October 2015

The know zone

  • Worth the risk?
    Julia Harnden examines the value of spending precious leadership time and resources on risk management. More
  • Sea-change for ‘coasting’ schools
    The Education and Adoption Bill 2015-16 would give the Secretary of State (SoS) greater powers to act when schools are deemed to be ‘coasting’ and to create academies. Katie Michelon of Browne Jacobson LLP explains the changes. More
  • The taxman cometh
    Changes to the Lifetime Allowances limit are likely to mean more of us paying tax on our pensions, says Stephen Casey. More
  • Independents’ Day
    Barbara Stanley reports from ASCL’s annual information conference for leaders in the independent sector. More
  • Speakers cornered
    Attending conferences can be an excellent way for senior leaders to soak up a lot of important information in a relatively short space of time. More
  • A free new digital resource for schools
    Sport England is a public body, working to increase the number of people who play sport regularly with the aim of making their lives better through sport. Schools play a vital role in the provision of community sport with 39 per cent of sports facilities in England on school sites. More
  • Backing EBaccs?
    The government is proposing that every pupil should take EBacc subjects at GCSE . What are your views? Does your school already offer EBacc to all pupils? Do you agree or disagree with the government’s proposals and why? Here, ASCL members share their views. More
  • Leaders’ surgery
    Hotline advice expressed here, and in calls to us, is made in good faith to our members. Schools and colleges should always take formal HR or legal advice from their indemnified provider before acting. More
  • Last word
    Showing some appreciation can make a real difference to someone’s day, week, month or term. It’s cost-effective and all it takes is two little words… More
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Julia Harnden examines the value of spending precious leadership time and resources on risk management.

Worth the risk?

Risk can be defined as the uncertainty of outcome but, all too often, it is associated only with the threat of something bad happening. Yet risk can also provide a basis for opportunity. If a risk is something that might or might not happen, management of that risk will allow opportunities to be exploited and threats to be controlled.

This concept is extremely relevant in any educational setting where the core purpose is to maximise the opportunities of children and young people in a safe environment. So that said, risk management is something that cannot afford to be ignored!

It can be beneficial to think about risk management in terms of business risk as education is our business. This correlation is not always popular but, nevertheless, it should at least be considered. The logic for seeing education as a business is the scope it allows for applying tried and tested commercial theory and practice.

Risk management helps organisations to understand, evaluate and take action on their risks with a view to increasing the probability of success and reducing the likelihood of failure. Effective risk management is a vital part of the leadership toolkit of any successful school or college, supporting the delivery of a sustainable curriculum while actively protecting the interests of students and staff.

Cross-section of team

An important point to note about risk management is that although the process needs to be led by senior leadership, it should involve a cross-section of the school team. Its aim is to become a set of activities undertaken by staff as part of their role that complements school improvement and underpins strategic financial planning. It should not be an annual paper exercise to allow the auditors to put a tick in the box. The role of the senior team is to:

  • identify the risk profile of the organisation
  • create a risk register that is relevant, uses a common language and is dynamic
  • nurture the concept of horizon scanning

Every organisation will have its own risk profile, determined by legal status, its business and educational objectives and public expectations. The risk profile will also be influenced by external and environmental factors.

‘Horizon scanning’ is an increasingly popular phrase used to describe the idea of analysing the future. In Jon Day’s review of cross-government horizon scanning (2013) he defines it as ‘[a] systematic examination of information to identify potential threats, risks, emerging issues and opportunities, allowing for better preparedness’ (https://www.gov.uk/government/publications/review-of-cross-government-horizon-scanning).

It is certainly thought-provoking and, it could be argued, sounds more creative as a concept than risk management but there are definitely clear parallels. In a culture of visionary horizon scanning the risk register is the tangible evidence that it is taking place!

There isn’t a right or wrong way to set out a risk register and a variety of templates are available on the internet, from local authorities and auditors. As long as there is common understanding of how the ranking – that is low, medium or high risk – is arrived at, responsibility can and should be distributed across the school team. The risk profile of a school may look to consider the following:

1. Strategic and reputational risk

  • Governance: is the structure efficient and are there any skills gaps?
  • Loss of key staff: is succession planning a factor in strategic discussions among leaders?
  • Recruitment to shortage subjects: is there an established link with a training partnership?
  • Results: are department and key stage leaders equipped with the tools for data assessment and performance management?
  • Falling roll: is there a marketing strategy?
  • Financial reporting: are regular monitoring reports prepared and scrutinised at the appropriate level?

2. Operational risk

  • Insurance: is it relevant and adequate?
  • Staff absence: is there a structure in place to monitor and minimise?
  • Information management: are suitable software packages in place for collecting and reporting pupil and financial data?
  • IT: is the infrastructure effective and sustainable?
  • Contract risk: are commercial contracts fit for purpose and do they represent value for money?

3. Compliance risk

  • Is the organisation compliant with legislation and regulations applicable to these functions?
  • Employment law and payroll
  • Financial regulations and reporting requirements
  • Data protection
  • Health and safety

4. Financial risk

  • Are the internal financial controls robust and addressing these areas?
  • Cash flow
  • Reliance on additional variable income streams
  • Fraud and misuse of public money
  • Leasing

5. External risk

  • Does scenario planning take place to explore these risks?
  • Government funding policy changes
  • Pensions revaluations and National Insurance (NI)
  • Demographic trends
  • New and alternative provision in the local area

Julia Harnden is ASCL Funding Specialist