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CIPFA North East: 20th November 2015
Pioneers: Dealing with risk & uncertainty in a changing world
Kevin Morris - Regional ManagerSarah Pearson – Strategic Risk Practice LeaderZurich Municipal
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The story so far…
• Pioneers – Our Senior Managers Report (third edition)
• Cumulatively interviewed over 40 CEOs and Senior Managers
• This year features a focus on the North
• The pace of change is extraordinary, so we aren’t stopping here. 2016 report is in planning
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Some themes;
• Five (more) years of austerity
• Innovation and experimentation
• Combined authorities and devolution
• Health and Social Care integration
• The survival of Social Care
• The next generation authority
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Five (more) years of austerity
• Headline – DCLG - 30% reduction in funding over next 5 years – Will this follow for Local Government?
• Physical assets are degrading• Reduced or cancelled expenditure on low profile but essential
services, such as H&S Potential failure of statutory services
“We’ve got a plan until 2017 - after that we don’t know where the rest is coming from”
“Infrastructure will degrade - reduce spend on Highways maintenance at your peril is a strong message to members”
“Our physical infrastructure is crumbling”
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Innovation and experimentation
• …are the order of the day• Constant change in individual authorities, each going their
own way• Authorities’ risk management systems cannot keep up• Building unknown risk into organisations -’unintended
consequences’
“It’s like the wild west out there!”
“Don’t forget the governance”
“This is about risk appetite - people taking the risks no one would take before”
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Combined Authorities and Devolution
• Creation of sub regional bodies• Devolution down, but also devolution up• There will be consolidation and absorption• Role of districts?
“This is all about growing the economy- creating a diverse economy, where once there was only heavy industry”
“For some this is back to the future”
“District Councils are the guardians of localism”
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Integration: Working around agendas, not organisationsaround agendas, not organisations.Evolving beyond partnership working.
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Health and Social Care integration
• The great experiment in Greater Manchester• Huge unknowns at this stage• Governance is complex, obscure and fraught with challenges• Where will the liabilities sit?
“Prevention is the right path, bur savings may not come through for many years, maybe decades”
“Our hospital trust has huge financial challenges. Health and social care integration will not be easy”
“We mustn’t lose sight of the Community in all of this”
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The survival of Social care
• CEO’s are fearful for the future of Social Care for two reasonso funding; and o unreasonable resident expectations
• Integration will help but will not fix the challenge• Risks are high - the potential for more failures is ever present• Health inequalities are unacceptable
‘If you stay on the bus for a couple more stops, you might live 12 years longer”
“We’ve created a culture of learned helplessness”
“Its unrealistic expectations that the local authority will always provide- how do we let go? How do we empower the community?”
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The ‘next generation’ authority
• Extraordinary transformations taking place to create enabling authorities
• Northamptonshire cited as a case studyo reduction in direct staff from 4,000 to 150o a small commissioning core and four delivery organisations
• A new kind of risk management for public services
“The world has changed and Local Government has become an ineffective model”
“Austerity and demand are a perfect catalyst for change”
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‘Its like the wild west out there!’
• Massive and accelerating change
• Ideas becoming reality
• Risk Managers can’t cope
• Innovation carries huge risk - what are the unintended consequences of failure?
• Lets see what 2016 brings!
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Resilient future
On a scale of 1 – 5 (where 1 is more and 5 is less)
Do you think your role in managing risk will be more or less important in the future
Resilient future
On a scale of 1 – 5 (where 1 is more and 5 is less)
How confident are you in your ability to deal with this new world of risk?
13
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Resilient future
What is the role of the Risk Manager?
• Anticipate trends and the ensuing risks
• Support the evolution of ‘new ways of working’
• Do some of the hard work- understanding the vulnerabilities which others would choose not to see
• Be the conscience of the organisation, without being a drag
• Facilitate answers to problems
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What we would like you to do, please
• Please take time to read the report- it only takes 10 minutes.
• Think about how it relates to the customers you serve and the contacts you have.
• Are they going through changes? What do they mean for them and for us?
• Are they creating new organisations, outsourcing, merging?
• Are there business opportunities for us?
• Please keep everyone informed, the pace of change is frantic
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Thank you
Kevin Morris
Regional Manager
Mobile: 07710038497
Sarah Pearson
Strategic Risk Consultant
Mobile: 07875887320
