This is despite the fact that more than nine out of ten – 93% - said that their organisation is increasingly looking to commercial activities to generate income, a survey conducted by Zurich Municipal concluded.
Rod Penman, head of public services at Zurich Municipal, said: “The uplift we are seeing in public sector engagement with commercial initiatives marks a momentous shift in what is now required from organisations serving the public.
“To safeguard the future of public finance and services, there is a real need to ensure the appropriate risk management measures are in place to avoid walking blindly into trouble.”
Only 24% of ALARM members, which is a network for risk management professionals, surveyed believe that their organisation’s decisions are made with a full understanding of risk implications.
More than three quarters of the respondents said their organisations were involved with investing in commercial property, while almost two thirds (63%) confirmed that professional services, such as accountancy, financial planning and legal services, stemmed from commercial initiatives.
The primary reason for the commercial involvement was to close the funding gap and pressures to maintain services on squeezed funds, the report released this week said.
But more than half of public sector organisations believed that commercial activity could generate greater innovation and 68% said it enabled them to fund the services they needed to provide.
The survey used for the research received 41 responses and was carried out by insurance company Zurich Municipal. The firm believed although the sample size was small it “was enough to indicate trends in the market”.
