Lords Select Committee publishes review of Government risk management policies and activities

The House of Lords Select Committee on Economic Affairs has published a report into the risk management policies and activities of the UK Government. The report ‘Government Policy on the Management of Risk’ says that the Government ‘has developed a sound and potentially useful framework for the assessment of risk.’ However, while the framework is sound ‘the key issue is whether this framework is applied properly.’

The report says that the Select Committee was unable to find any significant evidence to support the widely-held view that Britain has become an increasingly risk-averse society but it expressed concern that public sector reward and assessment systems may emphasise the adverse impact of failure rather than the gains from success, and so encourage excessive risk-aversion within central and local government organisations.

Other findings include:

* Cost-benefit analysis provides a useful framework for thinking about risk policy, but costs and benefits are often uncertain or difficult to measure and it is important to recognise the limitations of quantitative approaches to risk assessment.

* Policy guidelines such as “As Low As Reasonably Practicable” (ALARP), “Gross
Disproportion” and the “Precautionary Principle” are imprecise and there is a danger that they can lead to an excessively cautious approach to risk. Unless these concepts can be clarified, they should be discarded. The committee stated: “In our view, the use of ill-defined and ambiguous terms in risk management and regulatory documents is generally unhelpful. There is a danger that they can induce an excessively cautious attitude to risk.”

Read the report

•Date: 7th June 2006• Region: UK • Type: Article •Topic: Public sector
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