October Budget – A Public Sector risk lens
11/01/2024
The announcement of the Government’s Autumn 2024 Budget has led to a degree of optimism across Public Sector organisations, although uncertainties will remain until the outcomes of the Spring Spending Review are known in 2025. This budget outlines shifts in funding, infrastructure investment including education, support for social services, and levers to address the housing crisis. For organisations to succeed in responding to these changes, risk-based decision making is fundamental to their future resilience. Risk management is not just about protection. It's also about creating value. To do so, requires a mature, pragmatic and proportional approach. Organisations must now consider how these changes impact the delivery of their priorities and plans and how they build organisation resilience for long-term sustainability. Zurich Municipal’s Risk & Resilience Team have considered some of the key aspects of the budget for your consideration:
1. Sustainable funding: Public Sector organisations must prepare for a funding landscape that meets current and future needs. The outline shift towards multiyear settlements has the potential to ensure financial stability, aiding strategic focus on long-term outcomes. The Budget provides a short-term solution, but this will only be confirmed after the spring spending review. Whilst we understand that Local Authorities will be protected from direct NI cost increases, broader public services are likely to be impacted. That said, there are impacts on operating costs within the public sector supply chain, containing and managing spend through risk-based decision making, remains a priority. There remains potential for further changes with the English Devolution White Paper being discussed and reviewed.
2. Preventative services: The budget includes increased investment in public health. Emphasising the importance of preventative measures to address future risks and further strengthen the importance of partnership working to the benefit of local communities. Having a framework to understand and managing risks across a multi-agency delivery model will support successful outcomes.
3. Housing: Whilst the budget signals the government’s intention to address the country’s housing supply and safety challenges, successful delivery will depend upon collaboration and cooperation across a range of organisations including government departments, devolved authorities and developers
4. Child and adult care: Funding for school transport and social care aims to support high-need areas, particularly for SEND services and care workers’ pay. It is crucial that organisations responsible for these services ensure proper safeguarding practices and processes are in place.Local climate action: Recognising climate risk as an urgent priority, the budget highlights the need for public sector organisations to develop, review and build climate action plans aimed at achieving long-term environmental resilience. Whilst we all recognise that climate change as a key risk, from our experiences, the development and understanding of the risks to delivering the plans in place to deliver on long term sustainability objectives are not mature to support delivery.
5. Safer streets: The budget makes short term funding available to ease the burden of temporary accommodation costs, however the long term need to understand and address the root cause will remain the focus for those organisations involved with homelessness, and future multi-agency delivery as mentioned above.
Risk management isn’t just about spotting the downsides. It’s also about seeing and making the most of opportunities. For example, whilst funding has been made available for planning officers, are there changes in working practices, such as the use of artificial intelligence and developing technologies, which would allow greater capacity to focus on more complex cases. Another example could be an increased investment in highways, this should focus on strategic asset management and consider the developments of technology which would benefit the integrity and safety of the network.
By embedding robust enterprise risk management, organisations can proactively address emerging risks and adapt to evolving challenges. Zurich Municipal’s Risk & Resilience Team has extensive experience in organisational resilience, supporting UK public sector organisations in building effective risk and resilience strategies. For over 20 years, we have delivered bespoke services that support organisations to anticipate, respond and adapt to significant disruptions and gradual change.
For more information on anything mentioned in this article please contact Gavin Chalmers, Strategic Risk Team Leader, Zurich Resilience Solutions on Gavin.Chalmers@uk.zurich.com
