Strategic Risk Register Review
Argyll and Bute Council · 17 September 2025
Back to Argyll and Bute HSCP Integration Joint Board (IJB) — 17 September 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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1 Integration Joint Board Date of Meeting: 17 September 2025 Title of Report: Strategic Risk Register Review Presented by: James Gow, Head of Finance The Integration Joint Board is asked to: • Note that the Strategic Risk Register has been reviewed by the Leadership Team and the Audit & Risk Committee. • Review and approve the Strategic Risk Register and Risk Appetite. • Note that a Board Development session to review the Risk Appetite is scheduled for November 2025. 1. EXECUTIVE SUMMARY 1.1 An important element of effective Risk Management is to regularly review the Strategic Risk Register (SRR). The Audit & Risk Committee undertake this on behalf of the IJB. This report provides an opportunity for the IJB to review the Strategic Risk Register, it is required to do this twice per year within the terms of the Risk Management Strategy. The SRR has been reviewed by the management team and the Audit & Risk Committee in recent months, it is unchanged in respect of risk ratings but the overall context remains one of high and increasing risk. Several risks were increased at the time of the last review in December 2024. 2. RECOMMENDATIONS 2.1 The Integration Joint Board is recommended to: • Review and Approve the Strategic Risk Register and Risk Appetite. • Note that a Board Development session to review the Risk Appetite is scheduled for November 2025. 3. DETAIL OF REPORT 3.1 The Risk Register is used to identify risks, assess their perceived likelihood and impact and outline how they are being mitigated. It is a dynamic document and is reviewed by the IJB twice annually. The current version is attached as appendix 1. The Register describes 21 strategic risks facing the HSCP. The table below summarises the number and assessment of perceived residual risks:
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2 Residual Risks Very High High Medium Total May 2021 2 9 9 20 June 2022 4 14 6 24 June 2023 4 13 7 24 June 2024 5 15 1 21 August 2025 6 15 0 21 Total risks have been reduced with some consolidated post pandemic. Overall the risk ratings have not changed but new issues of note are: • Leadership team – recent changes have reduced professional level social work capacity within the leadership team increasing reliance on the Chief Social Work Officer. (SSR 5 – High) • The Care Reform Bill has been passed (now Act) and is likely to have implications for expectations relating to social care delivery which will add to financial pressures or result in re-prioritisation of services. (SSR10 – High) • The Government are increasing scrutiny on waiting times and long waits. (SSR 15 – High) 3.2 The risk register incorporates an indicator which illustrates the perceived direction of each risk, the six ‘Very High’ risks are: Financial Sustainability (SSR01) The underlying budget gap for 2025/26 is substantial and deteriorates further in 2026/27. The most recent modelling outlines a series of risks relating to funding and costs as well as severe challenges facing public funding. It is recommended that this risk remains very high. Sustainability of Commissioned Service Providers (SSR08) This risk remains very high as service providers continue to struggle to recruit staff and deliver the services they are contracted to. Several are also requesting unaffordable uplifts in contract values. Work is on-going to provide additional support and change ways of working, particularly for care at home services. It is difficult to estimate the impacts the actions taken by the HSCP have had but it is 0 2 4 6 8 10 12 14 16 May-21 Aug-21 Nov-21 Feb-22 May-22 Aug-22 Nov-22 Feb-23 May-23 Aug-23 Nov-23 Feb-24 May-24 Aug-24 Nov-24 Feb-25 May-25 Residual Risk Trend Medium High Very High
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3 likely that some services have been protected that would have otherwise been withdrawn, this has come at a financial cost. The increase in the employer national insurance rate has added to the risk and the independent sector have recently written an open letter to Government re-stating the fragility of the sector. Workforce Recruitment and Retention (SSR11) The HSCP continues to experience difficulty in recruiting staff to a variety of roles. This is a constraint on service delivery in some areas. This risk is a national one, however the ageing and reducing population and the housing emergency provide an increasingly difficult local context. The workforce group is meeting regularly and is in the process of implementing the Workforce Strategy. The HSCP is improving accommodation options in the most challenging localities. However, the perception is the problem is not improving and some agency and locum rates are increasing. Socio-Economic Situation & Increasing Poverty (SSR21) This risk continues to be considered as very high and has multiple strands. It is largely outwith the influence of the HSCP. It is expected that the cost of living crisis will continue to drive increased poverty and deprivation and service demand. The HSCP continues to experience increased costs and reduced real terms value of resourcing. Recent public health publications and performance data support the evaluation. Addressing health inequality is a strategic objective for the HSCP and Government (Population Health Framework) but it is not clear how this sits alongside the scale of the financial challenge facing health and social care services. Infrastructure and Assets (SSR07) Significant backlog maintenance requirements have been identified, there is insufficient funding available to address all of these although some additional capital has been allocated. Additionally, there are excess requests for equipment replacement across the NHSH area and insufficient funding for digital infrastructure replacement and development. This risk to a large extent is not in the control of the HSCP and is the responsibility of partners. The risk of building failure is perceived to be