When various factors combined unexpectedly to hold up rubbish collections early this year, councils were pilloried. But such risks should be prepared for
At the beginning of the year, a combination of thick snow, freezing temperatures and festive bank holidays combined to create the perfect storm for local councils across the UK. This left many unable to make or complete refuse collections – and rubbish bags accumulated on the streets.
Birmingham, Exeter and Cardiff were among the hardest hit, with residents in some areas reportedly waiting five weeks between collections. The challenge for local authorities was heightened by extensive media coverage of the situation and loud public outcry, leading to claims from senior ministers that the bin debacle might cause voter disenchantment at the coming local elections.
Risk is often a combination of factors coincidentally occurring together – the 2005 Buncefield Oil Storage Depot explosion and the recent BP oil spillage in the Gulf of Mexico are just two examples. Similarly, the refuse collection situation highlights how a combination of seemingly manageable events can quickly escalate to pose a serious threat to the reputation of an organisation and, in this case, an entire sector.
Quite simply, when councils’ every move and expenditure were under close public scrutiny, seasonal factors merged to create an unpredictable last straw.
But how important is reputational risk? Our report into public sector challenges, Tough choices, found that only 15% of local authority chief executives believed reputational damage was a long-term strategic risk.
Yet the ‘bin backlash’ is a very real example of why reputation should always be in the front of managers’ minds. The fact is, any risk can threaten reputation, perhaps especially in a time of cuts. In addition, the government’s Big Society plans are putting local authorities under the spotlight more than ever before and, as a result, their reputation will grow in importance.
So it is in the midst of these cuts that local authority chief executives need to ensure that risk mitigation is built into every decision, looking at both the short and the longer-term risks, and at the possibility of negative events combining. The responsibility for risk needs to be taken at the very top of an organisation, not least because if things do go wrong, the blame will likely end up at the feet of senior teams.
But the situation is certainly not all doom and gloom and there are many steps councils can take to shore up an organisation against even the most unforeseen risk.
First, there is something to be learnt from the private sector, where organisations focus on ‘resilience’ as the key to managing risk and business continuity – an approach that takes a strategically driven, holistic view that accounts for every possible threat, from the tangible to intangible. Just as no responsible business would be without a robust business continuity and resilience plan, neither should a council.
Equally, local authorities could learn from neighbouring councils that might have already faced, and coped with, similar issues. This is a strong advantage in local government, and often not feasible in the competitive private sector.
Internal communication is vital in handling any potential crisis. In challenging times, an organisation relies on its staff, often needing to call on them to go over and above their regular duties. Thus, ensuring the buy-in and commitment of every member of staff should be best practice – laying the foundations in advance of a problem, rather than during it.
Indeed, if staff morale is high and employees are willing to go the extra mile (difficult when many teams are being stripped back), a local authority will find itself far better equipped to deal with any problem it might face.
Equally vital is external communication during a crisis or change in service. Local authorities that keep communication channels with residents clear and open – letting them know exactly what is and isn’t being done and how it will affect them – will be more able to mitigate knock-on effects. Local Government Secretary Eric Pickles’ proposed restrictions on council-produced newspapers might make communicating more difficult in the future.
Ultimately, however challenging or unlikely the many risks might seem, organisations need to prepare for them and their potential reputational impacts. In the coming months, there are likely to be further cuts, new systems and organisational change. While operational problems can be remedied once they have happened, reputational issues are much harder to manage without preparation, and, as we may see at the next elections, their costs could be far greater.
Andrew Jepp is director of public services at Zurich Municipal. Tough choices is available as a pdf on www.zurich.co.uk/newworldofrisk/toughchoice/toughchoice.htm
