Global and local risk management in Europe

by Dr. Lynn Drennan

No matter the size of the public organisation – whether a large metropolitan city, a small community or the provider of a public service – in order to effectively manage risk, attention needs to be given to both local and global threats.

Currently, society is exposed to threats on an international scale from the possibility of flu pandemics, climate change, terrorist attacks, the collapse of banks and manufacturing industries, and many other demographic changes. Clearly, there are few parts of the world that can avoid experiencing the impact of such events in their own backyards. The environmentalists’ plea to ‘think global, act local’ is one that local government, national government departments and other public service agencies are now actively addressing.

The current swine flu pandemic is an example of how good preparation, based on past experience (in the case of the UK, through previous threats such as avian flu and crises such as foot-andmouth disease) and the lessons learned about how best to communicate with and protect the public, has led to a swift government response that will hopefully mitigate the spread of this disease and avoid a full-scale epidemic.

Issues of business and service continuity are now in the spotlight with many organisations adjusting their own plans to deal with a worst case scenario – and all this at a time when the financial situation demands ‘doing more with less’. For the frontline public services in particular, there is no doubt that effective risk management is essential in these challenging times.

With an increasing emphasis on efficient use of public funds, the reality of budget cuts and Government pressure on local government and other public service organisations to work in partnership with one another, another issue – that of procurement, and the risks associated with this operation – has been much to the fore.

In 2005, it was estimated that the UK public sector was spending over £100 billion each year on the procurement of goods and services, while in 2007, local councils in England alone were responsible for around £40 billion of public procurements. Such processes are strictly regulated by UK and European Union law and failure to follow accepted guidelines can lead to legal challenges. But legal threats are not the only problems facing public service organisations in their efforts to achieve best value for their clients, and from the public purse.

A group of Alarm risk managers and procurement specialists were asked to consider the threats faced during the procurement process and the risk management strategies that might be employed to assist the organisation in achieving its strategic objectives.

The following actions were considered useful in helping mitigate many of the threats, including:

• Clear linking of procurement and strategy

• Easy access to comprehensive, good practice advice / toolkits

• Making best use of technology with regard to records / tender documents

• Collaborating with other organisations

• Actively promoting the procurement service

• Recruiting and retaining procurement staff

• Training procurement staff, and

• Monitoring the process

Whilst public service organisations are well acquainted with the key requirements of procurement policy and law, there appears to be some diversity in both experience and approach towards strategic and operational aspects of the process, as well as the management of any threats that may arise.

Some organisations have produced detailed strategic guidance documents, others have developed leaflets for all employees who might be involved in procuring goods and services, yet others have broken down the procurement process into a wide range of specialist topics and published separate guidance booklets on each of these.

Whatever the strategy adopted, it is fairly clear that governments both in the UK and across Europe will continue to expect more efficiency in the use of public funds. Faced with the global threats that exist today, the solution lies not only in having the correct resources to hand, when needed, but also in ensuring that the risks relating to large scale public procurements are effectively managed.