Press Release - Managing Risks to Improve Public Services
22 October 2004
Sir John Bourn, head of the National Audit Office, reported to
Parliament today that good progress has been made by departments to
improve their risk management capacity since his previous report in
August 2000, although departments have further to go to demonstrate
that they have made effective risk management a central part of
their day to day management processes.
Effective risk management can help departments avoid failures in
service delivery. Well managed risk taking also presents
opportunities to deliver better public services, make more reliable
decisions, improve efficiency and support innovation. The
announcement in the Governments July 2004 Spending Review of its
intention to achieve savings of 21.5 billion a year, staff
reductions of 84,000 in support functions by 2008 and sales of 30
billion of assets by 2010 makes effective risk management even more
critical. If these targets are to be successfully met whilst also
achieving Public Service Agreement targets risks will need to be
successfully managed.
In November 2002 a two year Risk Programme was launched by the
Prime Minister and led by the Treasury to give focus and drive to
departments in the development of plans and frameworks designed to
make effective risk management a reality. The Risk Programme comes
to an end in December 2004 and the NAO has identified that it is
critical for departments to build on the momentum achieved to
date.
The NAO report is based on a survey of the 20 main Whitehall
departments, focus groups of 27 departmental risk managers,
comparisons with private sector organisations, academic research,
and case studies of five departments. The NAO found that
departments have made good progress in embedding risk management,
providing staff with greater access to training and guidance on
risk management, and building a common understanding of risks they
face. Progress has been made particularly in defining risk
objectives, having processes to report changes in risks and in
regarding risk as an opportunity as well as a threat.
There are a number of areas where more needs to be done. Only
one quarter of the departments surveyed by the NAO were confident
that they have established an overall view about their exposure to
risk. The management of working relationships with partner
organisations needs to be strengthened, particularly where there
are complex delivery networks or where clarity is lacking about
which delivery organisation is responsible for different risks.
More progress is needed to embed risk management in the day to day
activities of departments, particularly by making sure that there
is a sufficient critical mass of staff with well developed skills
and expertise to manage risk effectively.
The report identifies five key aspects of risk management which,
if more widely applied, could contribute to better public services
and increased efficiency:
- Sufficient time, resource, and top level commitment needs to be
devoted to handling risks;
- Responsibility and accountability for risks need to be clear
and subject to scrutiny and robust challenge;
- Judgements about risks need to be based on reliable, timely and
up to date information;
- Risk management needs to be applied throughout departments
delivery networks;
- Departments need to continue to develop their understanding of
the common risks they share and work together to manage them.
Sir John Bourn said today:
"Today's public service delivery environment constantly
presents new risks to the provision of public services, and robust
risk management can help departments respond effectively. Just as
importantly it opens up opportunities to develop innovative
policies and delivery mechanisms. Well managed risk taking is to be
encouraged and I am pleased with the progress I have seen since my
last report in 2000. That being said, I have identified a number of
ways in which departments can make further progress in developing
cultures that place active, explicit and systematic risk management
at the heart of their business so that decisions are routinely
based around accurate and well informed judgements about risk. It
is critical that departments continue to build on the momentum
achieved so far in developing their risk management, particularly
in light of the challenges and opportunities presented by the
recent Spending Review."
Notes for Editors:
- The five case studies in the report cover the activities of the
Department of Trade and Industrys Coal Liabilities Unit, HM Customs
and Excises Law Enforcement Directorate, the Department for Culture
Media and Sports "Culture Online," National Savings and
Investments, and the Office for National Statistics.
- Sir John Bourn first reported on this topic in his report
Supporting Innovation: Managing Risk in government departments,
NAO, 1999-2000 (HC 864). The Committee of Public Accounts also
reported in its First Report, 2001-02, Managing Risk in Government
Departments (HC 336).
- Press notices and reports are available from the date of
publication on the NAO website,
which is now at www.nao.org.uk. Hard copies can be obtained from
The Stationery Office
on 0845 702 3474.
- The Comptroller and Auditor General, Sir John Bourn, is the
head of the National Audit Office which employs some 800 staff. He
and the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 61/04
All enquiries to Bill Schaper, NAO Press Office:
Tel: 020 7798 7335
Mobile: 07795 120838