As we move into the next phase of the pandemic, organisations should be considering how they align their current risk management structures to a new world. A change of working practices along with a realisation that the way we deliver our service in the future is going to change, should lead to organisations questioning the efficacy of, in some cases, very well developed risk management practices.
Steve Thomas has recently joined our risk management team. Steve has extensive public sector and education experience having held risk management positions at two large Welsh Unitary Authorities. Steve joins us from Zurich Risk Engineering where he was active across the sector in a consultative capacity.
Steve comments:-
If nothing else the pandemic showed that organisations can react in times of need. Decisions which often took months to make were being made in days. This allowed organisations to react to a volatile situation. The unfortunate but inevitable side effect of this more dynamic approach has been a reduction in the rigor around a risk-based approach to decision making in some organisations.
This more flexible approach was encouraged to some degree by central Government. A good example of his came in June 2020 with the issue of Procurement Policy Note (PPN) 04/20 1 . The guidance in that note related to the very real need to ensure contractors were being paid in a timely manner during the pandemic.
Through the note contracting authorities were reminded to pay invoices in accordance with PCR 2015 ( 30 days) but went further by stating contracting authorities should:-
- {be} Resolving disputed invoices as a matter of urgency; consider paying immediately and reconciling at a later date in critical situations.
And in addition:
- Take a risk based approach as to whether 2-way matching might be appropriate (rather than adopt regular 3-way matching against receipt and Purchase Order).
Both are significant divergence from the norm and whilst understandable increased the risk of fraudulent payments making it through system which was an issue not lost on insurers supporting the public sector.
The necessary changes organisations have made to their service delivery models during the pandemic have introduced efficiencies which should be welcomed. However, if organisations are to continue benefiting from these efficiencies good governance should become a priority. This has been recognised In a number of guidance documents recently, but specifically in PPN 05/21 2 issued in June 2021 which states:
- Contracting authorities should have processes and governance in place to determine and manage their most important contracts.
Governance will become a significant features of the Public Sector landscape as we start the recovery process. Please reach out to your client director or Steve if you would like to discuss your risk management and governance needs.
Sources:
- https://www.gov.uk/government/publications/procurement-policy-note-0420-recovery-and-transition-from-covid-19
- https://www.gov.uk/government/publications/procurement-policy-note-0521-national-procurement-policy-statement
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