Transforming risk management in local government

This post summarises a more in-depth article by LGIU’s Dr Andrew Walker and Bridget Tatham, a Partner at Browne Jacobson, published by LGC.

Local authorities today face an evolving landscape that necessitates a fundamental shift in how councils approach risk management. Recent research conducted by the LGIU and supported by our strategic partner Browne Jacobson reveals a significant transformation in this area.

Gone are the days when risk management was a mere box-ticking exercise. Interviews with risk managers from across England and Scotland highlight a conscious effort to embed risk management as an integral part of council operations. Councils are moving towards proactive planning, tailored communication, and cultural change, fostering more resilient organisations where risks are actively managed and staff at all levels are engaged in the process.

However, challenges remain. Sustained engagement among councillors and overcoming the perception of risk management as a punitive process are key areas that require attention. And the scope of risk management is evolving to include cybersecurity, climate and environment, public health, and socioeconomic inequalities. Reputational risk has emerged as a critical concern, intersecting with public perception and media scrutiny. Ensuring that senior figures and councillors understand these risks is paramount.

Our research emphasises the importance of “people skills” and communication in risk management. Beyond technical expertise in areas like insurance, the ability to “read the room,” build relationships, and ask challenging questions is crucial. These skills help in “winning hearts and minds” and ensuring effective risk mitigation.

To ensure a healthy and dynamic approach to risk management, the LGIU report, Navigating risk in local government: challenge, change, and capacity, proposes several recommendations, including:

• Risk management must be embedded within the council’s structure and culture, with clear roles, responsibilities, and reporting lines.
• Executive leadership needs to fully support the risk manager function, ensuring it has sufficient backing and authority.
•  Developing a talent pool of younger graduates with the necessary attributes and acknowledging the importance of non-technical skills is essential for the future of risk management.
• Finally, the government should collaborate with local authorities to create a shared platform for identifying and prioritising risk areas, fostering best practices and supporting resource distribution.