THE public sector has traditionally regarded risk as a four-letter word – to be avoided at all costs. The reasons are obvious. Playing fast and loose with taxpayers’ money, public safety or the electoral liability of your political paymasters is no way to career advancement. Nobody wants to be responsible for a bad headline.

Nevertheless there is a down-side to this overcautious approach. It can stifle innovation, block progress and lead to a box-ticking blame culture in which minor risks are overmanaged and major risks are missed. So is the public sector ready to become more bold?

“Attitude to risk has definitely changed over the past five years,” says Rohan Malik, an account director at Ernst & Young. “[But] I think there is still a long way to go... So far the focus has been on establishing risk management processes, but I’m not sure there has really been that much of a change in culture.”

Guidance published last year by the Treasury and earlier this year by the Office of Government Commerce talks of “risk appetite”, “risk registers” and “risk management”. It envisages a culture in which public bodies take “well thought-through risks where the long-term rewards are expected to be greater than any short-term losses”.

John Burton, the head of risk management at Transport for London, describes the process as creating a “risk and opportunity agenda that extends to all aspects of the business”. Risk management is considered from the outset of every project, built into the allocation of resources and covered in the training of each member of staff.

“We are training all our business managers to help them to create their own risk registers so that when they identify risks they can manage them,” he says. But while Burton emphasises the importance of taking a strategic approach to risk management, the results of a forthcoming Management Consultancies Association survey ( see page 13) suggests that this is not universal. About one public sector manager in three describes his or her risk management processes as “box-ticking”. Alan Downey, the head of KPMG’s public sector division, says “The public sector has embraced a lot of risk management methodology that was unheard of ten years ago. The danger, especially with the bigger initiatives, is that you can get bogged down with the bureaucracy of risk management. Everybody is filling in risk registers, but I’d rather they did something about the risk.”

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