increasing but there is an improved understanding of the problem and some steps are being taken to address the areas of most concern. Communication with both partners is on-going, some funding is being allocated and projects are now progressing. There is insufficient budget to maintain all properties to an acceptable standard in the longer term and spend is increasingly targeted at addressing issues raised by regulators and the Fire Service. Support Services (SSR 16) The management team no longer has a dedicated and integrated HR representative as part of its structure. This means qualified HR support is often not available when decisions are being considered and made. Additionally, the absence of such a role places additional pressure on senior management Effective HR management is key to change management and the situation impacts on transformation planning and delivery. HR is a key technical expert in partnership working for both senior staff and operational leadership for early
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4 resolution. The HSCP is continuing to work with both partners to seek a resolution. 3.4 Risk management within the HSCP relies heavily upon processes and procedures within the partner organisations, particularly in respect of cyber security, data protection, infrastructure replacement and financial processes and systems. Recent Cyber Security breaches within the NHS further highlight the growing and strategic nature of this risk. It is also the case that the actions that the HSCP is expecting to have to take in the coming weeks and months can be expected to have a further negative impacts on a range of strategic and operational risks, particularly as spend on social care services is required to reduce further. Further action is however necessary to manage financial risks and respond to the expectations of partners. 3.5 Audit Recommendations The Risk Management Strategy has been reviewed recently and risks have been mapped to strategic objectives. A focus of activity at present is to develop operational risk registers to ensure that they are consistent and complete across the HSCP. 3.6 Risk Appetite An IJB development workshop was held in October 2023 to develop the risk appetite for the HSCP. The main purpose is to ensure that the management understanding of risk appetite aligns with the IJB’s as summarised below: RISK APPETITE RATING Risk Grouping 0 1 1.5 2 2.5 3 3.5 4 Operational Risks Strategic Risk Legal / Regulatory Financial Development & Innovation Clinical & Care People & Workforce Reputational The risk appetite ratings quantitively indicate that there is a willingness within the IJB to accept higher levels of risk relating to strategic change, innovation and workforce. This reflects a recognition through the IJB and HSCP that there are significant drivers for change and transformation. It is also clear that the IJB has a lower appetite for clinical, legal / regulatory and financial risks. The risk appetite does require to be reviewed in the current year as actual perceived risks do not align well with the risk appetite at present, largely due to the impact of the financial challenge. 4. RELEVANT DATA AND INDICATORS 4.1 The identification and rating of risk is based on internal and external data and indicators as well as a wider environmental scan.
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5 5 CONTRIBUTION TO STRATEGIC PRIORITIES 5.1 Robust risk management is an important aspect of the overall strategic management of the HSCP. This report also seeks to ensure that risks relating to strategic objectives are adequately reflected in the SRR. 6. GOVERNANCE IMPLICATIONS 6.1 Financial Impact – This report outlines a need for the HSCP to change the way it operates in order to remain financially sustainable. 6.2 Staff Governance – the current lack of strategic and operational HR support within the needs identified has a potential impact on leadership and management time. 6.3 Clinical Governance – There would be potential impact in clinical/care delivery as a consequence of the management of the risks outlined in the SRR 7. Professional Advisory 7.1 Professional leads are embedded in operational and strategic risk management processes. 8. EQUALITY & DIVERSITY IMPLICATIONS 8.1 None arising directly from the contents of this report but it is considered that the implications of measures that may be required to achieve a sustainable financial position will have an impact upon people with protected characteristics. 9. GENERAL DATA PROTECTION PRINCIPLES COMPLIANCE 9.1 None directly but data protection compliance is an important business risk. 10. RISK ASSESSMENT 10.1 This report provides a detailed review of the strategic risks facing the HSCP. 11. PUBLIC & USER INVOLVEMENT & ENGAGEMENT 11.1 None arising directly from this report. 12. CONCLUSIONS 12.1 Overall the risk environment facing the HSCP remains challenging and is perceived to be worsening. Finance and staffing related issues continue to be amongst the main challenges. The local assessment aligns well with the national picture with recent reports published by Audit Scotland providing evidence. There is significant concern that some of the recent policy and legislative requirements will further exacerbate workforce and financial risks and are not supported with the financial investment that is required. 12.2 The risk that the HSCP will either not be able to remain financially sustainable or will not be able to deliver on the new and existing strategic priorities is increasing.
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6 13. DIRECTIONS Directions required to Council, NHS Board or both. Directions to: tick No Directions required √ Argyll & Bute Council NHS Highland Health Board Argyll & Bute Council and NHS Highland Health Board 14. PREVIOUS REVIEW OF THE REPORT Meeting Title of report Date Output (if relevant) SLT Strategic Risk Register 11/6/25 Review points taken into account Audit & Risk Committee Strategic Risk Register 20/6/25 Request for risk appetite statement review REPORT AUTHOR AND CONTACT James Gow, Head of Finance : james.gow@argyll-bute.gov.uk Appendix 1: Strategic Risk Register