1. Society for Risk Analysis Meeting 5-8 December 2004 Improving Government Risk Management and Appraisal of Risk to the Public Brian Glicksman

2. 2 Outline 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 perceptions Appraisal of risks – assessing risk perceptions The future The future

3. 3 Context for Government risk management…

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

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

6. 6 We face new threats...

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

8. 8 Connections increase exposure...

9. 9 And risk matters more to people...

10. 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. 11 Trust is an issue… Family Doctors, Teachers, Local Police Business Leaders Senior Civil Servants Real Estate Agents/ “Red-top” journalists Greenpeace/Amnesty Trust in individuals and institutions, 2003 institutions, 2003 Low trust means: less support for innovation and change; more demand for regulation Politicians Source: Market & Opinion Research International

12. 12 So change needed…

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

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

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

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

17. 17 Managing risk to the public…

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

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

20. 20 Proportionality and consistency Guidance on appraisal of risks to the public Guidance on appraisal of risks to the public Current consultation on this new guidance Current consultation on this new guidance Guidance includes: 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) “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 Consideration for public and expert risk perceptions Assessment tool for public concerns Assessment tool for public concerns

21. 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. 22 Assessment Framework Categories of concern: Categories of concern: Hazard: familiarity; understanding Hazard: familiarity; understanding Effects: equity; dread Effects: equity; dread Management: control; trust Management: control; trust Levels of concern: Levels of concern: 1-5 to indicate increasing degree of concern 1-5 to indicate increasing degree of concern

23. 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? Eg Effects: Fear (Dread) Concern assessment framework

24. 24 Decisions on managing risks to the public Concern factors Expert views Public views 1 Familiarity 2 Understanding 3 Equity 4 Dread 5 Control 6 Trust DeathsHarm CBA, including… Societal Concerns ‘Baseline’ WTP Decision making

25. 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. 26 www.risk-support.gov.uk email to: risk-support@hm-treasury.gov.uk For further information ….