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IMPROVED RISK MANAGEMENT CAN BRING COUNCILS REAL BENEFITS

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The way councils deal with risk can have a major impact on whether they ...
The way councils deal with risk can have a major impact on whether they
achieve their key strategic objectives. Despite this, the Audit Commission
has found that the evaluation and management of risks is often not carried
out in a structured, formalised way.
The commission's management paper 'Worth the risk: improving risk management
in local government', released today, provides practical advice to councils
on how to address their key business risks.
It argues that councils must identify and cope with the risks that threaten
the achievement of their key strategic aims, and recognise that the process
is not a one-off exercise, but an ongoing task.
The paper is aimed at councillors and officers to help them review whether
their current risk management activities are satisfactory. It is a practical
guide, containing examples of good practice and a number of suggestions for
improvement that can realistically be implemented in any council.
Specifically, the paper recommends that:
* councillors take the lead in establishing good risk management since
risks threaten the achievement of policy goals
* risk management should be embedded in existing processes and not
seen as a one-off event
* authorities need to be pragmatic, recognising that the process of
risk management does not eliminate risk but helps to control those risks
that could damage the council's objectives and reputation
Andrew Foster, controller of the Audit Commission said:
'Good risk management is necessary in all organisations but it is
particularly important in local government for delivering public services
effectively and ensuring that a council is well run. Councils need to keep
pace with the advances made by other sectors, such as the NHS and central
government.
'Successful risk management can make a council more flexible and responsive
to new pressures and external demands. It allows an authority to be better
able to meet the needs and expectations of its community. I hope that 'Worth
the risk' will encourage councils to look afresh at risk and will help them
to adapt and improve their existing processes.'
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