Agenda item

This report provides an update on the Council’s Strategic Risks as of February 2024. The update has been prepared in consultation with risk leads and Departmental Management Teams and summarises the risks that are considered to be of an impact and/or likelihood of materialising, and which may have an adverse effect on the achievement of the Council’s corporate objectives.

Darren Armstrong, Head of Audit & Investigation, introduced the report providing the Committee with an update on the Council’s Strategic Risks as of February 2024.

In considering the report the Committee noted:

·             The Strategic Risk Register had been prepared in consultation with risk leads, Departmental Management Teams and the Council Management Team in accordance with the key elements of the Council’s Risk Management Policy and Strategy.

·             Since the report was last updated in February 2023, the Council had continued to operate in a heightened risk environment due to several external factors that included the current economic climate and the cost -of-living crisis with the Council’s overall risk profile therefore continuing to reflect the challenging risk environment the Council was operating within.

·             In terms of the main changes since September 2023, 11 of the risks reported were assessed as being on a stable risk trend in terms of scores remaining as previously reported and one risk (Strategic Risk K: non-compliance with statutory housing duties) having shown a small downwards movement in its risk score.

·             The Committee’s attention was drawn to the Strategic Risk Heat Map within the Strategic Risk Report which had shown six of the strategic risks located within the upper quartile with the highest scoring being the risks related to cost-of-living crisis (A); increase in Dedicated Schools Grant High Needs Block deficit (B); lack of supply of Affordable Accommodation(C) and increase in use of emergency temporary accommodation (D).

·             Since the update in September 2023 two new risks had been added to the Strategic Risk Report.  Both related to the climate emergency, with the first focussed around adapting to climate risks and how Brent’s infrastructure, public health and the natural environment may be adversely affected by the physical effects of climate change.  The second related to reaching carbon neutrality, reflecting the risk that the Council may not be able to achieve its ambition of becoming a carbon neutral borough by 2030 due to a lack of funding and the extent to which behavioural change was still required to meet the scale of challenge identified.  Members were advised that both risks had previously formed part of a wider suite of inherent risks held on departmental risk registers, however, following review had now been added as Strategic Risks in their own right.  In this respect they had not been identified as new risks or escalated due to increased risk scores; they had been added to reflect a change in the Council’s risk management approach as part of ongoing efforts to continue to improve and enhance the Council’s risk management framework.

·             The wider improvements made to the Council’s risk management framework, as detailed within section 4.7 of the report along with the additional recommendations which had recently been made by the LGA in relation to risk management following a recent review of governance and financial challenges experienced by a number of other local authorities.  Whilst noting the robust arrangements already established within Brent to satisfy the majority of the recommendations made, the Committee was advised how these would be used to continue guiding development of the Strategic Risk Report, with particular focus on the tracking of proposed actions to manage and mitigate risks.

The Chair thanked Darren Armstrong for his report and before moving on to invite comments from the Committee took the opportunity to remind members of the role of Internal Audit in working with risk sponsors and nominated risk leads, in an advisory capacity, to coordinate and update the risk report as opposed to being the owner of specific risks.  If, as a result of any issues raised, further detail on specific risks/mitigations were required members were advised these would need to be sought from the relevant risk sponsor outside of the meeting.  On this basis, the following comments/issues were raised:

·             In response to a query, confirmation was provided that (with the exception of any loan arrangements) neither of the Council’s Housing subsidiary companies i4B Holdings Ltd and First Wave Housing Ltd were included as part of the assessment relating to Strategic Risk L: Financial Resilience and Sustainability with members advised that both companies maintained and monitored their own specific risk registers.

·             Further details were sought in relation to the LGA recommendations in relation to risk management and the way in which risks identified were being monitored and benchmarked against other local authorities in order to identify any more general trends.  Whilst highlighting that each authority would have their own specific risk management frameworks, confirmation was provided that risk registers and management frameworks were subject to comparison with other local authorities in order to share best practice and examine trends with many of the risks identified being as consistent across other councils.

·             In response to requests made for further detail on the mitigating measures in place to manage specific risks identified within the register relating to the physical impacts of climate change (including tower blocks and the promotion of more active forms of travel including dockless bikes), impact of demand on temporary accommodation (as a result of the recently introduced borough-wide landlord licensing scheme) and management of the relationship with external providers and partners in relation to cyber security, Darren Armstrong advised that these would need to be sought from the relevant strategic risk owners for circulation to members outside of the meeting.

·             In addition to the role undertaken by the Committee in monitoring strategic risk, further clarification was sought on the approach towards managing risks at a departmental/operational level.  In noting the Committee’s focus around the management of risk at a strategic level across the Council, supported by the Corporate Management Team (CMT), and ability to commission deep dives around specific risks (if required) members were advised that each Council department would also be responsible for maintaining a departmental risk register to ensure that all operational risks were being effectively managed, and to ensure that, where required, risks could be escalated to the Strategic Risk Report via CMT with the Council’s scrutiny function having responsibility to focus on these areas, as required.  Details were also sought on the potential for developing a risk management dashboard to provide better insight in respect of the categorisation of all Council risks.  Whilst the Committee advised they would be keen to explore the proposal in more detail, the existing support being provided by Internal Audit working with departments in relation to risk management was also noted as a means of providing further assurance around the completeness and reasonableness of the information provided and to ensure that audit resources were effectively being targeted at providing assurance on the highest risk areas with the need identified to recognise the progress made to date in relation to the maturity of the Council’s overall risk management journey.

·             Referring to the overall trend in risk scores, which it was noted had remained flat across a number of areas, further details were sought on the way in which delivery of the controls and mitigating actions were being monitored and their impact tracked resulting in the suggested inclusion (supported by the Committee) of an action tracker within future versions of the Strategic Risk Report to assist in monitoring the implementation of mitigating actions.  In response, members were reminded that this proposal had already been identified for inclusion as part of the planned enhancements to future iterations of the Strategic Risk Register.

·             As a final issue, details were also sought on the engagement of the Corporate Management Team (CMT) in review of the Strategic Risk Register with members advised of its collective ownership by CMT and each risk being assigned a Corporate Director as risk sponsor.  The report presented to the Committee was also subject to prior review by CMT with risk management identified as a core element of the Council’s corporate governance framework and closely aligned to the Borough Plan priorities.

As no further issues were raised, the Chair thanked Darren Armstrong and his team on behalf of the Committee for their hard work. The Committee RESOLVED to note the update on the Council’s strategic risks as of February 2024, with further detail on the approach towards addressing the following risks to be sought from the relevant strategic risk owners:

·          Tackling the physical effects of climate change and achieving carbon neutrality;

·          Increase in use of emergency temporary accommodation – in terms of any impact arising from introduction of the Private Rented Sector Landlord Licensing scheme;

·          Cyber Attacks – in terms of work being undertaken with third party providers by the Shared IT Service to support the Council’s Cyber Security Strategy.