Outlines some of the risks involved in public service delivery
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What is risk?
Risk is often described as the danger of something going wrong, but this is only half the story. Most risk management experts now consider risks to be potentially good as well as potentially bad.
Areas of risk
The Charity Commission Guidance on Public Service Delivery highlights the following areas of risk:
- loss of independence (for example, because it is the public body that ultimately decides on the service to be provided).
- danger of mission drift (for example, through delivering services that don’t fit with your mission, simply to generate income).
- financial risks (for example, through not being funded properly to deliver the service).
- contractual risks (for example, through agreeing to excessively onerous terms in the contract).
- reputational risks (for example, through being perceived as too closely associated with the public body).
Legal advice and funding agreement
All these risks can be managed, but where your funding agreement is in the form of a legally binding contract, you need to ensure you have explored the risks involved thoroughly and have decided how best to mitigate them. You should also seek legal advice before signing the contract.
The increasing trend towards public service delivery is not universally welcomed by the sector. The main concerns are:
- replacement of grants by contracts (which often disadvantages smaller, local groups and can therefore damage communities).
- becoming agents of the state rather than responding to local needs and demands.
- loss of community-based services to more professional, national organisations, who are better placed to win contracts.
- public perception of loss of independence leading to reduced trust and confidence in the sector.
A step-by-step guide to managing risk
- Explore areas of uncertainty for your organisation, looking at different elements of your work in turn, to identify possible risks.
- Assess how likely and serious the risks are.
- Prioritise your risks.
- Agree appropriate measures to avoid or manage the risks
- Design a process for monitoring and reviewing your key risks and associated plans
- Communicate your risk management plan.