, decisionsdecisions

Responsibility and choiceResponsibility and choice

• Use of arm’s length bodiesUse of arm’s length bodies

• Early and regular communicationEarly and regular communication

Building public trust Building public trust and understanding…and understanding…

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Implementing the principles

• Involving Government networks Involving Government networks •Communications – information directorsCommunications – information directors•Decision making - policy makersDecision making - policy makers•Evidence – scientists; economists and other analystsEvidence – scientists; economists and other analysts

• Wider engagementWider engagement – academics, stakeholders– academics, stakeholders• Guidance Guidance

• Supplement to HMT guidance on investment Supplement to HMT guidance on investment appraisalappraisal• A tool for structured assessment of public concernsA tool for structured assessment of public concerns• Communicating Risk to the Public Communicating Risk to the Public

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Proportionality and consistency

• Guidance on appraisal of risks to the publicGuidance on appraisal of risks to the public

• Current consultation on this new guidanceCurrent consultation on this new guidance• Guidance includes:Guidance includes:

• “ “benchmark” for Government spending to benchmark” for Government spending to prevent a fatality (£1m – £1.5m from road prevent a fatality (£1m – £1.5m from road transport ‘willingness to pay’ (WTP) studies); and transport ‘willingness to pay’ (WTP) studies); and to reduce harm of £20-30k per Quality Adjusted to reduce harm of £20-30k per Quality Adjusted Life Year (QALY)Life Year (QALY)

• Consideration for public and expert risk Consideration for public and expert risk perceptions perceptions

• Assessment tool for public concernsAssessment tool for public concerns

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Consultation on concerns

• Proactive, two-way communication• Consultation to capture structured, informed

and considered views• Challenge and varied perspectives valued in

building the evidence base• Not from a self-selected source• Not groupthink• Not media judgements

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Assessment FrameworkAssessment Framework

• Categories of concern:Categories of concern:• Hazard: familiarity; understandingHazard: familiarity; understanding• Effects: equity; dreadEffects: equity; dread• Management: control; trustManagement: control; trust

• Levels of concern: Levels of concern: • 1-5 to indicate increasing degree of 1-5 to indicate increasing degree of

concernconcern

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Level 1 Level 1 Level 2 Level 2 Level 3 Level 3 Level 4 Level 4 Level 5 Level 5

e.g. effects e.g. effects are trivial, are trivial, temporary temporary and and commonplacecommonplace

e.g. effects e.g. effects potentially potentially serious but serious but treatabletreatable

e.g. effects e.g. effects are serious, are serious, long-term but long-term but considered considered naturalnatural

e.g. effects e.g. effects are serious, are serious, permanent permanent and raise and raise ethical ethical concernsconcerns

e.g. effects e.g. effects are are catastrophic, catastrophic, permanent permanent and highly and highly fearedfeared

Evidence:Evidence:How serious are the effects?How serious are the effects?How long-term are the effects?How long-term are the effects?How feared are the effects?How feared are the effects? 

Eg Effects: Fear (Dread)Eg Effects: Fear (Dread)

Concern assessment Concern assessment frameworkframework

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Decisions on managing Decisions on managing risks to the publicrisks to the public

Concern factors

Expert views

Public views

1 Familiarity

2 Understanding

3 Equity

4 Dread

5 Control

6 Trust

Deaths Harm

CBA, including…CBA, including… Societal ConcernsSocietal Concerns

‘Baseline’ WTP

Decision making

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Future: culture change…

• Everyone is a risk manager• Knows the risks faced, how to manage them, and how this

links to achieving the organisation’s objectives• Looks for opportunity• Clear on risk appetite• Knows when to escalate risk

• More risk-based service provision• Clear objectives with• Resources targeted at risks

• Risks to public managed effectively• Proportionate action• Taking account of public perceptions• Communicating effectively

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www.risk-support.gov.ukwww.risk-support.gov.uk

email to: email to: risk-support@hm-treasury.gov.ukrisk-support@hm-treasury.gov.uk

For further information ….For further information ….