Outline of Presentation

1. Society for Risk Analysis Meeting5-8 December 2004Improving Government Risk Management and Appraisal of Risk to the PublicBrian Glicksman

2. Outline of Presentation • Context • The Risk Programme • Key issues and Actions • Managing risks to the public • Appraisal of risks – assessing risk perceptions • The future

3. Context for Government risk management…

4. We are taking on more risk - focus is on delivery • Aiming high – targets focus us on outcomes • Achieving outcomes is complex and hard-work • Will only happen if risks that can knock us off course are anticipated, and managed well

5. Project failures Departments continue to suffer, particularly in: • New complex IT systems • Traditional procurement programmes

6. We face new threats...

7. Pace of change brings both opportunity and uncertainty...

8. Connections increase exposure...

9. And risk matters more to people...

10. Public more aware & want more 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

11. Trust is an issue… Trust in individuals and institutions, 2003 Family Doctors, Teachers, Local Police Low trust means: less support for innovation and change; more demand for regulation Greenpeace/ Amnesty Senior Civil Servants Politicians Business Leaders Real Estate Agents/ “Red-top” journalists Source: Market & Opinion Research International

12. So change needed…

13. Risk Programme -improving government capability • 2 yr programme of change • Civil Service Management Board Group • Cross-government networks • Learning from public/private sectors • Treasury Chief Secretary Reports to Prime Minister

14. What is our Aim? Capabilities • Embedded risk management - skills, guidance, structures, incentives, culture • Effective - anticipation, decision-making, preparedness, crisis handling, communications, coordination; fewer adverse reports from auditors/politicians • Policies, targets, projects are being delivered; public safety, confidence, trust are being achieved Risk Handling Better outcomes

15. Innovation and well-managed risk taking New endeavours/ stretching targets Operational risk External threats “Self imposed” risk Current performance

16. Key Challenges • Leadership • Embedding in business processes • Risk in policy making • Managing risks with partners • Managing risks to the public • Learning from good practice

17. Managing risk to the public…

18. Building public trust and understanding… • Principles: • Openness & transparency • Involvement • Proportionality and consistency • Evidence for policies, actions, decisions • Responsibility and choice • Use of arm’s length bodies • Early and regular communication

19. Implementing the principles • Involving Government networks • Communications – information directors • Decision making - policy makers • Evidence – scientists; economists and other analysts • Wider engagement– academics, stakeholders • Guidance • Supplement to HMT guidance on investment appraisal • A tool for structured assessment of public concerns • Communicating Risk to the Public

20. Proportionality and consistency • Guidance on appraisal of risks to the public • Current consultation on this new guidance • Guidance includes: • “benchmark” for Government spending to prevent a fatality (£1m – £1.5m from road transport ‘willingness to pay’ (WTP) studies); and to reduce harm of £20-30k per Quality Adjusted Life Year (QALY) • Consideration for public and expert risk perceptions • Assessment tool for public concerns

21. 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

22. Assessment Framework • Categories of concern: • Hazard: familiarity; understanding • Effects: equity; dread • Management: control; trust • Levels of concern: • 1-5 to indicate increasing degree of concern

23. Level 1  Level 2  Level 3  Level 4  Level 5  e.g. effects are trivial, temporary and commonplace e.g. effects potentially serious but treatable e.g. effects are serious, long-term but considered natural e.g. effects are serious, permanent and raise ethical concerns e.g. effects are catastrophic, permanent and highly feared Evidence: How serious are the effects? How long-term are the effects? How feared are the effects? Concern assessment framework Eg Effects: Fear (Dread)

24. Decisions on managing risks to the public CBA, including… Societal Concerns

25. 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

26. For further information …. www.risk-support.gov.uk email to: risk-support@hm-treasury.gov.uk