Top 6 preparations for a major incident
- The likelihood of a major incident is a reality for all local authorities
- Leaders are not fully embracing this level of risk and its implications for services
- Better scenario planning and strategic risk management are essential
When historians come to write about the time we are living through now, there is a good chance that they might describe it as an “Age of Insecurity”.
A storm of risks is gathering, to present local authorities with the most challenging operating environment since the immediate post-WWII years, according to Zurich Municipal.
The financial crash of 2008 is proving different to previous busts; the effects are more stubborn, lasting longer, and the system seems as vulnerable now as it was six years ago to macroeconomic shocks from the Eurozone and beyond.
In addition, our creaky fiscal scaffolding is built on top of very wobbly foundations, including rising geopolitical risk, increasingly complex supply chains, government cuts and climate change.
The world seems a distinctly risky environment to operate in right now – just as we are struggling to find the money to fund resilience.
But local authorities have no choice but to press on, and find a way to keep delivering services, however challenging the conditions.
In this environment, understanding risks – and the complex way in which they interact – is essential.
The likelihood of a major incident affecting a large amount of people, over a broad area, is a very real possibility over the next five years for all local authorities, according to research by Zurich Municipal, which found that a majority of public sector leaders (54%) believe that major incident risk will increase over the next three years, driven by current market trends
For example, central government cuts could make social unrest more likely, and in turn this might increase vulnerability to the effects of this unrest, as services are less able to cope.
But paradoxically, despite managers believing an incident is likely, the Zurich Municipal research revealed a high degree of complacency and a worrying lack of strategic risk management.
For example, despite extensive outsourcing opening up a whole horizon of new exposure, many authorities downplayed these risks.
“One of the weaker areas for association members is probably supply chain risk,” confirmed John Hurrell, chief executive of UK risk management association, Airmic.
“People think of their own organisation first and then start looking outside it.”
In addition, managers were broadly confident in their cyber security – despite a long list of damaging data losses across the sector that would seem to suggest vulnerability.
Most worryingly of all, Zurich found many senior leaders seem to underestimate the financial challenges ahead, despite a large majority of their Finance Directors (71%) believing that smaller cash reserves would severely impact on their organisation’s ability to respond to – and recover from – a major incident.
Complacency at the top is further compounded by the organisational pressures facing many local authorities, as governance structures adapt to deep changes, investment is cut, and staff are demoralised by redundancies and pay freezes.
But, despite these stresses, leaders need to fully embrace the likelihood that potential incidents, crises and failures will form part of the landscape of risk over the next few years, and devote energy and resources to proper preparation and robust scenario planning, to minimise the short-term risks and consequences.
Six-point plan of attack
Zurich Municipal advises a six-point strategic approach that focuses on embracing risk. Adopting these measures will help local authorities find a path through short, and medium-term challenges, and go on to help build long-term resilience.
1. Think about the future. Scenario-planning and stress testing are essential components of building resilience – you need to know that your organisation, as it exists now, can cope with major events and potential follow-on events. How will your supply chain cope?
2. Be as strong as you can be. Talk to central government, ask for the leadership support you require and explore what can be achieved under the localism agenda.
3. Look to your community. Studies show that local people want to be part of any response to a major incident, both in the immediate aftermath and beyond – but say that they lack skills and direction. Ask how can you engage the community and empower them to be involved.
4. Take your reputation seriously and plan a proactive communication strategy that goes beyond the merely defensive. How can you encourage better reputational management right across the organisation? For example, how can you speed up the time between action, response and communication?
5. Think about your finances. Government cuts have inevitably concentrated focus on short term goals, and how to maintain services with less money around. But organisations need to consider their approach to ensuring long-term sustainability and resilience, as well as effectively managing an environment where increasing financial risk – such as falling levels of reserves – is a reality.
6. Accept that governance and risk are now topics for the top table. Although these have traditionally been operational concerns, all that has changed in the new regulatory structures, and they have now become key strategic issues.
The key is to look ahead now and plan for the worst. That way, when historians come to look back, they’ll be writing about your successes.